Fiat Chrysler hit with record $105 million U.S. penalty over recalls

Editor's note: Some earlier versions of this story misidentified the vehicles that FCA agreed to buy back. Most of them are Ram pickups.WASHINGTON -- 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.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 automakersNHTSA 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 deal, Fiat Chrysler said it has agreed to buy back about 200,000 vehicles from a recall population of about 500,000 vehicles, most of them Ram pickups, with defective suspension parts that could cause drivers to lose control. The cost of the buybacks would be included in the $20 million worth of performance requirements, FCA said in a statement Monday. "While such amounts may exceed the $20 million, contrary to certain reports, FCA US does not expect that the net cost of providing these additional alternatives will be material to its financial position, liquidity or results of operations," the company said in the latest statement.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 above-market value, or opt to take a “financial incentive” to have a trailer hitch installed, the department said. “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.” FCA vehicle buybacks:Vehicle: 2009 model year Chrysler Aspen; 2009 model year Dodge Durango; 2009-2012 model years Dodge Ram 1500; 2009-2011 model years Dodge DakotaReason for recall (13V-038): To correct a defect that may cause the axle to lock. As a result, the driver may lose steering power and crash.When: Feb. 6, 2013Number: 278,229 vehiclesVehicle: 2008-2012 model years Dodge Ram 4500; 2008-2012 model years Dodge Ram 5500Reason for recall (13V-527): To fix a defect that may cause the driver to lose steering power and crash.When: Nov. 6, 2013Number: 36,710 vehiclesVehicle: 2008 model year Dodge Ram 1500; 2008-2012 model years Dodge Ram 2500; 2008-2012 model years Dodge Ram 3500Reason for recall (13V-529): To repair and replace steering linkages that may cause the driver to lose steering power and crash.When: Nov. 6, 2013Number: 265,057 vehiclesNote: The total number of vehicles to be bought back will be less than 200,000 units after 60 percent of the recalled vehicles have been repaired, FCA said in a statement. Under scrutiny

Fiat Chrysler hit with record $105 million U.S. penalty over recalls

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