Acknowledging violations of the Motor Vehicle Safety Act’s requirements to repair vehicles with safety defects, Fiat Chrysler Automobiles has agreed to a $105 million civil penalty, the largest ever imposed by the National Highway Traffic Safety Administration. The automaker agreed to an independent monitor, approved by the NHTSA and in place for three years, to assess, track and report the company’s recall performance. It will also be required to buy back some defective vehicles from owners.
The enforcement action comes after a July 2 public hearing at which NHTSA officials outlined problems with Fiat Chrysler’s execution of 23 vehicle safety recalls covering more than 11 million defective vehicles. Fiat Chrysler has since admitted to violating the Safety Act in three areas: effective and timely recall remedies, notification to vehicle owners and dealers and notifications to NHTSA.
In a consent order issued by the NHTSA, Fiat Chrysler agreed to take action to get defective vehicles off the roads or repaired. Owners of more than half a million vehicles with defective suspension parts that could cause the vehicle to lose control will have the opportunity to sell their vehicle back to the company. Owners of more than a million Jeeps that are prone to fires will have the chance to trade their vehicle in for above its market value, or will receive a financial incentive to get their vehicle remedied.
The consent order requires FCA to notify vehicle owners eligible for buybacks and other financial incentives that these new options are available.
The company must pay a $70 million cash penalty – equal to the record $70 million civil penalty the agency imposed on Honda in January. In addition, Fiat Chrysler must spend at least $20 million on meeting performance requirements included in the Consent Order. Another $15 million could come due if the independent monitor discovers additional violations.