FCA Gets Hit With A $105 Million Fine Over Jeep/Ram Recalls

One would hope that the 70 million will go towards increasing the number of NHTSA employees so that they can avoid having to point fingers when they overlook stuff and need to save face later.

One would hope that the 70 million will go towards increasing the number of NHTSA employees so that they can avoid having to point fingers when they overlook stuff and need to save face later.

Agreed.  It also took them years to catch not only this, but the GM ignition issues, the Ford ignition issues of the 90s, and all the Toyota and Honda issues and the disaster that is the Takata airbag issues. 

NHTSA sounds about on par with the DOE - complete waste of taxpayer dollars

It is the bane of government-sponsored watchdogs: they are appointments, not hirings.

I'm not even saying that Mopar is without fault here. But NHTSA doesn't exactly have a lot of cred anymore in my books. Hearing that a good portion of that fine is going directly to them just cements my cynicism. What, next time they're in the red they'll magically conjure up another massive recall notice?

soooo... a government agency fines a company for "jeopardizing" their customer's safety and then turns around and pockets 66% of it for themselves? shouldn't that money go to the families or to the customers themselves in some shape or form. I saw where in the article they will have the opportunity to trade up, but it irks me to see an agency level a fine and then pocket the money with no real demonstration of what it will do with it.

Holy buckets that's one heck of a fine..

Any gov agency is corrupt if you ask me.. It's just what level of corruptness.

Well, they fined Honda 70 mil for similarly large oversights, supposedly. So I'm guessing they're pretty corrupt.

I was discussing this elsewhere when some hysterical old biddy crawled out of the woodwork to lambaste me for buying a Ram. After I let him flail away for a bit I pointed out to the intelligent posters that this was an industry-wide issue. IMO it's a mix of customers bringing a Wal-Mart mentality to car-shopping leading to automakers cutting costs any which way they can, while NHTSA plays the role of Roscoe P. Coltrane.

Then there is the irony that most of the failed systems are in cars because of government requirements.  Airbags for safety and electric steering to help meet epa requirements for example.  Then, WHY do we have to be driving computers on wheels? 

I've long felt that gas tank recall was stupid, because at the time those vehicles were manufactured they conformed to the safety requirements of the day. Now a decade later they suddenly aren't. These vehicles aren't exploding left and right.

The actual penalty at the moment is $90 Million with an additional $15 Mil if they don't update their ways soon. The thing that everyone missed was 

 

 

FCA will also have to buy back more than 500,000 vehicles - mostly Ram trucks - due to defective suspension parts that could cause drivers to lose control.

That is a real penalty if it comes to fruition. 500,000 at a market value of $10K would be a cool $5 Billion, and another reason why every manufacturer on the planet sees Sergio's number come up on caller ID and hits the "End" button sending that $h! straight to VM

Yeah, FCA's ****ed up the arse by this recall, and even more so because they have to buy back half a million trucks. 

a HALF A MILLION TRUCKS!!!  

That almost negates gains in truck market share for 2014 and part of 2013

a HALF A MILLION TRUCKS!!!  

 

 

That almost negates gains in truck market share for 2014 and part of 2013

And you are leaving out an important part of the article......  stating THEY CAN FIX AND RESALE THESE TRUCKS SO THE HIT ISN'T GOING TO BE NEARLY WHAT IT APPEARS!

Didn't Toyota have to pay like a 1.1 billion dollar fine?

 

a HALF A MILLION TRUCKS!!!  

 

 

That almost negates gains in truck market share for 2014 and part of 2013

And you are leaving out an important part of the article......  stating THEY CAN FIX AND RESALE THESE TRUCKS SO THE HIT ISN'T GOING TO BE NEARLY WHAT IT APPEARS!

 

It is. pulling in 500,000 vehicles is a chore for any manufacturer

The consumer also isn't forced to sell their vehicle back. Because they would likely need to up their payment to get a new vehicle to replace their old one I don't see all 500,000 selling them back. Now if they are just pissed off about the situation and want to get out of their Ram and switch to a Ferd or Chervy, I see that the more likely situation for them selling back to the manufacturer. Because, like Casa said, if they are only getting 10k(their purchase price minus depreciation is what the buyback price is) then they can't get $h! for that price and will still need to throw down nearly 30k(that is only at 10k - I doubt many have depreciated that low.) Trucks hold their value pretty well. Actually, would this cause them to depreciate even more?

