Fiat Chrysler will be fined a record $105m (£67m) by US regulators due to violating laws in a series of vehicle safety recalls involving millions of vehicles.
The National Highway Traffic Safety Administration (NHTSA) revealed that the agreement reached with the Italian-US automaker includes the requirement to buy back hundreds of thousands of recalled vehicles, including 1.56 million Jeep sport utility vehicles, to get them off the roads.
Owners will receive a trade-in or a financial incentive to get their vehicles repaired. Owners of the Jeeps, which have fuel tanks behind the rear axle, will be paid to bring them to dealers to install trailer hitches that help protect the tanks, which are vulnerable and can leak fuel if damaged in rear collisions.
Other recalled vehicles covered by the agreement include Dodge Ram, Dakota and Chrysler Aspen trucks from model years as early as 2008. More than half a million of the vehicles subject to buybacks have faulty suspension parts that can cause a loss of control.
The company has also agreed to an independent monitor to review its recall performance over a three-year period, according to yesterday’s announcement.
"Fiat Chrysler's pattern of poor performance put millions of its customers and the driving public at risk," the NHTSA’S new administrator Mark Rosekind said. "This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry, and gives Fiat Chrysler the opportunity to embrace a proactive safety culture."
The fines eclipses the previous record fine of $70m imposed against Honda in January for failing to report death, injury and other claims. Prior to that General Motors was ordered to pay $35m for a decade-long delay in reporting faulty ignition switches linked to more than 120 deaths.
Fiat’s fines include a $70m cash payment, a requirement for the company to spend $20m improving its recall process and an additional $15m payable if it is found to have committed any further violations.
The agreement is the result of discussions that started after the NHTSA held a public hearing on July 2 on Fiat Chrysler's recall performance, where NHTSA staff catalogued alleged failures in 23 separate recalls dating back to 2013 and covering more than 11 million vehicles, including what they termed misleading behaviour
These included failure to notify customers of recalls, delays in making and distributing repair parts, and in some cases failing to come up with repairs that fix the problems. Fiat Chrysler did not dispute the NHTSA’s allegations during the hearing.
The company's US unit said it accepted the consequences of the agreement with "renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us."
Fiat Chrysler chief executive Sergio Marchionne told reporters this month that the company needs to change the way it deals with regulators going forward. "We are intent on rebuilding our relationship with NHTSA," the automaker said yesterday.
The news comes just days after Fiat Chrysler announced it was recalling about 1.4 million cars and trucks in the US after two hackers revealed that they were able to take control of a Jeep Cherokee SUV over the Internet.
Sign up to the E&T News e-mail to get great stories like this delivered to your inbox every day.