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FCA to pay record $105M over recall failures

In a with the National Highway Traffic Safety Administration (NHTSA), Fiat Chrysler Automobiles has violations of the Motor Vehicle Safety Act’s requirements to repair vehicles with safety defects and will submit to federal oversight, buy back some defective vehicles from owners, and pay up to $105 million in penalties and remediation—the largest such settlement yet imposed by the Department’s National Highway Traffic Safety Administration.

The company must pay a $70-million cash penalty—equal to the record $70 million civil penalty the agency imposed on Honda in January. In addition, Fiat Chrysler must spend at least $20 million on meeting performance requirements included in the Consent Order. Another $15 million could come due if the independent monitor discovers additional violations of the Safety Act or the Consent Order.

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.

The enforcement action comes after a at which NHTSA officials outlined problems with Fiat Chrysler’s execution of 23 vehicle safety recalls covering more than 11 million defective vehicles. Fiat Chrysler has since admitted to violating the Safety Act in three areas: effective and timely recall remedies; notification to vehicle owners and dealers; and notifications to NHTSA.

In a consent order issued by NHTSA, Fiat Chrysler commits to take action to get defective vehicles off the roads or repaired. Owners of more than half a million vehicles with defective suspension parts that could cause the vehicle to lose control will have the opportunity to sell their vehicle back to Fiat Chrysler. Owners of more than a million Jeeps that are prone to deadly fires either will have the chance to trade their vehicle in for above its market value, or will receive a financial incentive to get their vehicle remedied.

The consent order requires FCA to notify vehicle owners eligible for buybacks and other financial incentives that these new options are available.

The automaker also agrees to unprecedented oversight for the next three years, which includes hiring an independent monitor approved by NHTSA to assess, track and report the company’s recall performance.

Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk. This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry, and gives Fiat Chrysler the opportunity to embrace a proactive safety culture.

—NHTSA Administrator Mark Rosekind

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