Fiat Chrysler has agreed to pay as much as $800 million to settle charges that it cheated diesel emissions tests.
The settlement also includes $72.5 million for state civil penalties and $20 million in payments to California and to offset excess emissions. The recalls include model year 2014-2016 Jeep Grand Cherokee and Ram pick ups. 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 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. Fiat Chrysler has two years to fix 85 percent of the vehicles being recalled, and it will face more penalties if it fails to do so. The government says the software acted as a defeat device as it would fully activate emission controls during EPA and California emissions testing, but "reduce or deactivate emission controls" during real world driving.
FCA said that the total cost of owner compensation, extended warranties, and environmental mitigation is estimated at $400 million. He said not only did Fiat Chrysler break the law but that it worked to hide its conduct.
"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", FCA said in a statement.
Fiat-Chrysler and the Department of Justice each declined to comment when reached by ABC News. About 500,000 VW vehicles were involved in the US cheating scandal.
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.
"Today's settlement sends a clear and strong signal to manufacturers and consumers that the Trump administration will vigorously enforce the nation's laws created to protect the environment and public health", said Acting EPA Administrator Andrew Wheeler.
But Fiat Chrylser has always maintained that it did nothing wrong and that the software for its diesel vehicle engines is a legitimate way to meet emissions rules.
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