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FCA nears plea deal in diesel emissions fraud probe

Fiat Chrysler Automobiles (FCA) is nearing an agreement to plead guilty to criminal conduct to resolve a multiyear emissions fraud probe surrounding Ram pickup trucks and Jeep sport-utility vehicles with diesel engines, people familiar with the matter said. FCA lawyers and U.S. Justice Department officials are brokering a plea deal that could be unveiled in coming weeks and include financial penalties totaling between $250 million and $300 million, the people said. Such a resolution with FCA, which is now part of Stellantis NV, would come more than four years after Volkswagen AG pleaded guilty to criminal charges  to resolve its own diesel-emissions scandal involving nearly 600,000 vehicles.It would also mark the final significant chapter in the government crackdown on automakers' emissions practices that was precipitated by Volkswagen's deception, which became known as "Dieselgate." The FCA investigation focuses on roughly 100,000 diesel-powered vehicles that allegedly evaded emissions requirements. The plea negotiations are fluid and some terms, including the size of any financial penalties, could change as discussions continue, the people said. Justice Department officials are preparing paperwork that will likely be negotiated with FCA to finalize the plea deal, which could result in changes and also present an outside chance for the agreement to fall apart, the people said. A plea agreement would cap a series of investigations dating back to 2015 surrounding diesel-powered vehicles in FCA's U.S. lineup. The current criminal investigation targets the U.S unit of the Italian-American automaker. The affected vehicles span model years 2014 to 2016. Representatives for FCA parent Stellantis and the Justice Department declined to comment. The scandals over emissions cheating tarnished diesel technology and accelerated the industry's shift to electric vehicles. The European automakers had promoted "clean diesel" technology as a way to reduce carbon dioxide emissions and ease a transition to an all-electric future. When regulators on both sides of the Atlantic uncovered evidence that diesel vehicles polluted far more in real world driving, the argument for a slower transition to battery electric vehicles was shredded. Now, automakers are accelerating battery electric vehicle development to comply with tougher, post-Dieselgate pollution standards.

Federal judge orders Barra and Manley to try to resolve GM racketeering lawsuit

DETROIT — A federal judge in Detroit on Tuesday ordered the chief executives of automakers General Motors and Fiat Chrysler Automobiles to meet by July 1 to try to resolve GM's racketeering lawsuit. U.S. District Court Judge Paul Borman called on GM CEO Mary Barra and FCA CEO Mike Manley to meet in person to try to resolve a case that could drag on for years. "What a waste of time and resources now and for the years to come in this mega-litigation if these automotive leaders and their large teams of lawyers are required to focus significant time-consuming efforts to pursue this nuclear-option lawsuit if it goes forward," Borman said at the end of a hearing during which FCA asked the judge to dismiss GM's lawsuit. Borman said instead, the companies need to focus on building cars and keeping people employed at a time when the coronavirus has hurt the U.S. economy and the country is also dealing with issues of racial injustice after the death of George Floyd, a Black man whose death in police custody in Minneapolis triggered worldwide protests. GM filed the racketeering lawsuit against FCA last November, alleging its rival bribed United Auto Workers (UAW) union officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. GM is seeking "substantial damages" that one analyst said could total at least $6 billion. Barra and Manley should meet, taking into account social distancing to keep them safe, to "explore and indeed reach a sensible resolution," Borman said in the hearing, which was broadcast online. It is common for judges to order parties to try to resolve disputes out of court. But it is unusual that the chief executives of two big companies be instructed to meet face-to-face, not just to settle their differences but also to serve a greater good. A GM spokesman said the No. 1 U.S. automaker has a strong case and "we look forward to constructive dialogue with FCA consistent with the courtÂ’s order.” FCA had no immediate comment. Borman said he wanted to hear from Barra and Manley personally at noon on July 1 to provide him with results from their discussion. FCA shares were up 6.1% at $10.24 in New York and GM shares were down 0.5% at $26.25 on Tuesday afternoon. Government/Legal Chrysler Fiat GM

How GM ended up suing its crosstown rival Fiat Chrysler

DETROIT — Automakers sue each other on occasion, but no one in Detroit can remember one accusing another of bribing union officials to get an unfair labor cost advantage. Yet thatÂ’s what happened Wednesday when General Motors filed a federal racketeering lawsuit against Fiat Chrysler Automobiles. ItÂ’s based on a widening federal investigation into corruption involving officials of the United Auto Workers union, and shortly after the lawsuit was filed, the unionÂ’s president Gary Jones stepped down. The 95-page complaint could affect ongoing contract talks between the union and Fiat Chrysler, the lone automaker of DetroitÂ’s big three thatÂ’s still in negotiations. It also could cause jitters with French automaker PSA Peugeot, which has reached an agreement to merge with the Italian-American automaker. Here are some questions and answers about the lawsuit and its impact: Why did GM sue? GM alleges that Fiat Chrysler senior executives, including now-deceased CEO Sergio Marchionne, paid $1.5 million in bribes to UAW officials for nearly a decade and corrupted the bargaining process with the union in the 2009, 2011 and 2015 contracts to gain advantages over General Motors. The lawsuit says that because of the bribes, which were funneled through a joint UAW-Fiat Chrysler training center, the union allowed Fiat Chrysler to use more lower-paid temporary workers. Also, FCA in 2015 did not have to limit the number of newly hired workers who make less and get lower-cost benefits than older workers hired before 2007. GM contends it couldnÂ’t negotiate similar union concessions that FCA was able to get through bribery. GM could only hire a limited number of temporary and lower-paid new workers, called “second tier” workers, which unfairly increased its labor costs by billions of dollars. It alleges the higher labor costs had another purpose — to force GM into a merger with FCA that Marchionne wanted. GM did wind up with higher labor costs, which until the lawsuit had not been linked to the federal corruption probe. Before contract talks with all three automakers began last summer, the Center for Automotive Research, an industry think tank, determined Fiat ChryslerÂ’s total hourly labor costs including wages and benefits were about $55 per hour, $8 less per hour than GM and $6 lower than Ford. At a Wall Street conference in New York on Thursday, GM CEO Mary Barra said her company can compete on a level playing field.