Fiat Chrysler Fined $105 Million for Failing to Complete Recalls
The company will pay up to $105 million in fines for failing to fix recalled vehicles in a timely manner. The automaker also agreed to pay top trade-in value for many cars that were subject to recall.
MELISSA BLOCK, HOST:
One hundred five million dollars — that's the amount Fiat Chrysler could owe for failing to act quickly on nearly two dozen safety recalls. The recalls cover 11 million vehicles. It's the largest civil penalty ever imposed by the National Highway Traffic Safety Administration. And as NPR's Jason Margolis reports, the penalties also include some unconventional measures.
JASON MARGOLIS, BYLINE:
U.S. Transportation Secretary Anthony Foxx didn't mince words on a conference call today. He said Fiat Chrysler failed to meet its legal obligations, and it failed to protect the safety of American drivers.
Let me share with you some of these failures — these included recall remedies that weren't actually remedies. They didn't fix the safety defects. These included failures to give consumers the information they need to take action on recalls; failures to produce the parts needed to fix defects and to make those repairs available to consumers.
Recall compliance rates have been abysmal for Fiat Chrysler. Certain Jeeps have rear-mounted gas tanks that can catch fire in a rear-end collision, but only 12 percent of owners brought the vehicles in to be fixed after a recent recall. The National Highway Traffic Safety Administration is now requiring the automaker to offer cash incentives to more than a million of those drivers, or they can trade in their Jeeps at above market rates. Karl Bauer, an analyst at Kelly Blue Book, says it's an attempt to speed things up.
It's very common for consumers to get a recall notice in the mail, and unfortunately, a lot of times if it's not something they can detect as a problem, they don't get very excited or work very hard to address it. But when you get something in the mail that says, you know, we might take your vehicle back and work with you to get a new one, that has a larger impact and I think can get more people to pay attention.
Fiat Chrysler released a brief memo accepting the consequences of its punishment. It resolved to improve the handling of recalls. The record fines will hurt the company's bottom line, but it should weather the storm, says Kelsey Mays, a senior consumer affairs editor at cars.com.
As we've seen in the past, recalls and fines and whatnot don't really necessarily affect new car sales. So I think that Fiat Chrysler is going to pay the fines and move on.
Mays adds with years of record recalls involving so many manufacturers, consumers have been increasingly tuning them out. Jason Margolis, NPR News.
This article originally appeared on NPR.