It seems that the National Highway Traffic Safety Administration (NHTSA) is less than satisfied with the manner in which Fiat Chrysler Automobiles (FCA) has handled a number of safety recalls over the past couple of years.
Furthermore, at a July 2 hearing on the matter, the NHTSA detailed an alarming number of shortfalls by the automaker. They include failure to notify customers of recalls in a timely manner, various delays in manufacturing and distributing recall related repair components, and worse yet failing to address the conditions that caused said recalls.
An unnamed source close to the situation informed the Wall Street Journal on Sunday of the NHTSA’s intentions to fine FCA $105-million for the infractions, this week. The source did not want to be identified because there has been no public announcement. This would be the largest fine levied against an automaker by the U.S. Government in history. Previously the Honda Motor Corporation held this dubious distinction when they were slapped with a $70-million fine for the manner in which they handled certain recalls related to the Takata airbag debacle (which is still ongoing).
The NHTSA will make the announcement on Monday. In addition to the massive fine, FCA will also be ordered to buy back a number of affected Jeep vehicles in order to get them off the road. Despite the fact that FCA maintains that the Jeeps are as safe as comparable vehicles built during the same period of time, the NHTSA has deemed them unsafe and ordered FCA to make payments to owners of 1.56-million vehicles. The older Jeep SUVs have the fuel tank behind the rear axle making them more vulnerable to explosion in the event of a motor vehicle crash, according to the NHTSA. To date the automaker maintains that the Jeeps are safe and refuses to buy them back from the customers. However, FCA has agreed to an independent monitor who will observe recall practices and review them before the NHTSA.
The NHTSA’s actions come on the heels of a rare public hearing that detailed FCA shortcomings with regard to twenty-three FCA recalls which covered more than 11-milllion cars and trucks. This is a sure sign that the NHTSA is taking a much sterner approach to disciplining automakers that refuse to comply with federal motor vehicle safety regulations. Immediately following hearing, NHTSA Administrator Mark Rosekind told reporters that Fiat Chrysler would surely be punished. “There’s a pattern that’s been going on for some time,” he said.
FCA has also indicated that they intend to make improvements in the way NHTSA recalls are handled on a corporate level. During the hearing, FCA did not dispute any of NHTSA’s allegations. Scott Kunselman, the company’s head of vehicle safety, said it is changing the way it manages safety to follow the industry’s best practices. “We have learned from our mistakes and missteps,” he said. The safety system, he said, has been reorganized with added personnel. He now reports directly to CEO Sergio Marchionne. Previously the person in his position was three rungs down from the chief executive.