NHTSA fines Ferrari $3.5 million

David Shepardson
Detroit News Washington Bureau

Washington — The National Highway Traffic Safety Administration said Friday it is fining Italian luxury automaker Ferrari $3.5 million for failing to disclose reports of issues of its vehicles under a 2000 law.

Ferrari — a unit of Fiat Chrysler Automobiles NV — was not required to file quarterly early warning reports until Fiat SpA acquired Chrysler in 2011 “identifying potential or actual safety issues” but was required to file reports on any fatal incidents. The company admitted it did not comply with the law and signed the agreement on Oct. 22.

Federal law requires large manufacturers and affiliates of large manufacturers to submit comprehensive reports on a quarterly basis, in order to provide notice to the department of potential safety concerns. Ferrari, an affiliate of Chrysler, admitted that it violated the law when it failed to submit required reports to NHTSA over a three-year period, and failed to report three fatal incidents.

In July, NHTSA disclosed in a letter to two members of Congress that it was investigating Ferrari’s failure to file reports.

“There is no excuse for failing to follow laws created to keep drivers safe, and our aggressive enforcement action today underscores the point that all automakers will be held accountable if they fail to do their part in our mission to keep Americans safe on the road,” said U.S. Transportation Secretary Anthony Foxx in a statement.

Under the settlement, Ferrari must improve its processes for early warning reporting, to train personnel on the requirements, to communicate these improvements to NHTSA, and to retroactively submit all reports. The order is enforceable in federal court if any terms are violated.

“The information included in early warning reports is an essential tool in tracking down dangerous defects in vehicles,” said NHTSA Deputy Administrator David Friedman. “Early warning reports are like NHTSA’s radar, helping us to find unsafe vehicles and make sure they are fixed. Companies that violate the law and fail to comply will be subject to comparable swift NHTSA enforcement action.”

The reports are required under the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act of 2000 approved in the aftermath of reports of hundreds of deaths in Ford SUVs linked to faulty Firestone tires. NHTSA noted the law requires quarterly reporting of: production information; incidents involving death or injury; aggregate data on property damage claims, consumer complaints, warranty claims, and field reports; and, copies of field reports involving specified vehicle components, a fire, or a rollover.

In July, Sens. Ed Markey, D-Mass., and Richard Blumenthal, D-Conn., said NHTSA’s Early Warning Reporting system was not be fully complied with by auto manufacturers.

“The EWR system requires automobile and automobile equipment manufacturers to submit quarterly reports of incidents in which the manufacturer learns of potential defects that could have caused fatalities or serious injuries. A search of the EWR database indicates that Ferrari has never once filed a death or injury claim in EWR,” they wrote NHTSA in a letter in July.

In a separate letter this month, the senators said Honda Motor Co. had apparently failed to comply with the EWR system by not submitting complete quarterly reports about accidents that may be due to a safety defect.

“We are concerned that NHTSA has not made real efforts to determine whether automakers have complied with this requirement to alert the public to potentially deadly defects,” they wrote.

In March, following the recall of more than 2.6 GM vehicles linked to 30 deaths, the pair introduced legislation to require auto manufacturers provide more information about incidents involving fatalities to NHTSA. The legislation, the Early Warning Reporting System Improvement Act, would require NHTSA make the information it receives from auto manufacturers publicly available in a searchable, user-friendly format.

Sean Kane, president of Safety Research and Strategies, said NHTSA hasn’t been aggressive enough.

“In the real world, NHTSA doesn’t care if manufacturers don’t file and, consequently, there are essentially no penalties for manufacturers who fail to file reportable claims,” Kane said.

Fiat Chrysler Automobiles said this week it plans to spin off Ferrari as a separate company.