Fiat Chrysler could be forced to pay hundreds of millions of dollars to get potentially defective Ram pickups and older Jeeps off the road under a deal with safety regulators.
The National Highway Traffic Safety Administration is pushing the company to offer to buy back certain Ram pickup trucks and Dodge and Chrysler SUVs with defective steering parts that can cause drivers to lose control.
More than 579,000 vehicles were initially recalled in 2013, but the company would only be required to buy back a third of those because many of the pickups have already been repaired.
The Italian-American automaker must also allow owners of more than a million older Jeeps with vulnerable rear-mounted gas tanks to trade them in at above market value or give them $US100 ($A137.49) as an incentive to get a repair. Fiat Chrysler also faces a record civil fine of up to $US105 million.
Fiat Chrysler shares dropped nearly 5 per cent Monday afternoon following the weekend announcement of the deal.
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.
“Merely identifying defects is not enough,” US Transportation Secretary Anthony Foxx said on Monday during a conference call with media. “Manufacturers that fail in their duty to fix these defects will pay a price.”
Nearly 1.3 million Rams, Chrysler Aspen and Dodge Durango SUVs and Dodge Dakota pickups from as far back as the 2003 model year were recalled for the steering problem in 2013. The government excluded around 700,000 of the oldest models from the buyback program because most have already been repaired or are no longer on the road.
But it ordered the buyback for up to 579,000 vehicles from the 2008 through 2012 model years. Of those, around 193,000 have not gotten the recall repairs and are eligible for either a repair or a buyback, according to recall reports submitted to the government by Fiat Chrysler.
In each case, Fiat Chrysler would be required to pay the original purchase price plus 10 per cent, minus a certain amount for depreciation.