Watch CBSN Live

Chrysler Fined Over Recall

A judge has fined Chrysler Corp. $800,000 for failing to recall 91,000 Cirrus and Stratus cars after the government told the company that their rear seat belt systems were unsafe.

U.S. District Judge Emmet G. Sullivan's fine, issued in court papers released on Monday, is the largest such monetary punishment meted out to an automaker for failure to comply with a government recall order.

The government had sought a $1.6 million penalty, $800,000 apiece for failing to notify owners of a recall and for failing to obey the order of the National Highway Traffic Safety Administration to recall the autos. But Judge Sullivan said the failures were one related series of events, and thus deserved one penalty.

NHTSA and Chrysler officials had no immediate comment.

Chrysler recalled the 1995 model year autos earlier this year after it lost an unprecedented battle with the government in court in February and Sullivan ordered the autos recalled.

Chrysler is the only company ever to fight in court a recall based on a car's failure to meet a safety test standard.

The National Highway Traffic Safety Administration wanted the 1995 Cirrus and Dodge Stratus cars recalled and fixed without charge because the rear seat belt anchoring system failed a federal strength test.

When Chrysler announced in 1996 that it would fight the recall in court, government officials were surprised at the unprecedented response.

The government's anchor standard had been in effect for more than 25 years and, during that time, had been violated 54 times. In every case, until Chrysler refused, the vehicles had been recalled to strengthen the belt anchor.

Chrysler said the anchor system was safe and had never failed in cars on the road. In court, company officials argued the federal test was unfair because regulators were not clear about the test's specifications so companies could duplicate it.

During the routine government safety compliance test in 1996, a nut anchoring the seat belt of a 1995 Cirrus pulled out of the floor.

The same anchor system was used in all Cirrus and Dodge Stratus cars built between June 30, 1994, and May 15, 1995. After that, Chrysler replaced the weld-nut anchor with a stronger design that includes a metal plate.

The largest previous such civil fine imposed on an automaker was $405,457 assessed to General Motors Corp. in 1978 for failure to recall some faulty Quadrajet carburetors prone to fuel leaks that could cause fires, according to government records. GM fought the recall, lost in court and received the maximum penalty at the time.

Written By Catherine Srong

View CBS News In
CBS News App Open
Chrome Safari Continue