US safety reg­u­la­tors fine Fiat Chrysler record $105m

The Pak Banker - - BUSINESS -

The US auto safety watchdog, tough­en­ing its stance against man­u­fac­turer de­fects, an­nounced on Sun­day a record $105 mil­lion in fines against Fiat Chrysler Au­to­mo­biles NV over lapses in safety re­calls in­volv­ing mil­lions of ve­hi­cles.

The Ital­ian-US au­tomaker's con­sent agree­ment with the Na­tional High­way Traf­fic Safety Ad­min­is­tra­tion con­tains an un­prece­dented buy­back op­tion cov­er­ing hun­dreds of thou­sands of ve­hi­cles, in­clud­ing more than one mil­lion Jeep sport util­ity ve­hi­cles, whose own­ers can re­ceive a trade-in or a fi­nan­cial in­cen­tive to get their ve­hi­cles re­paired.

Fiat Chrysler also agreed to sub­mit to an in­de­pen­dent mon­i­tor's au­dit of its re­call per­for­mance over a three­year pe­riod. The $105 mil­lion in fines sets a new stan­dard for NHTSA's deal­ings with car man­u­fac­tur­ers, eclips­ing the pre­vi­ous record fine of $70 mil­lion im­posed against Honda Mo­tor Co in Jan­uary for fail­ing to re­port death, in­jury and other claims.

Last year, Gen­eral Mo­tors Co was or­dered to pay $35 mil­lion for a decade-long de­lay in re­port­ing faulty ig­ni­tion switches tied to more than 120 deaths. NHTSA has taken a more ag­gres­sive en­force­ment pos­ture un­der its new ad­min­is­tra­tor, Mark Rosekind, af­ter com­ing un­der fire from lead­ers of both par­ties in Congress for lapses in its han­dling of deadly de­fects, in­clud­ing Takata Corp air bag in­fla­tors and GM ig­ni­tion switches.

"Fiat Chrysler's pat­tern of poor per­for­mance put mil­lions of its cus­tomers and the driv­ing public at risk," 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." The re­called ve­hi­cles cov­ered by the agree­ment in­clude Dodge Ram, Dakota and Chrysler Aspen trucks from model years as early as 2008. More than half a mil­lion of the ve­hi­cles sub­ject to buy­backs have faulty sus­pen­sion parts that can cause a loss of con­trol.

Fiat Chrysler's US unit FCA, for­merly Chrysler Group, said it ac­cepted the con­se­quences of the agree­ment with "re­newed re­solve to im­prove our han­dling of re­calls and re-es­tab­lish the trust our cus­tomers place in us."

The fines in­clude a $70 mil­lion cash pay­ment, an agree­ment that Fiat Chrysler will spend $20 mil­lion im­prov­ing its re­call process and an ad­di­tional $15 mil­lion payable if the au­tomaker is found to have com­mit­ted any fur­ther vi­o­la­tions.

The two sides have been en­gaged in dis­cus­sions since NHTSA held a July 2 public hear­ing on Fiat Chrysler's re­call per­for­mance. At the pro­ceed­ings, NHTSA staff cat­a­loged al­leged fail­ures in 23 sep­a­rate re­calls in­clud­ing what they termed mis­lead­ing be­hav­ior, while an FCA ex­ec­u­tive pledged to work with the agency to im­prove the au­tomaker's re­call pro­grams.

Fiat Chrysler has had a con­tentious re­la­tion­ship with NHTSA for years, push­ing back on the agency's ef­forts to se­cure re­calls and threat­en­ing law­suits to avoid manda­tory ac­tion, ac­cord­ing to for­mer auto reg­u­la­tors. Fiat Chrysler Chief Ex­ec­u­tive Ser­gio Mar­chionne told re­porters this month that the com­pany needs to change the way it deals with reg­u­la­tors go­ing for­ward. "We are in­tent on re­build­ing our re­la­tion­ship with NHTSA," the au­tomaker said on Sun­day.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.