UPDATED — Fiat Chrysler Automobiles agreed to pay a $70 million fine, accept three years of additional oversight by an independent monitor and buy back thousands of vehicles as part of a consent agreement to settle a U.S. government probe into 23 recalls since 2009.
Part of the penalty is related to issues with rear-mounted plastic fuel tanks on Jeep Liberty and Grand Cherokee SUVs, which have been linked to several deadly fires.
The $70 million cash fine is part of a potential $105 million civil penalty, the largest ever imposed by the National Highway Traffic Safety Administration, and part of a sweeping settlement to spur an overhaul of the automaker's safety and recall practices, the U.S. Department of Transportation announced Sunday evening.
Fiat Chrysler must spend another $20 million to meet performance requirements laid out by the consent agreement. The automaker may have to pay another $15 million if the monitor discovers additional violations of U.S. auto safety laws, or if Fiat Chrysler violates terms set by the consent order, the department said.
Fiat Chrysler, as part of the consent agreement, admitted that it “failed to timely provide an effective remedy” in three recall campaigns, and that it failed to comply with “various reporting requirements” of U.S. laws governing recalls in a timely manner.
In a separate statement, the company said it accepted “the resulting consequences with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us.”
The company said it was also “intent on rebuilding our relationship with NHTSA” and embracing the role of a public safety advocate.
Message to other automakers
NHTSA and other government officials appeared pleased with the broad agreement and the message it will send to other automakers.
“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,” 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 consent agreement was signed on Friday. News reports of the deal began to appear late Saturday.
The deal resolves the government's inquiry into 23 Fiat Chrysler recalls that were the subject of a rare public hearing on July 2. The independent monitor could identity additional issues that require attention, according to a NHTSA official.
That monitor, to be approved by NHTSA, will “assess, track and report the company's recall performance” for the next three years, part of “unprecedented” additional oversight by the agency agreed to by Fiat Chrysler, the Transportation Department said.
As part of the $20 million outreach effort, owners of more than 1 million Jeep Liberty and Grand Cherokee SUVs with rear-mounted fuel tanks linked to several deadly fires can either trade in their vehicles for $1,000 above market value, or opt to accept a $100 gift card if they come in to have a trailer hitch installed.
“Fiat Chrysler's pattern of poor performance put millions of its customers, and the driving public, at risk,” NHTSA Administrator Mark Rosekind said in a statement. “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.”
This story is part of a longer report by Automotive News, a sister newspaper to Plastics News. For the full report, see: “Fiat Chrysler hit with record $105 million U.S. penalty over recalls.”
