Fiat Chrysler agrees to record $105M fine over safety – USA TODAY
The nation’s vehicle safety agency has slapped Fiat Chrysler Automobiles with a record $105 million fine for shortcomings in reporting defects and inadequate recall procedures.
As part of its deal with the National Highway Traffic Safety Administration (NHTSA), Fiat Chrysler will also be required to buy back a limited number of vehicles, offer incentives for owners to participate in recall repairs, and be subject to independent monitoring to ensure its safety program continues to meet minimum standards.
U.S. Transportation Secretary Anthony Foxx on Sunday said Fiat Chrysler Automobiles had acknowledged violations of the Motor Vehicle Safety Act’s requirements to repair vehicles with safety defects. Foxx said the company will submit to “rigorous federal oversight” in the agreement, which will leave room for fine to be reduced if Fiat Chrysler shows good faith in adhering to terms of the agreement.
The agreement represents the culmination of a campaign by NHTSA to call out Fiat Chrysler for its handling of 23 recalls involving 11 million vehicles. The federal agency took the unusual step of holding a hearing on the issue earlier this month where officials complained about slow production rates of replacement parts needed for recalls; misinformation to owners about recalls; difficulty in obtaining service appointments at dealerships, and recall repairs that failed to adequate remedy defects.
“What you heard here is there’s a pattern that’s been going on for some time, frankly,” NHTSA Administrator Mark Rosekind said at the time of the hearing. He said Fiat Chrysler would be punished.
The new federal oversight, spanning the next three years, includes hiring an independent monitor approved by NHTSA to assess, track and report the company’s recall performance. Rosekind said 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 for an undercount that led to 1,729 deaths and injury claims not being reported to NHTSA over 11 years.
Fiat Chrysler must also 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 Safety Act or the Consent Order.
General Motors was fined $35 million in May for failing to promptly report defects that led to its faulty ignition-switch recalls, for which it is paying compensation for 124 deaths so far. Toyota already paid two federal fines of $16.375 million in 2010 for delays in reporting the floor mat and pedal defects, and another $17.35 million in 2012 related to an additional mat recall.
Fiat Chrysler, by contrast, drew ire from NHTSA for the pace of a recall involving 1.56 million Jeep Liberty and Grand Cherokee SUVs that had gas tanks vulnerable to fires in rear-end collisions. CEO Sergio Marchionne disputed NHTSA’s contention at the time that Fiat Chrysler was acting too slowly.
Fiat Chrysler has said it has repaired more than 500,000 of the affected Jeeps by installing a trailer hitch, and has more than 60,000 spare repair parts in reserve for owners who may still bring in their vehicles. In addition, it has said it has called owners multiple times urging them to bring in their vehicles for repair.