News - Fiat
FCA reaches settlement over alleged emissions cheating
Settlement costs total $A1.11 billion as FCA maintains emissions cheating innocence
11 Jan 2019
FIAT Chrysler Automobiles (FCA) has reached final settlements with US federal and state agencies, as well as private class actions, over its alleged diesel emissions cheating – a claim it continues to deny.
“The settlements do not change the company’s position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests,” FCA said in a statement.
“Further, the consent decree and settlement agreements contain no finding or admission with regard to any alleged violations of vehicle emissions rules.”
The estimated total cost of the settlements is $US800 million ($A1.11 billion), with about $US400 million ($A554 million) allocated to civil penalties, including $US305 million ($A423 million) to settle environmental claims with the US Environmental Protection Agency (EPA), US Department of Justice (DOJ) and California Air Resources Board (CARB).
Additionally, FCA will conduct a recall on about 100,000 2014-16 Jeep Grand Cherokee large SUVs and Ram 1500 pick-ups that sparked concern in the wake of Volkswagen Group’s ‘dieselgate’ scandal for their higher-than-expected real-world nitrogen oxide emissions.
These impacted vehicles are fitted with VM Motori’s 3.0-litre turbo-diesel V6 engine, which will receive an update to its emission control software that FCA says “does not affect average fuel economy, drivability, durability or refinement of the vehicles”.
Each current and former owner and lessee of these vehicles will be eligible to receive a payment of $US2800 ($A3879) as part of the plaintiff steering committee settlement, while the software update will be coupled with an extended warranty.
According to FCA head of North American safety and regulatory compliance Mark Chernoby, the move to recall the vehicles, compensate customers and overhaul its processes was made to re-establish trust in the company’s emissions compliance.
“We acknowledge that this has created uncertainty for our customers, and we believe this resolution will maintain their trust in us,” he said.
“We have implemented rigorous new validation procedures and updated our training programs to ensure continued compliance with the increasingly complex regulatory environment.
“Such measures are consistent with our mission to deliver advanced technologies that deliver value to our customers and that enhance the environmental performance of our products.”
FCA has also agreed to pay $US19 million ($A26.32 million) to the State of California for emissions mitigation initiatives and finance the upgrade of 200,000 of its high-efficiency catalytic convertors through the aftermarket.
Customer compensation, the estimated future cost of the extended warranty and the emissions mitigation initiatives account for about $US 400 million ($A554 million) of FCA’s final settlements.
As reported, FCA Australia is currently working with officials from the federal government’s Department of Infrastructure and Regional Development (DIRD) to determine the local impact of its parent company’s alleged diesel emissions cheating.
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