Honda fined $70 million for underreporting safety issues to government

The National Highway Traffic Safety Administration has fined Honda Motor $70 million for failing to submit reports of fatal accidents and injuries to the government.

It is the largest amount that the safety regulator has ever levied against an automaker. The penalty stems from the automaker’s failure to report 1,729 death and injury claims to the agency for the last 11 years and its failure to report certain warranty and other claims in the same period.

“Today’s announcement sends a very clear message to the entire industry that manufacturers have responsibility for the complete and timely reporting of this critical safety information,” Mark Rosekind, the new head of the agency, said Thursday.

Under a system called Early Warning Reporting, automakers are required to disclose claims they receive that blame vehicle defects for serious injuries or deaths.

Honda publicly disclosed in November that it had grossly underreported the number of deaths and injury claims linked to possible defects in its vehicles for more than a decade. An audit, commissioned by Honda, found that the Japanese automaker had not reported 1,729 written claims or notices on injuries or deaths from mid-2003 through mid-2014 — far more than the approximately 900 reports for that period that it did make.

A Honda employee identified the problem in 2011, and federal regulators notified Honda of potential underreporting of death and injury claims in 2012, but the car company did not take action until September 2014. In November, after receiving preliminary findings of the audit, the safety agency demanded that Honda submit more information on its reporting. That action came after the Center for Auto Safety, a private advocacy group, accused Honda in an open letter in October of systematically underreporting the Early Warning claims.

“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, said in a statement Thursday. “We continue to fully cooperate with NHTSA.”

Honda noted that, of the underreported claims, eight, including one death claim, were related to defective Takata airbags, which can deploy violently and rupture in an accident, sending metal fragments flying toward the driver or passenger instead of protecting them.

Honda said in a statement that the reporting failures stemmed from data entry, programming and coding errors, as well as a too-narrow and sometimes inaccurate interpretation of regulations.

Anthony Foxx, the secretary of transportation, said it did not matter that Honda said it had not meant to violate the law.

“Good intentions don’t help the automaker,” he said, adding that the safety agency has asked all automakers to audit their Early Warning reports for compliance.

Foxx said that NHTSA had alerted the Justice Department to Honda’s reporting problems but that it would be up to that agency to make a decision about a criminal investigation.

“Seventy million dollars is a start,” said Sen. Bill Nelson, D-Fla. “But we still need automakers to step up and take care of consumers with defective airbags, and we need regulators to insist on more timely and accurate reporting of possible safety defects.”

NHTSA has had a difficult past year. Last year brought record vehicle recalls and intense scrutiny from lawmakers, safety experts and the news media. A New York Times investigation into the agency’s handling of major safety defects over the past decade found that it often has been slow to identify problems, tentative to act and reluctant to use its full legal arsenal against automakers.

Rosekind, a former member of the National Transportation Safety Board, was confirmed as the agency’s administrator in December, almost a year after the resignation of David L. Strickland as the agency’s leader.

This week, Rosekind said that the safety regulator was overhauling its recall infrastructure to see how it could be improved and said he wanted more resources, including additional workers, for the agency.

“This is an agency that is so under-resourced,” he said. “It’s more severe than I realized from the outside.”

The action against Honda follows notable multimillion-dollar penalties against three other automakers last year. In May, safety regulators levied the maximum allowable penalty of $35 million against GM after the company failed to report for more than a decade an ignition defect in the Chevrolet Cobalt and other small cars that has been linked to at least 30 deaths. In August, the agency levied a penalty of nearly $17.4 million on Hyundai for not reporting in a timely manner a defect that affected braking in its cars. And in October, the agency fined Ferrari $3.5 million penalty for failing to submit Early Warning reports on fatal accidents.

In 2014, NHTSA issued more than $126 million in civil penalties, including the $70 million fine against Honda that the automaker agreed to in December.