Hyundai fined $17 million for reporting lapse
Hyundai will pay a $17million federal fine for failing to promptly report a brake problem in its Genesis cars, the National Highway Traffic Safety Administration said Thursday.
The action by the automobile safety agency marks a step up in enforcement. Both Toyota Motor Corp. and General Motors Co. have paid large federal fines this year for either not recalling vehicles promptly or misleading regulators and others about safety defects.
The Hyundai fine covers 43,500 Genesis cars from the 2009 to 2012 model years. The defect involves corrosion in the brake system that can make it more difficult to stop and increase the risk of a crash, regulators said.
“Safety is our toppriority, and all automakers should understand that there is no excuse for failing to report a safety-related defect, as required by law,” said U.S. Transportation Secretary Anthony Foxx, whose department operates NHTSA. “This administration will act aggressively and hold automakers accountable when they put the American public at risk.”
Instead of recalling the cars, Hyundai issued a “Technical Service Bulletin” to its dealers asking them to replace the brake fluid if they discovered the problem or if an owner complained. But Hyundai failed to inform all Genesis owners of the potential safety consequences of the problem, the safety agency said. Eventually, Hyundai recalled the cars after NHTSA opened an investigation into the defect.
The NHTSA probe found that Hyundai knew that brake fluids used in the Genesis models did not sufficiently inhibit corrosion in key components of the vehicle’s brake system.
Hyundai said no fatalities have been caused by the brake system defect. But NHTSA has tracked six collisions, including two reports of injuries.
“Federal law requires automakers toreport safetyrelated defects to NHTSA within five days, and neither NHTSA nor the American public will accept anything less,” said NHTSA Acting Administrator David Friedman. “Hyundai failed to act to protect their customers …and must change the way they deal with all safety-related defects.”
Hyundai signed a consent decree promising to make improvements to its processes for identifying, reporting and communicating safety-related defects. It will create a U.S.-based technical committee to review and make decisions regarding potential Hyundai-specific safety recalls, NHTSA said.
“In order to miti gate a situation like this in the future, Hyundai is instituting new organizational and process improvements, and enhancing the ability of the U.S. leadership team to readily respond to regulatory reporting requirements,” said David Zuchowski, chief executive of Fountain Valleybased Hyundai Motor America.
Hyundai, for example, is adding staff to review potential defects and complaints. The automaker also said it plans to meet with NHTSA on a regular basis regarding safety issues.
This year Toyota agreed to pay a $1.2-billion Justice Department fine to settle a four-year federal criminal investigation into whether it properly reported safety complaints about the sudden acceleration of its vehicles to regulators.
Also this year NHTSA fined General Motors $35 million for delays in recalling vehicles with faulty ignition switches that have been linked to13 deaths.