he National Highway Traffic Safety Administration (NHTSA) and Fiat Chrysler Automobiles (FCA) have entered a consent agreement that will see FCA paying a record $105 million civil penalty after the Government investigated 23 different recalls into the company since 2009.
“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. This civil penalty puts manufacturers on notice that the department will act when they do not take their obligations to repair safety defects seriously,” said Transportation Secretary Anthony Foxx.
As part of the consent agreement, FCA admitted that it "failed to timely provide an effective remedy” in three recall campaigns, and that it failed to comply with “various reporting requirements” of U.S. laws governing recalls in a timely manner.
The $105 million civil penalty is made up of a $70 million payment to NHTSA, $20 million to revamping their efforts in terms of safety, and $15 million in additional penalties if FCA doesn't meet the terms. Along with the penalty, FCA will also have to buy back more than 500,000 vehicles - mostly Ram trucks - due to defective suspension parts that could cause drivers to lose control. Also, owners of Jeep Grand Cherokee and Liberty SUVs with rear-mounted gas tanks will be able to trade their vehicles for above-market value or take a take a “financial incentive” to have a trailer hitch installed.
The final part of the agreement will see FCA bring in a independent monitor that will monitor issues at the company for the next three years.
"We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate. Accordingly, FCA US has agreed to address certain industry objectives, such as identifying best practices for recall execution and researching obstacles that discourage consumers from responding to recall notices," FCA said in a statement.
Source: The Detroit News, Fiat Chrysler Automobiles
Press Release is on Page 2
FCA US Reaches Consensual Resolution of NHTSA Investigation on 23 Recall Campaigns
July 26, 2015 , London, UK - FCA US LLC (FCA US) today announced it has entered into a consent order with the National Highway Traffic Safety Administration (NHTSA) which resolves the issues raised by NHTSA with respect to FCA US’s execution of 23 recall campaigns in NHTSA’s Special Order issued to FCA US on May 22, 2015 and further addressed at a NHTSA public hearing held on July 2, 2015. The consent order includes an admission by FCA US that in three specified campaigns it had failed to timely provide an effective remedy, and that it did not timely comply with various reporting requirements under the National Traffic and Motor Vehicle Safety Act of 1966.
Pursuant to the consent order, FCA US has agreed to make a $70 million cash payment to NHTSA and to spend $20 million on industry and consumer outreach activities and incentives to enhance certain recall and service campaign completion rates. An additional $15 million payment will be payable by FCA US if it fails to comply with certain terms of the consent order.
FCA US has also agreed to undertake specific actions to improve its recall execution. The consent order will be supervised by an independent monitor and will remain in place for three years subject to NHTSA’s right to extend for an additional year in the event of FCA US' noncompliance with the consent order.
FCA US LLC Consent Order Response
July 26, 2015 , Auburn Hills, Mich. - FCA US LLC acknowledges the admissions in its Consent Order with the National Highway Traffic Safety Administration. We also accept 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. Accordingly, FCA US has agreed to address certain industry objectives, such as identifying best practices for recall execution and researching obstacles that discourage consumers from responding to recall notices.