In a landmark decision, Japanese car maker Honda Motor Co. has been fined a record $70 million by the National Highway Traffic Safety Administration (NHTSA). According to Bloomberg, the hefty fine was imposed after it became clear that Honda had under-reported warranty claims, deaths and injuries that have been linked to defective parts in their cars. The report adds that Honda had under reported nearly 1,700 instances of failures in parts made by them or their associates.
Honda Motor Co. was pulled up by the regulator under a decade and half old U.S. law that requires automakers to submit reports about warranty claims, injuries and deaths. According to the NHTSA, the failure of Honda to report such instances could have possibly affected the federal agency’s ability to identify vehicle flaws.
In a statement issued earlier today by the NHTSA the U.S. Transportation Secretary Anthony Foxx quipped:
“Honda and all of the automakers have a safety responsibility they must live up to — no excuses. These fines reflect the tough stance we will take against those who violate the law.”
It was some time last year that the NHTSA became aware of the violations on part of Honda wherein it had under reported several warranty claims to the federal agency. This was at around the same time there was a widespread investigation on the quality of air bags that were fitted on to several car models across the globe. Honda, in an internal review filed with the NHTSA back in November claimed that they had under reported the cases due to an “inadvertent data entry and computer programming error.” Only here, the problem was that the under reporting went unnoticed for over 11 years!
The NHTSA however was least impressed and earlier today directed the automaker two pay two separate fines – each pegged at $35 million. According to the NHTSA, Honda Motor Co. had never reported 1.729 death and injury claims to them from 2003 to 2014. The second $35 million fine pulls up Honda for not completely reporting warranty claims and repairs offered under “customer satisfaction campaigns.”
“Today’s announcement sends a very clear message to the entire industry that manufacturers have responsibility for the complete and timely reporting of this critical safety information,” said NHTSA Administrator Dr. Mark Rosekind. “The actions we are requiring will push Honda to significantly raise the bar on the effectiveness of its EWR reporting program. Our ongoing oversight will ensure compliance and determine if there is cause for additional actions.”
The total amount of $70 million is the biggest fine that the NHTSA has imposed in its existence. Back in May 2014, they had imposed a $35 million fine on General Motors.Co.
The year 2014 has gone down as the year in which the NHTSA issued more fines than any time in its history. They have recovered a staggering $126 million from automakers last year alone. Looking at the way things are going this year, they are bound to break last years record yield!
[Image Via Honda]