Fiat Chrysler Automobiles has long denied any intentional wrongdoing in its alleged diesel cheating scandal, but federal authorities made clear Thursday in announcing a settlement in the case that they believe the automaker actively deceived regulators and the public for years.
As part of the settlement, owners of affected vehicles will be eligible for up to $3,000 in cash.
"Not only did they violate the law, they also tried to hide their actions," said Acting U.S. Environmental Protection Agency Administrator Andrew Wheeler, who explained that EPA engineers had a monumental challenge in weeding through more than 100 million lines of computer code to uncover the cheating.
By comparison, he said, a Boeing 787 has about 14 million lines of code.
Between approximately $400 million in civil penalties, an extended warranty, a proposed class-action legal settlement and other costs, the Italian-American automaker is expected to spend more than $790 million to resolve cheating allegations involving approximately 100,000 2014-16 Eco-diesel Ram 1500 pickups and Jeep Grand Cherokees.
The Justice Department, however, is continuing its criminal investigation into the automaker, and officials declined to address its status during a conference call.
While Volkswagen has become the global poster child for diesel emissions cheating, FCA's case differed in its scope, with fewer vehicles involved, and with VW's admission of wrongdoing in a scheme to fool U.S. emissions tests. Both companies, however, were accused of installing software known as defeat devices, which allowed vehicles to pollute more on roads than during testing.
In the VW case, its former CEO, Martin Winterkorn, and others at the company were charged criminally, the company paid billions of dollars in fines and millions of vehicles were affected worldwide.
FCA on Thursday continued to deny any intentional cheating.
"The settlements do not change the company's position that it did not engage in any deliberate scheme to install defeat devices to cheat emissions tests. Further, the consent decree and settlement agreements contain no finding or admission with regard to any alleged violations of vehicle emissions rules," according to an FCA statement.
Mark Chernoby, FCA's head of North American Safety and Regulatory Compliance, noted in a news release that "we acknowledge that this has created uncertainty for our customers, and we believe this resolution will maintain their trust in us."
The agreements provide for a repair and recall program - attorneys said there would be no need for a vehicle buy-back program as there was in the VW case - but the company must repair 85 percent of the affected vehicles or face additional penalties.
According to the government and attorneys for affected owners, proposed and resolved settlements in the case include:
$305 million to settle claims of cheating emission tests and failing to disclose unlawful defeat devices.
$19 million to mitigate excess emissions from more than 13,000 of the noncompliant vehicles in California.
$280 million as a proposed settlement resulting from a class-action lawsuit filed by owners. Auto supplier Bosch would pay $27.5 million as part of that proposed settlement.
In its third-quarter earnings report last year, the automaker estimated the scandal would cost it more than $800 million.
Wheeler, in a statement, said the case sends a strong message to corporations that seek to cheat U.S. environmental laws.
"Fiat Chrysler deceived consumers and the federal government by installing defeat devices on these vehicles that undermined important clean air protections," Wheeler said. "Today's settlement sends a clear and strong signal to manufacturers and consumers that EPA will vigorously enforce the nation's laws designed to protect the environment and public health."
Principal Deputy Associate Attorney General Jesse Panuccio, in a statement, noted that "the Department of Justice is committed to the full and fair enforcement of the laws that protect our nation's environment. ... Fiat Chrysler broke those laws and this case demonstrates that steep penalties await corporations that engage in such egregious violations."
Cash to customers
As part of the proposed class-action settlement, class members would receive a cash payment - approximately $3,000 in some cases - and be provided an extended warranty "that covers all parts and systems affected by the emissions modification."
Elizabeth Cabraser, court-appointed lead counsel and chair of the Plaintiffs' Steering Committee, cheered the arrangement.
"By holding FCA and Bosch accountable for their diesel emissions cheating, consumers will now receive the vehicle they were promised plus cash compensation, while protecting our environment. We look forward to presenting this settlement to the court, and once approved ensuring eligible owners and lessees take advantage of its benefits," Cabraser said in a release.
A message seeking comment was left for a Bosch spokesman.
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