Fiat Chrysler Faces Record $105 Million Fine for Lapses in Recalls

26 Jul 2015 | Author: | No comments yet »

AP Source: US to hit Fiat Chrysler with record $105M fine.

DETROIT (AP) — The U.S. government will hit Fiat Chrysler with a record $105 million fine next week for violating laws in a series of vehicle safety recalls, a person briefed on the matter said.

After the National Highway Traffic Safety Administration insisted a recall was necessary, the 2013-15 models of Fiat Chrysler’s Ram 1500, 2500 and 3500 will be fixed and properly calibrated.SAN FRANCISCO: Fiat Chrysler will recall 1.4 million vehicles in the United States to install software to prevent hackers from gaining remote control of the engine, steering and other systems in what federal officials said was the first such action of its kind.

At the insistence of federal regulators, Fiat Chrysler is recalling about 843,000 pickups because slamming the door too hard could set off the air bag meant to provide head protection in a side-impact crash, according to a report by the automaker posted Saturday on the regulator’s website. The announcement on Friday by FCA US LLC, formerly Chrysler Group LLC, was made days after reports that cyber security researchers used a wireless connection to turn off a Jeep Cherokee’s engine as it drove, increasing concerns about the safety of internet-enabled vehicles. On the line was Fiat Chrysler Automobiles, with news that two technology researchers had hacked wirelessly into a Jeep Cherokee through its dashboard connectivity system. They had managed to gain control of not just features like the radio and air-conditioning, but the actual functions of the vehicle: the engine, the brakes and the steering.

The company will make payments to owners of 1.56 million recalled older-model Jeeps with gas tanks behind the rear axle to bring them to dealers to install trailer hitches to help protect the tanks. In addition to the U.S. vehicles, about 153,000 are being recalled in Canada, 8,300 in Mexico and 15,000 outside North America, a spokesman for Chrysler, Eric Mayne, said in an email.

The government penalties target lapses spanning nearly two dozen recalls affecting more than 11 million Fiat Chrysler vehicles, including older Jeeps with rear gasoline tanks linked to numerous fatal fires. The fines are tied to legal violations in an array of areas, including misleading and obstructing regulators; inadequate and lagging repairs; and failing to alert car owners to recalls in a timely manner, the people said. Launching a recall is the right step to protect Fiat Chrysler’s customers, and it sets an important precedent for how NHTSA and the industry will respond to cyber-security vulnerabilities. At the July 2 hearing, NHTSA detailed an alarming litany of shortfalls: failure to notify customers of recalls, delays in making and distributing repair parts, and in some cases failing to come up with repairs that fix the problems.

Staff specialists at the safety agency aimed to grasp the full scope of the breach, and were particularly alarmed that the hacking allowed someone to essentially crash a vehicle. After the hearing, NHTSA Administrator Mark Rosekind told reporters that Fiat Chrysler would surely be punished. “There’s a pattern that’s been going on for some time,” he said.

And if drivers were vulnerable to an attack where they could lose control of their cars, that would certainly seem to qualify, even though a recall for a Web security threat had never before taken place. In the meantime, the researchers made their findings known last Tuesday in an article published by the news technology site Wired, telling how they had taken control of a cooperating driver’s car from 16km away as it sped down a St Louis highway. Fiat Chrysler subsequently issued a statement saying it would send affected owners a USB drive that they could plug into their vehicles to install an update to block the hacking vulnerability. GM and Takata Corp. 7312 -1.25 % of Japan face Justice Department probes for deadly flaws with ignition switches and rupturing air bags, respectively. Last Friday, Mr Valasek posted on social media that when he tried connecting again to his test Jeep, the pathway through Sprint’s network had been blocked.

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