Fiat Chrysler to settle U.S. diesel emissions cases for $1.1 billion

Bill Pugliano  Getty Images The Chrysler world headquarters in Auburn Hills Mich

Bill Pugliano Getty Images The Chrysler world headquarters in Auburn Hills Mich

Fiat Chrysler announced Thursday that it has reached final settlements with both U.S. regulators and private class-action lawsuits regarding allegations of excessive diesel vehicle emissions.

The Associated Press reported Wednesday that a multi-part agreement would include civil penalties of roughly $311 million paid to federal and California regulators, in addition to $280 million to compensate drivers and $72 million to settle claims brought by other US states.

The specific vehicles to be recalled include diesel-powered Ram 1500 and Jeep Grand Cherokee from the 2014-2016 model years. German auto supplier Robert Bosch GmbH, which provided some diesel components for the vehicles, also agreed to pay $27.5 million to resolve claims from diesel owners.

In last year's third quarter, Fiat Chrysler, also known as FCA, took an $810 million (700 million euros) charge to deal with possible USA diesel emissions settlement costs, cutting into the company's profits.

The Justice Department said Fiat Chrysler must work with one or more vendors of aftermarket catalytic converters to improve the efficiency of 200,000 converters that will be sold in the 47 US states that do not already require the use of the California-mandated high-efficiency gasoline vehicle catalysts.

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

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Under the deal, the company may be subject to additional penalties if at least 85 per cent of the vehicles aren't repaired within two years.

The Justice Department also opened a criminal investigation into Fiat Chrysler's conduct, and several state attorneys general also were investigating.

The U.S. Environmental Protection Agency first accused FCA of wrongdoing in January 2017 when it issued a notice alleging the company violated the Clean Air Act with excessive emissions of harmful nitrogen oxide. 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 $30 billion. VW's tally is past $25 billion in the USA alone.

"This settlement is a direct result of the enhanced screening and testing procedures CARB developed to uncover the Volkswagen diesel cheating scandal", said Mary Nichols, chairwoman of the air board, in a prepared statement.

Asked about the message the settlement would send, acting Environmental Protection Agency Administrator Andrew Wheeler responded: "Don't cheat".

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