Federal auto safety regulators are set to hit Fiat Chrysler Automobiles with a record fine, as large as $105 million, for mishandling recalls, a government source with knowledge of the issue said Sunday.
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Fiat Chrysler has to pay $70 million and must spend at least $20 million to meet performance requirements detailed in the agreement.
The NHTSA also forged a buy-back agreement with Fiat Chrysler, putting the automaker in a committed position to pay for as many as 1.5 million faulty vehicles that it has sold in the last three years.
“Consumers are at the heart of this enforcement action”, said U.S. Transportation Secretary Anthony Foxx in a prepared statement. The record civil fine, he said, puts automakers on notice that NHTSA will take action when recall laws aren’t followed.
Fiat Chrysler chief executive Sergio Marchionne told reporters this month that the company needed to change the way it deals with regulators going forward.
The NHTSA detailed many of Fiat Chrysler’s past failings during a July 2 hearing, including failing to notify customers of recalls, putting off making and distributing repair parts, and, in some cases, failing to do repairs needed to fix problems. The company was found to have failed to complete 23 safety recalls covering more than 11 million vehicles.
Over the weekend, NHTSA also released details of two new FCA recalls, totalling more than 1.7 million vehicles, involving Ram pickups from model years 2012-2014 for inadvertent deployment of air bags. The NHTSA claims that Fiat Chrysler failed to offer a reasonable solution to a problem that plagued its top-selling vehicle, the Dodge Ram truck. The company maintains the Jeeps are as safe as comparable vehicles built at the time, and it will not buy them back. At issue were gas tanks that can leak after a severe rear impact. And owners of more than one million Jeeps that are prone to deadly fires will have the chance to trade their vehicle in for above market value, or receive a financial incentive to get their vehicle fixed.
Buybacks of just a portion of qualifying vehicles could cost Fiat Chrysler billions.
Dodge Ram models included in the buyback are from the 1500 series, made between 2009 and 2012, the 2008 Ram Mega Cab 4×4, and the 4×4 models in series 2500, 3500, 4500 and 5500 made from 2008 to 2012.
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The NHTSA says that the company also provided the agency with incorrect and incomplete information which is potentially a violation of the Motor Vehicle Safety Act. The company will offer to buy back the trucks that have been identified with still outstanding recalls.
