The US auto safety watchdog, toughening its stance against manufacturer defects, announced on Sunday a record US$105 million in fines against Fiat Chrysler Automobiles NV over lapses in safety recalls involving millions of vehicles.
The Italian-US automaker’s consent agreement with the US National Highway Traffic Safety Administration (NHTSA) contains an unprecedented buyback option covering hundreds of thousands of vehicles, including more than 1 million Jeep sport utility vehicles, whose owners can receive a trade-in or a financial incentive to get their vehicles repaired.
Fiat Chrysler also agreed to submit to an independent monitor’s audit of its recall performance over a three-year period.
Photo: Bloomberg
The US$105 million in fines sets a new standard for the auto safety agency’s dealings with car manufacturers, eclipsing the previous record fine of US$70 million imposed against Honda Motor Co in January for failing to report death, injury and other claims.
Last year, General Motors Co (GM) was ordered to pay US$35 million for a decade-long delay in reporting faulty ignition switches tied to more than 120 deaths.
The US agency has taken a more aggressive enforcement posture under its new administrator, Mark Rosekind, after coming under fire from leaders of both parties in Congress for lapses in its handling of deadly defects, including Takata Corp air bag inflators and GM ignition switches.
“Fiat Chrysler’s pattern of poor performance put millions of its customers and the driving public at risk,” Rosekind said in a statement. “This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry, and gives Fiat Chrysler the opportunity to embrace a proactive safety culture.”
The recalled vehicles covered by the agreement include Dodge Ram, Dakota and Chrysler Aspen trucks from model years as early as 2008. More than half a million of the vehicles subject to buybacks have faulty suspension parts that can cause a loss of control.
Fiat Chrysler’s US unit, FCA US LLC, formerly Chrysler Group LLC, said it accepted the consequences of the agreement with “renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us.”
The fines include a US$70 million cash payment, an agreement that Fiat Chrysler will spend US$20 million improving its recall process and an additional US$15 million payable if the automaker is found to have committed any further violations.
Fiat Chrysler CEO Sergio Marchionne told reporters this month that the firm needs to change the way it deals with regulators.
“We are intent on rebuilding our relationship with NHTSA,” the firm said on Sunday.
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