Exactly, I would be surprised if the end up buying back 1/4 of the trucks recalled.  This is not like the Toyota frame recall on Tacomas where they bought back trucks that simply could not be made safe.  What they do buy back will be fixed, probably resold under factory certified which generally brings in even more money, and the hit is going to be minimal.  Also, does anyone know if this only covers original owners or will it cover someone who bought them used?

Ya. The half-million potential buybacks won't actually become a half-million buybacks. NHTSA may be a bunch of wombats, but they have enough sense to know not to drive a global automaker out of the marketplace... hopefully they remember Audi anyhow

They are only buying back those that aren't fixed at this time. So less than 40% that aren't fixed out of the total number. And even then this is a dealers wet dream to sell sell sell!

They are only buying back those that aren't fixed at this time. So less than 40% that aren't fixed out of the total number. And even then this is a dealers wet dream to sell sell sell!

But isn't 40% of 500,000 still a whopping 200,000 X $10K equaling $2 Billion? Good thing Sergio stole that $2 Billion from GM back in 2002. 

Seriously wish this would put them out of business. Hate Foreign companies. Would love GM being able to pick up Jeep for pennies on the dollar

It's fun seeing Casa go off a little on FCA..

They are only buying back those that aren't fixed at this time. So less than 40% that aren't fixed out of the total number. And even then this is a dealers wet dream to sell sell sell!

How is it a dealer's wet dream? They aren't buying them back at a trade-in price(where there is plenty of room for profits). They're buying them back at retail prices, right? price paid - depreciation. They will have to try and resell above market value.  

 

They are only buying back those that aren't fixed at this time. So less than 40% that aren't fixed out of the total number. And even then this is a dealers wet dream to sell sell sell!

 

 

 

But isn't 40% of 500,000 still a whopping 200,000 X $10K equaling $2 Billion? Good thing Sergio stole that $2 Billion from GM back in 2002. 

 

Seriously wish this would put them out of business. Hate Foreign companies. Would love GM being able to pick up Jeep for pennies on the dollar

 

uh huh, as I have said, hating a company just to hate it....  And you are still ignoring these trucks will be resold which is going wipe a VAST majority of that price out.  PLUS, the customer DOES NOT have to sell back and many won't because the depreciated price will be nowhere what it will take to get a new and equal replacement.    

You should also watch your wishing because how long is it until the government starts forcing GM to buyback all those millions of cars with faulty ignitions that aren't fixed yet?  This is a VERY dangerous precedent that is set...........

It's fun seeing Casa go off a little on FCA..

Having said that, the buyback thing is a scary precedent. And on a financial news front: the rumoured shotgun wedding with GM would be a disaster for both companies.

They are only buying back those that aren't fixed at this time. So less than 40% that aren't fixed out of the total number. And even then this is a dealers wet dream to sell sell sell!

 

 

 

But isn't 40% of 500,000 still a whopping 200,000 X $10K equaling $2 Billion? Good thing Sergio stole that $2 Billion from GM back in 2002. 

 

Seriously wish this would put them out of business. Hate Foreign companies. Would love GM being able to pick up Jeep for pennies on the dollar

uh huh, as I have said, hating a company just to hate it....  And you are still ignoring these trucks will be resold which is going wipe a VAST majority of that price out.  PLUS, the customer DOES NOT have to sell back and many won't because the depreciated price will be nowhere what it will take to get a new and equal replacement.    

 

You should also watch your wishing because how long is it until the government starts forcing GM to buyback all those millions of cars with faulty ignitions that aren't fixed yet?  This is a VERY dangerous precedent that is set...........

I'm still not understanding how they will make much profit at all off these trucks reselling them.. If they are bought back at the purchase price minus depreciation that's the value of the truck. They'll have to sell above the value, correct? I'm not trying to be a dick but am I wrong? If so, please correct me(seriously, not trying to be a dick). I'm just curious at this point.

