Fiat Chrysler Forced Into Biggest Vehicle Buyback Ever

DETROIT (Detroit Free Press/TNS) -

The National Highway Traffic Safety Administration said Monday it imposed the largest vehicle-buyback program in its history on Fiat Chrysler Automobiles because the automaker has yet to come up with an adequate remedy to fix nearly 580,000 pickup trucks and SUVs it recalled in 2013.

The buyback program is one component of a 37-page consent order that also includes the largest-ever civil penalty imposed by the agency.

The $105 million in civil penalties and the buyback program are the outcome of NHTSA’s investigation into FCA’s lax repair and recall completion rates for 23 separate recalls covering more than 11 million vehicles. It applies mostly to Ram trucks and Dodge SUVs made between 2008 and 2012 that were part of three separate recalls announced in 2013.

“This order requires FCA to offer buybacks for more than half a million vehicles prone to dangerous loss of control,” Rosekind said. “FCA has failed to offer an effective remedy of those vehicles.”

FCA has not said how much the buyback program will cost the automaker. However, the automaker said Monday that the scope of the buyback program is less than the number suggested by NHTSA.

“As of this date, repairs have been completed on well over 60 percent of the subject vehicles, leaving less than two hundred thousand eligible vehicles,” the automaker said in a statement.

Nevertheless, the automaker said it will offer to repurchase the trucks and SUVs that have not yet been fixed for a price equal to the original purchase price minus a reasonable allowance for depreciation plus 10 percent.

FCA also emphasized that it is allowed to resell the vehicles it repurchases after they are repaired.

The consent order also requires the automaker to pay civil penalties of $105 million, submit to an independent monitor for three years and also offer financial incentives to owners of about 1 million Jeep Cherokees recalled in 2013.

Fiat Chrysler acknowledged Sunday that some of its recall processes and procedures have fallen short.

“We also accept the resulting consequences with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us,” the company said in a statement. “We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate.”

NHTSA said the investigation revealed that FCA, in a variety of recalls, failed adequately to inform NHTSA about vehicle safety issues, failed to develop an adequate way to fix the vehicles or produce the parts necessary to repair them and failed to adequately inform dealers about safety recalls.

“Fiat Chrysler must find a better way to reach customers and to get the vehicles repaired,” U.S. Transportation Secretary Anthony Foxx said. “Merely identifying safety issues is not enough.”

The buyback program hits the automaker’s top-selling vehicle — Ram pickups — at a time when competition in the pickup segment is tougher than ever. The pickups have defective steering parts that can cause drivers to lose control. Some previous repairs have been unsuccessful.

Rosekind said the agency decided against requiring a buyback program for the Jeep Cherokees that are part of a recall for 1.54 million Jeep SUVs because, in that case, there is an available remedy.

Jeep Cherokees from model years 1993 to 1998 and Jeep Libertys from 2002 to 2007 have rear-mounted fuel tanks that NHTSA says are more prone to fiery rear-end collisions than SUVs made by other automakers. NHTSA has approved the installation of a trailer hitch to provide additional protection in rear-end crashes for those vehicles.

“There is a very clear line where the buybacks were focused on the vehicles where there was no option,” Rosekind said. There was not an available remedy.”

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The buyback program applies to the following vehicles:

– 278,229 vehicles recalled on February 6, 2013 because of a defect that may cause the axle to lock including the:

2009 model-year Chrysler Aspen

2009 model-year Dodge Durango

2009-2012 model-years Dodge Ram 1500

2009-2011 model-years Dodge Dakota

– 36,710 vehicles recalled on November 6, 2013 because of a defect that may cause the driver to lose steering power and crash:

2008-2012 model-years Dodge Ram 4500

2008-2012 model-years Dodge Ram 5500

– 265,057 vehicles recalled on November 6, 2013, to repair and replace steering linkages that may cause the driver to lose steering power and crash:

2008 model-year Dodge Ram 1500

2008-2012 model-years Dodge Ram 2500

2008-2012 model-years Dodge Ram 3500

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Where to turn for more information:

Owners of vehicles who have questions about the recalls can call the company at 1-800-853-1403.

A list of the 23 Fiat Chrysler recalls that NHTSA investigated can be found here: http://www.safercar.gov/rs/chrysler/index.html

Owners of any vehicle can look to see what, if any, recalls apply to their vehicle by entering their vehicle identification number at https://vinrcl.safercar.gov/vin/