(Bloomberg) -- A record penalty that could reach $105 millionisn’t the only imposition U.S. auto-safety regulators are making onFiat Chrysler: It’s also getting a house guest.

The maker of Dodge pickups and Jeep sport utility vehicles onSunday, like Toyota before it, agreed to hire an independentmonitor to ensure it will no longer delay safety recalls. IncludingGM and Honda, which have agreed to additional oversight, companiesrepresenting more than half of all vehicles sold in the U.S. willbe under the yoke of extraordinary regulatory scrutiny.

The message from NHTSA administrator Mark Rosekind, who tookover in December, should be clear, said Clarence Ditlow, executivedirector of the Washington-based research group Center for AutoSafety: The government no longer trusts them.

“The regulatory system in the past has been based on trust,”Ditlow said. “The auto companies have violated that trust so manytimes you can’t count it.”

Fiat Chrysler Automobiles NV, run by Chief Executive OfficerSergio Marchionne, agreed to hire a consultant to advise and assiston the establishment of best recall practices in addition to theindependent monitor who will evaluate how it decides upon andhandles recalls.

That’s a good step, said Ditlow, but they don’t ensure properbehavior.

“As soon as you get a monitor, you get into questions such as:Can they get everything they want? What aren’t they getting? What’shidden?” he said Sunday in a telephone interview. “They haven’tspent years within the company. They don’t know where all theclosets are, let alone the skeletons.”

Biggest penalty

The agreement announced Sunday represents the largest penaltyever imposed by NHTSA, which regulates the auto industry andinvestigates safety defects. It is the latest in a series ofrecord-breaking NHTSA fines. Honda Motor Co. in January agreed topay a record $70 million fine over failing to report warrantyclaims and injuries, including deaths caused by air bags thatexploded with too much force, firing shrapnel at vehicleoccupants.

Fiat Chrysler shares fell as much as 3.4 percent to 13.50 eurosand were down 2.1 percent at 9:29 a.m. in Milan, making it thethird-worst performer on the Euro Stoxx autos and parts index.

In addition to a $70 million cash fine, the automaker must spendat least $20 million meeting performance requirements of theconsent order. Fiat Chrysler will pay the remaining $15 million toan escrow account. The money will go to the U.S. Treasury only ifthe monitor finds additional safety-law violations or the companyfails to live up to the agreement.

The North American unit of London-based Fiat Chrysler alsoagreed to buy back more than half a million vehicles with defectivesuspension parts for more than market value and compensate ownersof more than a million Jeeps that are prone to deadly fires.

Stepped-up efforts

NHTSA has been stepping up its enforcement efforts followingcriticism that it acted too slowly on reports about faulty ignitionswitches in GM small cars that shut off air bags, leading to morethan 100 deaths. The agency faced similar complaints over itsresponse to reports about the air bags supplied by Takata Corp. toHonda and other automakers.

The agreement by Fiat Chrysler, which has its North Americanoperations based in Auburn Hills, Michigan, followed a recallannounced Saturday of 1.7 million of its late-model Ram trucks toreplace air bags that may deploy inadvertently. The company on July24 also said it was recalling about 1.4 million cars and trucksequipped with radios vulnerable to hacking, the first formal safetycampaign in response to a cybersecurity threat.

Fiat Chrysler stock fell 2.5 percent in New York on Friday, themost in two weeks, to $15.15. The drop pared the stock’s gain forthe year to 31 percent.

Rare hearing

On July 2, NHTSA held a rare public hearing to go over evidencethat Fiat Chrysler had taken too long to initiate safety recalls,delayed producing parts needed to fix defects, and didn’t do enoughto ensure that consumers complied.

NHTSA officials scrutinized a set of 23 recalls by the companycovering more than 10 million vehicles to fix various flaws.Rosekind said at the time that Fiat Chrysler exhibited a pattern ofdelaying recalls.

Specific examples NHTSA investigators cited at the hearingincluded defective pinion nuts in Ram pickups that could cause thewheels to lock and drivers to lose control. Fiat Chrysleridentified the defect in early 2013 but took more than two years tocome up with replacement parts.

Other Ram truck owners waited more than 15 months for repairs toa faulty tie rod.

Fiat Chrysler agreed to hire the independent monitor for threeyears. NHTSA has the right to add a fourth year if it chooses.NHTSA will pick the monitor from three options chosen by FiatChrysler. The agency can find its own monitor if none of thechoices are acceptable, according to the consent order.

Wide net

As part of General Motors Co.’s settlement terms with NHTSA, theDetroit-based company sends employees to meet with theadministration in Washington every month to talk about progress ofexisting recalls, show any data that could mean a new recall isneeded and give government officials a chance to ask questions,said company spokesman Jim Cain. NHTSA usually meets with JeffBoyer, GM’s vice president of global vehicles safety and his staff,Cain said. Boyer’s position was created last year by CEO MaryBarra.

Honda, as part of its civil consent order with NHTSA, agreed torevise its regulatory compliance practices, improve personneltraining and complete two outside audits on its data reporting.

Fiat Chrysler had promised to retrain its dealers and create asmartphone alert to improve responses to recalls. It has also hiredmore agents dedicated to answering consumer phone calls, and begunextensive training at the company’s dealerships.

NHTSA’s hammer

There are limits on NHTSA’s ability to issue fines, and the FiatChrysler agreement is still well below the $1.2 billion ToyotaMotor Corp. paid in March 2014 to settle a U.S. Justice Departmentcriminal investigation into whether the Japanese automaker coveredup information on unintended acceleration in | its vehicles. Thecompany agreed to an independent monitor as part of the agreementto defer wire-fraud charges for three years.

NHTSA’s tougher actions are a response to Congressionalcriticism that began before Rosekind took over as administrator forthe nation’s top safety agency. He is under tremendous pressure tobe tougher on automakers and take a more active role in enforcingrecalls.

Large fines and forcing Fiat Chrysler to buy vehicles back areevidence that Rosekind is going to be tough, said Scott Upham,founder and CEO of Philadelphia-based corporate-strategy firmValient Market Research Inc.

“We’ll see more diligence, higher fines and NHTSA recastingthemselves as the watchdog,” Upham said in an interview. “Rosekindis really pushing the envelope to empower himself.”

Upham said that Fiat Chrysler’s resistance to negotiations --arguing that its track record was better than most automakers --made their situation worse and pressured NHTSA to be tough.

Fiat Chrysler “has not helped their cause” he said. “Now we’reseeing the hammer come down.”

Rosekind told reporters in Detroit last week that he’s trying toget the industry to focus proactively on safety and not wait fortragedies to spur change.

“Automakers are saying the right things so far,” he said. “We’llcontinue to follow the great words. We want to see the actions.Given the resources, we’ll use every available tool to try and getthings done.”

--With assistance from Jeff Green in Southfield, Michigan.

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