BMW Safety Violations, Recall Problems Result in $40M Fine By NHTSA

Government highway safety officials have imposed a $40 million civil penalty on BMW, following an investigation that revealed multiple safety violations, including failing to issue safety recalls and meet regulatory minimums for side-impact crash protection. 

The National Highway Traffic Safety Administration (NHTSA) and BMW came to an agreement on the terms of a Consent Order on December 21, which will result in BMW paying $40 million in civil penalties and being required to initiate programs to prevent further failures under third-party NHTSA approved safety consultants.

This is the German auto maker’s second major fine for safety problems since 2012, with the prior penalty stemming from similar violations.

The Consent Order was issued after a detailed investigation by the NHTSA revealed that BMW had failed to meet minimum safety standards on multiple occasions and failed to issue a recall within the five day mandatory time frame after learning certain Mini Cooper models failed side-impact crash protection requirements.

The NHTSA’s investigation alleged that in October 2014, the agency crash tested a Mini 2 Door Hardtop Cooper, which failed to meet minimum crash-protection requirements mandated by federal regulations. The automaker claimed the vehicle was listed at the incorrect weight and would pass the test if conducted at the proper weight rating but agreed to conduct a recall to correct incorrect weight ratings on those vehicles.

In July 2015, the NHTSA conducted a second crash test at the corrected weight rating and the vehicle failed to comply with minimum standards once again. The NHTSA learned shortly after the second crash testing that BMW had failed to initiate a service campaign or recall that it had agreed to conduct, forcing the agency to seek penalties.

Under the terms of the Consent Order, BMW has agreed to pay $10 million to the NHTSA, spend at least $10 million meeting the performance obligations, and the remaining $20 million will be set aside for deferred penalties that will be due if the company fails to comply with the Order or commits other safety violations.

In addition to the civil penalties, BMW will be required under the Consent Order to retain a NHTSA approved safety consultant to help the automaker develop better practices for complying with the Motor Vehicle Safety Act and NHTSA regulations. BMW will be required to evaluate all safety compliance-related issues under the third-party consultant’s supervision and provide monthly written reports to the NHTSA. Lastly, BMW is required to establish a plan to deter the automakers dealers from selling new vehicles with unrepaired safety defects.

U.S. Transportation Secretary, Anthony Foxx, stated in a press release that BMW had failed its obligations to its customers, the public and to safety. Foxx claimed that the agreement not only penalizes the automaker for its misconduct, but will better guide the company to repair its practices to prevent further violations.