Fiat Chrysler Automobiles NV has agreed to a settlement worth about $800 million USA to resolve claims from the U.S. Justice Department and state of California that it used illegal software that produced false results on diesel-emissions tests, according to court filings on Thursday. Another $72 million will be paid to settle claims made by other states.
The settlement includes fines to the government, California regulators, compensation to vehicle owners as well as settlements with other states.
In last year's third quarter, Fiat Chrysler, also known as FCA, took an $810 million (700 million euros) charge to deal with possible US diesel emissions settlement costs, cutting into the company's profits. It will mark a milestone in the second major case brought by American officials against an automaker for Clean Air Act violations stemming from diesel vehicles equipped with pollution controls prohibited by US law.
The pact will resolve civil claims by the Justice Department on behalf of the U.S. Environmental Protection Agency that some Jeep Grand Cherokee and Ram 1500 models contain pollution-control software that improperly limits pollution during lab tests while allowing the vehicles to spew excess emissions on the road.
The settlement resolves allegations that FCA used illegal software to get about 100,000 diesel trucks past laboratory emissions inspections and onto US roads.
However, under the terms of the settlement, no admission of guilt is required from Fiat Chrysler. The company also agreed to buy back some vehicles, fix others, pay to mitigate environmental harm and settle lawsuits for a cost of more than US$30 billion.
The Justice Department filed a civil lawsuit against Fiat Chrysler in May 2017, accusing the company of using so-called defeat devices to mask pollution levels of its vehicles so they would pass government tests. About 500,000 VW vehicles were involved in the US cheating scandal.
This settlement is not expected to outline any criminal charges.
"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.
Asked about the message the settlement would send, acting Environmental Protection Agency Administrator Andrew Wheeler responded: "Don't cheat".