FCA’s Marchionne meets with NHTSA’s Rosekind after $175 million in fines

Sergio Marchionne

Fiat Chrysler and the National Highway Traffic Safety Administration have been doing a $175 million dance with each other for the last six months over years of safety regulation violations.

Today at the Detroit auto show, the man cashing those checks, NHTSA administrator Mark Rosekind, finally got a chance to meet face-to-face with the man who's been writing them, FCA CEO Sergio Marchionne.

And the two men shared some smiles as they privately discussed the automaker's efforts to change its culture, as well as the skyrocketing costs of safety equipment, such as that installed on the 2017 Chrysler Pacifica minivan, the two men said later.

"We were talking about all the safety elements of this new minivan, and I reminded him that all these things are available; nobody's trying to avoid introducing them into their vehicles. They come at a cost," Marchionne said. "The question is: How many of these can we actually pass on and on what time frame is a big issue?"

FCA was hit with up to $105 million in fines and potential civil penalties as part of a sweeping consent order with NHTSA in July that also included three years of oversight of its safety operations by an independent monitor. Last month, FCA agreed to pay another $70 million fine for failing to report claims of death and injury to regulators under the TREAD Act.

Marchionne said both settlements stung cash-strapped FCA, but also served as motivation internally.

"I have no interest in paying fines and he has no interest in imposing them. So we have to find a different way of running this business," Marchionne said. "But the onus is on us."

Rosekind, who was sworn in as NHTSA's administrator in December 2014, spent about 30 minutes speaking to Marchionne as part of a tour of the Detroit auto show, one of several high-level auto executives he met.

"That was great. We've had these one-on-one interactions rarely, so this is good for us to start talking," Rosekind said. "This is new for everybody in the industry — consent orders, monitors, etc. – I don't mind telling you that we're watching how everybody reacts."

Marchionne said the conversation with Rosekind was valuable, but FCA is not trying to skirt responsibility for its actions.

"I think he understands the fact that this business is incredibly competitive. One of the things we cannot forget, and I'm talking in our case: You can go out there and criticize the fine, but we were negligent in complying with the rule," Marchionne said. "Don't bitch after the rule has been set. It's my fault, and I know it's my fault. When it isn't my fault, you'll hear me. But [FCA's internal reporting] system failed. Do I think it was a lethal failure? No. Was it an administrative screw-up? Yes."

Rosekind said that he was sensitive to the cost of safety equipment that he and Marchionne discussed. But he said the cost of safety is what it is.

"I think that's one of the challenges that everybody has," the NHTSA administrator said. "NHTSA has that, the industry has that, safety advocates have that — how do we make sure people appreciate not only what the opportunity is, but what they should expect?

"From NHTSA's perspective, it's 32,675 lives lost in 2014. We need to save every single one of those," Rosekind said. "There's a lot of work for all of us to save them." autonews.com