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FCA To Pay $800 Million For Its Dirty EcoDiesel Engines
11 January 2019, 03:40 | Hattie Nash
Jeep Grand Cherokee vehicles are seen on a sales lot
Fiat Chrysler has agreed to pay as much as $800 million to settle charges that it cheated diesel emissions tests. The multinational auto manufacturer will pay $305 million to the state of California and the federal government, recall around 104,000 vehicles, pay vehicle owners an average of $2,500 in compensation, and pay approximately $78 million in litigation and other penalties.
Owners of these vehicles will also receive a payment averaging US$2800 ($3900) and an extended warranty. The VW scandal extended to some 11 million other vehicles the company sold worldwide and led to USA criminal charges against eight people. Roughly 100,000 vehicles are affected; of those, more than 13,000 are in California.
The settlement is scheduled to be announced Thursday by the Justice Department in Washington, the person said.
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.
FiatChrysler shares were up 1.2 percent at $15.96 in NY near midday on Thursday.
However, under the terms of the settlement, no admission of guilt is required from Fiat Chrysler. 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 company will also pay a $305 (£239 / €265) million civil penalty and "implement a program to mitigate excess pollution from these vehicles".
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. About 500,000 VW vehicles were involved in the US cheating scandal.
"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.