By on July 27, 2015

 

In an order detailing the largest civil penalty for an automaker so far, the National Highway Traffic Safety Administration said Monday that Fiat Chrysler Automobiles could have to buy back 500,000 defective trucks and accept trade-in above market value for 1 million defective Jeeps .

The automaker’s record $105 million fine includes a $70 million penalty, $20 million set aside for meeting safety standards dictated by the federal bureau and an additional $15 million in penalties if an independent monitor discovers further safety violations.

The record ruling comes after the agency said FCA botched recalls of more than 11 million vehicles for wide ranging issues, including Jeep models with rear gas tanks that could catch fire in rear collisions. The issue has been linked to more than 50 deaths. 

NHTSA Administrator Mark Rosekind scolded the automaker in a statement Monday announcing the fine.

“Fiat Chrysler’s pattern of poor performance put millions of its customers, and the driving public, at risk,” he said. “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.”

According to a statement by the automaker, Jeep owners who haven’t yet complied with their recall could get a $100 gift card to bring their vehicle into a dealer. Owners of defective Jeep models would also be eligible to trade in their vehicle for $1,000 above fair market value.

In addition to the Jeep fix, FCA will attempt to purchase or fix for free Ram trucks or Chrysler SUVs with a suspension defect that could cause the car to lose control. FCA could resell those fixed cars.

The automaker will have to submit to independent monitoring of its recalls for the next three years, with NHTSA being able to extend that agreement further for an additional year.

Last week, FCA announced it would be recalling 1.4 million cars for a security vulnerability that could allow hackers to remotely take control of a vehicle.

Read the ruling here.

The vehicles that may be eligible for repurchase are:

• 2009-2012 Ram 1500s

• 2008-2012 Ram 1500 Mega Cab 4×4, Ram 2500 4×4, 3500 4×4, 4500 4×4, 4500 4×4

• 2009 Chrysler Aspen and Dodge Durango

• 2009-2011 Dodge Dakota

The vehicles that may be eligible for a $100 gift card for dealer inspection or $1,000 over market value for trade-in are:

• 1993-2004 Jeep Grand Cherokee

• 2002-2007 Jeep Liberty

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63 Comments on “Fiat Chrysler May Have to Take Back 1.5M Defective Jeeps, Rams...”


  • avatar
    Secret Hi5

    Someone should hack the recalled vehicles and drive them to a dealer for repairs.

    • 0 avatar
      RideHeight

      LOL! And then FCA could claim first-to-market for autonomous vehicles.

    • 0 avatar
      DeadWeight

      USA Hypocrisy & Inconsistency in full view –

      Marchionne just got slammed because FCA isn’t deemed ” ‘Murican” as G(uangzhou) Motors and F(iesta)ord are, and it sucks to fall under the jurisdiction & gavel of racketeers.

      Ford & GM should now be forced to buy back every vehicle they made in last 30 years with fire-collision risks – Crown Vic, LTD, Explorer, etc., (or that catch fire standing still like the Mountaineer), ignition switch defects (that have killed more people and will continue to do so), brake defects, steering defects and suspension defects.

      If required to do so, and treated as FCA is now being treated, GM would have to buy back 75% of the vehicles they’ve produced since 1986.

      • 0 avatar
        tresmonos

        I think this has more to do with the fact that they didn’t react to initial inquiries.

        Your haterade consumption today is particularly strong.

        • 0 avatar
          DeadWeight

          So, because they weren’t as prompt in responding as they admittedly should have been, they are forced to buy back potentially 2.5 billion to 6 billion USD worth of vehicles?

          That’s the definition of disproportionate governmental overreaching, going into the arbitrary & capricious area.

          On a market share adjusted basis, I’d bet that a driver of or passenger in a vehicle produced in the last 30 years has had a higher statistical chance of being seriously injured or killed due to a defect in a GM or Ford than Chrysler/FCA produced one.

          GM has been given the keys to rape & pillage with near impunity by our esteemed, well-intentioned and completely competent (/sarc) Federal Regulatory Overlords.

          • 0 avatar
            APaGttH

            Buy backs historically have only been used when a repair or set of repairs cannot make a vehicle safe.

            I wrote this below.

            Toyota told customers to get rid of all weather floor mats, sent them zip ties to hold the right ones in place, and pulled out the exacto knife to trim gas pedals so they wouldn’t get entrapped due to a lack of clearance on some models. Problem solved.

            GM told customers not to hang four pounds of crap off of the ignition key and issued new ignitions – and in some cases new keys and/or key fobs. Problem solved.

