Announced over the weekend, Fiat Chrysler Automobiles (NYSE: FCAU) has been a been fined a record $105 million by the National Highway Traffic Safety Administration (NHTSA) due to safety recall issues involving millions of vehicles. In addition to the imposed fine, Chrysler is also recalling more than 1.6 million vehicles, which involves their Dodge Ram, Dakota and Chrysler Aspen trucks, in the US due to faulty parts.
The NHTSA has taken a firmer stance towards vehicle safety after it became heavily scrutinized over the Takata airbag and GM (NYSE: GM) ignition switches incidents. NHTSA administrator, Mark Rosekind, commented on Fiat Chrysler’s fine, “Fiat Chrysler’s pattern of poor performance put millions of its customers and the driving public at risk. This action will provide relief to owners of defective vehicles, will help improve recall performance throughout the auto industry and gives Fiat Chrysler the opportunity to embrace a proactive safety culture.”
The fine is broken down into three parts; a $70 million cash payment, $20 will be spent on improving Fiat Chrysler’s recall process, which was agreed upon prior, and an additional $15 million payable fine if further violations are discovered.
Fiat Chrysler stock dropped as much as 5 percent with the news.