After more than a year of stalling, Fiat Chrysler will pay for numerous safety violations noted in its recent recalls, including a defect that can cause gas tanks in older Jeeps to explode and catch fire.
On July 26, 2015, the National Highway Traffic Safety Administration issued Fiat-Chrysler a fine for $70 million after the federal entity discovered inadequate responses to a string of recent recalls. Fiat-Chrysler (FCA) has been ordered to buy back about half a million of its vehicles, and pay up to $105 million in civil penalties.
The overview of the recalls and response show the scope of the automaker’s errors:
- In 2013, FCA started several recall campaigns to correct a variety of potential hazards in its Jeep vehicles, including ignition switch problems, alternator failure, ruptured air bags, and sudden loss of steering. In June 2013, NHTSA discovered a further issue: a risk of Jeep gas tank explosions and fire in a rear-impact crashes. NHTSA requested that FCA temporarily recall the vehicles at risk of fires; Chrysler responded that the problem will be corrected by installing trailer-hitches on the affected vehicles.
- In the years that followed, customers file complaints that dealerships were not providing replacement parts. An NHTSA investigation revealed that fewer than 27 percent of recalled vehicles had been repaired. Meanwhile the number of people killed in fires due to rear-impact crashes had risen to over 50. Lawsuits against FCA allege that not only will new hitches not stop gas tanks from exploding, but Chrysler may have known that the placement of the fuel tanks on older model Jeeps posed a risk.
- In March 2015, CBS News called attention to the risks of fatal fires in Jeep models in an investigative report. In May, NHTSA officially ordered FCA to release all information pertaining to the recalls. On June 1, the recall documents were released, including communications from company headquarters to dealerships, information on the number and type of complaints received, and lawsuits filed against the automaker.
- In July 2015, NHTSA levied two separate $35 million fines (the maximum under federal law) with an additional $15 million if any part of the order is violated—making the highest penalty NHTSA has ever ordered against an automaker. In addition to fines, FCA will spend $20 million on consumer outreach, including public service announcements and gift cards.
You Shouldn’t Put Your Life at Risk to Save a Company’s Profits!
While this decision is a positive step in ensuring safety compliance in American cars, it is far from good news for the millions of Jeep and Chrysler drivers in the U.S.
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