Buyback imposed for Fiat Chrysler

DETROIT - 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 Fiat Chrysler'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 [Fiat Chrysler] to offer buybacks for more than half a million vehicles prone to dangerous loss of control," Mark Rosekind, NHTSA's top-ranking official, said Monday. "[Fiat Chrysler] has failed to offer an effective remedy of those vehicles."

Fiat Chrysler 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 200,000 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.

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

The consent order requires the automaker to pay civil penalties of $105 million, submit to an independent monitor for three years, and offer financial incentives to owners of about one 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 reestablish the trust our customers place in us," the company said. "We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate."

NHTSA said the investigation revealed that Fiat Chrysler, 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 Monday. "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."

Buyback Program Vehicles

Recalled Feb. 6, 2013, because of axle-locking issues:

2009 model year Chrysler Aspen

2009 model year Dodge Durango

2009-2012 model years Dodge Ram 1500

2009-2011 model years Dodge Dakota

Recalled Nov. 6, 2013, to repair and replace steering linkages:

2008 model year Dodge Ram 1500

2008-2012 model years Dodge Ram 2500

2008-2012 model years Dodge Ram 3500

Recalled Nov. 6, 2013, because of steering-power issues:

2008-2012 model years Dodge Ram 4500

2008-2012 model years Dodge Ram 5500

For more information:

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

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