Fiat Chrysler Approaches Admission Of Guilt For Emissions Fraud: Report | Economic and business news


Fiat Chrysler Automobiles (FCA) is on the verge of reaching an agreement to plead guilty of criminal conduct to disperse a multi-year investigation into emissions fraud involving diesel-powered Ram pick-up trucks and Jeep sport utility vehicles, people familiar with the matter said .

FCA attorneys and U.S. Department of Justice officials brokered a plea deal that could be unveiled in the coming weeks and include fines totaling $ 250 million to $ 300 million, they said.

Such a solution with FCA, which is now part of Stellantis NV, would come for more than four years after Volkswagen AG pleaded criminally guilty to solve its own diesel emissions scandal involving nearly 600,000 vehicles. It would also mark the final major chapter in the state crackdown on automakers’ emissions practices sparked by the Volkswagen deception known as the “Dieselgate”.

The FCA investigation focuses on around 100,000 diesel vehicles that allegedly bypassed emissions regulations. Negotiations on the plea are fluid and some terms, including the amount of any fines, could change as the discussions progressed, people said.

Justice Department officials are preparing documents that are likely to be negotiated with the FCA to finalize the plea deal, which could result in changes and also create an outside chance for the deal to fail, they said.

A settlement agreement would complete a series of 2015 investigations into diesel vehicles in FCA’s U.S. lineup. The current criminal investigation is directed against the US unit of the Italian-American automaker. The affected vehicles cover the model years 2014 to 2016.

Representatives of the FCA parent Stellantis and the Justice Department declined to comment.

The emissions fraud scandals have tarnished diesel technology and accelerated the industry’s transition to electric vehicles.

European automakers had promoted “clean diesel” technology to reduce carbon dioxide emissions and facilitate the transition to a fully electric future. When regulators on both sides of the Atlantic uncovered evidence that diesel vehicles were producing far more pollutants in real driving conditions, the argument for a slower transition to battery-electric vehicles was torn apart.

Now automakers are accelerating the development of battery-electric vehicles to meet stricter emissions standards after the diesel gate.

A conspiracy

The FCA discussions heat up as one of their staff prepares for the trial next year over allegations of misleading regulators over vehicle pollution and the deception continued even after officials Volkswagen caught fraud in government emissions tests.

FCA has already resolved related civil allegations [File: Rebecca Cook/Reuters]

In April, the Justice Department exposed charges against two other FCA employees for alleged emissions fraud. Italian authorities arrested one of the two additional workers in September.

In an indictment, the employees are accused of installing illegal software, so-called shutdown devices, in vehicles to fool government emissions tests and then polluting the streets beyond the legal limits.

The FCA has historically resolved related civil allegations and denied that it deliberately attempted to cheat on emissions testing.

Other legal issues have haunted the automaker as well. In March, the company pleaded guilty to violating US labor law and admitted that it had plotted to make illegal payments to union officials.

The current plea negotiations in the exhaust probe follow other changes at the FCA. At the beginning of the year, the company sealed a merger with the French Peugeot manufacturer PSA to form Stellantis. In September, Stellantis said the former top chief of FCA would be leaving to become chief executive of AutoNation Inc, the largest US retail chain.

Emissions test fraud

In the emissions test, the criminal case against FCA is expected to be followed closely with one against Volkswagen that the Justice Department revealed in 2017, people said.

Volkswagen admitted cheating on government emissions tests on diesel vehicles, misleading the U.S. Environmental Protection Agency and customers. The German automaker pleaded guilty to, among other things, conspiracy to defraud the United States, commit wire transfer fraud, and violate the Clean Air Act.

Volkswagen agreed to pay $ 2.8 billion to resolve this criminal case and another billion dollars to resolve civil allegations and lawsuits from vehicle owners and state officials in the Justice Department.

The FCA has spoken to senior Justice Department officials in recent months to plead guilty to a company claim, people familiar with the matter said.

Instead, the automaker advocated a so-called deferred prosecution agreement, it said. In such agreements, instead of pleading guilty, a company will be prosecuted and agree to supervisory and other terms and conditions. If the company sticks to the agreement, the prosecution will later ask a judge to dismiss the charges.

Justice Department officials denied the FCA’s request for milder treatment.

In talks with U.S. prosecutors, the FCA has highlighted the automaker’s January 2019 agreement to pay approximately $ 800 million to settle a civil litigation brought by the Department of Justice, state officials, and consumers who alleged the company’s vehicles were the Bypassed emissions regulations, said one of the people.

Regardless of this, this year FCA settled legal claims from customers who, according to court records, decided against the earlier settlement with consumers.


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