FCA chief executive Marchionne says new safety strategy of US regulators could lift costs image

According to the Fiat Chrysler Automobiles NV chief executive officer Sergio Marchionne, the Us government is entering a “new phase” in its relationship with the automotive industry, with the auto safety regulators tougher approach to vehicle safety likely translating into higher costs for the latter.

This week National Highway Traffic Safety Administration boss Mark Rosekind heavily criticized Fiat Chrysler’s recent handling strategy of its recalls, while it also managed to pressure Japan’s Takata Corp. to double up its recall of potentially fatal airbag inflators to a new industry record – almost 34 million vehicles. “We’re beginning to live through a new phase of regulation in the United States,” said Marchionne to media representatives after the NHTSA announced it would look over FVA’s handling of no less than 20 safety campaigns that cover ten million autos. Rosekind added the agency could impose penalties of up to $700 million and also force the company to buy back vehicles if it finds any evidence of foul play.

The outspoken chief executive added the new and “different attitude” was “bound to increase the costs of execution of the car” as automakers will use different strategies to make sure their vehicles are in compliance with the safety standards. Marchionne and FCA US has had a rough patch in recent years with the NHTSA, the most interesting case being the one involving Jeep models that could catch fire – the automaker never acknowledged a defect, but recalled them – and a Georgia court awarded to the victims’ family compensation of $150 million.

Via Reuters