A Fiat Chrysler Automobiles sign at the headquarters in Auburn Hills, Michigan, the US. Picture: REUTERS/REBECCA COOK
A Fiat Chrysler Automobiles sign at the headquarters in Auburn Hills, Michigan, the US. Picture: REUTERS/REBECCA COOK

Washington —  Fiat Chrysler Automobiles has agreed to a settlement worth about $800m to resolve claims from the US 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 $311m in total civil penalties, up to $280m to resolve claims from diesel owners, and extended warranties worth $100m. 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 $72.5m for state civil penalties and $20m in payments to California and to offset excess emissions.

As part of the settlement, Fiat Chrysler did not admit any wrongdoing. German vehicle parts supplier Robert Bosch, which provided some diesel components for the vehicles, also agreed to pay $27.5m 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 US 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 US 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 US states that do not already require the use of the California-mandated high-efficiency petrol vehicle catalysts. That is valued at $50m to $70m, 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% at $15.96 in New York near midday on Thursday.

Reuters