Fiat Chrysler Nears Settlement Over Dirty Diesel Allegations

Matt Posky
by Matt Posky

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.

From Reuters:

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.

[Image: FCA]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • SCE to AUX SCE to AUX on Jan 09, 2019

    I had defended FCA here on this matter, thinking that only VAG was cheating. It's very disappointing. But it looks like anyone doing diesel was looking for loopholes, and now the jig is up - and not just with passenger car diesels.

  • Jkk6 Jkk6 on Jan 10, 2019

    So will the trucks require registration under my name OR just a long term parking spot to become a beneficiary of this malicious class action.

  • NJRide So this is an average age of car to be junked now and of course this is a lower end (and now semi-orphaned) product. But street examples seem to still be worth 2500? So are cars getting junked only coming in because of a traumatic repair? If not it seems a lot of cars being junked that would still possibly worth more than scrap.Also Murilee I remember your Taurus article way back what is the king of the junkyard in 2024?
  • AMcA I applaud Toyota for getting away from the TRD performance name. TuRD. This is another great example of "if they'd just thought to preview the name with a 13 year old boy."
  • Jeff Does this really surprise anyone? How about the shoes and the clothes you wear. Anything you can think of that is either directly made in China or has components made in China likely has some slave labor involved. The very smart phone, tablet, and laptop you are using probably has some component in it that is either mined or made by slave labor. Not endorsing slave labor just trying to be real.
  • Jeff Self-driving is still a far ways from being perfected. I would say at the present time if my car took over if I had a bad day I would have a much worse day. Would be better to get an Uber
  • 2manyvettes Time for me to take my 79 Corvette coupe out of the garage and drive if to foil the forces of evil. As long as I can get the 8 track player working...