Software glitches and insufficient employee training have just cost Honda $70 million.
The National Highway Traffic Safety Administration fined Honda that amount for failing to report certain accident and warranty data over the past decade; it is the largest monetary penalty ever handed down by the agency at one time.
A few days before Thanksgiving—and only publicized by NHTSA today—Honda responded to a "special order" from NHTSA and admitted to violating the TREAD act, a 2000 law that requires automakers to submit quarterly reports of all crashes, injuries, deaths, warranty claims, and other associated problems with their vehicles.
At that same time, Honda publicly announced it had , known as , between 2003 and 2014. The automaker said—and an independent audit from a Phoenix law firm confirmed—that internal software had been discounting certain reports when there was no date entered, or when codes indicating specific vehicle problems did not correlate to NHTSA's predefined codes.
Honda also said it "used an overly narrow interpretation" of what NHTSA defines as "written notices" so that police reports and similar documents received by Honda were not counted. Additional "programming errors" that excluded extended warranties, third-party warranties, and approved damage claims were cited, too.
Under the special order, Honda agreed to pay two separate $35 million fines to the agency, one for the 1729 missing data entries and the other for missing warranty claims. It was double what . Despite Honda within since 2008, NHTSA did not find any wrongdoing and Honda said its seven related injuries and one related death in those instances "were disclosed to NHTSA in detail by other means."
Honda said it would adopt "new written procedures," retrain staff—its IT department, for example, didn't know that a missing date would cause the software to drop a data file—and likely put one person in charge of the Early Warning Reports, as recommended by the audit. The company must also complete two more third-party audits within the year and give NHTSA all the missing data. There is no indication that the Department of Justice, as it had and , will pursue a criminal case against Honda.
"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," said Dr. Mark Rosekind.
In an unusually aggressive statement on pending bills, NHTSA backed the $300-million fine suggested by DOT secretary Anthony Foxx, as have other lawmakers who attempting to increase fines on automakers in the last year.
While $17.35 million is technically the largest per-infraction fine NHTSA can levy, the agency, as it did with General Motors, is serving special orders under the broader code of the Department of Transportation, which has authority to hand out $35-million maximum penalties.
But NHTSA's enforcement, like its investigations, is . Toyota, during its between 2009 and 2012, was fined four times under regular NHTSA policy for a total of $66.1 million. And Ferrari, which had not filed any Early Warning Reporting since 2011, got off with in November.