FCA hits more US trouble

Fiat Chrysler bought its way out of legal trouble with the US National Highway Traffic Safety Administration (NHTSA) less than two months ago, but now it’s right back in.

The Italo-American company is staring down the barrel of more recalls and more tens of millions of dollars in penalties after it was caught under-reporting deaths and injuries in its cars.

In what NHTSA administrator Mark Rosekind called a “significant failure,” the agency triggered a red flag when it found out about a fatality in one of FCA’s cars that the company had not voluntarily reported to it. Opon further investigation other unreported incidents were found.

Under US law, all carmakers have to deliver the NHTSA an enormous amount of data on deaths, serious injuries, warranty claims and even lawsuits concerning their cars. The agency alleges FCA did not fully comply.

“This represents a significant failure to meet a manufacturer’s safety responsibilities,” Rosekind said.

“NHTSA will take appropriate action after gathering additional information on the scope and causes of this failure.”

He went on to point the finger at systemic shortcomings in FCA’s methods for gathering and reporting EWR data (Early Warning Reporting, introduced in 2000 to flag potentially major issues at an early stage).

For its part, FCA released a statement saying: FCA US takes this issue “extremely seriously and will continue to cooperate with NHTSA to resolve this matter and ensure these issues do not reoccur.”

The carmaker was already on the NHTSA’s watch list after it paid US$105 million in fines related to inadequacies in FCA’s handling of more than 20 recalls covering 11 million cars. It has also been forced to accept a consent order that includes three years of monitoring by an independent consultant. FCA appointed Deloittes for the task of reshaping the way it collates its data and reports it to the NHTSA.

FCA said the under-reporting was found as a result of the greater scrutiny of its practices due to the consent order.

It will be expecting to pay another major fine, though. As part of its last settlement with the NHTSA, any breach of US Federal safety laws will lead to payment of US$15 million that was suspended from its last settlement, plus US$3 million for the first violation. The NHTSA can opt to begin an entirely new prosecution, though.

Upon the last settlement, in July, US Transportation Secretary Anthony Foxx said: "Today's action holds Fiat Chrysler accountable for its past failures, pushes them to get unsafe vehicles repaired or off the roads and takes concrete steps to keep Americans safer going forward.

"This civil penalty puts manufacturers on notice that the department will act when they do not take their obligations to repair safety defects seriously."