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U.S. Announces Settlement With Fiat Chrysler Over Emissions U.S. Announces Settlement With Fiat Chrysler Over Emissions
(about 2 hours later)
Fiat Chrysler Automobiles will pay hundreds of millions of dollars in penalties and remedial efforts under an agreement announced Thursday to settle lawsuits over false emissions readings on diesel vehicles.Fiat Chrysler Automobiles will pay hundreds of millions of dollars in penalties and remedial efforts under an agreement announced Thursday to settle lawsuits over false emissions readings on diesel vehicles.
Including extended warranties and other provisions, the settlement could cost the company close to $800 million.Including extended warranties and other provisions, the settlement could cost the company close to $800 million.
The Justice Department sued the company in 2017 over the Environmental Protection Agency’s finding that it had used illegal engine-control software that turned off pollution controls under certain driving conditions. The E.P.A. contended that the software enabled the vehicles to pass emissions tests while allowing them to release higher levels of pollutants in normal driving. The Justice Department sued the company in 2017 over the Environmental Protection Agency’s finding that it had used illegal engine-control software that turned off pollution controls under certain driving conditions. The E.P.A. contended that the software enabled the vehicles to pass emissions tests while allowing them to release higher levels of pollutants in normal driving, conduct the agency called “serious and egregious.”
Under the settlement, the company will pay $305 million in civil penalties in connection with those claims, the Justice Department said, and another $6 million over allegations of illegally importing noncompliant vehicles.Under the settlement, the company will pay $305 million in civil penalties in connection with those claims, the Justice Department said, and another $6 million over allegations of illegally importing noncompliant vehicles.
It will also pay $19 million to mitigate excess emissions from noncompliant vehicles in California, which also sued the company.It will also pay $19 million to mitigate excess emissions from noncompliant vehicles in California, which also sued the company.
“Fiat Chrysler’s effort to defeat emissions controls is a clear violation of the law, and they also tried to hide their actions,” the E.P.A.’s acting administrator, Andrew Wheeler, said in a conference call. “The E.P.A. caught them cheating.”
As part of the agreement, Fiat Chrysler will recall about 100,000 diesel-powered Ram 1500 trucks and Jeep Grand Cherokee sport utility vehicles from the 2014, 2015 and 2016 model years, a person briefed on the settlement said. The recall repair involves installing new software in the vehicles and providing extended warranties, at a total cost of up to $185 million, the Justice Department said.As part of the agreement, Fiat Chrysler will recall about 100,000 diesel-powered Ram 1500 trucks and Jeep Grand Cherokee sport utility vehicles from the 2014, 2015 and 2016 model years, a person briefed on the settlement said. The recall repair involves installing new software in the vehicles and providing extended warranties, at a total cost of up to $185 million, the Justice Department said.
In addition, vehicle owners will be eligible for compensation of $990 to $3,075 from Fiat Chrysler and Bosch, a German company that supplied engine computers and software. That agreement could cost up to $300 million, the Justice Department said. Fiat Chrysler said it would bear an estimated $280 million of that cost. In addition, vehicle owners will be eligible for compensation of $990 to $3,075 from Fiat Chrysler and Bosch, a German company that supplied engine computers and software. That agreement that could cost up to $300 million, the Justice Department said. Fiat Chrysler said it would bear an estimated $280 million of that cost.
The Justice Department said the settlement did not resolve any potential criminal liability.The Justice Department said the settlement did not resolve any potential criminal liability.
In October, the company set aside about $800 million to cover the cost of a settling the emissions case. Fiat Chrysler stock was up more than 1 percent at noon on Thursday. “A multinational bad actor has seriously violated American emissions laws, to the detriment of the health and welfare of the American people,” said Jeffrey Clark, assistant attorney general of the department’s Environment and Natural Resources Division.
Fiat Chrysler, however, has said that its software did not amount to an illegal defeat device. “Our position on that hasn’t changed,” said Eric Mayne, a company spokesman.
In October, the company set aside about $800 million to cover the cost of a settling the emissions case. Fiat Chrysler stock was up more than 1 percent on Thursday afternoon.
Fiat Chrysler is coming off a strong year in North America. Although the company’s profit fell on a global basis in the first nine months of 2018, its North American division’s pretax profits rose 17 percent.Fiat Chrysler is coming off a strong year in North America. Although the company’s profit fell on a global basis in the first nine months of 2018, its North American division’s pretax profits rose 17 percent.
