Fiat Chrysler Automobiles NV, the third largest US automaker and the world’s seventh biggest, has been the first automaker to see the effects of the tougher stance adopted by the US auto safety regulator.
The Italian-American carmaker opted for a consent agreement with the National Highway Traffic Safety Administration that didn’t allow it to escape a record $105 million in fines against the company because of lapses in auto safety campaigns that covered millions of vehicles. The deal, besides the record fines, also includes a never before seen buyback option that covers hundreds of thousands of autos, such as more than one million Jeep sport utility vehicles, with the owners able to receive a trade-in or financial incentive to have their vehicles repaired. Fiat Chrysler will also be taken through the process of an independent monitor’s audit to assess its recall performance over the upcoming three years. The $105 million in fines also establishes a new benchmark in NHTSA’s approach to automakers, as it’s higher than a previously record fine against Honda of $70 million, when the automaker acknowledged it failed to report death, injury and other claims.
Just last year, General Motors was only ordered to pay $35 million after being found guilty of covering for more than a decade a defect that has been tied to at least 120 death cases. But the NHTSA since has taken a more aggressive stance under the new administrator Mark Rosekind – though only after being panned by the Congress for its own lapses in the handling of potentially fatal flaws.