Fiat Chrysler’s Diesel Effort Produces A Costly Settlement

The settlement amount was in line with the $800 million that the company set aside in October to cover it, and its stock closed up 1.5 percent on Thursday.

Analysts said the company was unlikely to suffer any significant damage to its reputation with American consumers, or any long-lasting decline in sales. “If sales do drop, I think they’ll pop back up pretty quickly,” said Michelle Krebs, an executive analyst at Autotrader.

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 focus on trucks and S.U.V.s, which have higher profit margins than smaller vehicles. In the United States, Fiat Chrysler’s new-vehicle sales rose 9 percent in 2018, while the overall market grew just 1 percent. Fiat Chrysler stopped making sedans in the United States five years ago and has added more high-margin variants of its trucks and Jeeps, a move Ford Motor is making only now.

The company still faces challenges, however. It has not pushed into electric vehicles and self-driving technology as aggressively as Ford, General Motors and some other companies have, though its Pacifica minivan is being used in Waymo’s autonomous-vehicle testing.

In addition, its chief executive, Mike Manley, has been on the job for just six months. He succeeded Sergio Marchionne, who died in July at 66 after shoulder surgery.

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 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 federal prosecutors. 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.

Source : https://www.nytimes.com/2019/01/10/business/fiat-chrysler-justice-emissions-settlement.html

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