NHTSA Hits Fiat Chrysler With $105M In Fines Over Auto Recall Failures

Fiat Chrysler Automobiles must pay a $105 million fine, the largest ever levied against an auto manufacturer, for failure to perform timely recalls and to notify regulators and consumers about defective vehicles. 

The U.S. National Highway Traffic Safety Administration (NHTSA) announced the civil penalties on July 26. In addition to the monetary fines, the company, more commonly known as Chrysler, must also submit to additional federal oversight and agree to buy back some defective vehicles from owners.

The fines and penalties were detailed in a consent order (PDF) dated July 24, which came after a July 2 public hearing covering problems the NHTSA found with 23 Chrysler recalls that affected more than 11 million vehicles.

“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 press release. “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 order requires Chrysler to pay a $70 million cash penalty, and to spend at least $20 million meeting performance requirements. In addition, the company may have to pay another $15 million if an independent monitor discovers more safety violations.

The company will also have to inform owners of more than half a million vehicles with potentially defective suspension parts, which could cause the driver to lose control, that they can sell their vehicle back to Fiat Chrysler. It must also give another million Jeep owners the opportunity to trade in their vehicles for above market value or give them a financial incentive to repair fuel tanks that could burst into flames.

Chrysler Recall Problems

The July 2nd hearing over the Chrysler problems involved a review of 23 different recalls where there was evidence that the company failed to adequately address safety problems.

Included in that list is a Jeep Grand Cherokee and Jeep Liberty rear fuel tank recall, which has been linked to at least 51 deaths due to the fuel tanks unprotected rear placement. The NHTSA reports at least 51 people have been killed in fiery crashes that included Chryslers 1993 to 1998 model years Jeep Grand Cherokee and 2002 to 2007 model years Jeep Liberty that have pose a fire hazard when rear-ended.

Despite the reported deaths associated with the rear end accidents causing the vehicles gas tank to crack and engulf the vehicle in flames, Chrysler denied NHTSA claims that a safety defect existed and refused to recall the vehicles. Even after Chrysler agreed to recall 1.5 million of the potentially affected 2.6 million vehicles, four months passed before the recall was actually initiated and announced. Many of these vehicles are still not repaired due to Chrysler’s inability to provide necessary repair parts.

An additional recall concern is the nearly 1.6 million Chrysler vehicles that were impacted by an ignition interlock safety hazard, similar to the General Motors recall that impacted 6 million vehicles. According to the NHTSA, certain Chrysler vehicles experienced defective ignition interlock systems that can get knocked out of the run position, putting the driver in an increased crash situation with no air bags.

Other recalls evaluated at the hearing included steering control failures, alternator failures, rear axle defects, and multiple air bag failure recalls all issued since 2013.

“Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk,” NHTSA Administrator Mark Rosekind said in the press release. “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.”