Chrysler gets "rammed" with massive recall and buy back
DETROIT (KTVU-AP) — Fiat Chrysler will pay a record fine of up to $105 million and be forced to buy back various vehicles stemming from a failure to properly conduct recalls as well as serious defects in the Ram and the Jeep.
Though not unprecedented, mass buybacks of cars by the manufacturer are rare indeed. For subjecting its customers to extreme steering dangers, Chrysler must offer to buy back a half million Ram pickup trucks as well as some other vehicles, minus depreciation.
Even with depreciation, the buyback could cost the company as much as $10 billion. Once bought back and repaired, Chrysler can resell the Rams as used trucks.
Also, owners of more than a million Jeeps will be able to trade their vehicles in above market value because, according to the government, their fuel tanks are dangerously mounted behind the rear axle when a collision could start a fire.
Consumer advocates say the death toll is much higher that what federal auto safety agency the NHTSA believes.
"The biggest killer in the 23 recalls is the Jeeps. If they're hit from behind in a rear impact, the fuel tank is very likely to explode as like the Ford Pinto. NHTSA itself says there are at least 75 deaths due to the defect. We now count 187 deaths to the defect," explained Clarence Ditlow, Director of the Center for Auto Safety.
Though many people wonder why car makers have been able to leave defective cars in consumers hands for decades, consumer advocates blame that on the puny power of the federal auto safety agency.
"It doesn't have unlimited penalties as other agencies do. It doesn't have criminal penalties. It doesn't have imminent hazard authority and it can only order a repair for free in recalls if the vehicle is less than 10 years old," said Ditlow.
In a separate statement, Fiat Chrysler said it accepted the consequences of the agreement "with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us."
NHTSA has been involved in vehicle buybacks in the past, but never one of this size. A buyback usually happens when a problem is so serious that it can't be fixed and the vehicles need to be removed from service.
The consent order that Fiat Chrysler agreed to requires it to notify owners who are eligible for buybacks and other incentives.
Buyback models include some 2009 to 2012 Ram 1500s, the 2008 Ram 1500 Mega Cab 4 x4, 2008 to 2012, 2008 to 2012 Ram 2500 4x4, 2008 to 2012 3500 4x 4500 4 by 4, and 2008 to 2012 5500 4x4, all from. Also included in the buyback offer are the 2009 Chrysler Aspen, 2009 Dodge Durango SUV and the 2008 to 2012 Dodge Dakota pickup.
The fine against FCA beats the old record of $70 million assessed against Honda Motor Co. for lapses in recalls of air bags made by Takata Corp.
Fiat Chrysler also received a $70 million fine, and must spend at least $20 million to meet performance requirements detailed in the agreement. Another $15 million could come due if the recall monitor finds any further violations.
Earlier this month, the safety agency held a rare public hearing where regulators detailed a litany of shortfalls: failure to notify customers of recalls, delays in making and distributing repair parts and in some cases failing to come up with repairs that fix the problems. Some of the recalls date to 2011.
Parties who want to check if their vehicle is covered by the current recall can check at the SaferCar.gov web page that allows look up by VIN number here.