Senate GOP bill would hike recall fines to $105 million

David Shepardson
Detroit News Washington Bureau

Washington — The Senate’s top Republican introduced legislation to triple the maximum fines for delayed auto recalls to $105 million, up from the current $35 million.

Sen. Majority Leader Mitch McConnell, R-Ky., unveiled a revised six-year highway bill Sunday that dramatically hikes fines for delaying recalls. The text was published Monday. Sen. Bill Nelson, D-Florida, on Sunday also introduced an amendment to hike the maximum fine to $105 million.

The Senate Commerce Committee earlier this month had voted to double maximum auto safety fines to $70 million, up from the current $35 million, while the Obama administration had asked Congress to hike them to $300 million per delayed recall. Some Democrats want the cap completed lifted; Congress voted to double fines to $35 million in 2012.

Congress has expressed frustration with automakers and air bag manufacturer Takata Corp. for failing to more quickly address safety issues.

Under the law, automakers must notify regulators within five days of determining a safety issue poses an unreasonable risk to driver safety.

The latest proposal comes as the National Highway Traffic Safety Administration on Sunday announced it had imposed a record-setting $105 million civil penalty on Fiat Chrysler for three separate violations of federal safety laws.

The highway bill’s future is in doubt, since the House has passed a five-month extension and is refusing to take up the Senate bill. The Senate still faces votes and it is not clear what amendments will be considered before the Senate holds a final vote on the highway bill.

On Friday, Transportation Secretary Anthony Foxx said he wants Congress to add new auto safety provisions to a six-year highway re-authorization bill under debate.

Foxx said he is still urging Congress to grant NHTSA sweeping authority to get unsafe vehicles off the road and force dealers to repair recalled used vehicles before selling them.

Senate Democrats proposed sweeping reforms and the Obama administration also sought major reforms last year, but the GOP-controlled Senate Commerce Committee rejected most of the proposals.

A compromise six-year highway bill omitted the administration’s request to get “imminent hazard” authority to get unsafe vehicles off the road if an automaker refused to move. Under current law, it requires a two-stage process that can take months and then requires a public hearing.

He said NHTSA came under harsh criticism for having too cozy a relationship with automakers

“Our recourse is to go to court and spend years trying to litigate the issue while dangerous stuff is on the street,” Foxx said. As a result, NHTSA has little choice but to seek settlements. “But if Congress wants us to have more teeth, give us the tools so that we can fight those battles directly.”

Federal law only requires recalled new cars to be repa

ired before being sold. The Detroit News reported this week that talks have been ongoing about adding used cars to the bill, but no agreement has been reached. “We think that’s a loophole that needs to be closed,” Foxx said.

The National Auto Dealers Association and other dealer groups on Monday sent a letter to Congress urging them not to include used car car provisions,saying it would diminish used car values and force dealers to ground vehicles for months awaiting parts.

Major auto trade associations and other groups also circulated a letter opposing Democratic amendments designed to toughen the bill. The Alliance of Automobile Manufacturers, Association of Global Automakers, National Association of Manufacturers and other groups criticized an amendment sponsored by Sen. Richard Blumenthal, D-Conn., that would subject auto executives to criminal penalties for delaying recalls that result in deaths.

The groups said the law would subject executives to jail for vague offenses that didn’t violate the federal recall statute. Blumenthal says auto executives must be held accountable for deadly defects.

“Its disappointing that the Senate would believe that auto manufacturers, suppliers and dealers should be subject to penalties seven times greater than manufacturers of any other consumer product,” said Alliance of Automobile Manufacturers spokesman Wade Newton. “At a time when U.S. traffic fatalities are at historic lows, the contrast seems particularly punitive and unnecessary.