It’s been a hard year for Fiat Chrysler Automobiles. In July, the multinational automobile manufacturer voluntarily recalled approximately 1.4 million vehicles fueled by fears of remote hacking. Now, the organization is facing a $70 million fine from the Obama administration for failing to repair recalled cars or replace them for owners.
The Italian-American company reports that its latest fine is being attached to a previous $105 million fine imposed on Fiat Chrysler for failing to properly report defects with cars that had been subject to recalls. The company says they will pay the fine and promise to change procedures to guarantee proper reporting.(1)
Transportation Secretary Anthony Foxx said the fine, which now clocks in at a whopping $175 million, is necessary to protect drivers from accidents and caution retailers that recalls need to be taken more seriously. The company failed to comply with a 2000 federal law that requires the disclosure of death and injury reports, which aid safety officials to identify defect trends early.(2)
“Accurate, early-warning reporting is a legal requirement, and it’s also part of a manufacturer’s obligation to protect the safety of the traveling public,” Foxx said in a statement. “We need FCA and other automakers to move toward a stronger, more proactive safety culture, and when they fall short, we will continue to exercise our enforcement authority to set them on the right path.”(1)
Obama administration safety regulators and automakers under fire
But it’s not just Fiat Chrysler that has come under attack lately. Safety regulators in the Obama administration, as well as automakers, have come under fire following massive recalls involving car parts that were deemed defective in early 2014, including General Motors and Takata Corporation.
Some democrats in Congress are pressing for legislation that would make failing to inform safety regulators about defective auto parts a crime worthy of five years of imprisonment.
This proposal would scrap a $35 million-per-violation cap on the NHTSA’s ability to fine automakers that do not comply with recall regulations. Furthermore, a warning system would be required to be installed in vehicles, which would alert drivers when their cars have been recalled by manufactures.(1)
NHTSA Administrator Mark Rosekind claimed the fines made against Fiat are a mark of the Obama administration’s commitment to clamping down on U.S. automakers that are not properly informing regulators, and failing to meet safety standards.
NHTSA has penalized five automakers in the last 14 months for failing to meet safety standards, including a $70 million fine for Honda Motor Co. in January for unsuccessfully handing in more than 1,700 death and injury reports since 2003. Other automakers fined included Ferrari NV, motorcycle manufacturer Triumph and specialty vehicle manufacturers, Forest River and Spartan Motors.(2)
“NHTSA’s enforcement actions in recent months have been designed not only to penalize previous actions, but to increase safety going forward,” Rosekind said in a statement.(1)
“FCA has expressed a desire to use this situation as a stepping stone to a stronger, more proactive safety posture, and NHTSA is ready to work with FCA and the industry as a whole to improve safety,” he continued.(1)
Putting the cash in crash
Fiat Chrysler said at the time of its first fine that it accepts the terms of the agreement with the highway safety agency “with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us.”(1)
“We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate,” the company said in a July statement.(1)
“Accordingly, FCA US has agreed to address certain industry objectives, such as identifying best practices for recall execution and researching obstacles that discourage consumers from responding to recall notices,” the Fiat Chrysler statement concludes.(1)
Sources include:
(1) TheHill.com
(2) Reuters.com