            FCA has been trying through multiple recalls and multiple repairs to solve a steering problem on Ram trucks that they can’t fix. They issue a repair, and repaired/recall vehicles still have the problem. They can’t be made safe in a timely manner. This is when buy backs are used.

            If we apply your suggested bar, than Honda might as well get the checkbook out for every vehicle they ever built that has an airbag in it, Toyota might as well start buying up Tacomas for their frames, Ford might as well for cruise control relays of flaming death, etc. etc. etc.

            In the above cases there are answers – Honda is replacing air bags, Toyota did do a small buy back on some Tacomas and did repairs on others, Ford was able to replace all those Texas Instruments relays of flaming death.

            The gas tank issue is — odd — but it is worth noting the official NHTSA death count of people roasted alive in Pintos is 27. That’s the “official” number. The “official” number for the Jeep GC is 3X that. Those 27 Pinto deaths are spread over 3.2 million vehicles also. The GC over that period is under 3 million – so statistically speaking less vehicles and 3X the deaths.

  • avatar
    ajla

    “Owners of defective Jeep models would also be eligible to trade in their vehicle for $1,000 above fair market value.”

    Market value as determined by what party? For a lot of the vehicles listed people either just got out from under their 72+ month loan or are still underwater on them. Dealers won’t have a hard time burying $1000 on a new deal somewhere so if people are rquired to buy another FCA vehicle under this then it is practically a windfall for FCA dealers.

  • avatar
    Firestorm 500

    Who determines market value? It is too subjective, based on a lot of factors.

    After this hits the TV and newspapers, the market value of the affected Jeeps will be less than a sack of ****.

    • 0 avatar
      anti121hero

      Wj grands and kj liberties don’t hold their value as compared to other jeeps to begin with.

    • 0 avatar
      heavy handle

      11-22 years old Jeep grand Cherokees? Those are already worth nothing. They are worth more now that you can get $1,000 trade-in on them.

      It would be cool to round-up 50 of them from junkyards (and front yards, depending where you live) and trade them in. I wonder if there’s a “limit one per customer” clause in the fine print.

      Explorers and Trailblazers from the same era are worth just as little.

      • 0 avatar
        CoreyDL

        Not here – the Explorer and Trailblazer are actually still running and saleable. The GC’s are rusty and falling to bits with torn up interiors and trim falling off.

        But at least they have a massive V8 to get poor economy.

        Literally, older XJ Cherokees are worth twice what a newer GC is.

        • 0 avatar
          heavy handle

          It’s weird to hear about 90’s Blazers and Explorers that are drivable. Not here, not for the best part of a decade. I think Cash for Clunkers killed the last few.

          It’s almost time for near-perfect ones to appear on vintage sites with 5 figure asks, like 70s wood-paneled 3-row wagons.

          • 0 avatar
            CoreyDL

            Yep, see them lots. The earlier Explorers are largely rusted away (I’ve looked for an Explorer Limited – all have rust in the doors), but the GM models didn’t.

            See!

            https://cincinnati.craigslist.org/cto/5141920336.html

            http://dayton.craigslist.org/cto/5083106509.html

            https://cincinnati.craigslist.org/cto/5143136132.html

          • 0 avatar
            heavy handle

            Corey,

            Neat listings. They bring me back.

            Not the Envoy, of course, I still see lots of the later ones.

          • 0 avatar
            CoreyDL

            I would like to find (besides a Montero) an early TrailBlazer or Envoy Jimmy from 98-00. They’re hard to come by.

            http://images.thecarconnection.com/med/1998-gmc-envoy_100027502_m.jpg

            They had nicer interior bits and trim.

      • 0 avatar
        anti121hero

        Check out nice condition wrangler and Cherokee prices from the same vintage. Also jeeps before then always held their value such as full sizers and cjs. I would not touch an exploder or trail blazer no matter the price difference.

  • avatar
    Steve Biro

    My brother-in-law has a 2000 Grand Cherokee on which Chrysler installed a trailer hitch a number of years ago to deal with the fuel tank issue. I wonder if that’s considered a complete fix under the settlement or if he’ll be contacted by FCA.

  • avatar
    sirwired

    This is a pretty severe penalty, but I think it is wholly justified by how much FCA has drug their feet over the whole Jeep Rear-End Hitch Fix. The amount of time it’s taken to get parts in stock has been well out of bounds of reasonable.

    (And I don’t think the NHTSA was real thrilled over the whole protracted “Well, the standards at the time didn’t specifically spell out that the thing shouldn’t turn into flaming death after a love-tap from a Geo Metro!” defense leading up to the recall.)

