Honda Gets Fined $70M By NHTSA For Unreported Deaths

The U.S. National Highway Traffic Safety Administration (NHTSA) has ordered Honda will pay a record $70 million in fines for failing to report deaths, injuries and warranty claims associated with its vehicles. 

The Honda fines were announced in a press release issued by the NHTSA on January 8, after the agency determined that the company violated the auto manufacturer reporting requirements in the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act.

In addition to the fines, Honda will allow increased NHTSA oversight and third party audits to confirm it is meeting its reporting requirements.

The fines came after an investigation into Honda’s reporting activities that were sparked by the numerous recalls linked to airbags manufactured by Takata Corp., a Japanese parts supplier.

Last year, about 10 million vehicles were subjected to airbag recalls because they could overinflate and rupture, firing deadly shrapnel into the passengers’ compartment of the vehicle. At least six deaths have been linked to the defective airbags, but many critics believe the number of incidents may be substantially higher.

Honda was hardest hit by the recalls, and most of the deaths occurred in Honda vehicles. During an NHTSA investigation of the airbags, Honda and the NHTSA found discrepancies between known incidents in Honda vehicles and what Honda actually reported. Some of those involved incidents with Takata airbags.

The $70 million fine came in the form of two separate $35 million fines, which are the maximum amount the NHTSA can levy against an automaker. One fine addresses Honda’s failure to report 1,729 death and injury claims made between 2003 and 2014. The second is due to a failure to report warranty claims and claims under customer satisfaction campaigns made during the same time period.

Honda is also required to develop new written procedures for complying with TREAD Act requirements, provide annual training to appropriate personnel, complete two third-party audits on compliance, and provide the NHTSA with information on the unreported death, injury and warranty claims.

The violations were first announced by the NHTSA after it received the findings of a third-party audit of Honda’s early warning reports (EWR) (PDF) on November 24. Honda’s response to the report (PDF) claims that many of the violations were due to a database error and coding problems. The company says it has corrected the problem.

Record-breaking Auto Recall Year

In 2014, the industry broke all auto recall records, with about 60 million vehicles recalled throughout the entire year. That is nearly double the number of auto recalls issued in 2004, when 30.8 million were recalled.

The NHTSA took fire for not addressing problems that had simmered for years, including General Motors ignition switch recalls due to problems that were known for at least a decade, and the Takata airbags, which had also been linked to problems for years.

The NHTSA was heavily pressured to begin dropping the hammer on auto manufacturers who failed to play by the rules.

“Today’s announcement sends a very clear message to the entire industry that manufacturers have responsibility for the complete and timely reporting of this critical safety information,” NHTSA Administrator Dr. Mark Rosekind said in the press release. “The actions we are requiring will push Honda to significantly raise the bar on the effectiveness of its EWR reporting program. our ongoing oversight will ensure compliance and determine if there is cause for additional actions.”

The NHTSA noted that 2014 was a record year for fines and enforcement actions by the NHTSA, pointing out that it issued more than $126 million in fines, including a $35 million fine against GM over the ignition switch problems. The agency claims the total amount of fines issued in 2014 exceeds the total amount of fines collected throughout its 43 year history combined.

“Honda and all of the automakers have a safety responsibility they must live up to – no excuses,” U.S. Transportation Secretary Anthony Foxx said. “Last year alone, we issued more fines than in NHTSA’s entire history. These fines reflect the tough stance we will take against those who violate the law and fail to do their part in the mission to keep Americans safe on the road.”

NHTSA officials have said that they expect 2015 to likely be another record-breaking year for auto recalls as the agency continues to put pressure on auto makers to correct long-standing problems.