Fiat Chrysler to Pay $105M in Fines for Recall Handling

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Fiat Chrysler will pay a $105 million civil penalty to the National Highway Traffic Safety Administration, submit to rigorous federal oversight and buy back half-a-million vehicles for its lax handling of recalls covering 11 million defective vehicles, U.S. Transportation Secretary Anthony Foxx said Sunday.

The civil penalty, the largest ever imposed by the National Highway Traffic Safety Administration, comes after a July 2 public hearing in which agency officials outlined problems with the 23 safety recalls, according to a statement. The NHTSA found the automaker violated the Motor Vehicle Safety Act in three areas:

• Effective and timely recall remedies
• Notification to vehicle owners and dealers
• Notification to the NHTSA

Foxx said the consent order holds the Italian American automaker, whose U.S. headquarters are in Auburn Hills, “accountable for their past failures, pushes them to get unsafe vehicles repaired or off the roads and takes concrete steps to keep Americans safer moving forward.”

“This civil penalty puts manufacturers on notice that the Department will act when they do not take their obligations to repair safety defects seriously,” Foxx said in a statement.

Owners of vehicles with defective suspension parts that could cause the vehicle to lose control will have the opportunity to sell their vehicle back to Fiat Chrysler. Owners of more than a million Jeeps that are prone to deadly fires either will have the chance to trade their vehicle in for above its market value, or will receive a financial incentive to get their vehicle remedied, the NHTSA said.

The NHTSA’s sweeping agreement requires Fiat Chrysler to notify vehicle owners eligible for buybacks and other financial incentives that these new options are available.

Related:

• 1.4M Vehicles Recalled; Hackers Could Take Over Steering Wheels
• Fiat Chrysler Recalls 2.2M Trucks Over Faulty Air Bags

The automaker also agreed to unprecedented oversight for the next three years, which includes hiring an independent monitor approved by NHTSA to assess, track and report the company’s recall performance. Oversight could continue for a fourth year.

“Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk,” NHTSA Administrator Mark Rosekind said, also 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 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 Safety Act or the consent order.

In a statement, Fiat Chrysler said it accepts “the resulting consequences with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us. We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate,” The Detroit News reports.

Announcement of the consent agreement came after back-to-back recalls of 1.4 million and 2.2 vehicles announced by the automaker on Friday and Saturday. On Friday, the automaker said it was recalling 1.4 million vehicles over hacking concerns, and on Saturday it said it was calling back 2.2 million trucks because air bags can deploy without warning.