31 Jul NHTSA Imposes Groundbreaking $105M Penalty against Fiat Chrysler
This past week, regulators at the National Highway Traffic Safety Administration (NHTSA) announced that they were imposing a $105 million fine on Fiat Chrysler for its failure to notify them, the public and dealers about a potentially deadly vehicle equipment defect.
This fine, which is the largest fine that the NHTSA has ever imposed, is part of a greater enforcement action that includes “rigorous federal oversight” and the “buy back [of] some defective vehicles from owners.”
Commenting on these penalties, U.S. Transportation Secretary Anthony Foxx has stated:
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.
What Led to the Enforcement Action against Fiat Chrysler
According to the NHTSA, Fiat Chrysler failed to warn regulators and the public about defective suspension parts that could cause motorists to lose control of vehicles or, for about 1 million Jeep owners, could cause vehicle fires. When Fiat Chrysler became aware of these problems, they admittedly were not forthcoming with the public and officials and have agreed that they did not conduct a timely or effective recall.
In fact, in a public hearing held on July 2nd, NHTSA officials pointed out problems with the way that the company handled more than 20 safety recalls affecting more than 11 million vehicles.
Explaining the impacts of Fiat Chrysler’s negligence, NHTSA Administrator Mark Rosekind has stated:
Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk… 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.
The Next Steps for Fiat Chrysler…
At this point, Fiat Chrysler has agreed to “unprecedented oversight for the next three years, which includes hiring an independent monitor approved by NHTSA to assess, track and report the company’s recall performance.”
Additionally Fiat Chrysler will have to:
- Notify more than 1.5 million vehicle owners that they are eligible for buybacks
- Spend at least $20 million meeting all federal requirements.
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