Fiat Chrysler Automobiles, the third largest US automaker and the world’s seventh biggest, could be forced to pay billions of dollars to buy back defective vehicles after it settled the issue of recall wrongdoings with the US auto safety regulator.
The company could still alleviate some of the losses because they are allowed to resell the autos once the repairs are completed. The auto safety regulator NHTSA announced on Sunday it was penalizing the Italian-American automaker with a $105 million fine – the largest ever from US regulators against an auto manufacturer – because of numerous issues with safety campaigns involving millions of autos. FCA also announced on Monday that around 193,000 Ram trucks involved in recalls for suspension and steering defects were unrepaired and therefore eligible for buyback deals under the agreement signed with the National Highway Traffic Safety Administration. And at the average price of $15,000 per vehicle, the total could have FCA paying almost three billion dollars. The net cost at the end could be far lower, though, with a company spokesperson adding the deal also included the option for the company to resell the vehicles once repaired.
Mark Rosekind, administrator of the NHTSA added the record fine and the rest of provisions of the consent order were targeted at improving “the entire industry’s performance” on safety, also serving as a warning to those who believe could jump the fence and fly under the regulator’s radar. Rosekind was backed by U.S. Transportation Secretary Anthony Foxx, who showcased his own efforts to transform NHTSA into a “much more muscular agency” when it came to the auto industry’s recent record on recall completion.