Fiat Chrysler to pay record $123.3m for lapses in vehicle recalls

A file picture of a Fiat Jeep Grand Cherokee is pictured. Fiat Chrysler will recall 1.4 million vehicles in the United States to install software to prevent hackers from gaining remote control of the engine, steering and other systems in what federal
A file picture of a Fiat Jeep Grand Cherokee is pictured. Fiat Chrysler will recall 1.4 million vehicles in the United States to install software to prevent hackers from gaining remote control of the engine, steering and other systems in what federal officials said was the first such action of its kind. PHOTO: REUTERS

MILAN (AFP) - Automaker Fiat Chrysler will pay a record US$90 million (S$123.3 million) for lapses in recalls of its vehicles under a deal reached with US regulators, the company said on Monday.

The Italian-American automaker will pay a US$70-million fine to the National Highway Traffic Safety Administration (NHTSA).

It will spend a further US$20 million on "consumer outreach activities and incentives to enhance certain recall completion rates" and will be required to pay an additional US$15 million if it fails to comply with the terms of the deal, it said in a statement.

Under the deal, an independent auditor will monitor the company's recall process for three years. If the company fails to comply with the terms imposed, the NHTSA can extend the scrutiny by another year.

In a report on Sunday, the Wall Street Journal quoted sources as saying that under the deal the company will buy back some defective vehicles.

The fine was to punish legal violations in recalls of 11 million vehicles, including older Jeep models with rear gas tanks linked to numerous fatal fires, the Journal said.

The NHTSA had accused the automaker of obstructing the work of regulators, of not alerting car owners to problems in a timely manner, and of carrying out insufficient repairs, the report said.

The auto company on Friday announced recalls of 1.4 million vehicles in the United States after hackers demonstrated they could remotely control a Jeep Cherokee while it was in operation.

The US$90 million of penalties imposed on Fiat Chrysler (FCA) are greater than those slapped on General Motors (US$35 million) for delayed recalls and on Japan's Honda (US$70 million) for hiding safety problems in some of its vehicles.