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Record recall penalty for FCA

by Bill Cawthon on

FCA US has agreed to a $105 million civil penalty, the largest ever levied by the government, after the company admitted to violating  the Motor Vehicle Safety Act.

The fines dwarf those issued to GM and Toyota, partly because of the number of recalls involved. The company was cited in three areas: effective and timely recall remedies, notifications to owners and dealers, and notifications to the NHTSA.

FCA will also have to buy back an estimated 500,000 vehicles and submit to federal oversight for three years. GM escaped the latter, though an estimated 125 people have now died in incidents involving defective ignition-key switches.

Dodge-Dart-NHTSA

Owners who could lose control of their vehicle due to defective suspension components will be able to sell the vehicle back. Owners of Jeeps that the NHTSA has said are prone to fires will either be allowed to trade their vehicle in for above its market value, or will be eligible to get a financial incentive to get their vehicle fixed.

Fiat Chrysler will hire an independent monitor approved by the NHTSA to track and report the company’s performance.

The government’s share of the fine is $70 million, the same that Honda paid in January; the additional costs are $20 million to follow the consent order and a possible $15 million more if the monitor discovers more violations.

An official statement noted, “… We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate.” The company said it planned to find best practices for recalls and to find “obstacles that discourage consumers from responding to recall notices.”

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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