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FCA and Cummins named in diesel emissions class-action lawsuit

Chrysler is now the first United States-based carmaker to be sued for allegedly skewing emissions results. In a move that sounds eerily similar to the troubles of European manufacturers, Chrysler is claimed to have hid diesel engine characteristics causing emissions as much as 14 times higher than permitted by regulations. According to Bloomberg, the lawsuit alleges that Chrysler, together with its diesel engine partner Cummins, has concealed the nitrogen oxide output of certain Ram vehicles produced between 2007 and 2012. The NOx pollutants were meant to be broken down in a process called regeneration in the truck's NAC system, or NOx Absorption Catalyst, which predated the 2013-introduced SCR, or Selective Catalytic Reduction system. By design, the NAC captures and stores NOx emissions, converting them to nitrogen and oxygen through a catalytic process. The lawsuit claims the Cummins engine's system has a limited capacity to store the emissions, and as a result the pollutants escape, increasing emissions, worsening fuel consumption and wearing down the catalytic converter. The later, cleaner SCR system uses a urea-water injection, and it gradually replaced the NAC on Cummins 6.7-liter engines, as it was first implemented in 2011 and made standard in 2013. As Bloomberg notes, the model years of Ram trucks involved in the lawsuit predate the earliest Volkswagen "Dieselgate" models by two years. The lawsuit, filed on behalf of 500,000 truck owners, accuses Chrysler and Cummins of fraud, false advertising and racketeering. As an underlying motive, the filing mentions a 2001 change in EPA emissions standards. Announced to become effective in 2010, the EPA requirements drove Chrysler and Cummins to try and reach those already by 2007. However, the NAC system is said to have fallen short of these goals, and the filing claims that Chrysler and Cummins chose to "rig" the engines instead. The affected vehicles predate the 2014 merger of Chrysler and Fiat. FCA US has released a statement regarding the lawsuit, saying it will contest the lawsuit "vigorously". News Source: BloombergImage Credit: Getty Editorial Government/Legal Green Chrysler Dodge RAM Emissions Diesel Vehicles FCA cummins diesel

Weekly Recap: FCA hit with record fine as NHTSA crackdown continues

The National Highway Traffic Safety Administration slapped Fiat Chrysler Automobiles with a record fine this week that could reach $105 million. The punishment comes after NHTSA found problems with the automaker's execution of 23 recalls that affect more than 11 million vehicles. The consent agreement, announced Sunday, calls for FCA to pay a $70-million cash fine and requires the company to spend at least $20 million over a three-year period on industry outreach programs and to beef up old recall campaigns. Failure to comply will result in another $15-million fine. FCA also agreed to federal oversight, which includes an independent monitor to oversee the company's recalls. The $70-million cash fine equals a penalty NHTSA levied on Honda in January. "Fiat Chrysler's pattern of poor performance put millions of its customers and the driving public at risk," NHTSA administrator Mark Rosekind said in a statement. "This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry, and gives Fiat Chrysler the opportunity to embrace a proactive safety culture." FCA called the deal a "consensual resolution," but admitted that it "failed to timely provide an effective remedy" during certain recalls. "We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate," the company said in a statement. The announcement kicked off a busy week for the automaker. NHTSA agreed FCA did not need to recall 4.7 million vehicles after an investigation failed to find defects with a power module used in some Jeep, Dodge, and Ram vehicles. A Georgia judge also reduced a civil verdict involving a death in a Jeep Grand Cherokee crash. Amid all of that, the company reported net profit of about 333 million euros, or $364 million in the second quarter on Thursday. OTHER NEWS & NOTES FCA ramps up Hellcat production Despite a decidedly legal and financial week for FCA, there was still time for the performance side of the business to briefly grab the spotlight. The automaker is more than doubling its production of the Dodge Challenger and Charger SRT Hellcats in response to strong demand. The order bank opens the second week of August and production begins in September. FCA will finish up its scheduled 2015 model-year Hellcat builds, and cancel any "unscheduled" versions, though customers will get discounted pricing for 2016.

Chrysler banks $507 million in Q2, trims 2013 earnings forecast

Chrysler has some good news and some bad news. First, profits were up 16 percent over the second quarter of 2012, bringing the Auburn Hills, Michigan-based manufacturer $507 million on the back of strong demand for trucks and SUVs (a recurring theme this quarter, particularly in the US). Q2 revenue was up as well, from $16.8 billion in 2012 to $18 billion in 2013. The bad news is that the Pentastar's overall earnings forecast for net income in 2013 has been trimmed from $2.2 billion to between $1.7 and $2.2 billion, according to Automotive News.
In addition to the adjusted net income forecast, Chrysler tweaked its operating profit from $3.8 billion to between $3.3 and $3.8 billion. This has gone largely unexplained by Chrysler, perhaps hoping the news of a three-percent increase in its transaction prices for Q2 will allow it to sweep this adjustment under the rug.
The star of the show for Chrysler has been its US sales, which saw a 10-percent jump, both bettering the industry average of eight percent and improving over the same stretch of 2012. As with the increase in transaction prices, Chrysler has the new Ram pickup and Jeep Grand Cherokee to thank. Perhaps most worrying from this report, though, is that every brand in the automaker's stable saw an increase in sales... except for the Chrysler brand itself.