Honda fined record $70 million for failure to report deaths

Honda has agreed to pay a record $70 million in fines and submit to stricter oversight for failing to tell the US government about warranty claims and more than 1,700 injuries and deaths linked to potential defects in its cars.

Carmakers are required to report such information under a 14-year-old US law, and Honda’s violations may have hampered the National Highway Traffic Safety Administration’s ability to quickly identify vehicle flaws.

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 NHTSA in November, the Tokyo-based carmaker blamed its underreporting on “inadvertent data entry or computer programming errors” that spanned 11 years.

“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, Honda North America’s executive vice-president, said yesterday in a statement.

“We continue to fully cooperate with NHTSA to achieve greater transparency and to further enhance our reporting practices.”

The civil penalties yesterday comprise two fines of $35 million, each the maximum allowable under US law.

One covers Honda’s failure to report 1,729 death and injury claims from 2003 to 2014.

The second covers lapses on completely reporting warranty claims and repairs offered under “customer satisfaction campaigns.”

As part of a civil consent order with NHTSA, Honda will revise its regulatory compliance practices, according to the US statement.

The number of injury-claim omissions Honda admitted exceeded the 1,144 reports Honda filed over the 11-year period.

Eight of Honda’s missing reports, from July 1, 2003, to June 30, 2014, involved Takata air-bag inflator ruptures, and NHTSA knew of those incidents, the company said in November.

Honda president Takanobu Ito said then that the automaker didn’t share the same understanding as authorities of its obligations under US. law.

He said local management made many mistakes filing early-warning reports, which NHTSA relies on to help spot potential defects.

Bloomberg