auto products liability

Honda breaks history…hit with $70 million fine

Yesterday, Obama administration fined Honda $70 million for failure to report complaints re injuries/deaths & warranty issues.

Yesterday, Obama administration fined Honda $70 million for failure to report complaints re injuries/deaths & warranty issues.

“Holey moley!” That’s what I thought when I read that Honda got hit with a $70 million fine. The Obama administration imposed this history-making fine because the Japanese automaker failed to report to regulators roughly 1,700 complaints about its vehicles, claiming serious injuries and deaths. Moreover, the automaker apparently failed to report warranty claims. The complaints spanned an 11 year period, beginning in 2003.

This past November, Honda admitted that it didn’t report the aforementioned complaints to the National Highway Traffic Safety Administration (NHTSA). When did its executives learn of these omissions? It was in 2011 — three years ago.

Because the company also failed to report customer satisfaction/warranty claims (same 11 year period), NHTSA doubled the $35 million fine. One was for the failure to report the death/injury complaints; the other $35 mil for its failure to report the warranty/customer satisfaction claims. Ouch.

In case you’re wondering, yes – some of the complaints related to the Takata air bags along with other defective parts.

Large Auto Makers Cut Corners on Safety When They Can

Whenever you decide to drive a car in Mexico and the rest of Latin America, remember that GM, Nissan, and other automakers are not required to include many safety features that we take for granted in the U.S.  Those airbags and passive restraint seat belts are standard in our cars because we have the governmental agency, the National Highway Traffic Safety Administration (NHTSA), establishing requirements to increase auto safety. A key way NHTSA establishes standards is from its review of significant auto products liability cases. Catastrophic accidents often happen when an airbag didn’t deploy when it should have or when a roof collapsed when it shouldn’t have.

this image taken from a March 2013 video released by independent crash-test group Latin NCAP on Nov. 27, 2013, a Nissan model Tsuru vehicle with no airbags is crash-tested at Latin NCAP's facilities in Landsberg am Lech, Germany. Many international car manufacturers with plants in Mexico produce two versions of cars; sending models with air bags, antilock brakes and electronic stability control to the United States, and cars without those safety features to the local market. Photo: Latin NCAP, AP.

This image taken from a March 2013 video released by independent crash-test group Latin NCAP on Nov. 27, 2013, a Nissan model Tsuru vehicle with no airbags is crash-tested at Latin NCAP’s facilities in Landsberg am Lech, Germany. Many international car manufacturers with plants in Mexico produce two versions of cars; sending models with air bags, antilock brakes and electronic stability control to the United States, and cars without those safety features to the local market. Photo: Latin NCAP, AP.

However, for about  the same cost, you may find an identical car in Mexico with far fewer safety features in place. Why? While Nissan and GM won’t say it, the fact is that these companies are able to make greater profits by paying less for labor, for fewer parts, and for omitting antilock braking systems, electronic stability controls, or more than two airbags.

While the auto industry is booming in Mexico, there was a 58% increase in auto accident fatalities in the span of 10 years (2001 to 2011). Mexico’s auto-related fatality rate is three times that of U.S., which dropped about 40% in its car accident deaths in the same decade (2001 to 2011).

As much as Mexico needs more rigorous safety standards, the government is well aware of the $30 billion auto industry, which has raised the employment rate and the economic health by many accounts in the country. Still, there are those such as Dr. Arturo Cervantes Trejo, director of the Mexican Health Ministry‘s National Accident Prevention Council, who understands the need for upgrading the safety requirements for auto makers in Mexico.

“It’s a complicated subject because of the amount of money carmakers bring to this country. The economy protects them,” Cervantes told the AP. “But there are plans, there is a strategy. We have a working group with the car industry…”

But Alejandro Furas, technical director for Global New Car Assessment Program, or NCAP, a vehicle crash-test group doesn’t mince words: “We are paying for cars that are far more expensive and far less safe…Something is very wrong.”

Indeed, when not enough airbags are present in a car in a high impact collision, the likelihood of death or profound injuries shoot up. The auto makers enjoy healthy profits in Latin America at the expense of the citizens’ safety and lives.

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