Regulators fine BMW $40M for slow recall notification
Washington — Automaker BMW North America will pay a penalty as high as $40 million for failing to recall 2014-2015 Mini Cooper models in a timely fashion, regulators said Monday.
The National Highway Transportation Safety Administration said BMW has acknowledged it violated requirements to notify owners in a timely fashion of the recalls, and to provide required information about its recalls to NHTSA. The agency fined BMW $3 million for similar violations in 2012.
“The requirement to launch recalls and inform consumers in a timely fashion when a safety defect or noncompliance is discovered is fundamental to our system for protecting the traveling public. This is a must-do,” NHTSA Administrator Mark Rosekind said in a statement Monday.
“For the second time in three years, BMW has been penalized for failing to meet that obligation. The company must take this opportunity to reform its procedures and its culture to put safety where it belongs: At the top of its priority list.”
Federal law requires automakers to alert NHTSA within five working days of determining that a safety defect or noncompliance exists, and to promptly conduct a recall. The consent order, dated Dec. 17, stems from an investigation into whether BMW failed to issue a recall within five days of learning that the Mini Cooper models failed to minimum regulatory standards for side-impact crash protection.
The $40 million civil penalty breaks down into $10 million in cash, in addition to a requirement that the company spend at least $10 million meeting the order’s performance obligations over the next two years. Another $20 million in deferred penalties would come due if BMW fails to comply with the order or commits other safety violations.
“NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety,” U.S. Transportation Secretary Anthony Foxx said in a statement.
“The consent order NHTSA has issued not only penalizes this misconduct, it requires BMW to take a series of steps to remedy the practices and procedures that led to these violations.”
BMW said Monday that it has agreed to carry out steps to improve its recall and reporting processes.
“The company is committed to further improving its recall processes to better serve its customers,” BMW said. “BMW NA respects the role of NHTSA and looks forward to working with them to develop solutions for the future.”
The 2012 fine came about after an examination of 16 BMW recalls issued in 2010 uncovered a number of instances in which the automaker failed to report safety defects and recalls to the agency in accordance with federal law.
Under Monday’s consent order, BMW is required to retain an independent safety consultant to help the automaker develop best practices for complying with the Motor Vehicle Safety Act and agency regulations.
Under the consultant’s guidance, BMW must evaluate all safety or compliance-related issues under the company’s review and provide a monthly written report to NHTSA on those issues. The automaker must also launch a program to see whether it can use data analysis to detect emerging safety-related defect trends.
Finally, the company must set up a plan to train dealers on the importance of complying with the prohibition on selling new vehicles with unfixed safety defects — a requirement stemming from the fact that during NHTSA’s investigation, a government representative purchased a new vehicle with an open safety recall from a BMW dealer.
After a two-door hardtop Mini Cooper failed a crash test in October 2014, the company said the car was listed at the wrong weight and would pass if tested at the proper weight rating. BMW agreed to conduct a recall to correct the weight rating and to conduct a voluntary service campaign to add additional side-impact protection.
But the vehicle again failed in a July 2015 crash test by NHTSA at the corrected weight rating and with the additional side-impact protection. At that time, the agency learned that BMW had not launched the service campaign it had said it would.
In the consent order, BMW admits to failing in multiple recalls since 2012 to notify owners and dealers of recalls in a timely fashion and to provide required quarterly recall completion reports on time.
The consent order remains in place for two years, subject to the agency’s right to extend it for another year.
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