U.S. to fine Fiat Chrysler $105M: source

The Guardian (Charlottetown) - - CLASSIFIEDS/BUSINESS -

The U.S. gov­ern­ment will hit Fiat Chrysler with a record $105 mil­lion fine next week for vi­o­lat­ing laws in a se­ries of ve­hi­cle safety re­calls, a per­son briefed on the mat­ter said.

The Na­tional High­way Traf­fic Safety Ad­min­is­tra­tion will re­veal the fine to­day. In ad­di­tion, Fiat Chrysler will be re­quired to buy back a group of re­called ve­hi­cles to get them off the roads, said the per­son, who didn't want to be iden­ti­fied be­cause no of­fi­cial an­nounce­ment has been made.

Fiat Chrysler, also known as FCA US LLC, also will agree to an in­de­pen­dent mon­i­tor to re­view re­calls.

The com­pany will make pay­ments to own­ers of 1.56 mil­lion re­called older-model Jeeps with gas tanks be­hind the rear axle to bring them to deal­ers to in­stall trailer hitches to help pro­tect the tanks. The tanks are vul­ner­a­ble and can leak ga­so­line if dam­aged in rear col­li­sions. The com­pany main­tains the Jeeps are as safe as com­pa­ra­ble ve­hi­cles built at the time, and it will not buy them back.

The agency's ac­tions come less than a month af­ter it held a rare public hear­ing to de­tail prob­lems with 23 Fiat Chrysler re­calls cov­er­ing more than 11 mil­lion cars and trucks. It's another sign that NHTSA is tak­ing a much tougher stance against au­tomak­ers that don't obey auto safety laws.

The fine beats the old record of $70 mil­lion as­sessed against Honda Mo­tor Co. for lapses in re­calls of air bags made by Takata Corp.

At the July 2 hear­ing, NHTSA de­tailed an alarm­ing litany of short­falls: fail­ure to no­tify cus­tomers of re­calls, de­lays in mak­ing and dis­tribut­ing re­pair parts, and in some cases fail­ing to come up with re­pairs that fix the prob­lems. Some of the re­calls date to 2013.

Af­ter the hear­ing, NHTSA Ad­min­is­tra­tor Mark Rosekind told re­porters that Fiat Chrysler would surely be pun­ished. “There's a pat­tern that's been go­ing on for some time,” he said.

Dur­ing the hear­ing, Fiat Chrysler did not dis­pute any of NHTSA's al­le­ga­tions. Scott Kun­sel­man, the com­pany's head of ve­hi­cle safety, said it is chang­ing the way it man­ages safety to fol­low the in­dus­try's best prac­tices. The safety sys­tem, he said, has been re­or­ga­nized with added per­son­nel. He now re­ports di­rectly to CEO Ser­gio Mar­chionne. Pre­vi­ously the per­son in his po­si­tion was three rungs down the or­ga­ni­za­tion chart from the chief ex­ec­u­tive, he said.

AP PHOTO

In this May 6, 2014, file photo, the Fiat Chrysler Au­to­mo­biles sign is seen af­ter be­ing un­veiled at Chrysler World Head­quar­ters in Auburn Hills, Mich. The U.S. gov­ern­ment will fine Fiat Chrysler a record $105 mil­lion for vi­o­lat­ing safety laws in a se­ries of re­calls, a per­son briefed on the mat­ter says.

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