Honda Pays $70M for Failure to Report

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According to transportation officials, Honda Motor Co. has agreed to pay the U.S. government $70 million for its failure to provide reports of hundreds of injuries, deaths and other consumer claims involving its cars.

Investigation

The two $35 million fines (totaling $70 million) will be the highest amount an automaker has ever paid as a result of an investigation by the National Highway Transportation Safety Administration (NHTSA). The investigation was into violations of the NHTSA’s Early Warning Reporting regulations which require automakers to quickly report information regarding possible defects, deaths and injuries, or damage and warranty claims made by consumers. It was revealed in November that Honda had failed to report 1,729 cases that involved death or injury between July 2003 and June 2014.

Air Bag Rupture

Eight of the reported 1,729 cases involved Takata Corp air bags that had ruptured. The same air bags have been the subject of large recalls and federal investigations.

“One thing we cannot tolerate and will not tolerate is an automaker failing to report to us any safety issues, because if we don’t know about these problems, we’re missing an essential piece of the puzzle in the recall efforts we use to fix them and to protect the public,” said U.S. Transportation Secretary Anthony Foxx. He went on to say, “In this situation, we’re talking about 11 years - 11 years of information we did not have. It’s egregious and I think the penalties reflect that.” He feels Congress' cap of fines at $35 million needs to be lifted, due to the fact that a single violation could result in death.

Reasons

Honda is attributing its slack disclosure to data entry and computer programing errors. The company has also said it had previously relied on an “overly narrow interpretation” of its legal reporting requirements. Moving forward, the company has plans to initiate new training regimens, while also making changes to its internal reporting policy while also enhancing oversight of the early warning process of reporting.

“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,” said Rick Schostek, executive vice president of Honda North America Inc..

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