Fiat Chrysler Cited By NHTSA, Agrees To Pay $105M Fine For Faulty Recall Procedures

U.S Transportation Secretary Anthony Foxx announced Sunday Fiat Chrysler Automobiles had agreed to submit to new federal oversight and pay a $105 million civil penalty after acknowledging it violated the Motor Vehicle Safety Act’s requirements for repairing vehicles with safety defects,a National Highway Traffic Safety Administration (NHTSA) press release said.

The civil penalty, which is the largest ever imposed by the NHTSA, comes after Fiat Chrysler admitted it violated the safety act in three areas, namely: effective and speedy recall procedures, notifying vehicle owners and dealers of safety concerns, and notifying the NHTSA. The fine is also the latest in a series of record-breaking fines following a $70 million fine Honda Motor Co. paid last year.

On July 2, NHTSA officials cited Fiat Chrysler for failures over the course of 23 vehicle safety recalls, which involved more than 11 million defective vehicles.

“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,” Foxx said in his statement. “This civil penalty puts manufacturers on notice that the department will act when they do not take their obligations to repair safety defects seriously.”

“Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk,” said NHTSA Administrator Mark Rosekind in the press release. “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 issued a consent order against the Michigan automaker under which Fiat Chrysler must agree to buy back, trade-in or pay for repairs for some of the more than 1 million Jeeps prone to fires, as well as more than 500,000 cars with defective suspensions, which can cause loss of control.

The order also requires Fiat to notify customers who are eligible for these incentives and to hire an independent monitor to audit the company’s recall process, the Wall Street Journal reported.

Fiat released a response to the NHTSA action Sunday, saying:

“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.”

Fiat Chrysler’s penalty includes $70 million in cash, with an additional $20 million to meet “performance requirements” to ensure drivers’ vehicles are repaired, CNNMoney reported. An additional $15 million could be issued if the independent monitor discovers more violations of the consent order.

View the NHTSA's Consent Order Against Fiat Chrysler below:

FCA Consent Order