    • 0 avatar
      Pch101

      I am the first to criticize companies for doing too little. But this particular incident smacks of NHTSA resentment for Marchionne’s cramdown of the trailer hitch compromise that was far less than what the agency wanted.

      I have some experience doing business with government, and it is my opinion that you can throw your weight around…once. The rules can be interpreted in many ways, and they will be interpreted as favorably as they can be if they like you and in quite the opposite fashion if they don’t.

      It pays to get along, and Marchionne clearly took the opposite tact when he played chicken and refused to comply with their demands to refit the Jeeps. The government guys will negotiate with you, but they don’t like it when you try to shove something down their throats. It looks to me as if they are trying to indirectly welch on their deal with FCA because they lost face, which isn’t a good reason.

      • 0 avatar

        You question the fairness and morality of people working for the government? I thought that only folks in the private sector had selfish interests.

        Yet you support the ideology that makes gangster government more possible. It is a puzzlement.

        • 0 avatar
          Pch101

          The problem with you anti-government guys is that you assume that a world without government will be some sort of glorious nirvana where the free market will solve everything.

          That’s horribly naive. A lack of regulations would be notably worse; these regulations exist because the lack of regulations was a failure. The solution is to fix our government, not to whine about it as if it is some alien force that has nothing to do with us.

          • 0 avatar

            That’s not why most regulations exist. The mission creep, out-of-control bureaucracy that has to justify own existence, owning the media in the pre-Internet era, plain old power trips, and yes, the misguided liberal ideas about utopian society (witness California’s attempts at social engineering with carpool lanes — new regs every year). Your attempts to smear your opponents as desiring to get rid of _all_ regulatins is a typical strawman.

          • 0 avatar
            Pch101

            Right, because claiming that I support “gangster government” is really bringing intellectual vigor to the thread.

            Just a thought: Go easy on the hyperbole and the bogus assumptions, and you’ll get less sarcasm lobbed back in your direction.

      • 0 avatar
        APaGttH

        That doesn’t address the fact that 1/2 a million Ram trucks have serious steering system deficiencies that haven’t been properly corrected through multiple recalls.

        Toyota told customers to get rid of floor mats, sent them zip ties, and got the exacto knife out to trim gas pedals so they don’t get entrapped.

        GM told customers to not hang four pounds of crap off of their car keys, and is issuing new ignition switches.

        FCA apparently has a very severe steering issue problem to agree to a 1/2 million Ram truck buyback that goes beyond government strong arm tactics.

        I still remain floored on how Honda/Takata, relatively speaking, are still getting a free ride in comparison to the above automakers for their various sins of varying severity.

        With that said – stuck gas pedal – average driver should be able to deal with that.

        Loss of power steering and brakes due to ignition failure causing an engine shut down – average driver should be able to deal with that.

        Steering system that causes you to lose control under normal operation and multiple recall attempts don’t solve – big problem.

        Airbags that turn into Claymore mines 1% of the time when they deploy in accidents – big problem.

        • 0 avatar
          CJinSD

          I’ve spelled out for you exactly why Honda isn’t suffering for the Takata airbag recall a number of times, but you clearly have no interest in facts. If you care, look for my old posts about it. If you don’t, then stop repeating the same false indignation.

        • 0 avatar
          Pch101

          Takata is a third-party supplier to many automakers. It not only makes the parts, but it designs them.

          The problem in this case with not with the automaker, but with the supplier that offered a poorly designed part. The airbag maker is supposed to have the expertise to provide such a specialized component and it failed its customers.

          • 0 avatar
            APaGttH

            The accusations floating is that Honda was aware of the problem years ago and squashed their own internal reports, ended internal test programs, and sanitized failure results to make it look like it wasn’t a problem.

            This is familiar dance music from other makers. Agreed Takata is a parts maker and they screwed the pooch, but there is strong evidence Honda knew and covered it up. It was covered here in the pages of TTAC.

        • 0 avatar
          28-Cars-Later

          Possibly with the exception of Toyota, the pattern is the cheapening of essential systems.

          • 0 avatar
            Pch101

            It sounds as if Takata just screwed up. In some respects, it may even be an understandable mistake; it isn’t possible to foresee every problem.

  • avatar
    CoreyDL

    “• 1993-2004 Jeep Grand Cherokee”

    There’s the one that’s gonna hurt on the $100/$1000.

  • avatar
    krhodes1

    Please point me to where WJ JGCs are worthless, because I will buy a dozen of them and bring them to Maine to resell. They cost a fortune here for a decent one.

