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FCA Fined $70M for Regulatory Reporting Lapses

December 11, 2015

                FOXX
                FOXX

The National Highway Traffic Safety Administration has levied a new $70 million civil penalty on FCA US, charging that the automaker failed to report legally required safety data.

The fine 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. The federal safety agency, which operates within the U.S. Department of Transportation, uses such data to identify and investigate potential defects that may ultimately warrant a safety recall. The data include reports of deaths and injuries, warranty claims, consumer complaints and field reports of safety issues.

FCA (Fiat Chrysler Automobiles) 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 related to FCA’s administration of two dozen safety recalls. Including the new fine, 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 said.

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 discovered 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 the missing early-warning data. Also, the independent monitor appointed under the July 24 consent order will work to ensure the company’s 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.”

In a released statement, FCA US said the company is “revising its processes to ensure regulatory compliance.” The automaker also expressed confidence that it has already “identified and addressed all issues that arose during the relevant time period, using alternate data sources.”

Under the terms of the consent order amendment, FCA acknowledged significant failures in early-warning reporting. These lapses date back to the beginning of the requirements in 2003. The reporting 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.

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