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Fiat Chrysler agrees to U.S. diesel-emissions settlement worth $800M US

Fiat Chrysler Automobiles NV has agreed to a settlement worth about $800 million US 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.

U.S. Justice Department, state of California claim it used illegal software to produce false results

In this May 6, 2014, file photo, a vehicle moves past a sign outside Fiat Chrysler Automobiles world headquarters in Auburn Hills, Mich. The company has agreed to a settlement worth about $800 million US to resolve claims that it used illegal software to produce false emission test results. (Carlos Osorio/Associated Press)

Fiat Chrysler Automobiles NV has agreed to a settlement worth about $800 million US 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 settlement includes $311 million in total civil penalties, up to $280 million to resolve claims from diesel owners, and extended warranties worth $100 million. It covers 104,000 Fiat Chrysler diesel vehicles from model years 2014–16, court filings said.

Fiat Chrysler said in a statement that it "maintains its position that the Company did not engage in any deliberate scheme to install defeat devices to cheat 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.

Did not admit wrongdoing

As part of the settlement, Fiat Chrysler did not admit any wrongdoing. 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. Owners will receive an average of $2,800 to obtain software updates as part of the emissions recall, Fiat Chrysler said.

The Justice Department said the settlement does not resolve an ongoing criminal investigation into Fiat Chrysler's conduct. The U.S. Securities and Exchange Commission is also investigating.

"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. "Today's settlement sends a clear and strong signal to manufacturers and consumers alike — the Trump administration will vigorously enforce the nation's laws designed to protect the environment and public health."

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 U.S. states that do not already require the use of the California-mandated high-efficiency gasoline vehicle catalysts. That is valued at $50 million to $70 million, officials said.

"Fiat Chrysler broke those laws and this case demonstrates that steep penalties await corporations that engage in such egregious violations," Principal Deputy Associate Attorney General Jesse Panuccio told a news conference.

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