Fiat Chrysler agrees to USA diesel-emissions settlement worth $800M US

Ram trucks are seen on a sales lot

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 comes nearly exactly two years since regulators first accused Fiat Chrysler of cheating on the tests. It covers 104,000 Fiat Chrysler diesel vehicles from model years 2014-16, court filings said.

The settlement includes $311 million in total civil penalties, up to $280 million to resolve claims from diesel owners, and extended warranties worth $100 million.

U.S. officials said FCA's EcoDiesel Ram 1500 and Jeep Grand Cherokee for model years 2014-2016 were built with software created to operate differently during emissions tests compared with real-world conditions. Current and former owners and lessees are also eligible to receive a payment averaging $2,800.

"Fiat Chrysler broke those laws and this case demonstrates that steep penalties await corporations that engage in such egregious violations", Principal Deputy Associate Attorney General Jesse Panuccio told a news conference. Fiat Chrysler will pay about $400 million in civil fines to different federal and state agencies.

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Fiat Chrysler shares were up 1.2 percent at $15.96 in NY near midday on Thursday. Fiat Chrysler has two years to fix 85 percent of the vehicles being recalled, and it will face more penalties if it fails to do so.

The U.S. Environmental Protection Agency first accused FCA of wrongdoing in January 2017 when it issued a notice alleging the company violated the Clean Air Act with excessive emissions of harmful nitrogen oxide.

Volkswagen AG in January 2017 pleaded guilty to criminal charges and agreed to pay some $4.3 billion in US penalties for its scheme to deliberately rig hundreds of thousands of USA diesel vehicles to cheat on emissions tests. VW's tally is past $25 billion in the USA alone. The Fiat Chrysler settlement does not resolve any criminal allegations, according to Assistant Attorney General Jeffrey Clark.

The $25 billion Italian-American carmaker deceived consumers and the USA government by installing so-called defeat devices that "undermined important clean air protections", Andrew Wheeler, acting administrator of the Environmental Protection Agency, said yesterday.

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