VW just the latest to run afoul of regulators

David Shepardson
Detroit News Washington Bureau

Volkswagen AG, which has admitted to cheating on emissions tests covering 11 million diesel-powered cars worldwide, is only the latest global automaker to face the wrath of U.S. regulators.

It’s been a rough few years for automakers as they’ve become ensnared in safety and environmental scandals. Toyota Motor Corp., General Motors Co., Fiat Chrysler Automobiles NV, Hyundai Motor Co., Kia Motors Inc. and Honda Motor Co. are among the automakers that have paid large fines for running afoul of U.S. regulations.

On Thursday, GM agreed to pay $900 million to the Justice Department to end an 18-month probe into its delayed ignition switch recall linked to at least 124 deaths. GM must pay by the end of this week.

GM’s total cost to date for its delayed recall of 2.6 million Chevrolet Cobalts, Saturn Ions and other small cars is about $2.35 billion when the expected payout of a compensation program for those hurt or killed in defective cars is factored in.

Last week GM CEO Mary Barra said there was no way to estimate GM’s exposure to fines and settlements in ongoing litigation, and with investigations by the Securities and Exchange Commission, Federal Trade Commission, state attorneys general and Canadian authorities. It includes settlements of more than half of the pending lawsuits against the automaker, but doesn’t include possible future verdicts

Toyota’s sudden acceleration cases cost it more than $3 billion in the United States. The automaker paid $1.2 billion to the Justice Department to settle an investigation into sticky gas pedals and sudden acceleration recalls. It set aside $300 million to pay for the costs of the massive worldwide recalls and settled a series of class action lawsuits for $1.6 billion. Toyota also paid $29 million to settle lawsuits by 29 state attorneys general and paid about $50 million in fines to NHTSA.

VW’s settlement could end up close to what Ford Motor Co. paid in 2000 and 2001. Ford and Bridgestone Firestone in 2000 recalled 6.5 million tires; then Ford in 2001 recalled 13 million Firestone tires at a total cost of $3 billion. The tires, mostly on Ford Explorers, were linked to at least 270 rollover deaths. Ford also settled numerous lawsuits linked to the tires and rollovers. The automaker was cleared by NHTSA in 2001 of wrongdoing in the investigation.

In 2008, Ford settled a class-action lawsuit on behalf of 800,000 Explorer owners who said their SUVs lost value; they got vouchers of up to $500 off a new vehicle. Firestone agreed to pay Ford $240 million in 2005 to resolve the dispute.

Fiat Chrysler in July agreed to a $105 million civil settlement with NHTSA over improperly handling nearly two dozen recalls covering 11 million vehicles.

It also was hit with a $150 million verdict — since reduced to $40 million — in the death of a 4-year-old boy in a Jeep gas tank fire. Fiat Chrysler is appealing and it has settled dozens of other Jeep fire cases under confidentiality agreements so it is impossible to calculate the full costs.

In February, Honda Motor Co. agreed to pay a $70 million fine for failing to disclose more than 1,700 reports of deaths, injuries and other “early warning” information to the National Highway Traffic Safety Administration over more than a decade — then the largest auto safety fine in U.S. history to the agency.

In November, Korean automakers Hyundai Motor Co. and Kia Motors Corp. agreed to a record-setting $360 million settlement for overstating fuel economy ratings, ending EPA’s two-year investigation into the automakers’ overstatement of mileage ratings for 1.2 million 2011-13 U.S. vehicles.

It is the largest settlement of its kind and includes a $100 million civil penalty, forfeiting $210 million in greenhouse gas emission credits and spending $50 million to ensure independent auditing of its current and future vehicles.

After an investigation by the EPA, Hyundai and Kia in November 2012 agreed to restate expected gas mileage for 1.1 million vehicles in North America, including 900,000 in the United States. In total, the restatement has cost the Korean automakers more than $750 million, including the $395 million civil settlement to owners of vehicles.

Transportation Secretary Anthony Foxx wants to hike the maximum fine for delaying a recall to $300 million up from the current $35 million, saying current fines are too low to serve as a deterrent.