Feds Fine Honda $70MJanuary 13, 2015
The National Highway Traffic Safety Administration issued a $70 million fine to Honda Motor Company. The NHTSA slapped Honda with the maximum fine of $35 million for the company’s failure to report serious vehicle defects that contributed to more than 1,700 deaths and injuries. Honda was also fined another $35 million for failure to report warranty and service claims on the affected vehicles. The combined fines represent the highest amount the agency has ever fined a single automaker.
Automakers Face Millions in Federal Fines
The Honda fine was the latest round of federal scrutiny into the safety records of the auto industry. The NHTSA fined General Motors the maximum of $35 million in May 2014 for its failure to report defects with its ignition switches in millions of vehicles. South Korean carmaker Hyundai was fined $17.4 million for its slow response to issuing a recall. Italian sports car manufacturer Ferrari was also fined $3.5 million for failing to report safety issues that led to three fatal accidents.
Safety Issues Spur Record Recalls
Last year, more than 60 million vehicles were recalled, nearly double the previous record set ten years earlier. Many of those recalls were related to safety issues that led to fatal accidents. At least 40 deaths have been tied to the defect in the GM ignition switch assembly. The defect would cause the vehicle to lose power when the switch was bumped, shutting off the vehicle’s safety systems. A volatile ingredient in airbags from Japanese manufacturer Takata has been linked to at least five deaths.
“New Resolve” For NHTSA
The record number of recalled vehicles in 2014 has spurred the NHTSA into a new phase of its mission. After the agency’s own shortcomings in addressing the issues related to the GM ignition switch defect, Congress has called on NHTSA staffers to increase their vigilance. University of Richmond law school professor Carl Tobias told the Los Angeles Times that the record fine for Honda shows “a new resolve” by the agency in its mission “to hold automakers strictly accountable” for their failures to report potentially dangerous defects.
Higher Fines To Come?
Federal law currently limits the maximum fines on automakers to $35 million per offense. Clarence Ditlow, executive director of the Center for Auto Safety, called Honda’s $70 million fine “too small a price to pay” for the 1,729 death and injury claims stemming from the unreported defects. Officials with the U.S. Department of Transportation plan have asked Congress to lift the limit to $300 million. Incoming NHTSA Administrator Mark Rosekind stated that the higher limit will send a signal to the auto industry “to obey the law or pay a steep price.”
Source: Los Angeles Times
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