FCA Diesel Owners to Get Money and Fix in Emissions Settlement

Ram trucks are seen on a sales lot

The settlement, which is expected to be formally announced Thursday by the U.S. Justice Department and the Environmental Protection Agency, is the second between the U.S. government and an automaker over diesel emissions-cheating allegations. If Fiat Chrysler doesn't get at least 85% of the vehicles brought in for repairs, it will face additional fines.

The remaining funds will go to civil fines and mitigation payments to the United States and the state of California.

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

Fiat Chrysler will agree to corporate governance reforms meant to prevent future emissions violations under the agreement, the person said.

But the deal does not include any admission of guilt or wrongdoing by the automaker. The practice was discovered in September 2015 when Volkswagen admitted to using them. The company will also pay $6 (£4.7 / €5.2) million to "resolve allegations of illegally importing 1,700 noncompliant vehicles". The company said the software is there to protect the engine from damage during testing rather than to cheat on emissions tests.

Bosch must "refuse to accommodate requests for software development and programming that could result in the installation of defeat device software", the New York Attorney General's Office said as part of the settlement.


At issue is what CARB calls "auxiliary emission-control devices" (in other words, software code) that can allow excess pollution at specific times, such as during a cold start or for dumping fuel to clean the particulate filter, that must be disclosed.

"We acknowledge that this has created uncertainty for our customers and we believe this resolution will maintain their trust in us", said Mark Chernoby, the company's Head of North American Safety and Regulatory Compliance.

The state said Fiat Chrysler sold 100,000 of those vehicles nationwide and 13,325 in California.

Fiat Chrysler (FCAU) previously had set aside $800 million to settle the case.

The Trump administration has taken a much more industry-friendly view of environmental regulations. But it did not drop the case against Fiat Chrysler.

"By concealing this software, Fiat Chrysler deceived regulators and violated environmental law", said Associate Attorney General Jesse Panuccio.

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