So much gray area people...

Only original owners.

The amount of depreciation is up to the dealer (unless otherwise specified which it isn't at this time)

Look at the Jeep recall...many just don't care about it or are worried about it.

All get to be resold if bought back. The fix is either tie rods or pinion...not hard to do as I've done both in my garage.

CASA is a tool - there is a reason he and wings keep getting banned everywhere.

I just get banned for saying places suck.

FCA is indeed in dire straits. It's so funny how MT gave Sergio the number one in power rankings two years in a row. Yet here we are now years later and FCA is in dire trouble.

Don't get me wrong, I'm a Mopar lover and I would hate to see the Markham plant that builds everything LX and Hellcats shutter down.

But I think he's an idiot for delaying new products for FCA US LLC while trying to revive Alfa. It's even worse than trying to revive Lincoln, but atleast they seem to have a competent car for the Giulia. But it's gonna be such an ultra niche brand because I don't think many Fiat-Chrysler dealers want Alfa. They want new Chryslers, Jeeps and Rams and Dodges and NOT a lenghty and costly revival of a brand no one's seen on the road for decades.

And for what product? They have one, ONE sedan for their reboot. Good luck on that. Getting rid of Ferrari was a move of desperation, I think every industry analyst can tell you that. 

FCA has to find a way to increase transaction prices, improve operational inefficiencies while at the same time realigning their disjointed brands. The problem lies with the fact that they need separate marketing teams for 3-4 brands that might as well be part of one brand with big line-ups and have a familial styling resemblance which helps control costs and is just plain simpler to execute.

Ford and Chevy have it down right, and FCA is not going to succeed because of either Fiat or Alfa becoming viable in the U.S.

I'm onboard with the lack of integration being an issue. I also think that the sooner they spread that Giulia platform throughout the lineup the better. but it's the European operations that are the big drag on the system, and as long as Sergio gives them undue preference things will, at best, limp along.

I'm onboard with the lack of integration being an issue. I also think that the sooner they spread that Giulia platform throughout the lineup the better. but it's the European operations that are the big drag on the system, and as long as Sergio gives them undue preference things will, at best, limp along.

I know we've always thought to allow a premium brand to get the best new platform first, but I think the opposite would have been SO much better. 

LX will get really long in the tooth by the time the rest of FCA gets the new global RWD performance platform. FCA US should have been given the platform first. Alfa can wait. Get the bread and butter ready first, then build your luxury brands. It's a proven recipe for foreign marques, namely Toyota and at one time Honda and Nissan as well.

Right now I'm betting the LX, the trucks, and the Ferrari IPO are the only things keeping them solvent.

The LX will survive another two, maybe three years simply because Americans are horsepower-crazed and will snatch up every Hellcat and SRT variant they can. Thankfully for Mopar, those are the big-profit margin vehicles. GM had a similar spurt in the late-80s with the Chevy Monte Carlo SS and Buick Grand National/GNX extending the life of an old platform. It's short-term and dirty, but it works.

Next thing for Mopar is to get a small Dodge version of the 500. As nice a small car as the Fiat is, the styling ain't gonna cut it over here beyond the hardcore niche guys. That's also why the Jeep Renegade exists.

Crazy fine, none the less. 

Not even sure how many owner would even cash in on that anyways. Most would rather fix it and move on, not extend their car payment further......

 

 

 

They are only buying back those that aren't fixed at this time. So less than 40% that aren't fixed out of the total number. And even then this is a dealers wet dream to sell sell sell!

 

 

 

But isn't 40% of 500,000 still a whopping 200,000 X $10K equaling $2 Billion? Good thing Sergio stole that $2 Billion from GM back in 2002. 

 

Seriously wish this would put them out of business. Hate Foreign companies. Would love GM being able to pick up Jeep for pennies on the dollar

uh huh, as I have said, hating a company just to hate it....  And you are still ignoring these trucks will be resold which is going wipe a VAST majority of that price out.  PLUS, the customer DOES NOT have to sell back and many won't because the depreciated price will be nowhere what it will take to get a new and equal replacement.    

