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Fiat Chrysler's massive recall fine

Monday, July 27, 2015 - 01:55

Fiat Chrysler is facing a $105 million fine, costly repairs and buybacks, after lapses in safety recalls involving millions of vehicles. Bobbi Rebell reports.

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Fiat Chrysler facing the biggest fine that the U.S. has ever levied against an automaker: $105 million. The National Highway Traffic Safety Administration saying, Chrysler didn't do its part to properly execute recalls. U.S. Transportation Secretary Anthony Foxx: (AUDIO SOUNDBITE) ANTHONY FOXX, SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION (ENGLISH) SAYING: "They didn't fix the safety defects. These included failures to give consumers the information they need to take action on recalls, failures to produce the parts needed to fix defects, and to make those repairs available to consumers, and failures to provide NHTSA the information it needs to make sure the traveling public is safe. This pattern represents an unacceptable risk to safety." The settlement also includes an unprecedented buyback option for some vehicles. That includes more than a million Jeep SUV's where owners can receive a trade-in for more than market value, or a financial incentive to get their vehicles repaired. Morningstar's Richard Hilgert: SOUNDBITE: RICHARD HILGERT, AUTO ANALYST, MORNINGSTAR (ENGLISH) SAYING: "Fiat Chrysler has a much higher cash burden for debt obligations, compared to other manufacturers. That debt obligation constrains its cash. It also has a huge amount of investment that it wants to do to revamp its product lines over the next three years, and, because of those cash constraints, it's conceivable that management may have been dragging its feet in terms of getting 23 different recalls conveyed to consumers, communicated to the public as well as getting the necessary repairs done." NHTSA has taken a more aggressive enforcement stance after coming under fire from leaders of both parties in Congress for lapses in its handling of deadly defects, including the General Motors ignition switch recall last year.

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Fiat Chrysler's massive recall fine

Monday, July 27, 2015 - 01:55