By on July 26, 2015

 

The National Highway Traffic Safety Administration will fine Fiat Chrysler Automobiles $105 million for botching the recall of more than 11 million cars, including 1.6 million Jeeps with a fuel tank issue, the Wall Street Journal is reporting.

The automaker faced fines of up to $700 million.

As part of the settlement, FCA will agree to an independent monitor to audit its recalls. On Friday, FCA announced it was recalling 1.4 million cars and trucks for software that could be hacked and controlled remotely.

The automaker faced a congressional hearing this month for its failure to quickly recall Jeeps that could catch fire in a rear-end collision. In June, Chrysler refused to comply with a request by NHTSA to recall those Jeeps.

A bill is winding its way through Congress to change how NHTSA penalizes automakers and conducts recalls.

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36 Comments on “Report: NHTSA to fine Fiat Chrysler $105M...”


  • avatar
    GeneralMalaise

    Thievery by Government.

    • 0 avatar
      GermanReliabilityMyth

      The government giveth and the government taketh away. But mostly taketh away.

    • 0 avatar
      el scotto

      I approve this because massive fines,and I mean money, are the only way to get corporations to pay attention. Acts of deceit and negligence will continue unless a recognizable penalty is in place. To say this money would have went to product research or fund orphanages is absurd at best.

      • 0 avatar
        GeneralMalaise

        If government were held to the same ethics, standards and laws as the business community, we’d see a good many of fed employees serving long sentences

        • 0 avatar
          CJinSD

          It has to be brainwashing that enables people to put complete faith in the government on topics chosen to redistribute wealth and strip private property rights.

  • avatar

    #1 There are people who get paid to work for the NHTSA regardless what the outcome. They could care less.

    #2 How many people DIED?

    #3 Doesn’t suing for these sums hurt the company’s ability to make their product better? Or is it water under the bridge?

    • 0 avatar
      HerrKaLeun

      I’m sure cars would be so much safer today if regulators, civil lawsuits etc. wouldn’t interfere with their business all the time. I’m also sure 100% of the money they would have saved paying fines would have gone to improving safety, not to CEO bonuses etc.

      So Toyota has to pay $1.2 billion for some bogus floormat issue that never harmed anyone (at least not someone who knows that the left pedal could have been used to slow down the car), and Chrysler pays a pittance for actual design flaws that have been known about and willingly implemented?

      • 0 avatar
        sunridge place

        Toyota didn’t pay NHTSA $1.2 Billion. Get your sources of fines/penalties right.

        This is just the NHTSA fine. More to come…then compare it to the $1.2 Billion or whatever.

      • 0 avatar
        SC5door

        So what we’re saying now is that companies can produce products and then have to retroactively obey new safety standards?

        Why aren’t we installing ABS and ESP onto cars that don’t have it then?

        • 0 avatar
          Erikstrawn

          Recalls are not automatically tied to standards. If you sell widgets that are built to legal spec, then people or property suffer damages due to a previously unforeseen defect, you may be asked by the regulatory agency to fix your design in the manner you see fit. If you don’t voluntarily fix it, you will be forced to fix it in the way the regulator sees fit. This is not a surprise, and all Chrysler’s whining is as fruitless as it should be.

  • avatar
    DenverMike

    They have to be laughing. Up to $70 per car? Worst case??

    Party on, business as usually. What a joke.

    • 0 avatar
      Pch101

      Most of the profits went to Daimler. So no, they’re not laughing.

    • 0 avatar
      SC5door

      Yes business as usual.

      The cars met the set safety standards at the time; should we be putting airbags and ABS into cars that don’t have it as well? This isn’t the GM problem where the knew from the beginning that there was a problem with the ignition switch during pre production testing.

      The design improved when better tank technology as well as the safety standard was tightened. The agreed upon fix is to install a Chrysler designed trailer hitch onto the rear; the government may be upset that it took quite some time to get parts ready but each version had to be designed, tested, signed off. Finding a supplier and getting tooling ready to produce isn’t exactly a easy task either.

