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    William Maley

    FCA Gets Hit With A $105 Million Fine Over Jeep/Ram Recalls

      FCA Gets Handed A $105 Million Fine from NHTSA for Various Safety Issues


    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.


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    Here's a little more about the situation that I discovered.

     

    "How do I find out if my pickup is affected?

    Find your pickup's vehicle identification number, which is usually etched in the windshield's lower driver's side corner, and enter it onto NHTSA's VIN search tool. If your vehicle has an open (that is, unfixed) recall under campaign numbers 13V-038, 13V-252, 13V-527 or 13V-529, then it's eligible for these offers. We strongly suggest you get the recall taken care of as soon as possible.

    You can usually find the build date by month on a sticker around the driver's doorjamb. FCA has 60 days to notify owners of the buyback offer, NHTSA says.

    Which pickups are in the buyback program?

    Here are the specific vehicles affected and build dates, broken down by weight class and why they were recalled in the first place.

    • 2009-2011 Dodge Dakota pickups built from Feb. 27, 2007, through June 30, 2009, and Dec. 1, 2009, through Sept. 30, 2011. These were recalled in 2013 for rear suspension problems.
    • 2009-2012 Ram 1500 pickup trucks built from Feb. 27, 2008, through June 30, 2009, and Dec. 1, 2009, through Oct. 20, 2011. These were recalled in 2013 for rear suspension problems.
    • 2008 Dodge Ram 1500 Mega Cab pickups with four-wheel drive, recalled in 2013 for problems with the steering system.
    • 2008-2012 Ram 2500 and 3500 pickups with four-wheel drive, recalled in 2013 for problems with the steering system.
    • 2008-2012 Ram 3500 chassis-cab pickups with rear-wheel drive, recalled in 2013 for problems with the steering system.
    • 2008-2012 Ram 4500 and 5500 commercial pickups built from Feb. 20, 2007, through Dec. 22, 2012. These were recalled in 2013 for problems with the steering system.

    How much will I get for my pickup?

    According to NHTSA, the buyback program requires FCA to give a refund of the purchase price minus depreciation plus an additional 10 percent.

    What if I modified my vehicle? Will the modifications be refunded in the buyback program?

    Not unless they were on the car when it was new. Any modifications made after the vehicle's retail sale won't be calculated into the purchase price, according to NHTSA.

    Will these repurchased vehicles end up in circulation?

    Some will. FCA "may remedy and resell any vehicle repurchased" under the buyback program, according to NHTSA's consent order. The automaker intends to do that for the vehicles it will buy back, said FCA spokesman Eric Mayne. But it won't do so for the cars that got the trade-in bonus because "they are, many of them, over 20 years old," he said. "It doesn't make economic sense to do that."

    Can FCA dealers still sell unfixed vehicles?

    That's unclear, as it's "subject to regulation," Mayne said. But NHTSA's order requires FCA to "develop and implement a process to deter dealer sales of unremedied vehicles subject to recall." That process must include dealer training and financial penalties from FCA."

    http://news.pickuptrucks.com/2015/07/youve-got-a-recalled-ram-now-what.html

     

    I highlighted the red line because we talked about that part inparticular at one point and I know I was curious about it.

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    So, they lowball the trade in value. I'm not saying it's the right thing to do, but there it is. What's even worse (better?) is that they can actually use NHTSA's own ruling to justify doing so, since a negative ruling by a government agency would inevitably drive down consumer confidence and thus retained value.

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    Well wrapped up the Dart experience this week.

     

    Not the worst car but far from class leading.

    The good.

     

    Decent power

     

    Handling is good with out a sport package

     

    Large trunk

     

    Good brakes

     

    The Bad

     

    Average to below average interior

     

    Engine noise

     

    Missing small details in the car like a simple Compass that would have helped in Orlando

     

    Gas MPG was nothing to write home about.

     

    The Dart while it is a major step up from a Caliber or Neon it is still not a competitive car in the class unless it is majorly discounted. Even now the old Cruze is a much better value.

