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FCA Image

by Matt Konkle
Quadratec Channel Editor

Those of you out there who are current or former owners of 2014-16 Jeep Grand Cherokee vehicles sporting Eco-Diesel V-6 engines, may just find yourselves a little bit richer in the coming months thanks in part to Fiat Chrysler Automobiles.

That’s because FCA Thursday announced it has reached settlement with U.S. federal and state agencies regarding allegations the automaker used illegal software to allow 104,000 U.S. diesel vehicles to pollute beyond legal limits.

As part of the settlement, FCA will pay approximately $400 million in civil penalties to owners of those affected vehicles, which also includes 2014-16 Dodge Ram 1500 pickups. Each current and former owner or lessee of these vehicles will be eligible to receive a payment averaging $2,800. Additionally, FCA said it will offer extended warranties to affected vehicles as well as a recall and software update.

For its part, FCA has long denied any intentional wrongdoing and said there never was an attempt to cheat emission rules. Fiat Chrysler will not admit wrongdoing as part of the civil settlement.

"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. Further, the consent decree and settlement agreements contain no finding or admission with regard to any alleged violations of vehicle emissions rules," according to an FCA statement.

Under the deal, FCA will also payout approximately $400 million in civil penalties that includes $305 million to the U.S. Environmental Protection Agency (EPA), U.S. Department of Justice (DOJ) and the California Air Resources Board (CARB) for environmental claims, $13.5 million to the California Attorney General for consumer claims and mitigation expenses, $72.5 million to various other state attorneys general for environmental and consumer claims, and $6 million to Customs and Border Protection.

In addition, FCA will pay $19 million to the State of California for emissions mitigation initiatives, while also financing the upgrade of 200,000 high-efficiency catalytic converters through the aftermarket.

”“We acknowledge that this has created uncertainty for our customers, and we believe this resolution will maintain their trust in us,” said Mark Chernoby, FCA’s Head of North American Safety and Regulatory Compliance.

In its third-quarter earnings report last year, FCA estimated the scandal would cost it more than $800 million.

The U.S. EPA first accused FCA of wrongdoing in January 2017 when it issued a notice alleging the company violated the Clean Air Act with excessive emissions of harmful nitrogen oxide. Four months later, the Justice Department sued FCA on the EPA’s behalf alleging software on diesel engines allowed them to emit more pollution on the road than during EPA lab tests.

The government said FCA put eight software-based features on its 3.0-litre V6 diesel engines that powered Grand Cherokee and Ram 1500 vehicles, and failed to disclose the software during a certification process. The EPA called the software a “defeat device” that changes the way the vehicles perform on treadmill tests in a laboratory.

While Volkswagen has become the global poster child for diesel emissions cheating, Fiat Chrysler's case differed in its scope with fewer vehicles involved, and with VW's admission of wrongdoing in a scheme to fool U.S. emissions tests. However, both companies were accused of installing this defeat devices.

The Justice Department currently still has a separate ongoing criminal investigation against FCA into the excess emissions.

In its Thursday statement, FCA said it is currently in the process of establishing the required logistics to identify vehicle owners and provide service and remuneration, and affected customers will be advised when they may schedule service appointments.

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