Already under fire for its slow response to various safety problems, Fiat Chrysler Automobiles now faces hefty fines from the National Highway Traffic Safety Administration which accused the maker of misleading federal safety regulators.
FCA officials came in for sharp criticism during a hearing in Washington on Thursday, NHTSA officials accusing the maker of repeatedly keeping it “in the dark” about safety problems. The unprecedented session was called to examine Fiat Chrysler’s handling of 23 separate recalls covering 11 million vehicles.
“What you heard here is there’s a pattern that’s been going on for some time, frankly,” said Mark Rosekind, the new Administrator for NHTSA. The agency has taken heat for some of its own lapses in recent weeks, and Rosekind has promised to both fix those problems and crack down on the industry.
In Fiat Chrysler’s case, such lapses could lead to tens, perhaps $100s of millions of dollars in fines.
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FCA has been accused of failing to meet federal guidelines on reporting potential safety problems. It has also been cited for the slow pace in which it has handled repairs on some recalls. That includes the millions of Jeeps targeted by a 2014 service action because of a potential fire problem.
While automakers are generally required to advise federal regulators within days of learning of a defect, notification sometimes took months, noted Jennifer Timian, the acting director of NHTSA’s Office of Defects Investigation, or ODI. She called the lapses, “widespread.”
“We have serious concerns with Fiat Chrysler notifications to owners and to NHTSA about its recalls,” she added. “In every one of the 23 recalls, we have identified ways in which Fiat Chrysler failed to do its job.”
Responding to the harsh criticism at Thursday’s hearing, Chrysler Senior Vice President of Vehicle Safety Scott Kunselman acknowledged that regulators had “legitimate concerns.” The company had “fallen short” and “could’ve done better,” he said.
Some critics have said FCA’s sometimes confrontational approach has come from the top down. CEO Sergio Marchionne was openly critical of NHTSA’s call for a recall of Jeeps equipped with gas tanks mounted behind the rear axle, and threatened to fight the government in court. He backed down just before the deadline – but only after NHTSA agreed to reduce the number of vehicles covered by the recall.
And since then, by FCA’s own count, less than a quarter of the Jeeps covered by that service action actually have been repaired.
What NHTSA will do next is uncertain, but the agency appears to be in a position in which it will have to take tough action. Late last month, safety regulators faced sharp criticism of their own actions during a Senate hearing. Lawmakers were responding to a harsh auditors report that found numerous failures at NHTSA.
Among other things, the agency has been criticized for failing to uncover the ignition switch problems at General Motors that has so far been blamed for more than 100 deaths, as well as airbag problems involving Takata safety systems that have led to the recall of 36 million vehicles.
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FCA has 10 days to issue a written response to NHTSA, but following Thursday’s meeting, Administrator Rosekind said “no,” when asked if the maker could avoid penalties.
At the least, Fiat Chrysler may be asked to enter a consent agreement to force a change in its behavior. At the other extreme it could face fines of up to $35 million for each of the 23 recalls should NHTSA determine it violated its legal requirements.
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