Fiat Chrysler Nears Settlement Over Dirty Diesel Allegations
Fiat Chrysler Automobiles is on the cusp of reaching a settlement with the U.S. Justice Department over undeclared emissions control software that allowed 104,000 diesel vehicles to pollute beyond legal limits.
The settlement is expected to include significant civil penalties and fines to account for the excess diesel emissions while also covering claims from the Justice Department, various U.S. states, and vehicle owners — similar to Volkswagen’s “Dieselgate” settlement. A final agreement could be reached any day now.
According to Reuters, FCA declined to comment on the matter this week, but previously denied any intentionally illicit behavior, noting there was never any attempt made to create software that would circumvent U.S. emissions regulations. Still, the company may have realized this assurance might not matter in the courts, as it set aside $815 million to cover potential costs associated with the case.
While not nearly as grand as Volkswagen Group’s emission snafu, FCA’s diesel discrepancy remains a serious issue. The Justice Department sought significant penalties for the automaker since filing its lawsuit in May of 2017. The outlet even noted that U.S. and California regulators stepped up diesel scrutiny after VW admitted to illegally installing software designed to fool emissions tests in 2015. Unchecked, the company was allowed to get away with it for years. As retribution, Volkswagen Group agreed to pay over $25 billion in the United States.
Reuters reported in February that a settlement offer sent to Fiat Chrysler lawyers by the Justice Department in January 2018 would require the company to offset excess pollution and take steps to prevent future excess emissions. The letter included language that a settlement must include very substantial civil penalties.
The company and government lawyers have sparred for months over the size of penalties, [one source] said.
The Justice Department has a separate ongoing criminal investigation into the excess emissions. The U.S. Securities and Exchange Commission and a group of U.S. state attorneys general have also been investigating.
Helping to damn the Italian-American company are a series of emails from 2010, in which the person in charge of the controls and calibration for supplier VM Motori (which furnishes EcoDiesel motors for the Ram and Jeep brands) suggested Fiat Chrysler was interested in software that could detect test cycles in order to achieve — and advertise — superior fuel economy figures for specific models.
At the start of the year, the Justice Department offered Fiat Chrysler settlement terms that would include recalling all 2014-2016 models equipped with the EcoDiesel V6 in order to bring their emissions software into compliance. Regulators also demanded the automaker pay a “very substantial fine [that would] adequately reflect the seriousness of the conduct that led to these violations.” Some believed the automaker could face financial penalties amounting to over $4 billion.
FCA isn’t the only automaker in hot water over the finer points of emissions testing, however. Regulators have been probing diesel emissions in Daimler vehicles for some time. The German manufacturer said in financial filings it faces ongoing investigations from U.S. and German authorities into excess diesel emissions that could eventually lead to significant financial penalties and some recalls.
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