Fiat Chrysler CEO says automakers now more sensitive to safety issues

WASHINGTON Wed May 21, 2014 3:50pm EDT

WASHINGTON May 21 (Reuters) - Fiat Chrysler Automobiles Chief Executive Sergio Marchionne said on Wednesday that the fallout from General Motors' delay in recalling millions of cars for faulty ignition switches has prompted automakers to be more sensitive to safety issues.

"Given the nature of the events that we've seen in the last three or four months, I think it is more than likely automotive houses will now shift their attitude and be even more prudent than they would have been under normal circumstances. And probably beyond what is required," Marchionne told reporters.

GM is under investigation by the Justice Department, Congress, the Securities and Exchange Commission and several states for waiting 10 years after first learning of the defective ignition switches to issue the recall.

At least 13 deaths have been linked to the faulty part in 2.6 million Chevrolet Cobalts, Saturn Ions and other cars, which were recalled beginning in February.

GM has issued a total of 29 recalls this year involving a record 11.8 million vehicles in the United States.

"I just find the number of recalls that have come out to just be an astounding number, just in sheer size," Marchionne said of the industry after an event at Brookings Institution.

"It can't be all of a sudden we woke up to these issues. There must be a change in attitude inside the (companies)," he said.

Marchionne said if the frequency of recalls conducted by GM becomes the norm in the industry, the costs will be shifted to consumers in the form of higher-priced cars.

Last week, the National Highway Traffic Safety Administration fined GM a record $35 million for its delayed response to the ignition-switch recall.

Marchionne said the NHTSA fine would not act as a deterrent to future safety problems.

"The issue is a reputational issue associated with the brand," he said. "It has to do with what we do as professionals."

Chrysler has recalled 1.7 million vehicles in the first three months of this year. It recalled 4.1 million in 2013.

The automaker has hired outside consultants who have begun a review of the company's recall process, Marchionne said.

"We going to look to see whether we're doing all the right things. To the best of my knowledge, I think the vehicle recall committee that is in place and all the work that's done by the technical staff is world class. If we can improve it, we will," he said. (Reporting by Eric Beech; Editing by Cynthia Osterman)

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