Chrysler fined $105 million over recalls
Fiat Chrysler Automobiles (FCAU) has agreed to pay a record $105 million fine and buy back defective vehicles in a sweeping agreement with the federal government that will also require an independent monitor for future recalls.
The auto maker could also end up buying back more than half a million vehicles with defective suspension parts if owners opt to sell their vehicles back to Chrysler.
Under the terms of an agreement with the Department of Transportation, Chrysler acknowledged violations of the Motor Vehicle Safety Act’s requirements to repair vehicles with safety defects, after a hearing earlier in the month outlined problems with the auto maker’s execution of 23 recalls covering more than 11 million defective vehicles.
Chrysler has since admitted it violated the Safety Act in three areas: effective and timely recall remedies, notification to vehicle owners and dealers, and notifications to the National Highway Traffic Safety Administration (NHTSA).
Chrysler is required to pay a $70 million cash penalty, which is equal to the record penalty that was imposed on Honda in January. Chrysler must also spend at least $20 million on meeting performance requirements laid out by the federal government and another $15 million could be due if an independent monitor discovers additional violations of the Safety Act. The company also agreed to oversight for the next three years, which includes hiring an independent monitor approved by the NHTSA to assess the company’s recall performance.
“There’s nothing more important to all of us here at [Fiat Chrysler] than the safety of our customers and their passengers,” the company said in a statement. “That’s why we’re taking steps to improve not only the way we communicate product recalls, but the number of vehicles customers are bringing to dealerships to have those repairs made.”
It has been a bad month of publicity for Chrysler, which sold 1.08 million vehicles in the first six months of 2015, a 6% increase from the prior-year period. Last week, Chrysler had to recall about 1.4 million U.S. vehicles after a Wired story highlighted a security flaw with some of the company’s touchscreen systems that made it possible to remotely manipulate some of the vehicle’s systems through a cyber hack.