     

    As for the Patriot and Compass both were train wrecks from the start. The Germans and the investment company never understood Jeep and really made some major mistakes here. The ironic thing about the compass was it had non too unless you upgraded LOL I just found that ironic.

    The new Renegade may or may not work. It mechanically appears to be ok but will the styling catch on. It will rely on people who liked the Scion, Element and the Soul. Generally older people appear to be the ones who take up for it.

     

    To be the styling looks like a car Springfield at a light next to Homer Simpson. The tail lamps look like a dead cartoon character. they really need to remove the X from the lamps.

     

    I wish Fiat would just take the money from Jeep and replace the Dart with a product of their own making. Also upgrade the 200 as it is a decent start but it too needs a little more to make it a segment leader. Both of these cars are key as they should not be discounting the Dart as they are or offering the 200 at $199 for a lease.

     

    Now for the LX RWD they really need to enter into a program to get these cars lighter. Not just to make the better but to lead into the future and protect their sales. Adding Big HP was good for marketing but added nothing to the future of these models. They really need an Omega like platform here now not in 3 years.

     

    As for the 300 they are trying to main stream it much. They are wanting to take it and compete with the Taurus and Impala. They would be best off shooting for the middle ground with a new car. They had a good start with the present car but it has withered do to the lack of investment before Fiat arrived and all they did was refresh it and discount it.

     

    Other than the warranty issues my in-laws car as a bargain in the low $30K range but this is a car that should never sell this cheap. These are profits left on the table.

     

    I truly thing Chrysler can make it but I do feel Sergio could really lead them to their demise. Making Alfa and Maserati priorities over Chrysler is one of the greatest automotive miscalculations we have ever seen.

     

    I do not want to see them fail and have no ill will here. While they are no longer American owned they are still American based and we can not afford to lose anymore products like this. I understand why some left like Mercury ands such but to lose Chrysler as a whole would be devastating.

    .

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    The Patriot and Compass were not disasters of Sergio's making, as you have noted. They will continue to be de-emphasized as the Renegade and Cherokee find traction in the market. The Cherokee has already been a great success.

    The Renegade is a bit whimsical for a Jeep. But having seen a few around these parts I'll say that it looks much more rugged than a Trax or an Encore. I suspect it will be fine.

    The Dart was a nice first crack, but the 200 is showing the way forward. I expect a heavy revision in the not-so-distant future. Certainly not a Fiat version though-they need mainstream sales, and they're not going to do that with Fiat in NA.

    The Fiata will be a fun niche product.

    It makes little sense to say the LX cars are too heavy and then dismiss Sergio's emphasis on Alfa Romeo. The new Alfa will provide the new RWD platform-it has to. If it doesn't then yes, they deserve to fail. In the meantime, the LX cars continue to sell.

    Mopar is a mixed bag. But I'm a bit more optimistic about the whole thing.

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    I really like the new little Renegade. I think it'll do just fine. I think the only thing that will hold it back is the relatively low mpg for the class. It is only rated at 31mpg highway where as the competition is;(all FWD numbers) CX-3:35mpg  HR-V:35mpg  Trax:34mpg. I realize it is probably 100% because of its funky aero, but that's Jeep.

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    Never said Sergio was responsible for the Compass or Patriot. Just said they were junk.

    Dart was better but they needed better. The car like the present Malibu would have been a good car 5 years ago but this segment is much more tougher than that and too little came to market. Chrysler is in need of more high MPG models and they needed to have them yesterday.

    Right now they Fiat is the best they have for a small car and it has under performed to their expectations.

     

    The new Alfa program should have been at Chrysler first where they would sell 3 times as many vs. dragging it out over years to replace the LX.

    The LX sells because they have them so discounted for the most part as most are V6 base cars people are buying for $30K or even less in come cases. Good value for the buyer but not much meat on the bone for Chrysler. They need more money and more investment and right now was Ford and GM are plowing billions into new product Chrysler is falling farther and farther behind.

     

    GM sold a hell of a lot of cars on their way to chapter 11 too. They made money but not enough to support the corporation.