The company is benefiting from a decision in 2015 to stop selling cars and focus on trucks and S.U.V.s, which have higher profit margins. In the United States, Fiat Chrysler’s new-vehicle sales rose 9 percent in 2018, while the overall market grew just 1 percent.The company is benefiting from a decision in 2015 to stop selling cars and focus on trucks and S.U.V.s, which have higher profit margins. In the United States, Fiat Chrysler’s new-vehicle sales rose 9 percent in 2018, while the overall market grew just 1 percent.
The federal investigation into Fiat Chrysler followed the vast diesel emissions-cheating scandal that rocked Volkswagen. But United States officials viewed the Fiat Chrysler matter as much less serious, and stopped short of accusing the company of intentionally engineering the software to cheat on emissions tests. The federal investigation into Fiat Chrysler followed the vast diesel emissions-cheating scandal that rocked Volkswagen. That case prompted American regulators to look more closely at emissions from the diesel cars produced by other companies.
Volkswagen acknowledged that it had used “defeat device” software to cheat on emissions tests, and pleaded guilty to conspiracy to commit wire fraud and other charges brought by the Justice Department. The company agreed to pay $22 billion in settlements and fines, including $4.3 billion to settle a case brought by the Justice Department. It also was required to buy back 600,000 diesel vehicles from American consumers. Two Volkswagen executives pleaded guilty to criminal charges in the United States. But United States officials viewed the Fiat Chrysler matter as less serious in some respects than the Volkswagen case because it involved fewer vehicles and the trucks and S.U.V.s had been on the road for less time. The E.P.A. also stopped short of accusing the company of intentionally engineering the software to cheat on emissions tests.
Volkswagen acknowledged that it had used defeat-device software for nearly a decade to cheat on emissions tests, and pleaded guilty to conspiracy to commit wire fraud and other charges brought by the Justice Department. The company agreed to pay $22 billion in settlements and fines, including $4.3 billion to settle a case brought by the Justice Department. It also was required to buy back 600,000 diesel vehicles from American consumers. Two Volkswagen executives pleaded guilty to criminal charges in the United States.
In Germany, the scandal resulted in the ouster of Volkswagen’s chief executive, his successor and some two dozen other executives. The former chief executive of Volkswagen’s Audi division was arrested last year and is awaiting trial on criminal charges.In Germany, the scandal resulted in the ouster of Volkswagen’s chief executive, his successor and some two dozen other executives. The former chief executive of Volkswagen’s Audi division was arrested last year and is awaiting trial on criminal charges.
Diesel engines were once seen as a key part of automakers’ strategies for increasing fuel economy and lowering emissions of greenhouse gases. But the Volkswagen scandal and diesel-emissions investigations against other companies have all but extinguished interest and demand for diesel cars and S.U.V.s. Diesel remains a popular choice for heavy-duty pickups and larger trucks.Diesel engines were once seen as a key part of automakers’ strategies for increasing fuel economy and lowering emissions of greenhouse gases. But the Volkswagen scandal and diesel-emissions investigations against other companies have all but extinguished interest and demand for diesel cars and S.U.V.s. Diesel remains a popular choice for heavy-duty pickups and larger trucks.
In place of diesel cars, automakers are scrambling to develop a variety of battery-powered vehicles. Last year, Ford Motor said it planned to spend $11 billion in a bid to introduce 16 battery-powered vehicles and 24 hybrids by 2022. Audi and Mercedes-Benz plan to add new electric models this year. Both companies had previously been big promoters of “clean diesel” technology.In place of diesel cars, automakers are scrambling to develop a variety of battery-powered vehicles. Last year, Ford Motor said it planned to spend $11 billion in a bid to introduce 16 battery-powered vehicles and 24 hybrids by 2022. Audi and Mercedes-Benz plan to add new electric models this year. Both companies had previously been big promoters of “clean diesel” technology.
Volkswagen was once one of the largest sellers of diesel cars in the United States market, and had built a loyal following for the diesel versions of the Jetta and the Beetle. But sales plunged after the diesel cheating scandal. As part of a bid to win back customers, the company plans to introduce an electric S.U.V. in 2020, followed by an electric hatchback and possibly an electric minivan.Volkswagen was once one of the largest sellers of diesel cars in the United States market, and had built a loyal following for the diesel versions of the Jetta and the Beetle. But sales plunged after the diesel cheating scandal. As part of a bid to win back customers, the company plans to introduce an electric S.U.V. in 2020, followed by an electric hatchback and possibly an electric minivan.