Fiat Chrysler Automobiles will pay a record $105 million for mishandling 23 recalls. The National Highway Traffic Safety Administration said Chrysler admitted to violating federal safety law. The agency has been pressing the automaker over its handling of recalls for several years. NHTSA also announced that Chrysler has agreed to “submit to rigorous federal oversight” for three years and to hire an independent monitor.
The expected fine stems from Chrysler’s handling of 23 recalls involving 11 million vehicles. Of the $105 million Chrysler agreed to pay, $70 million is a cash penalty. The company will also pay another $20 million to meet “performance requirements” aimed at ensuring that drivers’ vehicles are fixed. Finally, Chrysler could face another $15 million in penalties if the independent monitor decides in the future it hasn’t met certain terms under the settlement. One of the most high profile of the recalls involved in Sunday’s settlement involved Jeep Grand Cherokees. At issue were gas tanks that can leak after a severe rear impact. NHTSA said in 2013 that more than 50 deaths had been linked to the problem.
Now, owners of more than 1 million Jeeps “prone to deadly fires” will be able to trade in their SUV for a price above market value or get a “financial incentive” to have it fixed.
In addition, owners of more than 500,000 vehicles with defective suspension parts can sell their vehicle back to Fiat Chrysler. Chrysler said in a statement that it accepts the “consequences with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us.” The federal auto safety regulator, under fire on Capitol Hill for not being tough enough on recalls, has recently come down hard in a number of cases. The agency fined Honda $70 million earlier this year for failing to report accidents and safety issues.
Last year, General Motors was ordered to pay $35 million for its 10-year delay in reporting a faulty ignition switch now tied to at least 124 deaths. A criminal investigation by the Justice Department into GM is ongoing. The federal government’s largest ever criminal penalty — separate from NHTSA fines — against an automaker was $1.2 billion, which Toyot agreed to pay last March to settle charges it mishandled recalls related to unintended acceleration.
— CNNMoney’s Peter Valdes-Dapena and Chris Isidore contributed to this report.