     

    Most financial people and even I agree this is a mixed bag here. The fact is the path to salvation for FCM is through Chrysler not Alfa. Sergio will do more damage till 2018 unless they let him go. Mussolini won a lot of battles too but the Allies in the end won the ones that counted. That is much how this is going.

     

    You can starve to death even if you eat daily. The key is the amounts. FCA is just not making the volume levels they need and the income they need to sustain growths and future profits.

    I believe they can be saved but first Sergio needs removed. If not the odds of turning things around may get bleaker by 2018. This is bases on his goals that will not be met.

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    Lack of cash for product development is THE issue for Sergio, fer sure. He's shopping around for a suitor for a reason.

    But again: looking at this lineup RIGHT NOW, I fail to see any gaping holes beyond the lack of presence in the small-car segment. It's not realistic to think the 200 will displace the Camry. Jeep is doing fine in the SUV segment. Ram is maxed out on production capacity.

    The only risk I see is the development of the Giulia platform becoming unduly costly. And even then I look at what GM is about to do with the Alpha and consider the risk to be worth the reward. Better to have a new Challenger on an upmarket platform than an Alfa on a downmarket one.

    In fact, the fact that the LX is still around is kinda the original proof of concept. Granted, it has evolved beyond recognition from the old E-Class frame from whence it sprung. But the Benz engineering that went into it originally has surely helped it remain viable as a mainstream platform even a decade or two later. By way of contrast, what would happen if you dropped 700hp in a W-body? :o

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    Never said Sergio was responsible for the Compass or Patriot. Just said they were junk.

    Dart was better but they needed better. The car like the present Malibu would have been a good car 5 years ago but this segment is much more tougher than that and too little came to market. Chrysler is in need of more high MPG models and they needed to have them yesterday.

    Right now they Fiat is the best they have for a small car and it has under performed to their expectations.

     

    The new Alfa program should have been at Chrysler first where they would sell 3 times as many vs. dragging it out over years to replace the LX.

    The LX sells because they have them so discounted for the most part as most are V6 base cars people are buying for $30K or even less in come cases. Good value for the buyer but not much meat on the bone for Chrysler. They need more money and more investment and right now was Ford and GM are plowing billions into new product Chrysler is falling farther and farther behind.

     

    GM sold a hell of a lot of cars on their way to chapter 11 too. They made money but not enough to support the corporation.

     

    Most financial people and even I agree this is a mixed bag here. The fact is the path to salvation for FCM is through Chrysler not Alfa. Sergio will do more damage till 2018 unless they let him go. Mussolini won a lot of battles too but the Allies in the end won the ones that counted. That is much how this is going.

     

    You can starve to death even if you eat daily. The key is the amounts. FCA is just not making the volume levels they need and the income they need to sustain growths and future profits.

    I believe they can be saved but first Sergio needs removed. If not the odds of turning things around may get bleaker by 2018. This is bases on his goals that will not be met.

    As a previous owner of an 07 Patriot I bought brand new and put 130k trouble free miles on (on and off-road), you are full of $h!. 

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    The vehicle is entry level at best. While junk may be a little harsh it just never lived up to the level it could have been. The Daimler, Chrysler  Mitsubishi GS never really was as good as it could have been mostly due to the lack of money put into development. The Compass was a total mess and they at least fixed the looks so it really looked like a Jeep product.

     

    To me it is kind of like the Chevy Trax is today Not a bad car but not up to the level of the others in segment right now.

    Sorry you do not measure the value of a product with 130,000 miles. I can show you some really crap cars with 250,000 miles and mean nothing. What we are talking here is potential and leadership in segment. The GS platforms never were leaders in any form.

     

    Having owned one you should be the first to realize that if Chrysler had more money they really could have had a segment leader with more investment. GM vehicles of the same era suffered the same things.

     

    The Germans really never understood Jeep and it showed. At least Fiat appears to understand to a point and also have gotten lucky on some of the styling changes. They were major risk that have paid off. The traditional buyer really do not care for them but they have found new customers who are just as important as long as you can get them to return.

     

    If it were not for the basement price it would never have sold as well as it has. It also because of this has left a ton of money on the table Chrysler could have reaped. Volume is great but you also need to balance it out with profits.

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