Fiat Chrysler Fined $105 Million over Recalls

Fiat Chrysler Fined $105 Million over Recalls – On July 26, 2015 NHTSA released a Consent Order in regards to FCA recall violations. FCA agreed to pay a record $105 million fine for misleading and obstructing regulators, inadequate and lagging repairs, and failing to alert car owners to recalls in a timely manner. FCA will have to pay $70 million up front and $20 million to industry outreach efforts such as educating manufacturers on meeting legal safety obligations and encouraging suppliers to alert the company to possible defects. The remaining $15 million is deferred but could become payable if FCA violates the consent order. In addition to the financial penalty, FCA will be assigned an independent monitor to audit its recall processes for up to four years and in some cases the auto maker will repurchase recalled vehicles.

Below is a more detailed description of FCA obligations in addition to the penalties:

FCA US Performance Obligations:

1. FCA, with an independent third party consultant will develop new written procedures for dealing with and reporting defects which NHTSA then has the authority to comment on and revise if it deems it necessary.

2. FCA will make a public commitment to lead best practices in safety, including industry education and outreach.

FCA US Industry and Consumer Outreach Performance Obligations:

1. Requires FCA to spend no less than $20 million over a three-year period on Industry Outreach, with the total amount documented by an independent monitor on an annual basis.

FCA US’s Repurchase Program:

1. FCA will offer a repurchase program for vehicles affected by recalls 13V-038, 13V-527, and 13V-529; FCA may remedy and resell any vehicle repurchased.

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