 

You should also watch your wishing because how long is it until the government starts forcing GM to buyback all those millions of cars with faulty ignitions that aren't fixed yet?  This is a VERY dangerous precedent that is set...........

I'm still not understanding how they will make much profit at all off these trucks reselling them.. If they are bought back at the purchase price minus depreciation that's the value of the truck. They'll have to sell above the value, correct? I'm not trying to be a dick but am I wrong? If so, please correct me(seriously, not trying to be a dick). I'm just curious at this point.

 

You misunderstand me.  I am not saying they will make a profit or even break even, just that when all is said and done the impact will not be anything eve remotely close to what Casa is hinting at. 

So much gray area people...

 

Only original owners.

 

The amount of depreciation is up to the dealer (unless otherwise specified which it isn't at this time)

 

Look at the Jeep recall...many just don't care about it or are worried about it.

 

All get to be resold if bought back. The fix is either tie rods or pinion...not hard to do as I've done both in my garage.

 

CASA is a tool - there is a reason he and wings keep getting banned everywhere.

Where am I banned from outside of one place? Also.. your Mom is a tool.. the garden variety. 

 

 

 

 

They are only buying back those that aren't fixed at this time. So less than 40% that aren't fixed out of the total number. And even then this is a dealers wet dream to sell sell sell!

 

 

 

But isn't 40% of 500,000 still a whopping 200,000 X $10K equaling $2 Billion? Good thing Sergio stole that $2 Billion from GM back in 2002. 

 

Seriously wish this would put them out of business. Hate Foreign companies. Would love GM being able to pick up Jeep for pennies on the dollar

uh huh, as I have said, hating a company just to hate it....  And you are still ignoring these trucks will be resold which is going wipe a VAST majority of that price out.  PLUS, the customer DOES NOT have to sell back and many won't because the depreciated price will be nowhere what it will take to get a new and equal replacement.    

 

You should also watch your wishing because how long is it until the government starts forcing GM to buyback all those millions of cars with faulty ignitions that aren't fixed yet?  This is a VERY dangerous precedent that is set...........

I'm still not understanding how they will make much profit at all off these trucks reselling them.. If they are bought back at the purchase price minus depreciation that's the value of the truck. They'll have to sell above the value, correct? I'm not trying to be a dick but am I wrong? If so, please correct me(seriously, not trying to be a dick). I'm just curious at this point.

 

You misunderstand me.  I am not saying they will make a profit or even break even, just that when all is said and done the impact will not be anything eve remotely close to what Casa is hinting at. 

 

I agree that it is very VERY unlikely to be all 200,000 trucks. But I could still see it causing issues if they buy back a truck(because they have to) and then it just sits and sits and sits because they can't unload it because of the price they had to pay for it then just end up taking a loss.. Ya know what.. I just don't know.. Like TAF said "So much gray area people..."

So much gray area people...

 

Only original owners.

 

The amount of depreciation is up to the dealer (unless otherwise specified which it isn't at this time)

 

Look at the Jeep recall...many just don't care about it or are worried about it.

 

All get to be resold if bought back. The fix is either tie rods or pinion...not hard to do as I've done both in my garage.

 

CASA is a tool - there is a reason he and wings keep getting banned everywhere.

I think that is $h!ty leaving it up to a dealer to call the shots on. Of course they will lowball the hell out of it, they're the ones who have to try and resell it.

I know it wouldn't be easy but they should have regional appraisors do the deed, a 3rd party. Otherwise these owners will just be getting trade in value for their truck, aka: ripped off again. They're already dealing with an issue that's been ongoing for 3-6 years(depending on the year of the truck). They don't need to get tossed around again.

FCA is indeed in dire straits. It's so funny how MT gave Sergio the number one in power rankings two years in a row. Yet here we are now years later and FCA is in dire trouble.

 

Its a popularity contest, much in the same way that Donald Trump was/is leading the GOP polls a few weeks ago. 

