U.S to hit Fiat Chrysler with record $105M fine: AP source

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. 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.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. The National Highway Traffic Safety Administration is expected slap the Italian-U.S. company with the financial penalty and assign an independent monitor to audit the company’s recall processes for an extended period as part of a sweeping settlement, the people said. 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. 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.

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. 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. 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. Instead, Chrysler wanted to notify owners that a fix was available, but the safety agency disagreed and insisted on a recall that requires every vehicle to be fixed and requires progress reports.

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. 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. The fines against Fiat Chrysler top the $70 million the government assessed against Honda Motor Co. earlier this year for lapses in reporting possible safety problems and a $35 million fine paid by General Motors Co. in 2014 for failing to alert regulators in a timely manner to a faulty ignition switch now linked to more than 120 deaths.

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. Regulators at a hearing earlier this month outlined widespread transgressions at Fiat Chrysler, accusing the auto maker of misleading and obstructing the government on its handling of recalls.

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