Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Hyundai, Kia agree to $210 million U.S. auto safety civil penalty

Stock MarketsNov 27, 2020 06:35PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Cars for sale are seen at Hyundai of Serramonte in Colma, California 2/2

By David Shepardson

WASHINGTON (Reuters) - Hyundai Motor Co and Kia Motors' U.S. units on Friday agreed to a record $210 million civil penalty after U.S. auto safety regulators said they failed to recall 1.6 million vehicles for engine issues in a timely fashion.

The U.S. National Highway Traffic Safety Administration (NHTSA) said the two affiliated Korean automakers agreed to consent orders after it said they had inaccurately reported some information to the agency regarding the recalls.

Hyundai agreed to a total civil penalty of $140 million, including an upfront payment of $54 million, an obligation to spend $40 million on safety performance measures, and an additional $46 million deferred penalty if it does not meet requirements.

Kia's civil penalty totals $70 million, including an upfront payment of $27 million, requirements to spend $16 million on specified safety measures and a potential $27 million deferred penalty.

"It’s critical that manufacturers appropriately recognize the urgency of their safety recall responsibilities and provide timely and candid information to the agency about all safety issues," said NHTSA Deputy Administrator James Owens.

The settlement covers recalls in 2015 and 2017 for manufacturing issues that could lead to bearing wear and engine failure.

As part of the settlement, Hyundai is investing $40 million to build a safety field test and inspection laboratory in the United States and implementing new IT systems to better analyze safety data.

"We are taking immediate action to enhance our response to potential safety concerns," said Brian Latouf, chief safety officer, Hyundai Motor North America.

Kia said in statement it "denied the allegations but agreed to settle the matter to avoid a protracted dispute with the government". It added it has agreed "to restructure and transfer the departments responsible for recall determinations to the United States".

SAFETY-RELATED DEFECTS

In August 2014, Hyundai agreed to pay a $17.35 million fine to settle an NHTSA investigation that it delayed the recall of 43,500 Genesis cars to fix a brake defect linked to two injuries. NHTSA said in 2014 Hyundai "must change the way they deal with safety-related defects".

Kia agreed to create a new U.S. safety office headed by a chief safety officer and each automaker will retain an independent, third-party auditor who will directly report to NHTSA and will conduct a comprehensive review of the company’s safety practices.

Hyundai's consent order will last three years, while Kia's is for two years, but both can be extended by one year.

The 2015 and 2017 recalls involved the 2011-2014 Hyundai Sonata and 2013-2014 Santa Fe Sport vehicles, while Kia did not recall the vehicles until 2017, when it called back the 2011-2014 Optima, 2012-2014 Sorento, and 2011-2013 Sportage vehicles.

The settlements are separate from ongoing NHTSA investigations into non-crash fires in certain Hyundai and Kia vehicles, some of which have the recalled engines.

In 2019, Reuters reported a group of U.S. states were investigating Hyundai and Kia for potential unfair and deceptive acts related to reports of hundreds of vehicle fires.

In November 2018, Reuters reported that federal prosecutors had launched a criminal investigation into Hyundai and Kia to determine if vehicle recalls linked to engine defects had been conducted properly.

In 2014, Hyundai and Kia agreed to pay $350 million in penalties to the U.S. government for overstating fuel economy ratings, which were billed at the time as the largest ever under the Clean Air Act.

Hyundai, Kia agree to $210 million U.S. auto safety civil penalty
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email