    I was very happy with my ’02, and my friend who bought it continues to be happy with it at over 165K miles on it. It’s old, it breaks occasionally. Old cars and trucks do that.

    • 0 avatar
      CoreyDL

      Ohio – they fall apart and are just junk. How much are they there for a decent one?

      • 0 avatar
        CJinSD

        There are a few of them on Craigslist in San Diego. They’re in excellent shape cosmetically, which makes sense since our climate is kind to cars. They sell for between the high teens of hundreds of dollars and four grand. It does seem that every single survivor has the 4.0 I6 instead of the 4.7 liter V8, for what it’s worth.

      • 0 avatar
        anti121hero

        Maybe if owned by a complete moron or are powered by a 4.7 but you will be hard pressed to find a longer lasting, more durable vehicle, albeit one that will nickel and dime you to death on the little stuff if that matters to you. I don’t know where you live Corey but my vehicle landscape is quite different in upstate ny

    • 0 avatar

      Here in CT I don’t really see and WJ’s with rust tons of them still on the road (plenty of ZJ’s too). Not great resale thou tons for sale in the 2500 range with 150-200k on them. Kind of like cockroaches here in New England their everywhere. Oddly the liberty seem to be worth a little more most are listed at 4-5k on cragslist private seller. Again these are kind of like cockroaches they are everywhere. In the early 2000’s the wj was the best selling vehicle for a number of years in New England (beating both f150 and camry as I recall) so it may just be a local thing.

      • 0 avatar
        cgjeep

        Lots of WJ in DC area as well. Proud owner of an 01. Zero rust, Zero Rattles (impressed me) runs great, use it as weekend beater for the kids and dog. paid 6.5k for it 4 years ago with 49k miles on it. Now has 85 and figure is worth about 4k here. Cheap money to go anywhere you want no matter how much snow is on the ground. Get about 12mpg though (V8 with a slight lift)

  • avatar

    Golly they always give me more than market value for my trade. My dealership has my best interest at heart and always gives me the best deal ever!

  • avatar
    seanx37

    Death Watch 2 starts now?

    • 0 avatar
      OneAlpha

      I hope this one’s got Charles Bronson in it.

    • 0 avatar
      Geekcarlover

      The Jeep name is worth too much. Besides, they could be exploding like car bombs and the Jeep fanatics would still be lining up to buy them.

    • 0 avatar
      APaGttH

      I don’t know if we’re to death watch but FCA has massive problems.

      * Product roadmap delayed in some cases 5 to 6 years on models that will be over a decade old without significant changes

      * Massive over capacity in Europe

      * Fiat not taking off anywhere close to where they thought

      * Renegade (remember all the B&B preductions how this would kill the Trax/Encore once and for all) is a quality and driveability flop – GM hasn’t lost a sale and Honda is killing them. The subcompact CUV love it or hate it, is here to stay

      * Ridiculous amounts of money and energy being poured into reviving Alfa because of…ego? Hubris? Because it is a mountain to climb?

      * Botched c-segment offering in the Dodge Dart – damage can’t be fixed without a redo and that is years away.

      * Kick in the teeth to bread-and-butter bill paying brands Jeep and RAM.

      * Apparent solution to all of this is more of the same and slap Hellcat engines in anything that has wheels (the give everything a Hemi plan worked so well 15 years ago, didn’t it)

      * They have huge looming CAFE issues with no viable offerings in some key categories, and no visible programs of any scale around electrification, hybrid, or hydrogen. They only have the Fiat 500 electric compliance car (but I do hear it is a hoot to drive)

      * Outside of North America, Dodge and Chrysler and a lesser extent Ram are big rocks around the neck. Outside of Europe Fiat is a large rock. Alfa is a large rock everywhere. Really, all they have is Jeep – and big motors – and old Mercedes technology.

      * No viable buyer in sight – the only thing that makes sense is maybe Hyundai/Kia or China. If China buys them look for every brand other than Jeep to eventually die.

      Big, big problems at FCA.

  • avatar
    DevilsRotary86

    Outright buy back orders are rare aren’t they? The only ones I can think of right now are the Nissan Van from the 90’s, the Toyota Tacoma frame rust more recently, and now this. And I think the Nissan and Toyota buy backs were voluntary. Does anyone know when the last compulsory buy back was?

    • 0 avatar
      APaGttH

      Very rare, and this is the largest one in history.

      Generally speaking buy back orders only happen when a system cannot be made safe. I question if this is the reality as FCA says about 60% of the impacted vehicles have already been “repaired.”

      What that means exactly opposed to the buy back I don’t know, and hasn’t been made clear.