      The cost in the end will be much higher: tooling, product cost, shipping to dealers, and dealer labor all adds up.

      • 0 avatar
        Pch101

        The idea is to have a car that avoids having egregious safety hazards, not just to comply with a specific set of regulations from a specific year.

        NHTSA takes a dim view of fire. Fire is bad, and anything that is prone to detonating tends to make NHTSA unhappy.

      • 0 avatar
        DenverMike

        @SC5door – A high riding SUV with a low hanging gas tank? What tank “technology”are you referring to? It’s a recipe for disaster, even at low speeds. So I wouldn’t quite call it “met the set safety standards at the time”. Not even the Pinto’s ‘time’.

  • avatar
    DenverMike

    @Pch101 – Regardless of where past profits went, today FCA is profiting tremendously from the Cherokee *brand* or history/legacy/namesake (and other car/truck lines). Sure there’s a relatively small amount of Cherokee ‘baggage’ or liability, along with all the massive fortunes, but laughable just the same.

    Where’s the incentive to do better? It’s not here.

  • avatar
    PeteRR

    No point in fining GM, it would just moving the money from the government’s left pocket to its right.

  • avatar
    APaGttH

    Ya, why fine GM. I mean they get all the breaks…

    http://www.washingtonpost.com/business/economy/gm-fined-35-million-in-ignition-switch-safety-case/2014/05/16/f1b92e56-dd08-11e3-8009-71de85b9c527_story.html

  • avatar

    I’m curious…what happens to these ginormous fines? Do they go to compensate people who’ve bought the defective vehicles, or do they just go into the *defective* NHTSA’s coffers?

    • 0 avatar
      Pch101

      The Department of Transportation spends more than it takes in, so there no coffers. But no, they aren’t just transferring taxpayer money to folks with failing ignitions or exploding gas tanks.

      The big fines are intended to encourage automakers to be more proactive. Big fines mean bad PR, and NHTSA is counting on automakers to police themselves because the agency lacks the resources to do all of it on its own.

      • 0 avatar

        Thanks for the response. I think the current system we have is very broken from a public perspective, but I don’t know the details (as clearly indicated by my assumption that the NHTSA doesn’t lose money every year), and don’t have a proposal on how to fix it…

        • 0 avatar
          shaker

          From what I’ve seen, NHTSA had to implement its own testing program to discover the weakness of the Jeep’s gas tank, due to denials/stonewalling by FCA.

          This stuff costs money, thus the fines.

          Since the automakers won’t police themselves…

          So, the answer seems to be: Do you want *cheap* cars, or *safe* cars?

          • 0 avatar
            Pch101

            The fines are much, much higher than they used to be.

            I keep saying this, but I’m surprised that nobody in the automotive press has noticed how much the fines have increased. It’s a night-and-day difference, not just a minor increase.

          • 0 avatar
            shaker

            I never said that the gubmint was efficient…

            But, it exists because profit takes precedence over safety.

            When corporations abandon ethics to pursue profit, and people suffer, then new laws get written, and new government agencies are established to pursue violations.

            Oh, and lawyers benefit the most, and the taxpayers take the hit, and bemoan the size of the Gov’t.

  • avatar
    wmba

    Why do people concentrate on the old Grand Cherokee? This is a fine for FCA botching the recalls and dragging their heels on 11 million recalls, 9.5 million of which are not Cherokees.

    It’s the price Marchionne has to pay for regarding himself as God reincarnate,and dismissing rules and regulations as not worthy of his time. There may well be justification for calling out NHTSA for many, many reasons, but he ignored two recent formal requests for recall updates as being below his dignity.

    And so the fines happened. Maybe now he’ll sit up and pay attention, because DOJ fines will follow and be much bigger, much like happened to Toyota. Stupid man – his company is about broke and cash poor.

    GM’s next. They were so bad about recalls, there is a permanent NHTSA staff member assigned to GM HQ to ensure timely data release as per the Act and regulations.

  • avatar
    APaGttH

    This story is getting way bigger. Word is breaking all over the news channels FCA is being required to offer to buy back 300K to 500K Ram pickup trucks from customers because or major steering problems that have been the subject of multiple recalls.

