Joeb427

iTrader: (1)

Gov't: Fiat Chrysler must offer to buy back 500,000 pickups
Associated Press By TOM KRISHER and JONATHAN FAHEY
16 hours ago


DETROIT (AP) — Fiat Chrysler must offer to buy back from customers more than 500,000 Ram pickup trucks and other vehicles in the biggest such action in U.S. history as part of a costly deal with safety regulators to settle legal problems in about two dozen recalls.



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. A buyback usually happens when a problem is so serious that it can't be fixed and the vehicles need to be removed from service.

Under the agreement, Fiat Chrysler has to buy back the Ram trucks for the purchase price, minus depreciation.

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.

Fiat Chrysler said more than 60 percent of the trucks already have been fixed, and the company is allowed to repair and resell the trucks it buys back.

The Jeep trade-ins could add to the tab, but they also could generate more new vehicle sales by getting customers into showrooms. Still, the total could strain the parent company, Fiat Chrysler Automobiles NV. The company posted a first-quarter net profit of $101 million and had more than $20 billion in cash and securities on March 31.

The consent order that Fiat Chrysler agreed to requires it to notify owners who are eligible for buybacks and other incentives.

Models included in the buyback offer are certain Ram 1500s from 2009 to 2012; the Ram 1500 Mega Cab 4 by 4 from 2008; and the Ram 2500 4 by 4, 3500 4 by 4, 4500 4 by 4, and 5500 4 by 4, all from 2008 through 2012. Also part of the offer are 2009 Chrysler Aspen and Dodge Durango SUVs and the Dodge Dakota pickup from 2009 through 2011.

The fine against FCA beats the old record of $70 million assessed against Honda Motor Co. for lapses in recalls of air bags made by Takata Corp.

Fiat Chrysler also received a $70 million fine, and must spend at least $20 million to meet performance requirements detailed in the agreement. Another $15 million could come due if the recall monitor finds any further violations.

Earlier this month, the safety agency held a rare public hearing where regulators detailed a litany of shortfalls: failure to notify customers of recalls, delays in making and distributing repair parts and in some cases failing to come up with repairs that fix the problems. Some of the recalls date to 2011.

http://finance.yahoo.com/news/ap-sou...--finance.html

Toys4RJill

And people wonder why I stay with Toyota.

Levi68

Kind of unfair Fiat has to pay, should be Daimler as it was happened in that time.

pbm317

When you buy a company or anything, you take on all liabilities...

mmarshall

Toyota has certainly had its share of problems, though not quite to the tune of having to buy back a half million vehicles.

Hoovey689

iTrader: (16)

Wow, Ram 1500 won Motortrends TOTY in 2013 and 2014. Some massive improvements between MY12 and My13 no doubt.

mmarshall

Technically, isn't the U.S. Government itself (and possibly the UAW) part-owner and liable? When Chrysler went bankrupt in 2009, as I understand it, it was actually a mixture of government, Fiat, and UAW money that actually bought out the company....unless Fiat has (since) bought out all of the remaining shares.

Hoovey689

iTrader: (16)

No wonder Marchionne was trying to cuddle up with other Automakers. On top of buying back 500,000 units, the fun just keeps coming

Fiat Chrysler to get $105M fine from NHTSA for recall woes

FCA recalls 2 million Ram trucks over airbag issues

mmarshall

I have a feeling this settlement might wind up in court, but if it stands, Fiat can probably afford it. They are a huge company (one of the largest in Europe), with plenty of assets and resources.

On the issue of Marchionne trying to integrate with other automakers, you might have something, but I think the main issue with that was long-term production, not just this case and its liability.

S2000toIS350

This is fantastic news.

I am celebrating with a large dish of coffee ice cream with a cashew turtle broken into it.

What will happen to the repurchased vehicles? Hopefully they will not be foisted onto hard working Americans through shady used car dealerships.

jadu

iTrader: (42)

1/2 a million, wow....

Aron9000

I was listening about this on public radio on the way home. Really the forced buyback and draconian fine is more about Fiat/Chrysler dragging their feet on getting the recalled vehicles fixed. They were talking about how only a small % of the recalled Ram trucks had been fixed, how dealers didn't have the necessary parts to do the fix, etc.

What really blew my mind, and might be the real big fuss about this issue is that the first time they recalled the pickup trucks they put more defective parts(I think they were tie rod ends) on them that didn't fix the issue.

Stormwind

Poor fiat. That's what they got for buying pos.

mmarshall

Why? Did you end up with one of those 500K vehicles?

As I understand it (though I'm not a lawyer), cars returned to the manufacturer under state Lemon Laws can be, and sometimes are, resold on the used-car market, if a subsequent owner finds the car acceptable. But I don't think that can legally be done if the Government orders, and the manufacturer agrees to, a buy-back....the manufacturers (and banks) are stuck with them. Buy-Backs are ordered when the vehicle is considered non-reparable with safety issues.....so they can't be resold.

Shawnmack

I agree with you 100%