Fiat Chrysler: Recall Lapses Leads to Heavy Loss

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<h2>Fiat Chrysler: Recall Lapses Leads to Heavy Loss</h2>

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Fiat Chrysler will pay a record $90 million (R1.1bn) for lapses in recalls of its vehicles under a deal reached with US regulators, the company said on Monday.

The carmaker will pay a $70-million fine to the National Highway Traffic Safety Administration (NHTSA). In addition to that, it will spend a further $20 million on “consumer outreach activities and incentives to enhance certain recall completion rates” and will be required to pay an additional $15 million if it fails to comply with the terms of the deal, it said in a statement.

A problem for Chrysler is not over yet; under the deal an independent auditor will monitor recall process for three years. If company fails to work on the basis of terms imposed then NHTSA can extend their investigation. 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 fuel tanks linked to numerous fatal fires, the Journal said.

The NHTSA had accused the carmaker 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 car 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. This is the biggest blow for any carmaker in the history. The $90 million penalties is gargantuan as compared to General Motors ($35 million) and Honda ($70 million) for hiding safety problems of its vehicles.
 
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