Fiat Chrysler boss says tougher US safety stance will raise costs

      

US vehicle safety regulators' tougher posture toward automakers is a "new phase" in the government's relations with the industry and will likely mean higher costs, Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne (right in picture) said Tuesday. 

PHOTO: REUTERS

MAY 20, 201512:31 PM

[DETROIT] US vehicle safety regulators' tougher posture toward automakers is a "new phase" in the government's relations with the industry and will likely mean higher costs, Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne said Tuesday.

"We're beginning to live through a new phase of regulation in the United States," Mr Marchionne told reporters after the head of the U.S. National Highway Traffic Safety Administration criticized Fiat Chrysler's handling of recalls.

NHTSA chief Mark Rosekind on Monday said the agency was reviewing Fiat Chrysler's handling of 20 recalls and criticized the automaker for failing to act aggressively enough to repair 10 million vehicles covered by the actions.

He said the agency could fine Fiat Chrysler up to US$700 million and compel it to buy back vehicles. The agency also planned a public hearing in July to examine the company's behavior.

Mr Marchionne said FCA would "work with the agency in a cooperative way ... and meet their requirement".

But he said the regulator's "different attitude" was "bound to increase the costs of execution of the car" because of additional measures automakers would have to take to comply with safety rules.

Mr Marchionne and FCA's US arm, the former Chrysler Group, have tangled with regulators in recent years, notably over the scope of a recall to address concerns that fuel tanks in certain Jeeps posed a risk of rupturing and catching fire in rear-end collisions.

Chrysler ultimately agreed to recall nearly 1.6 million Jeeps and install trailer hitches to protect the gas tanks. "I just want clear rules," Mr Marchionne said. "This is the only thing that we, humbly, will request ... We can't change the rules after the event."

Mr Marchionne also said that NHTSA may have unrealistic expectations about how many vehicle owners would bring cars back to dealers to get recall-related repairs. "The willingness of us to repair 100 per cent is on the table. But the likelihood of us getting 75 per cent of the cars in that period of time even if we work our buns off is limited,"he said.

He was referring to a NHTSA target for automakers to repair 75 per cent of the vehicles covered by a recall within 18 months.

FCA has not made a decision on where to build its next-generation Jeep Wrangler, Mr Marchionne said. The model is currently built in Toledo, Ohio.

REUTERS