Coverage: Fiat Chrysler to pay $70 million auto safety fine

After failing to disclose vehicle crash death and injury reports, Fiat Chrysler Automobiles has agreed to pay a $70 million fine issued by the National Highway Traffic Safety Administration.

The agreement comes after the safety regulator launched an investigation in September into Fiat Chrysler’s reporting process.

David Shepardson of Reuters broke the news of the impending fine:

Fiat Chrysler Automobiles NV has agreed to pay $70 million in fines to resolve a U.S. investigation that it failed to disclose vehicle crash death and injury reports, people familiar with the matter told Reuters on Wednesday.

The settlement is expected to be announced by the National Highway Traffic Safety Administration as early as Thursday. Fiat Chrysler in September acknowledged it had failed to disclose an unspecified number of reports that are required to be submitted to regulators under a 2000 law. NHTSA in September called Fiat Chrysler’s reporting omissions a “significant failure.”

In July, the automaker reached a separate $105 million settlement with NHTSA over its handling of nearly two dozen recalls covering 11 million vehicles.

Major auto companies are required to electronically submit massive amounts of data involving vehicle crashes, deaths, lawsuits, warranty claims and other information.

This is the latest fine imposed by the U.S. auto safety agency after it came under harsh criticism from Congress and in a government audit for not being more aggressive in enforcing safety laws.

In a new highway funding law, Congress agreed to give NHTSA more funding if it implements more reforms outlined by the Transportation Department inspector general.

Michael Wayland of The Detroit News explained why Fiat Chrysler had trouble reporting information to NHTSA to begin with:

The automaker’s North American operations, FCA US, originally said the issue came about the same time it reached a record-setting $105 million settlement with NHTSA this summer over its handling of nearly two dozen recalls covering 11 million vehicles.

NHTSA Administrator Mark Rosekind in September said preliminary information suggested the underreporting was due to problems with systems for gathering and reporting the information, and not necessarily a cover-up.

The Detroit News previously reported the automaker said it had problems with its software for extracting information from a company database to submit to NHTSA, and as a result significantly under-reported death and injury claims.

Clarence Ditlow, director of the Center for Auto Safety, said one of the critical problems with the early warning system is that it’s up to the automakers to report the problems that they created. “Given the fact that Chrysler underreported EWR — violated the law and regulation — they were trying to avoid detection of defects,” he said Wednesday. “Without the full compliance of automakers, EWR is effectively crippled.”

He argued “it’s no excuse that your computer’s defective.”

Danielle Ivory and Bill Vlasic of The New York Times detailed how this fine would be in line with others recently issued by NHTSA:

The penalty is only the latest in a series of escalating fines issued by the safety agency.

In October, regulators imposed a record penalty on Takata, the Japanese supplier that produces defective airbags whose components can rupture violently, sending metal flying at passengers. In that case, Takata could pay as much as $130 million if it does not live up to the terms of its agreement with the safety agency.

And in January, Honda agreed to pay $70 million in fines for significantly underreporting death and injury claims under the Early Warning Reporting system. In that case, more than 1,700 deaths and injuries over an 11-year period were not reported to regulators. At the time, the penalty was the largest ever imposed on an automaker by the safety agency. Honda’s penalty followed one imposed in October 2014 on Ferrari, for $3.5 million, because it failed to submit any Early Warning reports on fatal accidents.

The agency is currently authorized to impose a maximum fine of $35 million for each violation, though that number is set to increase. Congress recently passed a transportation bill that would allow the agency to levy a fine capped at $105 million, but the change won’t go into effect until the agency has issued a final rule, according to the legislation.

“Chrysler just made it in under the wire,” Ms. Claybrook said, referring the penalty.

The cap was criticized by many lawmakers last year when regulators imposed a penalty of $35 million on G.M. after it failed to report for more than a decade a deadly ignition defect. At the time, the defect was linked to 13 deaths. It is now linked to at least 124.