Stellantis faces a $300 million fine for defrauding the show

Photo: Stellantis

Photo: Stellantis

  • Stellandis is on the hook for fines of up to $300 million and three FCA employees face possible criminal charges arising from the creation and concealment of polluting technologies.

  • The automaker pleaded guilty in June to fraud and violating the Clean Air Act after a three-year investigation by the EPA and the FBI.

  • Model year 2014-2016 Jeep Grand Cherokees and Ram 1500s with the 3.0-liter EcoDiesel V6 are retrofitted to meet emissions standards, while owners receive extended warranties and cash settlement.

More than a decade ago, the automotive group formerly known as Fiat Chrysler Automobiles began producing the next generation of utility turbo-diesel engines. Known for low torque and economical mileage, FCA has chosen Italian diesel manufacturer VM Motori to create this new engine, which will soon be branded as EcoDiesel. The 3.0-liter V6 diesel was used in 2014-2016 Jeep Grand Cherokees and Ram 1500 trucks (101,482 vehicles total) and produced 240 horsepower and 420 lb-ft of torque. The engine also produced significantly more emissions than federally allowed, but the team found a solution. Now, the merged Stellantis group is on the hook for nearly $300 million in fines and forfeiture money judgments after pleading guilty to intentionally cheating on federal emissions tests.

Similar to the crash device used by Volkswagen, the Jeep and Ram models had software installed that detected when EPA emissions tests were performed and emitted significantly less nitrogen oxides during those driving cycles. Additionally, the DOJ brief says FCA US willingly deceived both federal regulators and customers by advertising its EcoDiesel engines as not only MPG-efficient but also low-emissions. Without this on-off cycle software, EcoDiesel models failed the emissions portion of regulatory testing and tarnished their advertised “best-in-class” fuel economy.

Photo: MediaNews Group/Boston Herald via Getty Images - Getty Images

Photo: MediaNews Group/Boston Herald via Getty Images – Getty Images

“Today’s sentencing of FCA US, which includes a $300 million criminal penalty, is the result of an exhaustive three-year investigation,” said Assistant Attorney General Todd Kim of the Department of Justice’s Environment and Natural Resources Division. “This resolution shows that the Department of Justice is committed to holding corporate wrongdoers accountable for misleading regulators.”

After the extensive investigation, the company pleaded guilty to conspiracy to defraud in June and was sentenced yesterday. While the big hit to Stellantis will come in the form of fines, the company must also create an internal compliance and ethics program that will report directly to the Department of Justice. This program is a result of Stellantis’ failure to disclose known broadcast cheating information at the outset of the investigation and lack of corrective action.

Photo: ERIC PIERMONT - Getty Images

Photo: ERIC PIERMONT – Getty Images

In addition to the corporate audit, three FCA employees face possible criminal charges arising from the creation and concealment of polluting technologies. Emanuele Palma, senior director of diesel engine calibration at FCA North America, is joined by Sergio Pasini and Gianluca Sabbioni, directors and managers of FCA’s diesel operation in Italy, who have been charged by the DOJ with violations of the Clean Air Act and wire fraud. Each of the employees is awaiting trial and could face up to 37 years in prison if convicted on all charges.

The company has also faced scrutiny for emissions cheating in Germany, where investigators caught diesel cheating earlier than US regulators. The offices of the European FCA were raided in July 2020 in an attempt to secure documents proving the existence of destruction devices, a raid prompted by German prosecutors investigating emissions fraud.

Customers affected by the EcoDiesel scandal are in the process of having their vehicles repaired as part of the settlement process. An emissions modification fix was approved by federal regulators in 2019 and has been applied to many model year 2014-2016 Ram 1500 and Jeep Grand Cherokee models.

The settlement also included an extended warranty covering either 10 years from original sale or 120,000 miles, whichever comes first, in addition to an additional four years or 48,000 miles from the date of installation of the approved emissions fix. Original owners were also eligible for a $3075 settlement, while previous owners or lessees were eligible for $990. The claims portal has been closed and Stellandis says consumer claims have been resolved.

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