Fiat Chrysler Automobiles has agreed to a settlement worth about US$800 million to resolve claims from the US Justice Department and state of California that it used illegal software that produced false results on diesel-emissions tests, Reuters reports.
The settlement includes US$311 million in total civil penalties to Federal and California regulators, up to US$280 million to resolve claims from diesel owners, and extended warranties worth US$105 million, the report said.
It covers 104,000 Fiat Chrysler 2014-16 Ram 1500 and Jeep Grand Cherokee diesel vehicles.
Regulators said Fiat Chrysler used “defeat devices” to cheat emissions tests in real-world driving.
Fiat Chrysler said in a statement that “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 company did not admit liability.
“You wouldn’t pay 311 million total dollars to the federal government in civil penalties if there were not a serious problem,” US assistant attorney general Jeff Clark told a news conference.
The settlement also includes US$72.5 million for state civil penalties, and US$33.5 million in payments to California to offset excess emissions and consumer claims.
German auto supplier Robert Bosch, which provided the emissions control software for the vehicles, also agreed to pay US$27.5 million to resolve claims from diesel owners.
Owners will receive an average of US$2,800 to obtain software updates as part of the emissions recall, Fiat Chrysler said.
Bosch also agreed to pay US$103.5 million to settle claims with 47 US states that said the supplier “enabled” the cheating and should have known its customers would use the software improperly, the New York Attorney General’s Office said.
Bosch said in a statement it did not accept liability or admit to the factual allegations, but that the settlement reflects “Bosch’s desire to move forward and to spare the company the very substantial costs and the burden on the company’s resources that would be required to litigate these issues.”
The Justice Department said the settlement does not resolve an ongoing criminal investigation into Fiat Chrysler’s conduct.
The hefty penalty is the latest fallout from the US government’s stepped-up enforcement of vehicle emissions rules after Volkswagen admitted in September 2015 to intentionally evading emissions rules.
US regulators said the industry was getting a tough message.
“Fiat Chrysler deceived consumers and the federal government by installing defeat devices on these vehicles that undermined important clean air protections,” said Andrew Wheeler, acting administrator of the US Environmental Protection Agency.
“Today’s settlement sends a clear and strong signal to manufacturers and consumers alike – the Trump administration will vigorously enforce the nation’s laws designed to protect the environment and public health.”
Wheeler said the settlement message is simple to automakers: “Don’t cheat.”
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