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Fiat Chrysler Recall 2015: Company Agrees to Pay Record $105 Million in Fines, Buyback 500,000 Vehicles and Provide Repair Incentives

( [email protected] ) Jul 29, 2015 01:43 PM EDT
Italian-American car maker Fiat Chrysler has agreed to pay $105 million in fines, buy back more than 500,000 vehicles and provide financial assistance for repair of one million Jeeps affected by defects and software faults that allow hackers to take control of the vehicles.
Fiat Chrysler has agreed to pay a record $105 million in fines imposed by the National Highway Traffic Safety Administration. Getty images

Italian-American car maker Fiat Chrysler has agreed to pay $105 million in fines, buy back more than 500,000 vehicles and provide financial assistance for repair of one million Jeeps affected by defects and software faults that allow hackers to take control of the vehicles.

The fine, which the FCA agreed to pay, includes $70 million cash payment to the National Highway Traffic Safety Administration (NHTSA) and $20 million on industry and consumer outreach activities and incentives to enhance certain recall and service campaign completion rates. An additional $15 million payment will be payable by FCA US if it fails to comply with certain terms of the consent order.

The amount is the largest imposed by the NHTSA against a car manufacturer, almost doubling the $70 million slapped on Japanese car maker Honda in January this year.

However, a separate report by BBC estimated that the deal with the NHTSA could cover up to more than 11 million defective cars involving 23 vehicle safety recalls. The FCA could buy-back up to 1.5 million vehicles under the deal, the report added.

Fiat Chrysler has also agreed to allow an independent monitor to audit the company's recall performance for three years and to undertake specific actions to improve its recall execution.   

"The consent order includes an admission by FCA US that in three specified campaigns it had failed to timely provide an effective remedy, and that it did not timely comply with various reporting requirements under the National Traffic and Motor Vehicle Safety Act of 1966," Fiat Chrysler said in a press statement.

NHTSA administrator Mark Rosekind said in a separate statement that Fiat Chrysler had admitted violations, particularly in "effective and timely recall remedies, notification to vehicle owners and dealers and notifications to NHTSA." He added, "Fiat Chrysler's pattern of poor performance put millions of its customers, and the driving public, at risk."

U.S. Transportation Secretary Anthony Foxx also issued a statement saying, "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. This civil penalty puts manufacturers on notice that the Department will act when they do not take their obligations to repair safety defects seriously."

Meanwhile, Fiat Chrysler clarified that the company has agreed to additional remedies for  three  recall campaigns covering approximately half a million vehicles, primarily 2008 through 2012 chassis cab, 2009 through  2011 light duty and  2008 through  2012  heavy  duty  Ram  Trucks. 

"In each of those campaigns, FCA US will offer to owners whose vehicles have not yet been remedied, as an alternative remedy, to repurchase those vehicles at a price equal to the original purchase price less a reasonable allowance for depreciation plus ten percent. However,  customers responding  to  the  recall  may  continue to keep  their  vehicles  and  have  them  repaired in accordance with the original recall. As of this date, repairs have been completed on well over 60% of the subject vehicles, leaving less than two hundred thousand eligible vehicles.  As is expressly provided for under the consent order, FCA intends that any vehicles repurchased will be remedied and resold," Fiat Chrysler said. 

 

Tags : Fiat Chrysler, record penalty, buyback, vehicles, cherokee jeep, National Highway Traffic Safety Administration, NHTSA, transportation, anthony fox, recall, software fault, hacker