Fiat Chrysler will pay $70M to settle safety disclosure suit
Thu, Dec 10 2015NHTSA says the failures to report this information "stem from problems in FCA's electronic system for monitoring and reporting safety data, including improper coding and failure to account for changes in brand names." There are no allegations of any intentional deception by the automaker.
NHTSA will wrap up the latest fine with the previous consent order against FCA US earlier this year for the automaker's handling of 23 recalls. The company will know owe the safety regulator a total of $140 million in cash, and there will be possibility of $35 million more in deferred penalties if FCA doesn't comply with the agency's requests.
In a statement about the fine to Autoblog, FCA US said the automaker "accepts these penalties and is revising its processes to ensure regulatory compliance." The company strongly believes that it didn't miss any safety problems over the time with this problem.
Early Warning Reports include information on deaths, injuries, crashes, and other potential safety concerns, and NHTSA often uses the data in investigations for possible recalls. In September, the safety agency first announced the automaker failed to submit these documents. At the time, the regulator's administrator Mark Rosekind promised to "take appropriate action after gathering additional information on the scope and causes of this failure." FCA US also released a statement then about the lapse and said the company notified NHTSA immediately after discovering the problem.
FCA US is not the first company to run afoul of NHTSA's reporting requirement. The agency fined Triumph Motorcycles and Honda this year for similar lapses. It also punished Ferrari in 2014.
U.S. DOT Fines Fiat Chrysler $70 million for Failure to Provide Early Warning Report Data to NHTSA
WASHINGTON – The U.S. Department of Transportation's National Highway Traffic Safety Administration has imposed a $70 million civil penalty on Fiat Chrysler Automobiles (FCA) for the auto manufacturer's failure to report legally required safety data.
The penalty follows FCA's admission in September that it had failed, over several years, to provide Early Warning Report data to NHTSA as required by the TREAD Act of 2000. NHTSA uses the data, including reports of deaths and injuries, warranty claims, consumer complaints and field reports of safety issues, to identify and investigate potential defects that may require a safety recall. FCA has commissioned a third-party audit to determine the full extent of the reporting failure.
"Accurate, early-warning reporting is a legal requirement, and it's also part of a manufacturer's obligation to protect the safety of the traveling public," said U.S. Transportation Secretary Anthony Foxx. "We need FCA and other automakers to move toward a stronger, more proactive safety culture, and when they fall short, we will continue to exercise our enforcement authority to set them on the right path."
The penalty is included in an amendment to the July 24 consent order NHTSA issued regarding FCA's administration of two dozen safety recalls. Including the new penalty, the civil penalties from that investigation now total $175 million, with $140 million due in cash and another $35 million in deferred penalties that will come due if the company fails to meet its obligations under the consent order.
NHTSA notified FCA in late July of apparent discrepancies in the company's early warning reporting. In September, the company reported to NHTSA that in investigating that discrepancy, it had found significant under-reporting of death and injury claims and other information. In addition to the new civil penalty, FCA must report on the results of its third-party audit and provide missing early warning data. Also, the Independent Monitor appointed under the July 24 consent order will monitor the company's early warning compliance.
"NHTSA's enforcement actions in recent months have been designed not only to penalize previous actions, but to increase safety going forward," said NHTSA Administrator Mark Rosekind. "FCA has expressed a desire to use this situation as a stepping stone to a stronger, more proactive safety posture, and NHTSA is ready to work with FCA and the industry as a whole to improve safety."
Under the terms of the consent order amendment, FCA acknowledges significant failures in early warning reporting dating to the beginning of the requirements in 2003. The failures stem from problems in FCA's electronic system for monitoring and reporting safety data, including improper coding and failure to account for changes in brand names.
FCA is the fifth vehicle manufacturer in the past 14 months that NHTSA has penalized for failure to meet early warning reporting requirements. The agency previously issued penalties to automakers Honda and Ferrari, motorcycle manufacturer Triumph, and specialty vehicle manufacturers Forest River and Spartan Motors. The FAST ACT signed by President Obama on December 4 provides funding DOT requested for additional personnel to audit manufacturer compliance with early warning requirements.
Read the amendment to NHTSA's July 24 consent order here.
For more information on the consent order and NHTSA's investigation of FCA's recall compliance issues, click here.
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FCA US Statement
FCA US LLC accepts these penalties and is revising its processes to ensure regulatory compliance. However, FCA US is confident that it identified and addressed all issues that arose during the relevant time period, using alternate data sources.
WASHINGTON – The U.S. Department of Transportation's National Highway Traffic Safety Administration has imposed a $70 million civil penalty on Fiat Chrysler Automobiles (FCA) for the auto manufacturer's failure to report legally required safety data.
The penalty follows FCA's admission in September that it had failed, over several years, to provide Early Warning Report data to NHTSA as required by the TREAD Act of 2000. NHTSA uses the data, including reports of deaths and injuries, warranty claims, consumer complaints and field reports of safety issues, to identify and investigate potential defects that may require a safety recall. FCA has commissioned a third-party audit to determine the full extent of the reporting failure.
"Accurate, early-warning reporting is a legal requirement, and it's also part of a manufacturer's obligation to protect the safety of the traveling public," said U.S. Transportation Secretary Anthony Foxx. "We need FCA and other automakers to move toward a stronger, more proactive safety culture, and when they fall short, we will continue to exercise our enforcement authority to set them on the right path."
The penalty is included in an amendment to the July 24 consent order NHTSA issued regarding FCA's administration of two dozen safety recalls. Including the new penalty, the civil penalties from that investigation now total $175 million, with $140 million due in cash and another $35 million in deferred penalties that will come due if the company fails to meet its obligations under the consent order.
NHTSA notified FCA in late July of apparent discrepancies in the company's early warning reporting. In September, the company reported to NHTSA that in investigating that discrepancy, it had found significant under-reporting of death and injury claims and other information. In addition to the new civil penalty, FCA must report on the results of its third-party audit and provide missing early warning data. Also, the Independent Monitor appointed under the July 24 consent order will monitor the company's early warning compliance.
"NHTSA's enforcement actions in recent months have been designed not only to penalize previous actions, but to increase safety going forward," said NHTSA Administrator Mark Rosekind. "FCA has expressed a desire to use this situation as a stepping stone to a stronger, more proactive safety posture, and NHTSA is ready to work with FCA and the industry as a whole to improve safety."
Under the terms of the consent order amendment, FCA acknowledges significant failures in early warning reporting dating to the beginning of the requirements in 2003. The failures stem from problems in FCA's electronic system for monitoring and reporting safety data, including improper coding and failure to account for changes in brand names.
FCA is the fifth vehicle manufacturer in the past 14 months that NHTSA has penalized for failure to meet early warning reporting requirements. The agency previously issued penalties to automakers Honda and Ferrari, motorcycle manufacturer Triumph, and specialty vehicle manufacturers Forest River and Spartan Motors. The FAST ACT signed by President Obama on December 4 provides funding DOT requested for additional personnel to audit manufacturer compliance with early warning requirements.
Read the amendment to NHTSA's July 24 consent order here.
For more information on the consent order and NHTSA's investigation of FCA's recall compliance issues, click here.
###
FCA US Statement
FCA US LLC accepts these penalties and is revising its processes to ensure regulatory compliance. However, FCA US is confident that it identified and addressed all issues that arose during the relevant time period, using alternate data sources.
By Chris Bruce
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