DaimlerChrysler in $90M Settlement to Repair Defective Emissions Controls
21 December 2005
The United States has reached a settlement with DaimlerChrysler to repair defective emission controls on nearly 1.5 million Jeep and Dodge vehicles from model years 1996 through 2001, the Justice Department and the Environmental Protection Agency (EPA) announced today.
The agreement also settles allegations that the company violated the Clean Air Act (CAA) by failing to properly disclose defective catalytic converters installed on the affected vehicles.
In settlement, Chrysler has agreed to:
Extend the warranty on the catalytic converters installed on approximately 700,000 of the vehicles involved, and for another 300,000 vehicle owners, send notification of the catalytic converter problem which will be covered under the original emissions system warranty under the CAA;
Recall approximately 500,000 of the vehicles to fix a separate defect in the on-board diagnostic (OBD) system installed on the vehicles and to check the catalytic converters on the recalled vehicles;
Implement enhanced emission-related defect reporting procedures.
The total estimated cost to Chrysler to implement the settlement is $90 million. In addition, Chrysler will pay penalties of $1 million and will spend at least $3 million to implement a supplemental environmental project to reduce emissions from diesel engines currently in use, making this the largest settlement yet for an emission-related defect reporting case.
Chrysler will pay another $1 million to California as part of a parallel administrative settlement agreement with the California Air Resources Board (CARB), and will provide similar remedies for California-certified vehicles with the catalyst or OBD defects.
The lawsuit is the result of a joint EPA-CARB investigation of Chrysler’s 1996 through 2001 Cherokees, Grand Cherokees, Wranglers, Dakota trucks, and Ram vans, wagons, and pickup trucks. The investigation disclosed that a significant percentage of the vehicles experience excessive deterioration or failure of the catalytic converter.
The deterioration of the catalytic converters in the named models results from a design defect in the original converter installed on each of the vehicles. As a result of this design defect—in some of the identified Chrysler vehicles—the internal components of the converter move around excessively, causing the device’s ceramic core to break up.
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