Fiat-Chrysler hit with record $105-million penalty for slow response to recalls

Fiat-Chrysler hit with record $105-million penalty for slow response to recalls In the largest such civil sanctions to date, the National Highway Traffic Safety Administration (NHTSA) has fined Fiat-Chrysler Automobiles $70 million and exacted what could be another $35 million in additional penalties over the next three years as a punishment for past wrongs implementing safety recalls and to ensure future compliance with federal requirements. This penalty is half again as much as the previous record, $70 million in fines that Honda Motors had to pay the government last January for sloppy compliance in reporting safety-defect information. In a consent order signed on July 24 by Fiat-Chrysler Automobiles, now called FCA, the car company admitted that it had failed to find remedies to vehicle defects in a timely way or to communicate about the defects promptly to dealers or vehicle owners. (Read “Chrysler and Tesla demonstrate two different approaches to a car recall” and “Chrysler and NHTSA at odds over Jeep Grand Cherokee and Liberty recall request.”) Among other steps, the company has agreed to hire a yet-unnamed “independent monitor” who for the next three years will have full access to company documents and personnel to ensure that the company has complied with and will continue to comply with safety-recall requirements and adopt a series of “best practices” in the future, or face millions of dollars in additional penalties. (Read “Chrysler and NHTSA at odds over Jeep Grand Cherokee and Liberty recall request.” One of the problems endemic to Chrysler has been a poor completion rate for recall work, meaning that substantially fewer Chrysler, Dodge, and Jeep vehicles under a recall ever receive the repair than is the case with other car companies. (Read “Chrysler agrees to safety upgrade for Jeep Grand Cherokee and Liberty SUVs.”) To boost that completion rate, FCA is offering a number of incentives to owners to bring their recalled cars in for repair. In some cases, that includes an offer to buy back the car, $100 to bring it in, or a generous trade-in allowance good toward the purchase of another FCA vehicle. (Discuss this action in the comments below.) Learn the truth about car recalls. Buy-back The buy-back offer will be calculated as the initial purchase price less “reasonable depreciation,” plus an additional 10 percent over that depreciated value. Potentially, this applies to some half-million vehicles on which the recall work has not yet been done.   Covered models include: 2009 Chrysler Aspen 2009-2011 Dodge Dakota 2009 Dodge Durango 2009 Dodge Ram 1500 2010-2012 Ram 1500 2008-2009 Dodge Ram 4500 and 5500 2010-2012 Ram 4500 and 5500 2008 Dodge Ram 1500 2008-2012 Dodge Ram 2500 and 3500 Cash or trade-in Jeep owners could qualify for a $100 unrestricted gift card just for bringing their vehicle in for overdue recall work to remedy a potential fire hazard associated with the placement of the vehicle’s fuel tank. The remedy consists of getting a company-approved trailer hitch installed, free of charge. Alternatively, owners can get a normal trade-in allowance plus $1,000 toward the purchase of another FCA vehicle (Chrysler, Dodge, Fiat, or Jeep). These vehicles qualify: 1993-1998 Jeep Grand Cherokee 2002-2007 Jeep Liberty Cash only Grand Cherokees from model years 1999-2004 also have the potential fire hazard where the repair involves getting a company-approved trailer hitch installed. Those qualify for the $100 gift card as an incentive for bringing the vehicle in for recall service, but not the enhanced trade-in or buy-back offers. If you own any of these vehicles, you can find out of it qualifies for an incentive by contacting any of your brand’s franchised dealers or the company’s website. You will need to have your car’s Vehicle Indentification Number (VIN) handy to conduct the check (found at the base of the windshield, on driver’s side). You can also use a VIN-check tool at the government’s car-safety web site, www.safercar.org.   The far-reaching sanctions placed on FCA are meant meant as a lesson to other automakers as much as a punishment for Chrysler. The rather exacting language in the consent order regarding training and procedures for employees involved with safety recalls indicates that the National Highway Traffic Safety Administration is sending the strongest possible message to automakers that the agency expects all of them to make vehicle safety a priority not just for new cars, but for cars the automaker may have produced many years ago. Find out whether your car has been recalled. —Gordon Hard       Consumer Reports has no relationship with any advertisers on this website. Copyright © 2006-2015 Consumers Union of U.S.

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