Fiat Chrysler Hit with Record-Making Buy-back Order and Fines
Fiat Chrysler Automobiles has reached a landmark settlement with the National Highway Traffic Safety Administration that requires it to buy back about 200,000 Ram trucks and pay fines totaling more than $100 million.
The automaker has had 23 recalls involving 11 million vehicles since 2013. Three of those recalls were announced just last Friday and Saturday, involving more than 3 million U.S. Ram trucks and other vehicles. (More about those three recalls is here: “Ram Trucks: Hackability, Airbag Problems and the Death Wobble.”)
The NHTSA has complained that Fiat Chrysler has not handled its 23 recalls properly, leading to the buy-back program and the stiff fine.
“In every one of the 23 recalls, we have identified ways in which Fiat Chrysler failed to do its job,” said Jennifer Timian, NHTSA acting head of defect investigations, in an NHTSA public hearing earlier this month.
Ram is a subsidiary of Fiat Chrysler Automobiles, and the Ram truck is the company’s top-selling vehicle.
Largest Buy-Back Ever
The buy-back is the largest ever ordered by the NHTSA. Fiat Chrysler must offer to buy back about 200,000 Ram pickup trucks and up to 100,000 other vehicles. The vehicles were recalled in 2013 for defective steering parts that can cause drivers to lose control of their vehicles.
The automaker has sold more than half a million Ram trucks covered by the buy-back order, but it says that more than 300,000 of those trucks have been repaired since the recalls. The NHTSA has essentially ordered Fiat Chrysler to offer the owners’ their money back on vehicles that are still not repaired, two years after the recalls were announced.
Largest Civil Fine Ever
In addition to the precedent-setting buy-back, Fiat Chrysler must pay the highest civil fine the NHTSA has ever ordered. The automaker must pay a $70 million penalty, plus a possible additional $15 million as the investigation continues, plus $20 million in expenditures to meet other requirements of the consent order.
The highest previous NHTSA fine was $70 million against Honda in January for Honda’s poor handling of Takata airbag recalls.
Defective Jeeps Also Part of Settlement
Another provision of the settlement involves more than 1 million older Jeeps with rear-mounted gas tanks. Jeep is also a Fiat Chrysler brand.
The gas tanks are located behind the rear axle. A rear-end collision can rupture the tanks and spill gasoline. At least 75 people have died in fires that were caused by crashes. The automaker must offer above-market trade-in value or pay the owners $100 to bring the Jeeps in for repairs — adding a trailer hitch to soften the impact on the gas tanks in a collision.
The NHTSA has accused Fiat Chrysler Automotive of a long list of violations, including:
- failing to handle recalls quickly and effectively,
- failing to properly notify owners of vehicles involved in recalls,
- failing to inform its own dealers about recalls,
- failing to develop adequate repairs for recalls (some “repaired” vehicles were later found to still have the problem that prompted the recall),
- failing to make and distribute sufficient repair parts to the dealers,
- and failing to keep the NHTSA informed about how it was progressing on recalls.
In an NHTSA public hearing earlier this month about Fiat Chrysler’s dismal recall history, Todd Anderson of Massachusetts described the 2013 death of his 17-year-old son, Skyler Anderson-Coughlin. The teenager was driving a Jeep Grand Cherokee which burst into flames in a rear-end collision.
Months before the accident, Fiat Chrysler had agreed to recall and repair more than 1 million Jeeps. However, a notification from the automaker about the recall did not go out to the Andersons until six months after the boy’s death.
Fiat Chrysler must buy back the Ram trucks for the purchase price minus depreciation. Alternatively, the owners may bring the trucks in for repairs.
One news agency estimated that a 2010 Ram 1500 truck with 60,000 miles and in good condition could be worth up to $20,000. Depending on how many Ram truck owners want their money back, the buy-back could cost the automaker billions of dollars. The automaker will recoup some of its losses by repairing the vehicles and reselling them.
Ram truck models included in the buy-back are:
- Ram 1500 Mega Cab 4 by 4 (2008)
- Some Ram 1500s (2009 -2012)
- Ram 2500 4 by 4 (2008-2012)
- Ram 3500 4 by 4 (2008-2012)
- Ram 4500 4 by 4 (2008-2012)
- Ram 5500 4 by 4 (2008-2012)
Other affected vehicles include Chrysler Aspen (2009), Dodge Durango SUVs (2009), and Dodge Dakota pickup (2009 -2011).
Do You Need Legal Consultation?
When a car or truck is included in a safety recall, vehicle owners should take notice. Most recalls involves a repair; owners should take their vehicle to the dealer for repairs, which are almost always performed at no cost.
Vehicle owners should also consider whether they have already experienced harms and losses. A recall means the automaker and/or the NHTSA has identified a defect that raises a serious safety concern. Vehicle owners who have already suffered as a result of those defects deserve to be compensated.
If you drive a Ram truck or other Fiat Chrysler vehicle and you or a loved one has had a serious accident or fatality due to a steering problem, airbag problem, exploding gas tank or other defect, you should investigate your legal rights.
To learn more, contact the car accident lawyers of Hasbrook & Hasbrook. Your consultation is free, and if we accept your case, we will do so on a contingency basis, which means you only pay when the case is successful. Give us a call at 866-416-4737 or send us a message by email (email@example.com) or by suing using our website contact form: Contact Us.