The first civil penalty is a result of Honda’s failure to report 1,729 death and injury claims between 2003 and 2014. The second penalty is for failing to report certain warranty claims and claims under customer service campaigns in the same time period.
The U.S. Department of Transportation’s National Highway Traffic Safety Administration, NHTSA, announced today that because of an investigation, Honda would pay two $35 million civil penalties, for a total of $70 million, for failing to report deaths, injuries, and certain warranty claims to the federal government in violation of the TREAD Act. (NHTSA Opens Cover-up Probe on Honda Takata Airbag Deaths)
It was a record fine for an automaker who violated Federal safety regulations. Honda copped a plea to increased NHTSA oversight and third party audits to ensure that all required reporting is completed now and in the future.
The investigation was damning for the Japanese automaker and by implication Takata. NHTSA’s said that a look at Honda’s safety reporting found that the automaker failed to submit early warning reports (EWR reports) identifying potential or actual safety issues.
Honda admitted – in a carefully crafted lawyer-written release – that the order was prompted by Honda’s disclosure to NHTSA of preliminary findings NHTSA requested from a third-party audit that Honda commissioned in September 2014 “in response to inadequately addressed discrepancies in the company’s early warning reporting.”
In responding to the Special Order, Honda admitted to under-reporting of written claims or notices of injuries or deaths over the past decade “due to errors related to data entry, computer coding, regulatory interpretation, and other errors in warranty and property damage claims reporting.”
Translation: Honda got caught flagrantly violating U.S. regulations.
The first civil penalty is a result of Honda’s failure to report 1,729 death and injury claims to NHTSA between 2003 and 2014. The second civil penalty is due to Honda’s failure to report warranty claims and claims under customer satisfaction campaigns throughout the same period.
“These fines reflect the tough stance we will take against those who violate the law and fail to do their part in the mission to keep Americans safe on the road,” said U.S. Transportation Secretary Anthony Foxx, who because of his background appears to one of the senior Obama Administration appointees actually qualified to do the job.
Federal law requires automakers to submit comprehensive so-called EWR or Early Warning Reports of potential safety concerns to NHTSA. These quarterly reports include production information; incidents involving a death or injury; aggregate data on property damage claims, consumer complaints, warranty claims, and field reports; and, copies of field reports involving specified vehicle components, a fire, or a rollover.
In addition to civil penalties, Honda has been ordered to comply with NHTSA oversight requirements under a Consent Order. It requires that Honda develop written procedures for compliance with EWR requirements, train people on at least an annual basis, and complete two third-party audits of the automaker’s compliance with its reporting obligations.
The Consent Order also requires Honda to provide NHTSA’s Early Warning Division with information regarding the 1,729 unreported death and injury incidents and the warranty claims, so that the agency “can analyze these incidents for potential safety concerns and take appropriate action to protect America’s driving public.”
Honda is experiencing something similar to Toyota’s safety meltdown and defiance of U.S. safety regulations and subsequent fines.
