Fiat Chrysler Record Civil Penalty: $105 Million Settlement!
Fiat Chrysler Record Civil Penalty: Historic $105 Million Settlement!
Fiat Chrysler Automobiles (FCA) admits failures and agrees to auto buy backs, three years of close federal oversight and a record civil penalty. The U.S. Department of Transportation’s enforcement action initiated after NHTSA officials outlined complications with the auto maker’s 23 safety recalls, bringing into review more than 11 million defective U.S. vehicles since 2009. According to the NHTSA, “Fiat Chrysler admitted to violating the Safety Act in three areas: effective and timely recall remedies, notification to vehicle owners and dealers and notifications to the NHTSA.”
The Fiat Chrysler record civil penalty includes a $70 million cash fine and at least $20 million spent on meeting recall performance requirements. Fiat Chrysler will pay an additional $15 million if a hired independent monitor discovers violations of the Motor Vehicle Safety Act of 1966 or the National Highway Traffic Administration (NHTSA)’s Consent Order. Scott Kunselman, senior vice president of vehicle safety and regulatory affairs for Fiat Chrysler, agreed to a $105 million civil penalty, the largest imposed by the NHTSA, ever.
Despite the hearing being viewed as a “more aggressive approach by the agency,” NHTSA officials confidently believe this will improve overall recall performance throughout the auto industry, ensuring compliance and safety.
Fiat Chrysler Record Civil Penalty: What is the Automaker Accountable For?
According to the Consent Order, the NHTSA requires that Fiat Chrysler get defective vehicles off the road. Fiat Chrysler is therefore recalling 667,000 U.S. Ram pickup trucks from 2013-2015 model years. Shutting the door “too hard” on these defective vehicles could set off the airbag meant to provide head protection in a side-impact auto accident. Chrysler stated that shutting the door with “excessive force” could set off the airbag, or “air curtain,” that is mounted in the ceiling above the side windows.
FCA will also buy back from customers more than 500,000 Ram pickup trucks. The Ram trucks have defective steering and suspension parts that cause drivers to lose control. As previous repairs have been unsuccessful, Fiat Chrysler agreed to buy back the defective Ram trucks to get them off the road quicker.
In addition to buybacks, Fiat Chrysler will offer trade-in and financial incentives to owners of more than 1 million 1993-1998 Jeep Grand Cherokee and 2002-2007 Jeep Liberty with vulnerable rear-mounted gas tanks. Since the rear-mounted gas tanks are located behind the rear axle, the tank is at a higher risk of rupturing and spilling gasoline in an auto accident. As a result, the vehicle can set on fire upon impact. At least 75 people have died in crash-related fires as a result of this defect.
What Does Fiat Chrysler Agree to Do?
In addition to the Fiat Chrysler record civil penalty, the NHTSA Consent Order requires Fiat Chrysler to notify all vehicle owners eligible for buy backs, trade-ins and financial incentives that these new options are available to them.
FCA also agrees to “unprecedented oversight for the next three years,” which includes hiring an independent monitor, approved by the NHTSA, as part of its performance requirement efforts. The independent monitor will assess, track and report the company’s recall performances.
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- Associated Press. “Chrysler to buy back Ram pickups.” Los Angeles Times. July 26, 2015. Print.
- Christopher Jensen. “Pickup Trucks To Be Recalled As Door Slams Set Off Airbags.” The New York Times. July 27, 2015. Print.
- “S. DOT Announces Fiat Chrysler Enforcement Action.” National Highway Traffic Administration. July 26, 2015. Press Release.
For Further Reading:
- Ryan Beene. “Fiat Chrysler under tighter scrutiny after record NHTSA penalty.” Automotive News.