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Fiat Chrysler Hit With Record $105 Million Fine Over Botched Recalls
An anonymous reader writes: The U.S. National Highway Traffic Safety Administration has levied a record fine against Fiat Chrysler Automobiles to punish them for failing to adequately recall and fix defective cars. (If Fiat sounds familiar, it's the same company that issued a 1.4 million-vehicle recall on Friday over a remote hack.) The NHTSA's $105 million fine is half-again as much as the next biggest fine (given to Honda last year over faulty airbags). Fiat Chrysler "admitted to violating federal rules requiring timely recalls and notifications to vehicle owners, dealers and regulators." The company will be forced to buy back hundreds of thousands of vehicles (at the owners' discretion, of course) that have problems with the suspension that could lead to a loss of control. A million more Jeep owners will be given a chance to trade in their vehicle at a higher rate than market value because of rear-mounted gas tanks that are prone to catching fire.
The $105 million fine is not for the 1.4 million vehicles recalled due to the remote hack. The fine is for a separate set of issues on which recalls weren't properly done. The $105 million fine also isn't the end of the punishment, they have to also purchase back affected vehicles from consenting owners.
You're dividing the fine by the number of recalls, but that makes no sense. The company is already being penalized by the cost of the recalls, so I think you'd need to *add* that to the fine.
The agency said the civil penalty was broken down into a cash penalty of $70 million, and an agreement that Fiat Chrysler would spend at least $20 million on meeting performance requirements detailed in the consent order. An additional penalty of $15 million will be assessed on the company if an independent monitor, who has yet to be announced, discovers further violations of safety laws or the consent order.
Under the order, Fiat Chrysler is required to buy back as many as 500,000 vehicles with defective suspensions that can cause drivers to lose control. Also, owners of more than one million Jeeps with rear-mounted gas tanks that are prone to fires will be given an opportunity to trade in their vehicles at rates above market value.
All in all, this may end up costing them well over a billion dollars, especially if a significant number of people take them up on that buy-back offer.
Irony: Agile development has too much intertia to be abandoned now.
Chrysler is not a partner of fiat, its a subsidiary and was sold to it by Merc a few years ago for a song.
Recalls, according to TFA, are for models from 2003 to 2012. Chrysler acquisition started in 2009, but was completed only in 2014. Just to have our facts right.
Disclaimer: I'm Italian (near Turin, too). Jeep and RAM models where never designed here. Other (even worse) cars, yes, but not those.