Fiat Chrysler fined $70 million for safety-data slips
Auto manufacturer Fiat Chrysler (FCAU) will pay $70 million in penalties for failing to provide early warning report data, its second multimillion-dollar fine this year related to safety.
The fine follows the company's admission in September that it failed over several years to report legally required safety data, the U.S. Department of Transportation said Thursday in a statement. The maximum penalty allowed is $35 million, so the $70 million involved two violations.
"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," U.S. Transportation Secretary Anthony Foxx said in the statement. "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 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, the federal agency said. The government relies on the filings to track patterns and potential safety issues. The system, called Early Warning Reporting, was put in place in 2000, after a slew of highway rollovers involving Ford Explorers with Firestone tires.
Thursday's penalty concludes the second large probe of Fiat Chrysler by the National Highway Traffic Safety Administration (NHTSA) this year. The regulator in July imposed what was at the time a record $105 million civil penalty on the company for its mishandling safety recalls on millions of vehicles.
"I wish there were a criminal penalty attached to it," Joan Claybrook, a former administrator of the NHTSA and longtime consumer safety advocate, said. "If there were a chance that a corporate executive could go to jail for selling, or not reporting, defective vehicles that can kill, the number in violation of the law would drop dramatically."
FCA is the fifth car manufacturer in the past 14 months that the NHTSA has penalized for failure to meet early warning reporting requirements. The agency previously issued penalties to Honda and Ferrari, motorcycle manufacturer Triumph, and specialty vehicle manufacturers Forest River and Spartan Motors.
Fiat Chrysler "accepts these penalties and is revising its processes to ensure regulatory compliance," Eric Mayne, a company spokesperson emailed. The company "is confident that it identified and addressed all issues that arose during the relevant time period, using alternate data sources," he added.
The company in the past has said its reporting lapses were connected to glitches in software used to pull information from a company database and that there was no attempt to circumvent regulators.
Transportation legislation recently passed in Congress will increase the maximum fine to $105 million for each violation, substantially higher than the $35 million currently allowed. However, the ability to access the higher levy won't take effect until the agency has issued a final rule, according to the bill.
"The other big issue for NHTSA is it's been starving," Claybrook said of the agency she led. In the government spending bill now being considered, the agency's annual budget would in 2016 increase to $179 million from its current $134 million. In Claybrook's view, the agency, requires an operating budget of $300 to $400 million to adequately perform its mandate.