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FCA To Pay $800 Million For Its Dirty EcoDiesel Engines

FCA To Pay $800 Million For Its Dirty EcoDiesel Engines

Fiat Chrysler Automobiles NV has agreed to a settlement worth about $800 million USA to resolve claims from the U.S. Justice Department and state of California that it used illegal software that produced false results on diesel-emissions tests, according to court filings on Thursday.

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.

Fiat Chrysler has maintained that it didn't deliberately scheme to cheat emissions tests and the company didn't admit wrongdoing.

Federal officials allege the vehicles, made between 2014 and 2016, were equipped with diesel engines programmed to run pollution controls during lab tests that would turn off under certain conditions on the road. In July 2017, the EPA and CARB approved 2017 model diesel Ram and Jeep vehicles after the company agreed to release this software update.

Bosch and its USA unit must pay $98.7 million to 47 states, the District of Columbia and Puerto Rico and Guam, and $27.5 million to 104,000 Fiat Chrysler diesel owners.

Fiat Chrysler shares were up 1.2 percent at $15.96 in NY near midday on Thursday.

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In 2016, Volkswagen pleaded guilty to criminal charges and agreed to pay a $2.8 billion penalty to settle government lawsuits.

FCA said that the total cost of owner compensation, extended warranties, and environmental mitigation is estimated at $400 million. VW's tally is past $25 billion in the U.S. alone.

The settlement is the second between the US government and an automaker over allegations of cheating on diesel emissions. FCA failed to disclose the software during the process to become certified so the vehicles can be sold, according to the EPA. Owners will receive an average of $2,800 to obtain software updates as part of the emissions recall, Fiat Chrysler said.

"Each of these vehicles differs materially from the specifications provided to EPA in the certification applications", the government said.

The supplier "enabled" the cheating and should have known its customers would use the software improperly, the office added. The software turned off the pollution control system under extreme circumstances such as climbing mountains in order to prevent engine damage, which is allowed under federal regulations, FCA said.

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