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Automakers Protest Bill That Would Increase Fines for Slow Recalls

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Car being towedAutomakers are opposed to a proposal in Congress that would raise fines by around $17 million to $250 million for failing to recall vehicles as the law requires. As David Shepardson writes in The Detroit News, the Senate is expected this week to debate an overhaul of national car safety laws as part of its highway funding bill.

The legislation is being sponsored by Senators Mark Pryor, D-Ark., and Jay Rockefeller, D-W. Va., as a way to strengthen auto safety and reform the National Highway Traffic Safety Administration’s (NHTSA’s) safety recall practices, reports Anthony Faccenda for Torque News. The proposal was partly inspired by the questionable recall practices conducted by Toyota, which paid approximately $50 million in fines to NHTSA in 2010. Toyota failed on several occasions to report safety defects within five days of discovering them.

As Faccenda writes:

In 2004, Toyota did not inform the NHTSA about issues regarding their 4Runner SUV until 11 months after discovering the problem. Additionally, Toyota was sluggish reporting their now infamous ‘sticking accelerator pedal’ defect in a timely manner in 2007 and 2010. The NHTSA fined Toyota the maximum allowed of $16.4 million for each of the three cases, totaling an estimated $49.2 million.

As if the Toyota case did not supply Congress with enough ammunition, the NHTSA just fined BMW $3 million for similar violations last week. Aside from not promptly notifying the NHTSA, BMW was also found guilty of not providing a sufficient amount of information in regard to the recalls as required by law.

The groups urging Congress to reject the proposal include the Alliance of Automobile Manufacturers, Association of Global Automakers, National Association of Manufacturers, and American International Automobile Dealers Association. The auto alliance includes General Motors Co., Ford Motor Co., Chrysler Group LLC, Toyota, and eight others.

A letter they sent to the Senate said: “The proposed increases are so out of proportion either to the current penalty structure or the penalty structure for other manufacturers under the Consumer Product Safety Act as to appear unfairly punitive. The proposed increases should be scaled back to a more appropriate level.”

Shepardson writes that the proposed bill would not take effect until at least one year after passage and that automakers back some of its provisions, including a proposed mandate that all new vehicles be equipped with event data recorders. In addition to raising fines for slow recall reporting and requiring event data recorders on new vehicles, the bill would implement new regulations on pedal placement and raise odometer-resetting fraud fees from $100,000 to $1 million.

The Senate Commerce Committee approved the measure in December, which would also give states grants to ban texting by drivers or the use of cell phones by teen drivers. The bill would also fund more research efforts, such as the development of in-vehicle interlocks to prevent drunk drivers from starting a vehicle.

Image by National Highway Traffic Safety Administration, used under Fair Use: Reporting.


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