In a stunning ruling, US safety regulators have mandated that Fiat Chrysler must offer to buy back from customers more than 500,000 Ram pickup trucks and other vehicles as part of a costly deal with safety regulators to settle legal problems in about two dozen recalls. As WTOP reports, this is the biggest such action in US history, and is in addition to a $105 million civil fine and owners of more than a million older Jeeps with vulnerable rear-mounted gas tanks will be able to trade them in or be paid by Chrysler to have the vehicles repaired. Think the punishment is harsh, consider that at least 75 people have died in crash-related fires, although Fiat Chrysler maintains they are as safe as comparable vehicles from the same era.
The settlement is the latest sign that auto safety regulators are taking a more aggressive approach toward companies that fail to disclose defects or don’t properly conduct a recall.
The Ram pickups, which are the company’s top-selling vehicle, have defective steering parts that can cause drivers to lose control. Some previous repairs have been unsuccessful, so Fiat Chrysler agreed to the buyback, according to the National Highway Traffic Safety Administration. Owners also have the option of getting them repaired, the agency said in documents released Sunday.
The older Jeeps have fuel tanks located behind the rear axle, with little to shield them in a rear crash. They can rupture and spill gasoline, causing a fire. At least 75 people have died in crash-related fires, although Fiat Chrysler maintains they are as safe as comparable vehicles from the same era.
Both the Jeep and Ram measures are part of a larger settlement between the government and the automaker over allegations of misconduct in 23 recalls covering more than 11 million vehicles. Besides the civil penalty, which was reported Saturday by The Associated Press, Fiat Chrysler agreed to an independent recall monitor and strict federal oversight. It’s another step in NHTSA’s effort to right itself after being criticized for lapses in some highly-publicized safety recalls.
“Today’s action holds Fiat Chrysler accountable for its past failures, pushes them to get unsafe vehicles repaired or off the roads and takes concrete steps to keep Americans safer going forward,” Transportation Secretary Anthony Foxx said in the statement.
In a separate statement, Fiat Chrysler said it accepted the consequences of the agreement “with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us.”
NHTSA has been involved in vehicle buybacks in the past, but never one of this size. The settlement is the latest sign that auto safety regulators are taking a more aggressive approach toward companies that fail to disclose defects or don’t properly conduct a recall.
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It’s unclear just how many Rams the automaker will have to repurchase, but the cash outlay could be substantial. According to Kelly Blue Book, a 2010 Dodge Ram 1500 — one of the smaller, less-expensive trucks involved in the recalls — could fetch $20,000 in a dealer trade-in, assuming the truck has 60,000 miles on it and is in “good” condition. At that rate, if Chrysler had to buy back even a quarter of the trucks at issue, it could spend $2.5 billion.