Fiat Chrysler's record $70 million (USD) fine
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28th July, 2015
U.S. Transportation Secretary Anthony Foxx recently announced that Fiat
Chrysler Automobiles has acknowledged violations of the Motor Vehicle Safety Act’s requirements to repair vehicles with
safety defects and will submit to rigorous federal oversight, buy back some defective vehicles from owners, and agreed to
a $105 million civil penalty, the largest ever imposed by the Department’s National Highway Traffic Safety
Administration.
The enforcement action comes after a 2nd July public hearing 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.
“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,” said Secretary Foxx at the time of
the announcement. “This civil penalty puts manufacturers on notice that the Department will act when they do not take
their obligations to repair safety defects seriously.”
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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 car maker 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,”
NHTSA Administrator Mark 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.”
The company must pay a $70 million cash penalty. 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.
E&OE.
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