  • avatar
    threeer

    So how do folks feel this will impact used car (person to person) sales of the cars in question? My father-in-law just lost a brother who has a 2002 GC Limited (no idea on how many miles on it) that they are likely to wind up selling. I’ve toyed with the idea of buying it, as I need a rescue dog hauler vehicle with working A/C. Best guesses on how the general market will respond to prices for these? Will such a massive recall negatively impact value immediately, or is the general feeling one that some of these vehicles have already hit rock bottom and can’t really go any lower?

    • 0 avatar
      DevilsRotary86

      For a 2002 GC, it has hit rock bottom I think. Personally, I would say go for it. The Grand Cherokee is an OK truck/crossover/station wagon thing as far as I can tell, and in my humble opinion the gas tank recall is and always has been a load of bull. The gas tank location is not ideal, but when built it was common practice to locate it where it is. It met safety standards of the time and is no more or less dangerous than a vehicle of similar vintage.

      The Dodge Ram recall on the other hand is far more disconcerting.

  • avatar
    CincyDavid

    I had a 2002 GC that was a horrible POS, can’t tell you everything that broke or fell off that heap. I will say that the square Cherokees I had previously were primitive but tough and reliable and I’d buy one today if I needed a 4wd.

    This is great opportunity for FCA dealers to move some “new, safe” metal off the lot…

  • avatar
    michal1980

    aww look no big truck blowhard in this post.

  • avatar
    jthorner

    If I am reading this correctly, FCA is being penalized because not enough owners bothered to bring their vehicles in when they were recalled. This is a common problem and is not in any way unique to FCA.

  • avatar
    wmba

    Not a soul seems to have read the actual NHTSA announcement:

    http://www.nhtsa.gov/About+NHTSA/Press+Releases/2015/nhtsa-fiat-chrysler-enforcement-action-07262015

    Nor have they followed FCA’s lame responses to previous NHTSA requests for updates on recall campaigns earlier this year.

    Nor apparently followed the public hearing at NHTSA on July 2.

    Marchionne played one of his brink-of-the-precipice moves on this with NHTSA. He lost. And there was plenty of warning.

    That’s the situation.

    It’s an entirely different thing whether it was fair to recall all the old GC’s because of the gas tank location. I personally don’t think it was, but the ruling stood due to a poor defence from FCA. Same goes with the steering on RAMs. FCA consented to the recalls – they should have sued if they felt strongly enough on the matter.

    Instead, they figured it would be cheaper to agree, and then just not put any effort into it. That’s what their lack of urgency of action implies.

    They consented to the recall, and then expressed their further displeasure by doing a half-arsed recall on all the issues – trailer hitch, seriously? Did not report in a timely fashion what they were doing and how the recalls were proceeding, as required by law, and sat on their hands, challenging authority in a face-down. The public hearing earlier this month seemed to have no effect on FCA getting on with the job. I say again, whether those original rulings were fair or not is beside the point, because FCA had previously consented to them . If you agree to do something but then proceed begrudgingly slowly, you show you did not take the situation seriously. Wrong response to legal agreements that have reporting requirements on timely progress.

    So yesterday they got the book thrown at them.

    Serves them right. To have a different opinion on the matter is to confuse facts with opinion, which commenters here do all the time.

    Marchionne played the brinkmanship routine and lost. That’s about the size of it.

    Honda has fallen all over itself trying to fix airbags, once they finally admitted the problem and, sure, that was a bit of a struggle as is usual with the Asians. However, nobody can fault Honda with the diligence they have since applied to correcting their problem, and they’ve kept complete records of what they were doing and sent them in on time. Even talked to the press about how difficult it had been, like contacting individual owners four times, even phone calls offering service appointments and still the idiots wouldn’t bring their cars in for repairs. You cannot punish a company for sincerely attempting to follow the legal order they agreed to.

    But FCA cocked at snoot at NHTSA and got slapped down. It’s a pretty clear situation, which no amount of railing at government by the uninformed “pundits” here will change.

    • 0 avatar

      Wmba,
      A lot of what you say is true. I would argue that Honda is a little more serious then you say. They did deny the problem for a long time despite uncovered memos that they had known about the issue for a long time. They also tried to limit the scope of the recall multiple times to save cash and time. But you are right a lot of this seems to be NHTSA responding to FCA and Marchionne’s cavalier attitude to the whole thing.

  • avatar
    alluster

    1. Buy a 2002 liberty for $50
    2. Take it in for repair
    3. Receive a $100 gift card
    4. ?????
    5. Profit.

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