The thing is that FCA cannot, and will not survive on LX and Hellcat orders alone. They wi;; certainly make a buck or two, but with CAFE hitting, is it really a design that FCA should bet the farm on? Sergio is smart to want to revive Alfa. He is looking at it in a "VW reviving Audi" kinda of way. I would say he was emulating VW/Audi/Porsche if he hadn't of just shuttled Ferrari. Alfa could be a profit center if Fiat's usual quality issues don't come in and dilute, then delete any money made with warranty claims daily and people take it seriously from the start and buy

This ^^^^ We agree. FCA is right now surviving on Jeep.. the LXs are just a little bit of gravy, and a lot of those sales are coming from discounted fleet deliveries. 

I agree that it is very VERY unlikely to be all 200,000 trucks. But I could still see it causing issues if they buy back a truck(because they have to) and then it just sits and sits and sits because they can't unload it because of the price they had to pay for it then just end up taking a loss.. Ya know what.. I just don't know.. Like TAF said "So much gray area people..."

You misunderstand me.  I am not saying they will make a profit or even break even, just that when all is said and done the impact will not be anything eve remotely close to what Casa is hinting at. 

 

 

My brother's Dakota R/T was a buyback from the towing issue.  i am sure we didn't pay what they did to buy i back so yes they will certainly lose some.  That said, a lot of he people who sold back their R/Ts ended up buying other Chrysler products, particularly 4.7 V8 Dakotas, so there is that to.  But yes, there is way to much gray area and Taf says it is only for original owners so a HUGE chunk of the buyback goes out the window right there simply on the age of the trucks. 

 

It's fun seeing Casa go off a little on FCA..

He does get excited... but I do kinda get it. Even though he's got some serious warts to his managerial style and is way too fond of black turtlenecks, I gotta go to bat for ol' Sergio because he's Italian/Canadian.

Having said that, the buyback thing is a scary precedent. And on a financial news front: the rumoured shotgun wedding with GM would be a disaster for both companies.

 

I never saw him in a black turtle neck.. Personally I think he has a weird fettish with crew-neck sweaters. I mean like Hannibal Lechter "rare meat and potatoes" emphasis on the rare meat fettish. 

It would be an EPIC disaster.. like the time Noah had to gather two of every animal in take a ride on a boat disaster. The only good thing that would come from a GM merger would be the acquisition of Jeep.. which quite frankly GM really doesn't need because it has GMC and HUMMER name. They could effectively create a Jeep Brand with a name that was synonymous with "off-road" by combing it GMC, a name synonymous with "truck." R

^ Does GM still own the HUMMER name??? I thought it got sold..

No. They held onto the rights to the name.

 

FCA is indeed in dire straits. It's so funny how MT gave Sergio the number one in power rankings two years in a row. Yet here we are now years later and FCA is in dire trouble.

 

 

 

Its a popularity contest, much in the same way that Donald Trump was/is leading the GOP polls a few weeks ago. 

 

 

Don't get me wrong, I'm a Mopar lover and I would hate to see the Markham plant that builds everything LX and Hellcats shutter down.

 

But I think he's an idiot for delaying new products for FCA US LLC while trying to revive Alfa. It's even worse than trying to revive Lincoln, but atleast they seem to have a competent car for the Giulia. But it's gonna be such an ultra niche brand because I don't think many Fiat-Chrysler dealers want Alfa. They want new Chryslers, Jeeps and Rams and Dodges and NOT a lenghty and costly revival of a brand no one's seen on the road for decades.

 

 

The thing is that FCA cannot, and will not survive on LX and Hellcat orders alone. They wi;; certainly make a buck or two, but with CAFE hitting, is it really a design that FCA should bet the farm on? Sergio is smart to want to revive Alfa. He is looking at it in a "VW reviving Audi" kinda of way. I would say he was emulating VW/Audi/Porsche if he hadn't of just shuttled Ferrari. Alfa could be a profit center if Fiat's usual quality issues don't come in and dilute, then delete any money made with warranty claims daily and people take it seriously from the start and buy

 

 

 

 

 

And for what product? They have one, ONE sedan for their reboot. Good luck on that. Getting rid of Ferrari was a move of desperation, I think every industry analyst can tell you that. 

 

FCA has to find a way to increase transaction prices, improve operational inefficiencies while at the same time realigning their disjointed brands. The problem lies with the fact that they need separate marketing teams for 3-4 brands that might as well be part of one brand with big line-ups and have a familial styling resemblance which helps control costs and is just plain simpler to execute.