    The action is extremely unusual and a buy back of this scale has never been done before. NHTSA and manufacturers typically don’t agree to a buy back unless the vehicles cannot be made safe. Owners apparently will have the option to keep their truck if they want, and FCA can resell buyback trucks after the steering has been repaired properly.

    I would speculate that this has been in negotiation for a while, and why FCA announced a couple of months ago significant delays in their product road maps and why they are actively looking for someone to buy them.

    In addition to the 1/2 million up for buy back, another 2 million Ram trucks are up for recall for airbag problems.

    http://www.foxnews.com/leisure/2015/07/27/fiat-chrysler-faces-record-fine-over-recalls-must-offer-to-buy-back-500000/

  • avatar
    VolandoBajo

    An interesting note re: all those Ford bashers who argue that Ford stands for “found on road dead” — GM is in hot water, FCA/Chrysler is in hot water.

    And while Ford has had issues in the past, the Pinto of decades ago may have been the last legitimate one.

    After researching issues surrounding LEO-owned Panthers and supposed fire hazards, it seems that part of the issue was that the gas tanks could get crushed when hit from behind when stationary, by a vehicle going seventy miles per hour. And it was only because the agency that bought them wanted to make an issue of it that it got publicity.

    I doubt there was a car on the road in the nineties that could have withstood that kind of collision.

    And even there, Ford engineered a pretty impressive rearward facing crashbar to better protect the tanks.

    I have no financial connection with Ford, but they have been some of the best vehicles I have ever owned, and I have a fairly impressive collection of just about everything except vehicles of the ultrarich in my history, so I have some basis for comparison.

    And I personally have experienced engineering and safety stupidities with Jeeps, a truck from GMC, an underhood fire with an Isuzu Trooper, repeated door handle and hood latch failures on a Corolla, and other such nonsense. But no such problems with two Fords, with a combined mileage of over a half million miles.

    Yet I am forced, as a taxpayer, to subsidize the poor engineering and to help pay the fines, for these other manufacturers.

    Oh, and lest I forget, stupid engineering stories of German engineering, as well. I’ll spare you the long version of them. Just that they too were discovered the hard way, by personal experiences.

    To each his own. As for me, make mine Ford.

    And BTW a tip for the editorial staff at TTAC – Ford is engineering a very high tech bicycle in conjunction with MIT as well, which is perhaps a greater contribution to ecology than a lot of subsidized electric cars with high fossil fuel costs to generate their electricity. Just saw it on the net today.

    • 0 avatar
      shaker

      Maybe Ford’s “skeletons* are further in the back of the closet – NHTSA is busy with the low-hanging fruit… we’ll see.

      Everyone is competing in the same ‘arena’; it’s likely that the same rules apply.

      • 0 avatar
        VolandoBajo

        The rules are the same for everyone. But not everyone plays the game the same.

        Anything is possible, but my money would be on Ford.

        I believe it was the sportswriter Damon Runyon who wrote that:

        “The race is not always to the swift, and the battle is not always to the strong. But you will quickly go broke if you consistently bet any other way.”

  • avatar
    Zackman

    This does not bode well for FCA. It seems Chrysler just can’t stay out of its own way. That’s unfortunate, but I have a bad feeling the brand may disappear altogether except for Jeep, and besides their continuing popularity, they are plagued with quality issues as well.

    A friend has had issues with his new Grand Cherokee, too. Transmission computer re-flashes and a few other niggling things. That’s too bad because it’s a super vehicle and he loves it.

  • avatar
    zerofoo

    I’m interested in the “above market value” trade-in deal. I’ve got an old Grand Cherokee that has been a wonderful car – but I’m ready for a Wrangler.

    If FCA makes me a sweet trade-in deal – I’d be happy to pick up a new Rubicon.

  • avatar
    DevilsRotary86

    AP is also reporting that FCA must offer buyback for 500,000 Ram trucks as well. Do you guys know anything about that as well?

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