Fiat Chrysler Agrees to Record $105M Fine over Safety

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In the largest civil penalty ever handed down by the National Highway Traffic Safety Administration, Fiat Chrysler will pay a record $105 million fine for mishandling 23 vehicle safety recalls.

The fine follows a July public hearing into how Fiat Chrysler handled those nearly two dozen recalls which involve 11 million vehicles. At the hearing, investigators complained about slow production rates of replacement parts needed for recalls, misinformation to owners, difficulty in obtaining service appointments at dealerships, and recall repairs that failed to fix the problems.

Now, along with admitting to the shortcomings in its recall and reporting procedures, Fiat Chrysler is not only agreeing to pay the fine, but also buy back some vehicles and offer incentives for owners to participate in recall repairs.

“Today’s action holds Fiat Chrysler accountable for its past failures, pushes them to get unsafe vehicles repaired or off the roads and takes concrete steps to keep Americans safer going forward,” said U.S. Secretary of Transportation Anthony Foxx. “This civil penalty puts manufacturers on notice that the Department will act when they do not take their obligations to repair safety defects seriously.”

The buy back plan includes up to 500,000 Dodge Ram trucks that have defective steering parts that could cause drivers to lose control. In addition, owners of more than a million older Jeeps with rear-mounted gas tanks will be able to trade them in or be paid by Chrysler to have the vehicles repaired. The tanks make the Jeeps vulnerable to vehicle fires in rear-end crashes.

The NHTSA isn’t leaving it at that though. Fiat Chrysler will also be subjected to rigorous federal oversight over the next three years. An independent monitor approved by NHTSA will be brought on to assess, track and report the company’s recall performance.

NHTSA chief Mark Rosekind says Fiat Chrysler’s pattern of poor performance “put millions of its customers, and the driving public, at risk.” The agreement, he said, will provide help for owners of defective vehicles, help improve the industry’s recall performance and give Fiat Chrysler “the opportunity to embrace a proactive safety culture.”

The company must pay a $70 million cash penalty – equal to the record $70 million civil penalty the agency imposed on Honda in January. In addition, Fiat Chrysler must spend at least $20 million on meeting performance requirements included in the Consent Order. Another $15 million could come due if the independent monitor discovers additional violations of the Motor Vehicle Safety Act or the Consent Order.

FCA Statement

July 26, 2015 , London, UK – FCA US LLC (FCA US) today announced it has entered into a consent order with the National Highway Traffic Safety Administration (NHTSA) which resolves the issues raised by NHTSA with respect to FCA US’s execution of 23 recall campaigns in NHTSA’s Special Order issued to FCA US on May 22, 2015 and further addressed at a  NHTSA public hearing held on July 2, 2015. The consent order includes an admission by FCA US that in three specified campaigns it had failed to timely provide an effective remedy, and that it did not timely comply with various reporting requirements under the National Traffic and Motor Vehicle Safety Act of 1966.

Pursuant to the consent order, FCA US has agreed to make a $70 million cash payment to NHTSA and to spend $20 million on industry and consumer outreach activities and incentives to enhance certain recall and service campaign completion rates. An additional $15 million payment will be payable by FCA US if it fails to comply with certain terms of the consent order.

FCA US has also agreed to undertake specific actions to improve its recall execution.  The consent order will be supervised by an independent monitor and will remain in place for three years subject to NHTSA’s right to extend for an additional year in the event of FCA US’ noncompliance with the consent order.

Photo Credit: FCA


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