Fiat Chrysler Automobiles N.V. said that its U.S. unit reached settlements on civil, environmental and consumer claims with the U.S. Environmental Protection Agency (EPA), U.S. Department of Justice (DOJ), the California Air Resources Board (CARB), the State of California, 49 other states and U.S. Customs and Border Protection, agreeing to pay $400 million in civil penalties to resolve allegations that it cheated on vehicle diesel emissions.

The business unit also settled a class action brought by consumers.

Customer compensation, the estimated future cost of an extended warranty program, and the cost of environmental mitigation efforts account for another $400 million.

Even with the nearly $800 million in settlements, the company said it was sticking with its position that it "did not engage in any deliberate scheme to install defeat devices to cheat emissions tests." It said that a consent decree and various settlement agreements "contain no finding or admission with regard to any alleged violations of vehicle emissions rules."

The company did acknowledge, however, that the allegations "created uncertainty for our customers."

(Read "Fiat Chrysler reports wider probe of vehicle emissions.")

Under the agreement, Fiat Chrysler will conduct an emissions recall to update emission control software in an estimated 100,000 model-year 2014-2016 Ram 1500 pickups and Jeep Grand Cherokee SUVs equipped with 3.0-liter EcoDiesel V-6 engines. The so-called "software reflash" is expected to affect average fuel economy, drivability or vehicle durability.

Each current and former owner and lessee of these vehicles also will be eligible to receive a payment averaging $2,800. The affected vehicles will also qualify for an extended warranty in connection with the software update.

The settlements still need to be approved by the San Francisco division of the United States District Court, North District of California.

(Read "VW scandal: When good engineers do the wrong thing.")

The approximately $400 million in civil penalties includes:

  • $305 million payable to the EPA, DOJ and CARB for environmental claims
  • $13.5 million to the California Attorney General for consumer claims and mitigation expenses
  • $72.5 million to various other state attorneys general for environmental and consumer claims
  • $6 million to Customs and Border Protection

Chrysler Fiat also will pay $19 million to the State of California for emissions mitigation initiatives, while also financing the upgrade of 200,000 high-efficiency catalytic converters through the aftermarket.