Fiat Chrysler Automobiles (FCA) has recently just been hit with a $70 million civil penalty from federal regulators at the National Highway Traffic Safety Administration (NHTSA). This fine has been issued due to FCA’s “failure to report legally required safety data” to federal authorities “over several years,” according to a recent NHTSA announcement.
While this penalty is certainly hefty, it is not the only civil fine that the NHTSA has issued Fiat Chrysler this year. In fact, this past July, FCA was issued a massive $105 million civil fine for mishandling more than 20 safety recalls. The latest $70 million fine, which has been imposed as an amendment to the July penalties, now brings the total amount of FCA’s civil penalties up to $175 million.
According to officials, $140 million of this penalty is due for cash payment immediately while the remaining $35 million will become due “if the company fails to meet its obligations under the consent order.”
Commenting on this action against FCA, U.S. Transportation Secretary Anthony Foxx has noted that:
Accurate, early-warning reporting is a legal requirement, and it’s also part of a manufacturer’s obligation to protect the safety of the traveling public… We need FCA and other automakers to move toward a stronger, more proactive safety culture, and when they fall short, we will continue to exercise our enforcement authority to set them on the right path.
Background on Fiat’s Failures
Fiat is now under fire from federal authorities for significantly underreporting the injury and death claims, as well as the warranty claims and other possible safety issues, that consumers have filed with the company. Motor vehicle manufacturers are required by law (per the TREAD Act of 2000) to report this data to the DOT so that regulators can “identify and investigate potential defects that may require a safety recall.”
Although the extent of FCA’s reporting failures is detailed in the official Consent Order, Fiat has also reportedly retained a third-party auditor to evaluate the “full extent of the reporting failure.” As part of this Consent Order, Fiat has reportedly acknowledged its failures “dating to the beginning of the requirements in 2003.”
Elaborating on these Consent Orders for FCA, NHTSA Administrator Mark Rosekind has explained that:
NHTSA’s enforcement actions in recent months have been designed not only to penalize previous actions, but to increase safety going forward…FCA has expressed a desire to use this situation as a stepping stone to a stronger, more proactive safety posture, and NHTSA is ready to work with FCA and the industry as a whole to improve safety.
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