The Consumer Corner - Friday, August 10, 2012 14:29 - 0 Comments

Government Fines Volvo $1.5 Million For Delaying Recall Reports

Volvo Car Corp., the Swedish carmaker now owned by China’s Zhejiang Geely Holding Group, has agreed to pay a $1.5 million fine to the federal government to settle claims that it delayed recalling vehicles. This was reported by the National Highway Traffic Safety Administration last month. David Strickland, the agency’s administrator, said in a news release that NHTSA “expects all manufacturers to obey the law and address automotive safety concerns without delay.” In the case of Volvo, NHTSA said those delays involved seven recalls covering a total of about 32,000 vehicles in 2010 and 2012.

The problems cited in the recalls included incorrect tire-pressure labeling, air bags that might not deploy properly and engines that could stall, among other flaws. Almost 16,000 of the vehicles were recalled for the more serious air-bag and stalling issues. In a settlement dated June 29 and announced last month, Volvo agreed to pay the fine. The automaker issued a statement in which it apologized and said it had “taken steps to improve the review process and analysis of potential quality and safety issues with our vehicles.”

Under federal regulations, after a manufacturer discovers a safety problem it has five business days to tell NHTSA of its plan for a recall or face civil penalties. According to NHTSA, Volvo failed to report all seven recalls in a timely fashion. The agency can fine an automaker up to $17.35 million, an amount consumer safety advocates commonly equate to only a “rounding error” for automakers.

According to a recent report by The Detroit News, that amount would double if a new transportation bill is enacted. But it should be noted that such punitive measures are rarely levied. NHTSA levied a $3 million civil penalty against BMW in February for failing to notify it promptly of plans to recall nearly 340,000 vehicles in 2010. Previously, in May 2010, Toyota agreed to pay $16.4 million to settle claims that it did not promptly act to correct sticking accelerator pedals on 2.3 million vehicles.

Source: New York Times