Chrysler To Pay $800M To Settle Emissions Cheating Suit

Jan. 10 (UPI) -- Fiat Chrysler Automobiles has agreed to pay nearly $800 million to settle lawsuits over illegal emission-control software, and must recall more than 100,000 vehicles as part of the deal, court documents showed Thursday.

The U.S. Department of Justice announced the settlement Thursday, marking the second time in four years that a major automaker has used software to circumvent emission tests. Volkswagen paid a $25 billion settlement with the department after admitting to installing software on diesel-powered vehicles that gave false results during emissions testing.

As part of the deal, Chrysler will be forced to recall diesel-engine Jeep Grand Cherokees and Dodge Ram 1500 pickup trucks for a software update. The recall affects 2014, 2015 and 2016 model vehicles, and FCA must pay owners of those vehicles $2,800 in compensation. That could ultimately cost the automaker $280 million. The software update will ensure the vehicle's emission tests are accurate.

"A multinational corporate bad actor seriously violated American emissions laws to the detriment of the health and welfare of the people of the United States," said Jeffrey Bossert Clark, assistant attorney general for the Justice Department's Environment and Natural Resources Division. "That is a very serious offense."

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The $800 million includes $311 million in total civil penalties.

Shares of FCAU were up 1.1 percent, 18 cents, in Thursday trading.

The Environmental Protection Agency first accused Fiat Chrysler of using the software in a complaint that was later joined by the Justice Department and the state of California. Anticipating the move, FCA set aside $800 million in October for a settlement.

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German parts supplier Robert Bosch GmbH agreed to pay $27.5 million as part of the settlement with consumers and pay $103.7 million to 50 jurisdictions.

The department stopped short of accusing Fiat Chrysler of intentionally engineering its software to cheat during emission tests.

"The settlements do not change the company's position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests," the automaker said in a statement. "The consent decree and settlement agreements contain no finding or admission with regard to any alleged violations of vehicle emissions rules."

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German automaker Volkswagen did admit to having installed "defeat devices" so certain vehicles would pass emissions testing. The company bought back 600,000 affected vehicles from American owners and the scandal cost Volkswagen's CEO, his successor and several other executives their jobs.

Volkswagen plans to phase out both diesel and gasoline engines by 2026.

Volkswagen has invested heavily in electric cars and plans to build 50 million of them, CEO Herbert Diess said in November. The German automaker said it plans to announce 12 new electric models by 2030.

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