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Record fine could complicate Fiat Chrysler's merger search

Jul 27, 2015

Fiat Chrysler will buy back some vehicles as part of a settlement with the National Highway Traffic Safety Administration over recall violations
Credit wikipedia

Fiat Chrysler will pay a record $105 million fine for multiple recall violations. That's bad enough.

"Fiat Chrysler does not have the deep pockets General Motors has, or Toyota," says Michelle Krebs of Autotrader, referring to two other car companies slapped with large civil penalties for recall violations.  "It certainly will pinch."

But she says there could be other repercussions.

"It's well known that Fiat Chrysler is looking for a partner (to merge)," she said. "This doesn't help in making it look tremendously desirable."

The automaker agreed to pay the fine plus buy back nearly 200,000 vehicles. It will also offer some owners a $100 gift card to bring their vehicles in for repairs, as well as hire an independent monitor and a chief safety officer.

NHTSA says Fiat Chrysler failed to notify the agency, and its customers, of recalls in a timely manner, and it failed to get the repairs completed in a reasonable amount of time.

"This civil penalty puts manufacturers on notice that the department will act when they do not take their obligations to repair safety defects seriously," said U.S. Transportation Secretary Anthony Foxx.