Fiat Chrysler Automobiles (FCA) has accepted the largest civil penalty ever imposed by the US National Highway Traffic Safety Administration (NHTSA) and will offer to buy back hundreds of thousands of defective vehicles from owners after acknowledging a substandard execution of vehicle safety recalls.
FCA agreed to a US$105 million ($144 million) penalty, a buy-back program for affected Jeep and Ram vehicles, and an oversight arrangement for the next three years that includes hiring an independent monitor approved by the NHTSA to assess, track and report the company’s recall performance.
The consent order includes an admission by FCA that in three specified campaigns it 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 action follows a public hearing on July 2 at which the NHTSA outlined problems with FCA’s execution of vehicle safety recalls affecting more than 11 million defective vehicles in the US.
FCA has agreed to additional remedies for three recall campaigns covering approximately half a million 2008-2012 Ram trucks with defective suspension parts that could cause the vehicle to lose control. In each of those campaigns, FCA will offer to owners whose vehicles have not yet been remedied to buy back those vehicles at 10 per cent above their market value. Owners may also choose to keep their vehicles and have them repaired.
In a statement, FCA said well over 60 per cent of the subject Ram trucks have been repaired, leaving fewer than 200,000 eligible vehicles. FCA intends to repair and resell any repurchased vehicles.
FCA is offering incentives to encourage owners of vehicles affected by the structural reinforcement campaign to participate in the campaign.
For owners of 1993-1998 Jeep Grand Cherokee models, FCA is also offering to increase the trade-in allowance to be applied to the purchase of another FCA product, service or parts for those owners who would prefer this alternative over the installation of a trailer hitch.
“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,” NHTSA secretary Anthony Foxx said.
“This civil penalty puts manufacturers on notice that the department will act when they do not take their obligations to repair safety defects seriously.”
NHTSA administrator Mark Rosekind echoed the secretary’s statement.
“Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk,” Rosekind said.
“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.”