US auto safety regulators fine Fiat Chrysler record $105 million

27 Jul 2015 | Author: | No comments yet »

Fiat Chrysler must offer to buy back 500,000 Ram pickups; biggest such action in US history.

DETROIT – Fiat Chrysler will buy back from customers more than 500,000 Ram pickup trucks in the biggest such action in U.S. history as part of a costly deal with U.S. safety regulators to settle legal problems in about two-dozen recalls.Fiat Chrysler agreed to pay largest fine ever from NHTSA, submit to three years of oversight of recalls, buy back half-a-million vehicles and offer financial incentives for repair of 1 million Jeeps Fiat Chrysler Automobiles will pay up to $105 million in fines and penalties to the National Highway Traffic Safety Administration, submit to oversight and buy back nearly half-a-million of the vehicles it has recalled, penalties issued Sunday for the auto company’s lax attitude toward addressing safety issues in millions of its vehicles. The trucks, which are the company’s top-selling vehicle, have defective steering parts that can cause drivers to lose control, and some previous repairs have been unsuccessful. NHTSA said it was concerned about slow completion rates on recalls the automaker announced, slow or inadequate notifications to consumers, faulty approaches to fixing the safety issues and improper actions by dealers.

In addition, owners of more than a million older Jeeps with vulnerable rear-mounted gas tanks will be able to trade them in or be paid by Chrysler to have the vehicles repaired. The penalty, the largest ever issued by the regulatory agency, reflects a tougher approach to automotive regulation in the wake of high-profile recalls last year by General Motors and airbag supplier Takata. The settlement is the latest sign that auto safety regulators are taking a more aggressive approach toward companies that fail to disclose defects or don’t properly conduct a recall. It comes less than a month after NHTSA held a hearing to present evidence of Fiat Chrysler low recall completion rates for more than two dozen recall campaigns covering 11 million vehicles. “Today’s action holds Fiat Chrysler accountable for its past failures, pushes them to get unsafe vehicles repaired or off the roads and takes concrete steps to keep Americans safer going forward,” U.S.

Transportation Secretary Anthony Foxx in a statement. “This civil penalty puts manufacturers on notice that the Department will act when they do not take their obligations to repair safety defects seriously.” The order requires Fiat Chrysler to pay a $70 million cash penalty and spend at least $20 million on meeting performance requirements included in the consent order. In a separate statement, Fiat Chrysler 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.” NHTSA has been involved in vehicle buybacks in the past, but never one of this size. At the July 2 hearing, NHTSA detailed a 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. The order comes just two days after Fiat Chrysler was forced to issue a recall notice for 1.4 million cars and trucks so it can beef up the software in the vehicles and protect them from cyber-security attacks.

According to Kelly Blue Book, a 2010 Dodge Ram 1500 — one of the smaller, less-expensive trucks involved in the recalls — could fetch $20,000 in a dealer trade-in, assuming the truck has 60,000 miles on it and is in “good” condition. That recall was prompted from a story published last Tuesday by Wired magazine that showed how two security experts were able to remotely hack into and take control of a Jeep Cherokee.

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