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Weekly Recap: FCA hit with record fine as NHTSA crackdown continues

The National Highway Traffic Safety Administration slapped Fiat Chrysler Automobiles with a record fine this week that could reach $105 million. The punishment comes after NHTSA found problems with the automaker's execution of 23 recalls that affect more than 11 million vehicles. The consent agreement, announced Sunday, calls for FCA to pay a $70-million cash fine and requires the company to spend at least $20 million over a three-year period on industry outreach programs and to beef up old recall campaigns. Failure to comply will result in another $15-million fine. FCA also agreed to federal oversight, which includes an independent monitor to oversee the company's recalls. The $70-million cash fine equals a penalty NHTSA levied on Honda in January. "Fiat Chrysler's pattern of poor performance put millions of its customers and the driving public at risk," NHTSA administrator Mark Rosekind said in a statement. "This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry, and gives Fiat Chrysler the opportunity to embrace a proactive safety culture." FCA called the deal a "consensual resolution," but admitted that it "failed to timely provide an effective remedy" during certain recalls. "We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate," the company said in a statement. The announcement kicked off a busy week for the automaker. NHTSA agreed FCA did not need to recall 4.7 million vehicles after an investigation failed to find defects with a power module used in some Jeep, Dodge, and Ram vehicles. A Georgia judge also reduced a civil verdict involving a death in a Jeep Grand Cherokee crash. Amid all of that, the company reported net profit of about 333 million euros, or $364 million in the second quarter on Thursday. OTHER NEWS & NOTES FCA ramps up Hellcat production Despite a decidedly legal and financial week for FCA, there was still time for the performance side of the business to briefly grab the spotlight. The automaker is more than doubling its production of the Dodge Challenger and Charger SRT Hellcats in response to strong demand. The order bank opens the second week of August and production begins in September. FCA will finish up its scheduled 2015 model-year Hellcat builds, and cancel any "unscheduled" versions, though customers will get discounted pricing for 2016.

SRT pulling Vipers out of Le Mans

Last year, Chrysler campaigned a pair of SRT Viper GTS-Rs in the 24 Hours of Le Mans. It was the first time Auburn Hills had sent a team to the famous French endurance race since 2000, when the Viper ended a three-year winning streak in the GTS class. It finished in 24th and 31st places, woefully behind the Porsche 911 RSR that won the LMGTE Pro category. But this year it won't be back. According to a report from Sportscar365 citing a statement issued by SRT chief Ralph Gilles, the outfit turned down its invitation from the ACO that organizes the race, ending what could have been a multi-year campaign. Instead it's opting to focus on its Stateside campaign in the United SportsCar Championship. SRT sent Autoblog the following statement: "We regretfully and respectfully decline to participate in this year's 24 Hours of Le Mans," said Ralph Gilles, President and CEO of SRT (Street and Racing Technology) Brand and Motorsports, Chrysler Group LLC. "We are honored to once again be invited by the ACO (Automobile Club de l'Ouest) to compete in this historic event, and they were the first to be informed of our decision. We will remain focused on our North American racing program in 2014." In its place, the Ferrari 458 fielded by JMW Motorsport will be invited to fill the last slot in the class, leaving only the Corvette and Dempsey Racing entries to represent the United States in the race this year. "Hopefully, we'll continue to go to Le Mans for many years to come," as SRT's marketing chief Beth Paretta put it when announcing the effort a year ago, "but as a sports-car fan, if you can make the trip even once, it's worth it."

Detroit 3 and UAW could create healthcare pool

Healthcare costs continue to multiply in the US with no clear end in sight, but the United Auto Workers and the Big Three are negotiating a way to rapid growth under control. As part of the latest contract talks, the union has an idea to create a healthcare pool across all of its members at Ford, General Motors, and FCA US. If accepted, the company-wide integration would spread out the expenses and create a massive member base for bargaining with insurance companies. Both Ford and GM are at least considering the proposal, according to The Detroit News, and FCA US might be on board, as well. The idea is the work of current UAW president Dennis Williams and is based on the similar pool for the Voluntary Employee Beneficiary Association for retirees. "I've walked through this several ways; I just don't have any other answer," Williams said to The Detroit News. "I do believe this will work. It's worked with the VEBA." Williams was elected UAW president last year and won by an overwhelming margin. He vowed no more concessions to automakers. In addition to healthcare, the two-tier wage system is another major talking point in the contract negotiation because it gives fewer benefits to entry-level workers. Higher wages are also a request. Healthcare costs are a massive expense for automakers and are expected to reach over $2 billion this year, according to The Detroit News. The payments are up nearly 50 percent or more in just the last four years.