Automakers Cry Foul, Oppose Increasing Fines for Delaying Recalls

By Blake Z. Rong | December 14, 2011
Automotive recalls are never fun for their makers. Just ask Toyota. In addition to the embarrassment of trotting out a massive, nationwide public campaign that basically states “we screwed up,” the government can also add insult to injury by fining automakers if it’s found that they have delayed a recall, from when problems were first reported. Now, in an effort to toughen up automotive safety laws, the Senate is considering increasing the fine to as high as $250 million. Not surprisingly, automaker groups are crying foul. The current maximum fine is $17.3 million, a paltry sum in comparison. But the Motor Vehicle Safety Act of 2010, as the bill is called, has sparked ire from a diverse group of lobbyists and coalitions that represent automakers, rental car agencies, and even the U.S. Chamber of Commerce. The Alliance of Automobile Manufacturers, the Association of Global Automakers, the National Association of Manufacturers and the American International Automobile Dealers Association all claim that the increased fines are “unfairly punitive.” "The proposed increases are so out of proportion either to the current penalty structure or the penalty structure for other manufacturers under the Consumer Product Safety Act as to appear unfairly punitive," the groups said in a joint letter. "The proposed increases should be scaled back to a more appropriate level." The group includes big-name companies like General Motors, Ford, Chrysler, and to little surprise, Toyota. Conversely, these automakers are fine with other aspects of the bill, including—controversially—the inclusion of event data recorders, or “black boxes” in all cars. The bill was introduced by Senators Mark Pryor, a Democrat from Arkansas, and Jay Rockefeller, a Democrat from West Virginia. They had had pushed the bill for more than a year and had been inspired to do so after Toyota’s rash of sudden-acceleration recalls from 2009 to 2011. If passed, it will not come into effect until a year from now—and would also set new standards for braking distances, strengthen safety requirements, increase funding to the NHTSA, and allow consumers to learn about vehicle defects much more easily. Source: Lexology, Detroit News