Congress plans to raise maximum auto recall fine image

The Obama administration believes that substantially higher fines are still needed as a check against future disclosure lapses.

National Highway Traffic Safety Administrator David Strickland told a House panel Thursday that higher fines would help deter automakers.

Strickland said the $17 million maximum fine is a “pittance to most of these automakers.
A provision in transportation legislation approved by the Senate last week would increase civil penalties for the first time in more than a decade to a maximum of $250 million.

Naturally, many automakers are opposing this particular measure, but they are, however, backing an additional regulation that would equip all new vehicles with ‘black box’ data recorders.

Recall fines are rarely levied. Toyota Motor Corp. paid nearly $50 million to settle three National Highway Traffic Safety Administration complaints that it delayed recalls; last month, BMW AG paid $3 million after NHTSA said a review of 16 recall campaigns in 2010 showed it hadn’t notified the government within the required five days after determining a safety defect.

Michael Stanton, CEO of Global Automakers – a foreign automaker trade association – called the penalties “excessive.”

“Vehicle manufacturers take their safety compliance obligations extremely seriously, and the substantial increases in the penalty amounts seem to be unnecessary and unfairly punitive in nature,” Stanton said.