Chrysler’s Record Fine May Only Be The Beginning
Michael Babboni
Personal Injury
The verdict is in, and the National Highway Traffic Safety Administration has assigned a record $105 million fine to Fiat Chrysler Automobiles for its failure to maintain federal standards regarding its recalls. Out of the total, $70 million is in cash, $20 million will be spent on meeting federal performance requirements, and the NHTSA is holding the last $15 million in reserve in case they find additional violations in the future.On top of this fine, the regulators are imposing a buyback program which covers half a million Dodge Ram and Dakota pickup trucks with faulty suspension and 1.5 million Jeep Liberties and Grand Cherokees whose gas tanks are placed so far back that they can rupture and catch fire during a rear-end collision. FCA is also signing an agreement that will allow the federal government to keep a close eye on their recall system for at least three years.
Courting Trouble
However, FCA’s recall woes are likely only just beginning. Investigators have linked at least 75 deaths to the faulty gas tanks alone, and given the evidence the NHTSA has collected regarding the car company’s lack of timely and comprehensive responses in 23 separate recalls, it seems likely that charges of criminal negligence will soon follow.
Whether or not the criminal charges happen, it seems likely that FCA will create a fund similar to the one GM has set in place to pay the victims and relatives of those killed by their faulty ignition switches. For the moment, it’s unclear how such a fund would compare next to the size of the federal fine, but it may end up being around the same amount depending on just how many people were affected by the defective parts and how many are able to come forward with individual and class action lawsuits.
A Change In The Wind
On the plus side, it seems as though the new, tough stance of the NHTSA is having the desired effect of forcing automakers to act more responsibly. Recently, two researchers proved that it’s possible to remotely hack the dashboard computers of several new FCA models and take control of the vehicle away from the driver. The researchers needed a year and a program they built from scratch to pull it off, but soon afterwards FCA issued a 1.4 million vehicle recall intended to upgrade the computer’s security software. Still, they refused to say they were fixing a defect, and instead they explained they were acting out of “an abundance of caution.”
GM is also getting more proactive, and in just one week in July they recalled nearly 700,000 vehicles from four different lines due to liftgate struts that may wear too quickly and cause the leftgate to suddenly fall and hit someone.
Between the efforts of accident lawyers and federal regulators, it seems as though automakers are finally starting to see fiscal consequences following years of criminal neglect and cover-ups meant to save their bottom lines from the expense of a large-scale recall. Of course, pressure must continue from both sides for there to be any hope of a long-term change in policy and behavior.