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Fiat Chrysler faces record fines for failing to recall unsafe cars

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  • JUDY WOODRUFF:

    Fiat Chrysler must offer to buy back hundreds of thousands of Ram pickup trucks and other vehicles as part of a settlement with the federal government. The automaker will also pay $105 million in penalties, the highest civil fine ever for an auto manufacturer, as part of the agreement.

    The National Highway Safety Traffic Administration, or NHTSA for short, found 23 allegations of misconduct with Fiat Chrysler, covering more than 11 million vehicles. The government said the company had failed to notify owners and it had delayed fixing vehicles, which included problems with steering and control.

    Now, this comes just days after a video showed hackers taking over a Jeep, and Fiat ordered a voluntary recall of more than one million cars in order to prevent hacking.

    Anthony Foxx is the secretary of transportation, and he joins me now.

    Welcome again to the NewsHour.

    ANTHONY FOXX, Secretary of Transportation: Thank you, Judy.

  • JUDY WOODRUFF:

    So, explain more why this penalty is being levied. What is it that Fiat Chrysler failed to do?

  • ANTHONY FOXX:

    Well, in the course of doing recalls, the recalls were basically ineffective.

    And so there were failures to notify dealers and consumers. There was failure to inform NHTSA of various aspects of the recall. And the recall was just executed poorly. And so these fines are calibrated not only to punish Fiat Chrysler, but also we have remedial steps in place to help improve their performance going forward.

  • JUDY WOODRUFF:

    It's $105 million in penalties, we mentioned. It could have been much higher, though. I was reading today, if you had levied, what, $35 million on each of the 23 recalls, it could have been $700 million or $800 million.

  • ANTHONY FOXX:

    Look, this is a significant penalty. It's the highest penalty NHTSA has ever put in place in its history.

    And I think it's a penalty that will be attention-grabbing not only to Fiat Chrysler, but also to the rest of the industry. Our goal is to see the industry be proactive with safety and to ensure that when consumers get behind the wheel, they're able to move where they're going safely.

  • JUDY WOODRUFF:

    How significant is it, Secretary Foxx, that Fiat Chrysler is being asked — or being ordered, in fact, to take cars and trucks back that they have sold? Is this designed to send a message to the rest of the auto industry?

  • ANTHONY FOXX:

    On that aspect of the recall, we have found that, in some cases, there is no effective remedy that Chrysler has been able to produce to solve the problem consumers have.

    And so, in those cases, we're having them buy those vehicles back and of course get the consumer in a better car.

  • JUDY WOODRUFF:

    But this is the first time something like that's happened?

  • ANTHONY FOXX:

    Well, this…

  • JUDY WOODRUFF:

    Of this magnitude. ANTHONY FOXX: Yes, this magnitude, perhaps. I haven't gone back into the history books to look, but I know that it's a rarely used authority, but it does exist within NHTSA.

  • JUDY WOODRUFF:

    How much of a safety risk is there right now with Fiat Chrysler? I mentioned the recall on Friday over the hacking. And then there was another recall on Saturday. How many of their vehicles are at risk?

  • ANTHONY FOXX:

    Well, I think there are sort of two separate issues.

    The 23 recalls that we're making the fines towards today, those recalls, we think, are going to be much more effective, given the remedial steps that are being put in place. As far as cyber-security is concerned, this is an ongoing concern that we have. We are working with industry to produce a roundtable with industry stakeholders, all of whom have skin in the game when it comes to cyber-security, so that we can share information across private sector holders, but also the government is at the table working with them to ensure that we're as safe as possible.

  • JUDY WOODRUFF:

    Well, how should the — someone who is watching — there are so many car owners in this country, people who drive cars and trucks. How concerned should people be?

  • ANTHONY FOXX:

    Well, what you should know is that we are not only working with Fiat Chrysler to address the specific problem that emerged last week, but we're also working to ensure that, across the industry, there is a much higher level of vigilance around these cyber-security issues. And there will be more to come on that.

  • JUDY WOODRUFF:

    But just on the recalls overall, Secretary Foxx, the sense is that NHTSA, the National Highway Traffic Safety organization, is just taking a much tougher line against the auto industry than has been the case in the past. Is that what — how we should interpret this?

  • ANTHONY FOXX:

    We believe very firmly that, in this age of rapidly changing technology and automakers trying to get more and more products onto the marketplace, that safety can't slip.

    And so we are being very muscular, I would say, in terms of responding to this environment and making sure the industry gets the appropriate signals that, if they're proactive, it's going to be a better business decision to deal with these issues before something gets on the street or to issue recalls, and to do the right thing in the first place.

  • JUDY WOODRUFF:

    Let me finally ask you about something else that is part of your portfolio, and that is a bill before Congress to fund highways. How worried are you that, now that we approach a deadline, the fact is both houses of Congress are not able to come together in some sort of an agreement on this, and the fact that the gasoline tax in this country no longer seems to be something that Congress is willing to use to fund the highway?

  • ANTHONY FOXX:

    We have a structural problem with how we pay for our highways.

    And, you know, on the good side of the ledger, it's good to see both houses working towards what they believe are solutions to solve the problem, even over, you know, a multiyear period. But we have lots of innings left in the week. I'm hoping that they get to some resolution so that we don't go over the highway cliff, because there are projects across country that would be potentially stopped and jobs that would be affected as well.

    Frankly, the country needs a long-term highway bill. I have been saying that the entire time I have been here, and we will keep pressing, even if we go into extra innings beyond this week.

  • JUDY WOODRUFF:

    You think it could go beyond this week?

  • ANTHONY FOXX:

    Potentially. I'm hoping they find a resolution, but, you know, we have to see.

  • JUDY WOODRUFF:

    Secretary Anthony Foxx, we thank you for joining us.

  • ANTHONY FOXX:

    Thank you.

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