A 14-year-old federal statute requires automakers to report warranty claims and injuries to the National Highway Traffic Safety Administration (NHTSA). Honda Motor Company was recently fined $70,000,000.00 for failing to comply with this statute. This is a record fine for an auto maker, which says much given General Motors' recent troubles with faulty ignition switches.
The statute actually limits the maximum penalty to $35,000,000.00. In this case, the NHTSA actually leveled to fines. The first covers Honda's failure to report over 1700 deaths and injuries from 2003 to 2014. The second fine addressed a failure to fully report warranty claims and repairs.
Auto safety advocacy groups are calling for a criminal investigation. These groups cite the serious nature of the violations, including injuries that involved the exploding airbags manufactured by Japanese company Takata Corporation. As of early January, five deaths have been attributed to the exploding airbags.
NHTSA was busy in 2014, issuing a total of $126 million in fines. Although these fines are significant at first glance, they do not deter bad behavior for auto makers that gross much, much more in annual profits. In response, the Department of Transportation has drafted proposed legislation allowing up to $300 million in fines.