Fiat Chrysler Faces Record Fines

by Industry Week | Business

MILAN — It's bad news for Fiat Chrysler which will pay a record $90 million (£58 million) for lapses in recalls of its vehicles under a deal reached with U.S. regulators, Industry Week reports Monday.

According to the details, the Italian-American automaker will pay a $70 million (£45 million) fine to the National Highway Traffic Safety Administration (NHTSA), and a a further $20 million (£13 million) on “consumer outreach activities and incentives to enhance certain recall completion rates.”

It does not end their because it will be required to pay an additional $15 million (£9.6 million) if it fails to comply with the terms of the deal, according to the report.

"Under the deal, an independent auditor will monitor the company’s recall process for three years. If the company fails to comply with the terms imposed, the NHTSA can extend the scrutiny by another year," Industry Week reports.

Fiat Chrysler is expected to buy back some defective vehicles according the provision of the deal, said the Wall Street Journal. 

"The fine was to punish legal violations in recalls of 11 million vehicles, including older Jeep models with rear gas tanks linked to numerous fatal fires", the Journal said.

The NHTSA had accused the automaker of obstructing the work of regulators, of not alerting car owners to problems in a timely manner, and of carrying out insufficient repairs, the report said.

The auto company on Friday announced recalls of 1.4 million vehicles in the United States after hackers demonstrated they could remotely control a Jeep Cherokee while it was in operation.

The $90 million (£58 million) of penalties imposed on Fiat Chrysler are greater than those slapped on General Motors ($35 million - £23 million) for delayed recalls and on Honda ($70 million - £45 million) for hiding safety problems in some of its vehicles.

The market reacted negatively on the news at the New York Stock Exchange (NYSE).