Fiat Chrysler Automobiles announces on Tuesday that their third-quarter profits dropped by almost 40 percent. They associated the drop with a one-off charge of covering potential payments in an American diesel probe that involves light-duty trucks and SUVs.
Low profit margins did take into account for a potential $1 billion charge to deal with any possible settlements in the future. Fiat Chrysler has the funds to pay and settle against any illegal emissions devices inside of over 100,000 American built Dodge Ram pickups, along with their Jeep Grand Cherokees during the 2014-2016 period. It can also use the funds to update the software that brings the models into compliance.
In May of last year, the United States Justice Department sued Fiat Chrysler. They alleged the company’s defeat device software allowed the models to emit few pollutants in lab tests rather than regular driving. The justice department sued for civil fines that might total over $4 billion US. There are also court orders that forbid Fiat Chrysler from making or selling vehicles with undisclosed software.
Settlement talks are still underway, and Fiat Chrysler has denied any intentional cheating. They maintain that the charge wasn’t any admission of liability. The company maintains that they are going to defend themselves against current and future claims and that the devices are legal and protect engines from any damage. Fiat Chrysler stated that excluding the charge, their adjusted gross earnings were a record high, and North American profit margins hit double digits for the first time.
North American profits counted for Fiat Chrysler’s share of net earnings, and Europe and Pacific Asia announced losses. The company stated that they saw lower sales with increased competition in China. They also indicated that they found lower sales and pricing pressure of the Fiat brand within Europe.
Overall combined shipments of Fiat Chrysler models were approximately 1.2 million, giving it a three percent rise. Fiat Chrysler said that increase was primarily due to NAFTA and Latin America sales.