NHTSA Fines BMW $40 Million for Series of Violations

23 Dec 2015 | Author: | No comments yet »

BMW hit with $40 million U.S. penalty for safety lapses.

DETROIT – U.S. safety regulators have slapped German automaker BMW AG with a $40 million penalty for moving too slowly to fix Mini brand cars that failed federal crash tests. WASHINGTON: US auto safety regulators on Monday (Dec 21) fined BMW US$10 million, part of a US$40 million civil settlement over the German automaker’s safety lapses.The National Highway Traffic Safety Administration has fined BMW AG BMW -1.25 % $40 million for repeatedly failing to address safety concerns related to its Mini Cooper vehicles and not launching an agreed-upon service campaign it had told regulators it would conduct.U.S. auto-safety regulators imposed a penalty of up to $40 million on BMW North America for recall failures, making the German automaker the latest in a series of car companies that have violated federal safety rules.

The agency says BMW has acknowledged it violated requirements to notify owners in a timely fashion of recalls, and to provide accurate information about its recalls to NHTSA. It is the second time in recent months that U.S. regulators have penalized a German auto maker for withholding information from government agencies and failing to take appropriate action to meet standards. The settlement ends a NHTSA investigation into whether the company failed to issue a recall within five days of learning that its 2014 and 2015 Mini Cooper models failed to meet regulatory minimums for side-impact crash protection. Volkswagen AG VLKAY 0.31 % in September was cited by the Environmental Protection Agency for installing software on its diesel vehicles allowing it to dupe emissions tests. NHTSA will also impose an independent safety consultant to recommend changes to the automaker’s recall compliance practices and monitor the company’s performance for two years. “NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety,” U.S.

The $40 million settlement includes a $10 million fine, a requirement that the company spend at least $10 million meeting the order’s performance obligations, and $20 million in deferred penalties if the company fails to comply with the order or commits other safety violations. That sparked a global crisis for Volkswagen that led to a management shake-up, several more disclosures about defective products and the potential for billions of dollars in fines and other damages. NHTSA has penalized General Motors and Fiat Chrysler over the last two years for their own failures to fix vehicles expeditiously and notify safety officials promptly of defects. According to NHTSA, a Mini two-door Hardtop Cooper failed an agency crash test in October 2014, and BMW responded by saying that the car was listed with an incorrect weight rating and would pass at the proper weight. Under the consultant’s guidance, BMW must evaluate all safety or compliance-related issues under the company’s review and provide a monthly written report to NHTSA on those issues.

BMW agreed to a recall to fix the weight rating label on the cars, and to do a service campaign, which is short of a recall, to add side-impact protection. In July of this year, however, “NHTSA conducted a second crash test at the corrected weight rating on a vehicle with the additional side-impact protection, and the vehicle again failed.

Finally, the company must set up a plan to deter dealers from selling new vehicles with unremedied safety defects — a requirement stemming from the fact that during NHTSA’s investigation, a government representative purchased a new vehicle with an open safety recall from a BMW dealer.

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