NHTSA issues $105 million fine to Fiat Chrysler for mishandling recalls

Article by Andrew Christian, on July 29, 2015

For failing to manage the recalls properly and in a timely manner, a record $105 million fine will be imposed on Fiat Chrysler Automobiles, according to two sources. They also said that this matter will be handled by an independent safety monitor under extensive penalties that the National Highway Traffic Safety Administration imposed.

In some of the cases, FCA will have to buy back some of the vehicles as part of the government’s investigation into how it handled almost 24 recalls that cover 11 million light vehicles. The recall covers 1.5 million older Jeep models with rear fuel tanks that were related to multiple fatal fires.

The Wall Street Journal was the first to report the fines and the terms of the settlement between the NHTSA and FCA. As part of the deal, FCA intends to give cash to convince those who own older Jeeps with rear fuel tanks to get repairs done. The sources said that the FCA may even offer an extra trade-in allowance on top of the value of recalled Jeep models if customers choose to trade it in.

It is believed that an announcement will be made of the fines and penalties that are included in a consent order that has yet to be inked between the NHTSA and the automaker, possibly by Monday. FCA follows Honda and General Motors that have both also been under the watchful eye of the agency since 2014 due to mishandled recalls.

The sources also said that according to the terms of its consent order, FCA will be able to recover a part of the fine if it meets certain conditions. They added that the financial penalties aren’t linked to how specific recalls were handled.

Rather, they are the result of insufficient and delayed repairs; misleading and impeding regulators; and failure to inform owners of recalled vehicles in a timely manner. Since 2009, there have been 23 Fiat Chrysler recalls that were investigated by the government.

Earlier this month, the NHTSA held a hearing into the FCA’s recall and safety practices. Since then, talks have been ongoing between the two parties. So far, the agency and FCA have not commented on the settlement details.

On the July 2 hearing, the agency brought up evidence that the company took too long to launch the recalls and to produce the parts required to fix the defects. The agency also said that its actions to notify customers were not enough. According to NHTSA head Mark Rosekind, FCA had been consistently failing to comply with legal obligations that covered recalls.

Topics: fiat, chrysler, nhtsa, recall

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