Hyundai has been shamed with a $17.35 million fine for taking an excessively long time to tell the U.S. government about a braking defect on Genesis sedans.
In October, Hyundai recalled 43,500 Genesis sedans from 2009–2012 to flush the brake lines with a newly formulated fluid and replace any hydraulic ABS controllers that had corroded valves resulting from the old fluid. The recall came a week after the National Highway Traffic Safety Administration opened an investigation following 23 complaints of weak brakes and increased stopping distances. In March 2013, according to NHTSA, the company had issued a technical service bulletin to U.S. dealers to replace the brake fluid and ABS controller in 2009–2012 Genesis and 2011–2012 Equus sedans, about a year after the brake-controller supplier had notified the automaker. (Some General Motors vehicles using the same brake-system supplier were also affected by the corrosion problem. Although GM never initiated a recall, NHTSA said the carmaker notified customers of the bulletin starting in November 2012 and told them of the potential problem, whereas Hyundai did no such thing.)
That omission, along with 87 owner complaints, six crashes, two injuries, and failure to notify the agency within five working days after discovering the defect, led to Hyundai agreeing to the maximum civil fine for a “related series of violations.” In other cases, as with the General Motors ignition-switch ruling in May, the maximum fine is $35 million.
In addition to the fine, Hyundai agreed to set up a recall committee in the U.S. that will report directly to the board of directors and CEO Dave Zuchowski, similar to an arrangement initiated by GM after its ignition-switch debacle. Hyundai will also be on a sort of probation for another year with required monthly and quarterly meetings with NHTSA staff to prove, essentially, that it’s looking at safety defects and addressing them properly.
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Toyota is currently facing a three-year probation after it paid a $1.2 billion settlement in March to avoid criminal wire-fraud charges in connection with its floor-mat and sticky-pedal recalls from the 2009–2012 period. Toyota also paid four separate NHTSA fines totaling more than $66 million for those recalls. Last August, Ford paid the same $17.35 million fine for its late notice of throttle problems on older Escape models.
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