FCA To Pay $800 Million For Its Dirty EcoDiesel Engines

Ram trucks are seen on a sales lot

Fiat Chrysler will pay more than US$650 million to settle allegations that it cheated on emissions tests involving more than 104,000 Jeep SUVs and Ram pickup trucks, a person with the knowledge of the settlement told The Associated Press on Wednesday.

According to the U.S. government, FCA used "illegal and undisclosed software" on 2014-2016 Ram 1500 and Jeep Grand Cherokee vehicles equipped with the 3.0-liter EcoDiesel V6 engine.

Separately, Fiat Chrysler also agreed to pay $280 million to settle lawsuits brought by vehicle owners - leading to payouts of about $2,800 per owner - and will pay $19 million to California to settle similar state regulatory allegations. 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 USA law.

Attorney General Xavier Becerra added, "The company not only violated the law and our trust, but did so at the expense of our environment".

Fiat Chrysler will agree to corporate governance reforms meant to prevent future emissions violations under the agreement, the person said. "Its deception robbed the public of the clean air we work hard to protect and put law-abiding competitors at a disadvantage".

However, under the terms of the settlement, no admission of guilt is required from Fiat Chrysler.

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Owners of these vehicles will also receive a payment averaging US$2800 ($3900) and an extended warranty.

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 expensive reprimand centers around Fiat Chrysler's use of illegal engine-controlled software, which allowed thousands of its diesel-fueled cars to produce false emissions tests results.

Volkswagen AG in January 2017 pleaded guilty to criminal charges and agreed to pay some $4.3 billion in US penalties for its scheme to deliberately rig hundreds of thousands of USA diesel vehicles to cheat on emissions tests. 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.

"Fiat Chrysler deceived consumers and the federal government by installing (hidden software) on these vehicles that undermined important clean air protections", said Andrew Wheeler, acting administrator of the U.S. Environmental Protection Agency.

The Justice Department said the settlement does not resolve an ongoing criminal investigation into Fiat Chrysler's conduct.

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