DaimlerChrysler Settles with DOJ and EPA for $94 Million Over Defective Emissions Controls

Strategic Insights -

The Department of Justice (DOJ) and the Environmental Protection Agency (EPA) have reached a major settlement with DaimlerChrysler Corporation, a leading automaker in the United States. The agreement stems from allegations of defective emissions controls on nearly 1.5 million Jeep and Dodge vehicles from model years 1996 through 2001. The settlement is significant not only for its monetary value of $94 million but also for its potential to improve air quality across the country.

Key Takeaways:

  • DaimlerChrysler will extend warranties or advise owners of problems with catalytic converters on about 1 million vehicles.
  • The automaker will recall an estimated 500,000 vehicles to repair defective on-board diagnostic systems and inspect catalytic converters.
  • DaimlerChrysler will enhance procedures for reporting emissions-related defects.
  • The estimated total cost to implement the settlement is $90 million.
  • DaimlerChrysler will pay a $1-million penalty.
  • The automaker will spend at least $3 million on a program to reduce emissions from existing diesel engines.
  • The company will also pay $1 million to the state of California as part of a related settlement agreement with the California Air Resources Board.
  • Bill Wehrum, acting EPA assistant administrator for air and radiation, emphasized the importance of emission controls in achieving the benefits envisioned by the Clean Air Act.

Statistics:

  • $94 million: Total value of the settlement between the DOJ, EPA, and DaimlerChrysler.
  • 1.5 million: Number of vehicles affected by the defective emissions controls.
  • 1 million: Number of vehicles with catalytic converter problems that will receive extended warranties or repair notifications.
  • 500,000: Estimated number of vehicles to be recalled to repair defective on-board diagnostic systems and inspect catalytic converters.
  • $90 million: Total estimated cost to implement the settlement.
  • $1 million: Penalty paid by DaimlerChrysler.
  • $3 million: Minimum amount spent by DaimlerChrysler on a program to reduce emissions from existing diesel engines.

Sources:

  • EIN Correspondent, "EPA, DOJ reach settlement with DaimlerChrysler over defective emission controls," December 21.