Hyundai Motor America has agreed to pay a $17.35 million fine for failing to promptly report a brake defect in its 2009 to 2012 Genesis luxury vehicles that caused corrosion and decreased braking effectiveness. U.S. Transportation Secretary Anthony Foxx said in a written statement:
Safety is our top priority, and all automakers should understand that there is no excuse for failing to report a safety-related defect, as required by law. This administration will act aggressively and hold automakers accountable when they put the American public at risk.
Hyundai and General Motors learned about the defect in 2012, when a supplier notified the automakers that certain incompatible brake fluids didn’t prevent corrosion on certain important parts of the brake system, according to the National Highway Traffice Safety Administration (NHTSA) consent order with Hyundai. The order says the corrosion could cause the brake pedal to go soft and become less effective, potentially increasing the risk of a crash.
General Motors initiated safety recalls in 67 foreign countries in January and September of 2012 and issued a technical service bulletin to its U.S. dealers in November of that year describing the potential consequences of leaving the defect unfixed. The automaker also notified its customers.
Hyundai issued a technical service bulletin in the U.S. in March 2013, telling dealers to replace the brake fluid in 2009 to 2012 Genesis and Equus vehicles. But the TSB failed to mention the potential safety consequences of not doing so. Hyundai, according to NHTSA, also did not notify customers about the problem. NHTSA opened an investigation in response to consumer complaints about reduced braking effectiveness in Genesis vehicles in October 2013. Hyundai recalled the vehicles less than two weeks later. No serious injuries or fatalities had been reported as a result of the braking problems, according to the NHTSA. Six consumers had reported crashes, including two with apparently minor injuries, the document said.
As part of its agreement with NHTSA, Hyundai admitted it failed to provide notice to the government under the National Traffic and Motor Vehicle Safety Act for the safety-related defect within five working days. NHTSA Acting Administrator David Friedman said in the statement:
Federal law requires automakers to report safety-related defects to NHTSA within five days, and neither NHTSA nor the American public will accept anything less. Hyundai failed to act to protect their customers and others that were harmed in an accident, and must change the way they deal with all safety related defects.
Based on what we have learned in litigation, it appears that automakers make it a practice all too often not to comply with the notice requirements relating to safety defects and resulting hazards.
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