Another air pollution scandal: Fiat Chrysler settles with California for $500 million

Irving Hamilton
January 11, 2019

Fiat Chrysler will pay more than $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.

FCA has agreed to pay almost $400 million in civil penalties, including $305 million to the EPA, the Department of Justice, and CARB; $6 million to Customs and Border Protection; and $72.5 million to various state attorneys general. Roughly 100,000 vehicles are affected; of those, more than 13,000 are in California.

In last year's third quarter, Fiat Chrysler, also known as FCA, took an $810 million (700 million euros) charge to deal with possible US diesel emissions settlement costs, cutting into the company's profits. 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.

Fiat Chrysler will also pay fines totalling around US$400 ($557 million) to various government agencies, with US$305 million ($425 million) going to the US Environmental Protection Agency, Department of Justice and the California Air Resources Board. 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.

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

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They also want to thank all the law enforcement agencies across the state and county that have assisted us in the case. The following Wednesday, the deaths of James and Denise Closs were officially ruled as homicide by a medical examiner.

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.

In 2016, Volkswagen pleaded guilty to criminal charges and agreed to pay a $2.8 billion penalty to settle government lawsuits. VW was found to have colluded with Bosch to pass USA emissions only while its vehicles sensed they were being tested by federal agencies, while otherwise they operated in a completely different driving mode that polluted up to 40 times above the legal limit.

The settlement is not expected to outline any criminal charges, according to ABC News. He declined to comment when asked about the status of the investigation.

"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.

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