As part of the record-setting $105 million settlement with U.S. regulators over recall lapses, Fiat Chrysler Automobiles (FCA) NV says it will buy back nearly 200,000 trucks and SUVs for steering and axle problems. Owners of affected vehicles have complained of monthslong waiting lists because of parts supply shortages.
FCA “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 U.S.’s execution of 23 recall campaigns,” the company said in a statement Sunday announcing the agreement.
In additional to a $70 million punitive fine, the company agreed to spend $20 million to improve safety efforts and $15 million more if the company doesn’t comply with NHTSA demands in a proper fashion. The company has also agreed to use an independent safety monitor for at least three years.
Some of the $20 million will be spent buying back a number of trucks and SUVs, offering $100 gift cards to qualified Jeep owners for getting their vehicles fixed, and extending a $1,000 bonuses on trade-ins of certain Jeep Grand Cherokees.
Originally, there were about 580,000 affected vehicles that FCA recalled to fix these problems. About 387,000 of them have been fixed, according to the company, leaving 193,000 that are eligible for the buyback program.
The NHTSA gave the company a “reasonable allowance for depreciation” on the price they’re willing to pay. A certain number of following vehicles are eligible for the buyback program:
* 2008 to 2012 model-year Ram pickup trucks that have either steering problems or axle problems, or both.
* 2008 to 2012 Ram 4500 and 5500 super duty pickup trucks, for steering problems;
* 2009 to 2011 Dodge Dakota trucks, for axle problems;
* 2009 Dodge Durango and Chrysler Aspen SUVs, for an axle problem.
Fiat Chrysler will also offer $1,000 on trade-ins of 1993 to 1998 model-year Jeep Grand Cherokees. Owners can also apply the money to service on other FCA vehicles they might own. FCA says more than 1 million Jeeps need to be fixed for a fire risk linked to the position of the vehicle’s gas tank. NHTSA and Fiat Chrysler have clashed for years over the gas-tank issue affecting 2.7 million Jeeps, but last year came to an agreement on how to protect the tanks: by installing a trailer hitch.
More than 70 people have been killed in fires involving rear-end collisions in these older Jeeps. FCA is facing dozens of lawsuits over the fires. In April, a Georgia jury awarded $150 million to the family of Remington Walden, 4, who burned to death in a rear-ended 1999 Jeep Grand Cherokee. FCA is fighting the verdict and says it’s willing to pay $4 million for wrongful death and $1 million for pain and suffering, according to the Atlanta-based Daily Report.
Auto safety experts have criticized how FCA has handled its Jeep recall. Fiat Chrysler has been installing trailer hitches to the backs of the Jeeps, which the company and NHTSA have agreed would guard the gas tank from being punctured in low-speed impacts. But some auto safety advocates have questioned the remedy.
FCA owns several automotive brands, including Fiat, Chrysler, Jeep, Dodge and Ram. FCA was formed early last year after Italian automaker Fiat SpA CEO Sergio Marchionne rescued Chrysler in 2009 in a deal orchestrated by the Canadian and U.S. governments. Last year the company completed its acquisition of union-held portion of Chrysler, which allowed a merger forming a new Netherlands-registered company. The U.S. taxpayer spent $1.29 billion bailing out Chrysler.
Correction: The original version of this story said FCA would buy back nearly 579,000 affected vehicles. In fact, the company says that all but 193,000 of the affected vehicles have been fixed. It’s the vehicles on the list above that have not been fixed that are eligible for the buyback offer. Check FCA's wesbite using your Vehicle Information Number here.