Fiat Chrysler to Pay Record-Setting $105 Million Fine

gavelLast week Chrysler announced a recall because hackers can take control of vehicles by wirelessly accessing stereo systems. Now, just a few days later, U.S. Transportation Secretary Anthony Foxx announced that Fiat Chrysler will pay $105 million, the highest penalty the National Highway Traffic Safety Administration (NHTSA) has ever imposed, for violating federal requirements for repairing safety defects. The NHTSA investigated 23 vehicle safety recalls covering more than 11 million defective vehicles and found that Chrysler came up short 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, in a 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.” In addition to paying the hefty fine, Chrysler has also agreed to buy back more than a half a million defective vehicles and comply with unprecedented federal oversight, which includes hiring an independent monitor to track the company’s recall performance over the next three years.

The fine includes a $70 million cash penalty equal to the record $70 million civil penalty that Honda was hit with in January for defective air bags. On top of that, Chrysler must spend at least $20 million on meeting performance requirements outlined by the NHTSA and possibly another $15 million, if the independent monitor discovers additional violations.

“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.”

Source: Forbes | NHTSA | Photo by PRSA-NY

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