 

Ford and Chevy have it down right, and FCA is not going to succeed because of either Fiat or Alfa becoming viable in the U.S.

 

 

 

This ^^^^ We agree. FCA is right now surviving on Jeep.. the LXs are just a little bit of gravy, and a lot of those sales are coming from discounted fleet deliveries. 

 

Bull$h!.   Not only Jeeps and LXs, but Ram, the 200 is in the top 5 best selling midsize sedans right now BLASTING the Malibu out of the water.  Journey and Dart are seeing record sales and considering the Journey's tooling was paid off years ago (same with the minivans), the thing is a money maker.  And, FYI,, Chrysler has the LOWEST percent of fleet of the big 3 and of last mo nth outsold Ford in retail sales AND had quicker growth in the market than Ford did for the first half of this year. 

Get your facts straight............

As for Alfa, we do already have the 4C so they are not starting out with simply a sedan and more will appear it does.  It has tons of potential!

No. They held onto the rights to the name.

Can't see it is worth much since by the time Hummer was dropped they didn't have the best rep.  The Jeep name has it, Jeep  > Hummer easily. 

I'm not going to argue any of that except possibly the Hummer vs. Jeep thing, since the only shared ground they ever had was the H3 (the H2 was bigger than the Commander and the H1 was bigger than anything). The 200 probably makes a modest contribution to the bottom line, and I admit to overlooking the Jeep lineup's contribution to same.

IMHO, the best thing to come from Hummer was the H3T and i 1 whopping year in production.

And that's fine. Personally I hold the brand in much higher esteem than that. If the tree-huggers hadn't been able to successfully attack it and the H4 had been produced I think it would have given Jeep fits.

I do agree there, it had mad potential, but Suburbans and trailblazers with a Hummer body just didn't cut it.  I also wonder why some of the Hummers amazing off-road equipment (ie the dual locakers from H3/H3T Alpha) didn't make it to the GMC brand.

No. They held onto the rights to the name.

Wow. That's actually really awesome.. Hopefully everything can go well for them and eventually bring it back. But not the crappy H2/H3 stuff.. Like the real stuff.. Or atleast differentiate the H2 more from the Suburban.

There has been talk of GMC having Hummer packages you could add to their product line. I personally think GMC needs to take the Hx and build it as a GMC and give Jeep the Heartache they deserve.

I do agree there, it had mad potential, but Suburbans and trailblazers with a Hummer body just didn't cut it.  I also wonder why some of the Hummers amazing off-road equipment (ie the dual locakers from H3/H3T Alpha) didn't make it to the GMC brand.

Actually, if you look back at the sales numbers and hype... they totally did. The H2 and H3 were serious machines. The fact they were rarely used to their potential lies with the owners. Why GMC never got the hardware post-'08 is a mystery. I'm guessing it's because GM decided to go with the upscale, "Denali" philosophy to boost profit margins.

There has been talk of GMC having Hummer packages you could add to their product line. I personally think GMC needs to take the Hx and build it as a GMC and give Jeep the Heartache they deserve.

 

1280px-Hummer_HX_Concept_-_Flickr_-_Alan_D_(1).jpg

I love that.  The only problem with it now is can they do it with Cafe looming?  The thoughts of an aluminum Wrangler scare me enough lol.  Hummer package doesn't sound right, especially since hummer can have a totally different meaning.....

 

I do agree there, it had mad potential, but Suburbans and trailblazers with a Hummer body just didn't cut it.  I also wonder why some of the Hummers amazing off-road equipment (ie the dual locakers from H3/H3T Alpha) didn't make it to the GMC brand.

Actually, if you look back at the sales numbers and hype... they totally did. The H2 and H3 were serious machines. The fact they were rarely used to their potential lies with the owners. Why GMC never got the hardware post-'08 is a mystery. I'm guessing it's because GM decided to go with the upscale, "Denali" philosophy to boost profit margins.

 

H2 was merely ok, H3, in the right trim, is actually pretty impressive.  I think they should have done both.  Denali for luxury and maybe make the all-terrain packages a lot more capable.