Chrysler facing fine up to $105 million for mishandling recalls
NEW YORK — Federal auto safety regulators are set to hit Fiat Chrysler Automobiles with a record fine, as large as $105 million, for mishandling recalls, a government source with knowledge of the issue said Sunday.
The National Highway Traffic Safety Administration has been pressing the automaker over its handling of recalls for several years.
NHTSA is expected to also announce that Chrysler has agreed to the appointment of an auditor to oversee its recalls. Chrysler declined to comment Sunday.
Chrysler will be able to recover some of the fine money if it meets certain requirements going forward, the source said. News of the fine was reported earlier by the Wall Street Journal.
The expected fine stems from Chrysler’s handling of 23 recalls involving 11 million vehicles, the source told CNNMoney.
At a public hearing on July 2, officials said the agency had “tentatively concluded” that Chrysler had failed to alert the public and regulators about potential safety problems early enough. Regulators cited complaints that car owners had trouble getting repairs done, or that repairs made under a recall didn’t fix the problem.
“We also have serious concerns with Fiat Chrysler’s notifications to owners and to NHTSA about its recalls,” one official said at the hearing. “In every one of the 23 recalls, we have identified ways in which Fiat Chrysler failed to do its job.”
Scott Kunselman, a senior vice president at Chrysler who spoke at the hearing, called NHTSA’s concerns “legitimate.”
“We have learned from our mistakes and missteps, and we will continue to revise our process,” Kunselman said. Chrysler began reforming its recall approach last fall, he added.
One of the most high profile of the recalls involved in the looming fine was for 1.5 million Jeep Grand Cherokees from model years 1993-2007. At issue were gas tanks that can leak after a severe rear impact. NHTSA said in 2013 that more than 50 deaths had been linked to the problem.
Chrysler has said it has repaired about 500,000 of those vehicles after sending recall notices to all affected Jeep owners.
Now Chrysler reportedly may offer cash incentives to the remaining customers to spur them to respond to recall notices.
The settlement also involves vanity mirrors with electrical wiring that could pose a fire hazard and defective axles or suspensions that can seize or break, potentially causing the driver to lose control.
The Chrysler fine would be the largest ever levied by NHTSA.
The agency fined Honda $70 million earlier this year for failing to report accidents and safety issues. Last year, General Motors was ordered to pay $35 million for its 10-year delay in reporting a faulty ignition switch now tied to at least 124 deaths.
The federal government’s largest ever criminal penalty — separate from NHTSA fines — against an automaker was $1.2 billion, which Toyota agreed to pay last March to settle charges it mishandled recalls related to unintended acceleration.
CNNMoney’s Peter Valdes-Dapena and Chris Isidore contributed to this report.
By Rene Marsh and Jackie Wattles