Fiat Chrysler to face sanctions over recall failures

The National Highway Traffic Safety Administration (NHTSA) says that Fiat Chrysler Automobiles (FCA) has broken various laws during numerous vehicle recall campaigns.

Rosekind says a number of options for agency action are “on the table”, including fines against the company and requiring it to buy back vehicles subject to recall. Another possible outcome would be the automaker signing a consent order in which it admits to its mishandling of the recalls and accepts the penalties.

He said Fiat Chrysler created a new employee position to monitor recalls and alert him and regulators to problems.

The automaker, which controls the Auburn Hills, Mich.-based auto company previously called Chrysler Group, is under scrutiny for its handling of 23 recalls involving about 11 million vehicles. The agency has authority to fine companies as much as $35 million per infraction, and could find several infractions in one recall. “In every one of the 23 recalls, we have identified ways in which Fiat Chrysler failed to do its job”, Jennifer Timina, NHTSA’s Office of Defects Investigation chief said. “They’ll be action soon after the docket closes”, said NHTSA Administrator Mark Rosekind said.

During an unprecedented public hearing, NHTSA said that FCA has widespread problems with the way it conducts vehicle recalls, also saying that the company has misled safety regulators and violated laws.

Fiat Chrysler must submit a written response to the NHTSA’s allegations within the next 10 days. Scott Kunselman, Fiat Chrysler’s recently appointed head of vehicle safety, said it is changing the way it manages safety to follow the industry’s best practices.

In some cases, the agency has “tentatively concluded” that Fiat Chrysler violated the law. The father of a 17-year-old boy killed in a fiery rear-end Jeep crash in November 2013 said he didn’t receive a recall notice about the vehicle until long after the accident.

Fiat Chrysler is installing trailer hitches on the backs of recalled Jeeps to provide better protection in lower-speed collisions.

Still, the rate of repairs “are not in line with Fiat Chrysler’s own projections or NHTSA’s expectations”, said Scott Yon, chief of the vehicle integrity division in NHTSA’s Office of Defects Investigation, during the hearing. Federal regulators have noted that only 21% of recalled Jeeps had been repaired as of April 30.

In the Jeep case, it has tried 4.5 million times to reach owners, a spokesman said. He added that dealers have problems getting parts, customers face difficulties getting repairs and proposed fixes often don’t remedy vehicle defects. Other recalls being scrutinized include those involving Fiat Chrysler vehicles equipped with rupture-prone air bags manufactured by Takata Corp. of Japan.

Witnesses testified about the recall of 1.56 million older Jeeps for rear-mounted gas tanks that are vulnerable in rear crashes. He says it is his opinion that Fiat Chrysler uses the initial recall notices to customers as a “get out of jail” free card because it waits so long after to send details about actually making the repairs.

Chrysler maintains the Jeeps are as safe as comparable SUVs built during the same years. NHTSA points to one case where FCA suspended a recall and requested that dealers return replacement parts for quality verification without notifying the agency.