NHTSA Hits Fiat Chrysler with Record $105 Million Fine for Dismal Recall Response
Image: Jeep

NHTSA Hits Fiat Chrysler with Record $105 Million Fine for Dismal Recall Response

July 27, 2015

Federal regulators have hit Fiat Chrysler with a hefty $105 million fine for delaying its response to deadly defects in millions of its cars and SUVs.

The action from the National Highway Traffic Safety Administration (NHTSA) comes less than a month following a public hearing in which agency officials outlined problems related to 23 recalls and 11 million vehicles. Agency officials charged that Fiat Chrysler failed to promptly notify vehicle owners of recalls, delayed repairs of defective models, and neglected to notify regulators in changes in recalls schedules.

Along with the fine, Fiat Chrysler will buy back millions of vehicles with defective suspensions and poorly located gas tanks. Owners of more than half a million vehicles with defective suspension parts will have the opportunity to sell their vehicles back to the company while owners of more than a million Jeeps that are prone to deadly fires can either trade in their vehicle for above its market value, or receive a financial incentive to get their SUV remedied.

Owners who are eligible for the program will be notified by Fiat Chrysler.

"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,"U.S. Department of Transportation Secretary Anthony Foxx said 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."

The agency itself has been criticized recent years for being too soft on automakers, especially when it came to its handling of deadly ignition defects in millions of General Motors (GM) cars. It's since been making an example of automakers by levying large record-setting fines.

Last year GM was fined $35 million for the faulty ignition switches that have been attributed to more than 120 deaths. The agency slapped Honda with a $70 million fine for failing to file early warning reports, including 1,700 death and injury claims.

The announcement is another blow for the automaker, which has had a pretty bad weekend. On Friday, the company ordered a recall of about 1.4 million vehicles after hackers took control of Jeep Cherokee with a Wired reporter at the wheel. The hackers had been working with Fiat Chrysler for the past nine months in order to patch the security holes they say have been there since 2013.

Chrysler previously urged owners to visit a dealership for updated software that would prevent hacking, but issued a full on recall following Wired's article.