Fiat Chrysler will pay about $800 million to settle charges that its diesel vehicles sold in the United States had improper software that allowed it to violate emissions rules.
The Justice Department and EPA announced the settlement Thursday morning. Fiat Chrysler will pay about $400 million in civil fines to different federal and state agencies. The company also reached a $280 million settlement with the owners of 100,000 diesel-powered Jeep SUVs and Ram pickup. Fiat Chrysler will pay them up to $2,800 per vehicle.
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The vehicles involved in the settlement are the 2014, 2015 and 2016 model year Jeep Grand Cherokee SUVs and Dodge Ram 1500 trucks with 3-liter diesel engines. To receive the payments, the car owners will have get their cars repaired. If Fiat Chrysler doesn't get at least 85% of the vehicles brought in for repairs, it will face additional fines.
The added costs beyond the fines and payments to vehicle owners are for various mitigation efforts to curb emissions, and for future warranty costs.
"Today's settlement sends a clear and strong signal to manufacturers and consumers that the Trump administration will vigorously enforce the nation's laws designed to protect the environment and public health," said Acting EPA Administrator Andrew Wheeler. He said not only did Fiat Chrysler break the law but that it worked to hide its conduct.
But the deal does not include any admission of guilt or wrongdoing by the automaker. And the settlement costs are just a fraction of the $14.7 billion deal reached between US authorities and Volkswagen in 2016. VW installed cheating software on nearly a half-million diesel cars sold in the country.
Volkswagen admitted that its software was improperly installed to deceive emission-testing equipment by making engines put out much lower levels of the pollutants when being tested than they did in real-world driving situations.
But Fiat Chrylser has always maintained that it did nothing wrong and that the software for its diesel car engines is a legitimate way to meet emissions rules. The company said the software is there to protect the engine from damage during testing rather than to cheat on emissions 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," said the company's statement. But it said that the charges against the company "has created uncertainty for our customers, and we believe this resolution will maintain their trust in us."
Fiat Chrysler (FCAU) previously had set aside $800 million to settle the case.
The settlement comes almost exactly two years since regulators first accused Fiat Chrysler of cheating on the tests. The announcement was made during the final days of the Obama administration.
The Trump administration has taken a much more industry-friendly view of environmental regulations. For example, it has taken steps to roll back Obama-era emissions rules that would require far greater fuel efficiency from future model years of US vehicles. But it did not drop the case against Fiat Chrysler.
Wheeler and Deputy Associate Attorney General Jesse Panuccio said the settlement shows that the Trump administration will enforce environmental law and provide a level playing field for the majority of companies that do follow environmental rules and laws.
"Hardworking Americans that follow the law and play by the rules should not suffer a competitive disadvantage," said Wheeler. "This is why enforcement and compliance are top priorities for the EPA."
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