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U.S. Department of Transportation fines Honda $70 million

Staff writer |
The U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) announced that Honda will pay two $35 million civil penalties for failing to report deaths, injuries, and certain warranty claims to the federal government in violation of the TREAD Act.

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In the Consent Order, finalized just before the new year, Honda also agreed to increased NHTSA oversight and third party audits to ensure that all required reporting is completed now and into the future.

In 2014 alone, NHTSA issued more than $126 million in civil penalties, exceeding the total amount collected by the agency during its forty-three year history.

NHTSA's investigation into Honda's safety reporting found that the automaker failed to submit early warning reports (EWR reports) identifying potential or actual safety issues.

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 the manufacturer's failure to report certain warranty claims and claims under customer satisfaction campaigns throughout the same time period. Additional details are available in the audit report prepared for Honda by Bowman and Brooke and in Honda's Response to NHTSA's Special Order addressing the violations.

Honda has been ordered to comply with NHTSA oversight requirements under a Consent Order.
Federal law requires manufacturers to submit comprehensive EWR reports of potential safety concerns to the Department. 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.

The data are then used to investigate whether safety defects or defect trends exist and warrant further action, including possible recalls.

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 appropriate personnel 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.


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