Honda Motor Co. has agreed to pay a record $70 million in fines and submit to stricter oversight for failing to tell the U.S. government about warranty claims and more than 1,700 injuries and deaths linked to potential defects in its cars.
Automakers are required to report such information under a 14-year-old U.S. law, and Honda’s violations may have hampered the National Highway Traffic Safety Administration’s ability to quickly identify vehicle flaws.
“Honda and all of the automakers have a safety responsibility they must live up to — no excuses,” U.S. Transportation Secretary Anthony Foxx said Thursday. “These fines reflect the tough stance we will take against those who violate the law.”
Honda’s violations came to light late last year as investigations into a global crisis over defective air bags cast doubt on the diligence of some automakers to tell the government about all potential product defects. In a synopsis of an internal review filed with the safety agency in November, the Tokyo-based automaker attributed its underreporting to “inadvertent data entry or computer programming errors” that spanned 11 years.
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The civil penalties include two separate fines of $35 million, each the maximum allowable under U.S. law. One covers Honda’s failure to report 1,729 death and injury claims from 2003 to 2014. The second fine covers lapses on completely reporting warranty claims and repairs offered under “customer satisfaction campaigns.”
The combined penalty exceeds the agency’s previous record for a compliance violation by a single company, the $35 million imposed on General Motors Co. in May for mishandling the response to its ignition switch defects.
The agency issued more fines in 2014 than at any time in its history — $126 million — and its tougher stand on enforcement is expected to continue, according to the regulator. The Honda agreement was signed just before the year ended and was announced Thursday.
As part of that consent order, Honda will revise its regulatory compliance practices, improve personnel training and complete two outside audits on its data reporting.
The number of injury claim omissions Honda admitted to exceeded the 1,144 reports Honda filed over the 11 years and in some cases involved the company not sharing information from police reports with the safety agency.
Eight of Honda’s missing reports — spanning from July 1, 2003, to June 30, 2014 — involved Takata Corp. air bag inflator ruptures, and the agency knew of those incidents, the company said in November.
Honda president Takanobu Ito said then the automaker didn’t share the same understanding as authorities of its obligations under U.S. law. He said local management made many mistakes filing early warning reports, which the agency relies on to help spot potential defects.
Honda said in October it had asked for a third-party audit of potential inaccuracies in its reports. The company decided in September to include spoken claims from owners or their representatives to make its reporting more consistent with other automakers, it said at the time.
Honda has said it has given the agency detailed information relating to all known ruptures of Takata air bag inflators.
Automakers face fines of $7,000 per violation per day for not abiding by the Transportation Recall Enhancement, Accountability and Documentation Act, which requires the companies to tell regulators about customer injuries, lawsuits, warranty claims and complaints. The maximum civil penalty is capped by Congress at $35 million.