By Jeff Plungis, Bloomberg News
WASHINGTON (Jan. 9, 2015) — American Honda Motor Co. Inc. has agreed to pay a record $70 million in fines and submit to stricter oversight for failing to tell the U.S. government about warranty claims and more than 1,700 injuries and deaths linked to potential defects in its cars.
Auto makers are required to report such information under a 14-year-old U.S. law, and Honda's violations may have hampered the National Highway Traffic Safety Administration's (NHTSA) ability to quickly identify vehicle flaws.
“Honda and all of the auto makers have a safety responsibility they must live up to — no excuses,” U.S. Transportation Secretary Anthony Foxx said in a statement Jan. 8. “These fines reflect the tough stance we will take against those who violate the law.” Honda's violations came to light late last year as investigations into a global crisis over defective airbags cast doubt on the diligence of some auto makers to tell the government about all potential product defects. In a synopsis of an internal review filed with NHTSA in November, the auto maker blamed its underreporting on “inadvertent data entry or computer programming errors” that spanned 11 years.
“We have resolved this matter and will move forward to build on the important actions Honda has already taken to address our past shortcomings in early warning reporting,” Rick Schostek, executive vice president, Honda North America, said in a statement. “We continue to fully cooperate with NHTSA to achieve greater transparency and to further enhance our reporting practices.”
The civil penalties include two separate fines of $35 million, each the maximum allowable under U.S. law. One covers Honda's failure to report 1,729 death and injury claims to NHTSA from 2003 to 2014. The second fine covers lapses on completely reporting warranty claims and repairs offered under “customer satisfaction campaigns.”
The combined penalty exceeds NHTSA's previous record for a compliance violation by a single company, the $35 million imposed on General Motors Co. in May for mishandling the response to an ignition-switch defect.
NHTSA issued more fines in 2014 than at any time in its history — $126 million — showing it is taking a tougher stand on enforcement that is expected to continue, according to the regulator. The Honda agreement was signed just before the year ended and announced Jan. 8.