Honda to pay US govt US$70mil for failure to report deaths, injuries

By REUTERS | 9 January 2015

WASHINGTON: Honda has agreed to pay US$70mil (RM250mil) to the US government in penalties for failing to report hundreds of injuries, deaths and other consumer claims involving its cars, transportation officials said today.

Honda will pay two US$35mil (RM125mil) fines, making it the largest amount ever paid by an automaker as a result of an investigation by the National Highway Transportation Safety Administration.

The automaker has been under investigation for violations of NHTSA's Early Warning Reporting regulations. The rules require automakers to report quickly any information about possible defects, deaths and injuries or damage and warranty claims made by consumers.

In November, Honda revealed it had failed to report 1,729 cases involving deaths or injuries between July 2003 and June 2014.

Eight of those incidents involved Takata Corp air bags that had ruptured and have been the subject of massive recalls and federal investigations.

"One thing we cannot tolerate and will not tolerate is an automaker failing to report to us any safety issues, because if we don't know about these problems, we're missing an essential piece of the puzzle in the recall efforts we use to fix them and to protect the public," US Transportation Secretary Anthony Foxx said during a news call.

The automaker had earlier attributed its disclosure transgressions to data entry and computer programing errors, and also said it had relied on an "overly narrow interpretation" of its legal reporting requirements

"We have resolved this matter and will move forward to build on the important actions Honda has already taken to address our past shortcomings in early warning reporting,” Rick Schostek, executive vice president of Honda North America Inc, said in a statement.

The company said it was initiating new training regimens, changing internal reporting policy and enhancing oversight of its early warning reporting process.

Congress caps the fines for those kinds of violations at US$35mil. Foxx said the caps need to be lifted because a single violation could lead to a death.

"In this situation, we're talking about 11 years - 11 years of information we did not have. It's egregious and I think the penalties reflect that," Foxx said.