FCA Awaits Fate Following Alleged Mishandling Of Recalls

With the latest sales numbers, FCA has to be feeling great. They were up 8.2 percent year-over-year. However, they also had to deal with the small matter of having to go to Washington D.C to explain what the NHTSA called a poor handling of recalls. However, just testifying about what went wrong isn’t enough. FCA could soon be subject to fines or other penalties coming from the National Highway Traffic Safety Administration. It seems FCA just didn’t have time to savor their strong Jeep and Chrysler numbers from June before the government came calling to talk about other issues.

FCA had to answer for their handling of 20 of its recalls. Secretary of Transportation, Anthony Foxx, spoke about the FCA hearing in a statement when he said, “Any auto defect that compromises the safety of our driving public is unacceptable, auto manufacturers are obligated to effectively remedy safety defects when they are discovered, and if they fail in that responsibility, we are obligated to act.” What those actions Secretary Foxx is talking about are not yet known, however, that revelation will come in the near future.

A report from Automotive News indicated directly after the NHTSA closes their review on FCA on July 17, the consequences of that review will become known. Those consequences could be fines or increased oversight. There is even speculation FCA might have to buy back certain recalled vehicles. That possibility comes specifically from a man who testified at the FCA hearing about how his son died in a newer Jeep. His plan to remedy the vehicles is to have them bought back and destroyed.

In 2014, Honda and GM set forth major recall efforts. Honda also faced a stiff $70 million fine from the DOT after also underreporting accidents. GM recalled more vehicles than they sold in 2014. Could 2015 be the year when FCA is forced to issue monumental recalls and be subject to large fines?