Fiat Chrysler to pay around US$650 million in emissions cheating case

Fiat Chrysler to pay around US$650 million in emissions cheating case

In a settlement announced Thursday by California officials, Fiat Chrysler Automobiles agreed to pay $500 million over charges that the global carmaker used "defeat device software" in thousands of diesel cars to cheat on air pollution tests.

The settlement includes fines and more than $300 million in "consumer relief" and requires Fiat Chrysler to establish a recall program offering motorists an approved plan for modification their emissions systems.

Under a deal with the Justice Department and the Environmental Protection Agency, the automaker will recall and fix the more than 104,000 out-of-compliance Jeep SUVs and Ram pickup trucks. German auto supplier Robert Bosch GmbH, which provided some diesel components for the vehicles, also agreed to pay $27.5 million to resolve claims from diesel owners.

The government accused FCA of putting eight "software-based features" on 3-liter V6 engines that powered the Jeep and Ram vehicles.

FCA has agreed to pay almost $400 million in civil penalties, including $305 million to the EPA, the Department of Justice, and CARB; $6 million to Customs and Border Protection; and $72.5 million to various state attorneys general.

Fiat Chrysler has maintained that it didn't deliberately scheme to cheat emissions tests and the company didn't admit wrongdoing.

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"Fiat Chrysler broke those laws and this case demonstrates that steep penalties await corporations that engage in such egregious violations", Principal US Deputy Associate Attorney General Jesse Panuccio said in a statement.

Fiat Chrysler will agree to corporate governance reforms meant to prevent future emissions violations under the agreement, the person said. The company will also need to pay about $280 million to compensate owners.

The settlement is the second between the USA government and an automaker over allegations of cheating on diesel emissions. About 500,000 VW vehicles were involved in the US cheating scandal. The practice was discovered in September 2015 when Volkswagen admitted to using them.

This settlement is not expected to outline any criminal charges.

Representatives for Fiat Chrysler and the Justice Department declined to comment.

"Fiat Chrysler deceived consumers and the federal government by installing (hidden software) on these vehicles that undermined important clean air protections", said Andrew Wheeler, acting administrator of the U.S. Environmental Protection Agency.

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