Feds: FCA failed to disclose death, injury reports

David Shepardson
Detroit News Washington Bureau

Washington — Fiat Chrysler Automobiles NV faces new penalties from federal regulators for failing to properly disclose death and injury reports.

The automaker’s North American operations, FCA US, said the disclosure came about the same time it reached a $105 million settlement with the National Highway Traffic Safety Administration over its handling of nearly two dozen recalls covering 11 million vehicles.

NHTSA Administrator Mark Rosekind said the issue is a “significant failure.”

The auto safety agency first raised questions when it learned about a death in a Fiat Chrysler car that had not been reported to the safety agency’s “early warning system.” Major auto companies are required to electronically submit massive amounts of data involving vehicle crashes, deaths, lawsuits, warranty claims and other information.

That prompted the automaker to conduct a review of its early warning reporting. It then told NHTSA it had discovered other incidents that hadn’t been reported.

Rosekind said preliminary information suggests the under-reporting is due to problems with systems for gathering and reporting the information. “This represents a significant failure to meet a manufacturer’s safety responsibilities.”

It’s not clear if it was a computer problem, confusion over what death and injury claims must be reported or another issue. NHTSA and Fiat Chrysler didn’t immediate comment on the questions.

But according to two people briefed on the investigation, Fiat Chrysler says 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.

In a statement, the automaker said, “FCA US promptly notified NHTSA of these issues, and committed to a thorough investigation, to be followed by complete remediation,” the company said, adding that it takes the issue “extremely seriously.”

The issue has been under discussion for more than a month. The early warning reports are required under a 2000 law passed by Congress after more than 270 were killed in rollover accidents in Ford Explorers with faulty tires. The law is aimed at helping regulators spot safety defect trends earlier.

Fiat Chrysler must follow all aspects of federal auto safety laws under the three-year consent decree it signed as part of the $105 million settlement.

If it doesn’t, it can be ordered to pay $15 million that was deferred from the $105 million penalty. NHTSA also can impose a $3 million fine for a first violation — or it could opt to open a separate enforcement action.

Sens. Edward Markey, D-Mass., and Richard Blumenthal, D-Conn., released a statement that said, “Yet again, we are told an automaker failed to submit all early warning documents related to potentially fatal defects, and once again NHTSA continues to drag its feet on issuing new requirements that would make this critical reporting immediate and mandatory.”

Legislation they are sponsoring would require automobile and equipment manufacturers to automatically submit accident reports or other documents that alerted them to fatalities involving their vehicles. NHTSA would be required to automatically make those documents public.

Fiat Chrysler disclosed this month that it hired Deloitte to review and evaluate the company’s procedures for compliance with NHTSA regulations. A monitor will be selected to oversee the company’s compliance with the three-year agreement that came after NHTSA raised questions about FCA’s handling of 23 recall campaigns covering more than 11 million vehicles.

Fiat Chrysler will undergo at least three years of oversight by an independent monitor, must hire an independent consultant and is required to conduct sweeping training and safety reforms.

It must hold regular meetings with NHTSA and its monitor to discuss safety issues before they reach the recall stage. It agreed to buy back unrepaired trucks that are part of three recalls of 578,000 trucks and SUVs that can lose control.

Vehicles in the buyback program include the unrepaired 2008-12 Ram trucks for a tie-rod assembly steering problem; 2008-12 Ram 4500 and 5,500 trucks recalled for similar steering problems; and 2009-12 Ram pickups, 2009-11 Dodge Dakotas, 2009 Dodge Durangos and Chrysler Aspen SUVs for a rear axle pinion nut problem that can cause the axle to lock up.

In January, Honda Motor Co. agreed to pay a $70 million fine for failing to disclose more than 1,700 reports of deaths, injuries and other “early warning” information to NHTSA, which then was the largest auto safety fine in U.S. history. Honda admitted it violated two sections of a 2000 federal law that requires automakers to disclose reports to NHTSA.