Fiat Chrysler Fined Record Amounts For Recall Failures

In 2014, the National Highway Traffic Safety Administration (“NHTSA”) issued 803 recalls. These recalls included 63.9 million motor vehicles.

The federal government sets minimum standards of safety that automobile manufacturers and auto parts manufacturers must meet. Title 49, Chapter 301 of the United States Code deals with Motor Vehicle Safety. Under this chapter, a motor vehicle is defined as “a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways, but does not include a vehicle operated only on a rail line.” The term motor vehicle safety means “the performance of a motor vehicle or motor vehicle equipment in a way that protects the public against unreasonable risk of accidents occurring because of the design, construction, or performance of a motor vehicle, and against unreasonable risk of death or injury in an accident, and includes nonoperational safety of a motor vehicle.”

A safety defect is defined by the NHTSA as “as a problem that exists in a motor vehicle or item of motor vehicle equipment that poses a risk to motor vehicle safety, and may exist in a group of vehicles of the same design or manufacture, or items of equipment of the same type and manufacture.” These defects include “any defect in performance, construction, a component, or material of a motor vehicle or motor vehicle equipment.”

Car companies whose vehicles do not comply with these safety standards for any number of reasons often recall those vehicles. The manufacturers must fix issues “by repairing it, replacing it, offering a refund, or in rare cases repurchasing the vehicle.”

If a company mishandles a recall, that company can face heavy penalties from the NHTSA as Fiat Chrysler Automobiles learned in July of 2015. The car company was fined a record $105 million by the NHTSA for how it handled 23 recalls involving over 11 million vehicles. According to the press release from the NHTSA, the automaker violated the Safety Act in three areas: “effective and timely recall remedies, notification to vehicle owners and dealers and notifications to NHTSA.”

As part of the recall, owners of some half a million vehicle will have the chance to sell their cars back to the company. The cars at issue have “defective suspension parts that could cause the vehicle to lose control .” In addition, owners of over a million Jeeps can “trade their vehicle in for above its market value, or will receive a financial incentive to get their vehicle remedied.” The Jeeps have a fuel tank in the rear of the car which can rupture in a rear-end crash, starting a fire. According to Fox Sports, these fires have caused the deaths of 75 people. Fiat Chrysler was fined again by the NHTSA a few months later, this time for $70 million, for “significant failures in early warning reporting dating to the beginning of the requirements in 2003.”

Those these fines may seem high, manufacturing motor vehicles that are safe for consumers to drive is of the utmost importance. By cracking down on automakers who are skirting their duties, the federal government will hopefully encourage more companies to take extra care in making sure the vehicles that the companies put on the market are as safe as they can reasonably be.

For more information on the Fiat Chrysler recalls, click here.