The US National Highway Traffic Safety Administration (NHTSA) has imposed a record $105m (£67.6m, €95.5m) fine on Fiat Chrysler Automobiles over lapses in recalls of millions of vehicles having manufacturing defects.
In order to settle lawsuits related to the issue, the carmaker would also have to buy back more than 500,000 Ram pickup trucks and other vehicles. In addition, owners of more than one million Jeep sport utility vehicles would receive a trade-in or a financial incentive to get their vehicles repaired.
Further, Fiat Chrysler has agreed to undergo an independent monitor's audit of its recall performance over a three-year period.
At a 2 July public hearing, NHTSA officials outlined problems with Fiat Chrysler's execution of 23 vehicle safety recalls covering more than 11 million defective vehicles. Fiat Chrysler has since admitted to violating rules over effective and timely recall remedies, notification to vehicle owners and dealers and notifications to NHTSA.
The NHTSA's $105m fine is so far the highest imposed on a car manufacturer over safety issues, beating the previous record of $70m imposed on Honda in January for failing to report death, injury and other claims.
The fines include a $70m cash payment, a commitment to spend $20m on improving recall process and an additional $15m payable if the automaker is found to have committed any further violations.
The safety watchdog has come under pressure to take a tougher stance against companies, after issues related to Takata air bag inflators and GM ignition switches. Both parties in Congress have criticised the NHTSA for its lapses in handling the deadly defects.
The regulator, headed by new administrator, Mark Rosekind, is apparently taking stronger against wrongdoers since then.
"Fiat Chrysler's pattern of poor performance put millions of its customers and the driving public at risk," Rosekind said in a statement.
"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."