Fiat Chrysler Warns Of $800 Million In Costs Related To Emissions Settlement

When confronted by authorities, Fiat Chrysler executives denied the scheme for three years, said Andrew Wheeler, acting administrator of the Environmental Protection Agency. Fiat Chrysler still faces potential criminal charges related to the probe and potential civil charges from several other states.

“Not only did they violate the law, they also tried to hide their actions,” Mr. Wheeler told reporters during a joint announcement with the Justice Department. “Today’s settlement should illustrate that anyone who skirts environmental laws for a competitive advantage will be caught and they will be prosecuted.”

The Justice Department sued Fiat Chrysler in 2017 on behalf of the EPA claiming it used illegal software on Jeep Grand Cherokee SUVs and Ram pickup trucks from the 2014 to 2016 model years to evade pollution controls. The government claims the company violated the Clean Air Act by allowing the vehicles to pollute more than 20 times beyond the legal limit.

The company didn’t admit to any environmental violations under the settlement and said there was no “deliberate scheme to install defeat devices to cheat emissions tests.”

“We acknowledge that this has created uncertainty for our customers, and we believe this resolution will maintain their trust in us,” Mark Chernoby, the Fiat’s head of North American safety and regulatory compliance, said.

Fiat Chrysler in October signaled a pending settlement, disclosing that it has set aside about $825 million in the third quarter to pay for estimated costs related to the diesel-emissions probe. It had been in settlement talks with the Justice Department for months and has consistently denied the allegations.

The allegations against Fiat Chrysler came in the wake of a scandal involving Volkswagen AG’s use of illegal devices to cheat emissions tests on nearly 600,000 diesel-powered vehicles cars in the U.S. VW in 2017 pleaded guilty to criminal charges and has paid more than $20 billion in legal settlements and fines.

With the settlement, Fiat Chrysler Chief Executive Mike Manley has taken a step toward moving past regulatory scrutiny he inherited when he took the top job in July, days ahead of the death of his predecessor, former CEO Sergio Marchionne.

Write to Timothy Puko at tim.puko@wsj.com and Mike Colias at Mike.Colias@wsj.com

Source : https://www.wsj.com/articles/fiat-chrysler-emissions-settlement-11547137242

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