- FCA talks follow VW emissions regulation sources
- Financial sanctions could approach $ 300 million from sources
Oct. 26 (Reuters) – Fiat Chrysler Automobiles (FCA) close to reaching a criminal driving plea deal to resolve a multi-year emissions fraud investigation into Ram pickup trucks and diesel-powered Jeep sport utility vehicles , said people familiar with the matter.
FCA lawyers and U.S. Department of Justice officials are negotiating a plea deal that could be unveiled in the coming weeks that includes financial penalties totaling between $ 250 million and $ 300 million, the people said.
Such a resolution with FCA, now part of Stellantis NV (STLA.MI), would come more than four years after Volkswagen AG (VOWG_p.DE) pleaded guilty to criminal charges to resolve its own diesel emissions scandal involving nearly 600,000 vehicles. . It would also mark the last major chapter in the government crackdown on car manufacturers’ emissions practices that was precipitated by Volkswagen’s deception, known as “Dieselgate”.
The FCA investigation focuses on around 100,000 diesel vehicles that have allegedly escaped emissions requirements. Plea negotiations are fluid and some terms, including the amount of any financial penalties, could change as discussions continue, people said.
Justice Department officials are preparing documents that will likely be negotiated with the FCA to finalize the plea deal, which could lead to changes and also present an outside chance for the deal to collapse, people said. .
A plea deal would close a series of investigations dating back to 2015 into diesel-powered vehicles in FCA’s US lineup. The ongoing criminal investigation targets the American unit of the Italian-American automaker. Affected vehicles cover model years 2014 to 2016.
Representatives for FCA parent Stellantis and the Justice Department declined to comment.
Emissions cheating scandals have tarnished diesel technology and accelerated the industry’s shift to electric vehicles.
European automakers had promoted “clean diesel” technology as a way to reduce carbon dioxide emissions and ease the transition to a fully electric future. When regulators on both sides of the Atlantic uncovered evidence that diesel vehicles polluted much more in the real world, the argument for a slower transition to battery-electric vehicles was shattered.
Now, automakers are accelerating the development of battery-electric vehicles to meet stricter post-Dieselgate pollution standards.
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FCA talks intensify as one of its employees prepares to face trial next year for misleading regulators about vehicle pollution, and continued the deception even after officials had caught Volkswagen cheating on government emissions tests.
In April, the Justice Department unveiled charges against two additional FCA employees in the alleged broadcast fraud. Italian authorities arrested one of the two additional employees in September.
An indictment alleges that employees conspired to install illegal software known as deactivation devices in vehicles so that they could fool government emissions tests and then pollute beyond legal limits on roads.
The FCA has previously resolved related civil allegations while denying that it deliberately attempted to cheat on emissions tests.
Other legal issues plagued the automaker as well. In March, the company pleaded guilty to violating U.S. labor law, admitting to conspiring to make illegal payments to union officials.
Current advocacy negotiations in the emissions inquiry follow other changes at FCA. Earlier this year, the company sealed a merger with French automaker Peugeot PSA to form Stellantis. In September, Stellantis said the former top FCA boss would be leaving to become managing director of AutoNation Inc (AN.N), America’s largest dealer chain.
In the emissions investigation, the criminal case against FCA is expected to follow closely the one against Volkswagen that the Justice Department unveiled in 2017, the people said.
Volkswagen has admitted to cheating on government emissions tests with diesel-powered vehicles, thereby misleading the US Environmental Protection Agency and customers. The German automaker has pleaded guilty to charges including conspiracy to defraud the United States, commit wire fraud and violate the Clean Air Act.
Volkswagen has agreed to pay $ 2.8 billion to resolve this criminal case, and billions more to settle civil claims and Justice Department lawsuits against vehicle owners and state officials.
The FCA, meanwhile, has spoken to senior Justice Department officials in recent months to push back a demand that the company should plead guilty, people familiar with the matter said.
Instead, the automaker argued for a so-called deferred prosecution agreement, the people said. In such agreements, a company is criminally charged and agrees to submit to surveillance and other conditions instead of pleading guilty. If the company sticks to the deal, prosecutors later ask a judge to dismiss the charges.
Justice Department officials have rejected the FCA’s request for more lenient treatment.
In discussions with U.S. prosecutors, the FCA highlighted the automaker’s January 2019 agreement to pay around $ 800 million to settle a civil dispute brought by the Department of Justice, state officials and consumers. alleging that the company’s vehicles had escaped emissions requirements, one of the people said.
Separately, the FCA this year resolved legal claims from customers who opted out of the previous consumer settlement, court records show.
Reporting by Mike Spector in New York and David Shepardson in Washington; additional reporting by Joe White in Detroit; edited by Edward Tobin
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