Fiat Chrysler facing $105-million fine after vehicle safety recalls

26 Jul 2015 | Author: | No comments yet »

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

Fiat Chrysler Automobiles NV is recalling about 1.4 million cars and trucks equipped with radios that are vulnerable to hacking, the first formal safety campaign in response to a cybersecurity threat. DETROIT — 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. An agreement just might be showcased as soon as Monday and Fiat Chrysler could have an occasion to earn many of the laws whether it satisfies certain problems, the classifieds ads said.

The company will also be required, in some cases, to buy back some vehicles as part of the government’s probe into Fiat Chrysler’s handling of nearly two dozen recalls covering 11 million light vehicles. The National Highway Traffic Safety Administration will reveal the fine on Monday, says the person who didn’t want to be identified because the official announcement hasn’t been made. In first July, the pinnacle of one’s NHTSA put it would likely act quickly to take action steps in order to respond to Fiat Chrysler’s treatment of remembers linked to way up to 11 huge number of official buses. Under terms of the deal with regulators, Fiat Chrysler plans to offer cash to encourage owners of the older Jeeps with rear fuel tanks to have repairs made. Fiat Chrysler was already distributing software to insulate some connected vehicles from illegal remote manipulation after Wired magazine published a story about software programmers who were able to take over a Jeep Cherokee being driven on a Missouri highway.

The financial penalties aren’t tied to the handling of specific recalls but cover inadequate and lagging repairs; misleading and obstructing regulators; and failing to notify car owners of recalls in a timely manner, the Journal reported. The company, led by Chief Executive Officer Sergio Marchionne, reiterated that it’s not aware of any real-world unauthorized remote hack into any of its vehicles. Fiat Chrysler has been in talks with NHTSA over the penalties for several weeks after the agency held a hearing into the company’s recall and safety practices earlier this month. It stressed that no defect was found and said it’s conducting the campaign out of “an abundance of caution.” “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 cybersecurity vulnerabilities,” NHTSA Administrator Mark Rosekind said in a statement Friday. NHTSA, amid a record string of recalls and high-profile safety lapses throughout the industry, has also come under fire from U.S. lawmakers and consumer advocates for failing to adequately monitor automakers and their suppliers.

But I think it will keep consumers comfortable and prevent current ones and future ones from straying away from the brand.” Fiat Chrysler shares fell 2.5 percent, the most in two weeks, to $15.15 Friday at the close in New York. After the hearing, NHTSA chief 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. Earlier hacks have mostly been achieved by jacking the researchers’ laptops into diagnostic ports inside the cars. “This is not a Sprint issue but we have been working with Chrysler to help them further secure their vehicles,” said Stephanie Vinge Walsh, a Sprint spokeswoman. NHTSA said it would open an investigation of the remedy “to ensure that the scope of the recall is correct and that the remedy will be effective,” agency spokesman Gordon Trowbridge said in an e-mailed statement.

There’s a possibility the recall could affect consumer confidence in Fiat Chrysler, even though the company isn’t the only one with cybersecurity challenges, said Thilo Koslowski, vice president and automotive practice leader at technology consultant Gartner Inc. “It validates that cyber-hacking with cars is a serious issue that the auto industry must pay attention to,” he said. “The auto industry needs to develop new technology to combat these technological problems.” General Motors Co. has a team working on cybersecurity and has hired Harris Corp.’s Exelis and other firms to develop anti-hacking systems, said Mark Reuss, the Detroit automaker’s executive vice president for global product development. The senators’ bill would also establish a rating system to inform owners about how secure their vehicles are beyond any minimum federal requirements. The lawmakers released a report in 2014 on gaps in car-security systems, concluding that only two of 16 automakers had the ability to detect and respond to a hacking attack. “There are no assurances that these vehicles are the only ones that are this unprotected from cyberattack,” he said Friday in an e-mail. “A safe and fully equipped vehicle should be one that is equipped to protect drivers from hackers and thieves.” Although general cyber threats have been acknowledged previously by the industry, the specific ability to take control of critical vehicle functions in the affected Fiat Chrysler vehicles only became clear with the Wired magazine report, said Fiat Chrysler spokesman Eric Mayne.

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