NHTSA Fines BMW $40M for Late Recalls, False Info

Now NHTSA is really seeing red over another German automaker scofflaw.

In the second time in three years, the National Highway Traffic Safety Administration has imposed a fine on BMW for violating numerous requirements of Motor Vehicle Safety Act and NHTSA regulations.

In a Consent Order just released, BMW acknowledges that it violated requirements to issue a timely recall of vehicles that did not comply with minimum crash protection standards, to notify owners of recalls in a timely fashion, and to provide accurate information about its recalls to NHTSA. The safety agency imposed a $3 million civil penalty to BMW in 2012 for similar violations.

“The Consent Order NHTSA has issued not only penalizes this misconduct, it requires BMW to take a series of steps to remedy the practices and procedures that led to these violations,” said U.S. Transportation Secretary Anthony Foxx.
The Consent Order resolves a NHTSA investigation into whether the company failed to issue a recall within five days of learning that 2014 and 2015 Mini Cooper models failed to meet regulatory minimums for side-impact crash protection.

In Oct. 2014, a Mini Cooper 2 Door Hardtop failed a crash test on meeting crash-protection minimums. BMW claimed the vehicle was listed with an incorrect weight and would pass the test if conducted at the proper weight rating, but agreed to conduct a recall to correct the incorrect weight rating on the vehicle’s Tire Information Placard and to conduct a voluntary service campaign, short of a recall, to add additional side-impact protection.

In July 2015, NHTSA conducted a second crash test at the corrected weight rating on a vehicle with the additional side-impact protection, and the vehicle again failed. At that time, NHTSA learned that BMW had not launched the service campaign it had agreed to conduct.

Under the Consent Order, BMW acknowledges that it failed to recall the non-compliant vehicles in a timely fashion. It also acknowledges additional violations discovered in NHTSA’s investigation, including failing in multiple recalls since its 2012 consent order to notify owners and dealers of recalls in a timely fashion and to provide required quarterly recall completion reports on time. The Consent Order will remain in place for two years subject to NHTSA’s right to extend for an additional year.

The order’s $40 million civil penalty is for $10 million due in cash, a requirement that the company spend at least $10 million meeting the order’s performance obligations, and $20 million in deferred penalties that will come due if the company fails to comply with the Order or commits other safety violations.

Closer NHTSA Supervision and Action Plans Required

In addition to paying the civil penalties, BMW must:
• Retain a NHTSA-approved independent safety consultant to help the company develop best practices for complying with the Motor Vehicle Safety Act and NHTSA regulations and submit those best practices to NHTSA.
• Evaluate, under the independent consultant’s guidance, all safety or compliance-related issues under the company’s review and provide a monthly written report to NHTSA on those issues.
• Launch a pilot program to determine whether the company can use data analytics capabilities to detect emerging safety-related defect trends.
• Establish a plan to deter BMW dealers from selling new vehicles with unrepaired safety defects, a requirement stemming from the fact that during NHTSA’s investigation, a NHTSA representative purchased a new vehicle with an open safety recall from a BMW dealer.