Fiat News: Justice Department Seeking Big Fines In Settlement with FCA

[William Maley]

The U.S. Justice Department has offered Fiat Chrysler Automobiles a possible settlement over its emissions-cheating EcoDiesel engine. But it will likely cost FCA a large chunk of cash.

Bloomberg obtained a copy of the settlement offer that was sent to FCA's lawyers. The key detail of the proposed settlement says the settlement “must include very substantial civil penalties” that discourage others future violations and that “adequately reflect the seriousness of the conduct that led to these violations.” The proposed settlement doesn't mention an end of the criminal investigation by the Justice Department.

Spokespeople for FCA did not respond for comment.

Bloomberg also obtained a term sheet sent by FCA to Government lawyers back in December. In the sheet, FCA acknowledged that the final settlement would include "civil penalties, an emissions fix for the diesel vehicles and environmental mitigation efforts." The mitigation efforts could include "projects to promote low- or zero-emissions “mobility projects”."

The saga of FCA's EcoDiesel mess dates back to last January when the Environmental Protection Agency (EPA) accused the automaker of having multiple defeat devices installed on the 3.0L EcoDiesel V6 - used in the Ram 1500 and Jeep Grand Cherokee. Since then, FCA has been working with the EPA and Justice Department on trying to clear this mess up. The automaker has also brought their 2017 and 2018 models equipped with the EcoDiesel into compliance via new software and hopes to do the same for the older models.

Source: Bloomberg

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[G. David Felt]

I can now see an announcement that FCA is delaying X, Y and Z new models for X amount of years due to the cost of the settlement taking dollars away from R&D for creation of new models.

This could be a death to some product lines as FCA has to clean up the mess and simplify their product offering.