BMW To Pay $40 Million Fine Over Safety Violations

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The National Highway Traffic Safety Administration (NHTSA) of the U.S. Department of Transportation ordered BMW North America to pay $40 million in civil penalty for repeatedly violating its regulations and the Motor Safety Vehicle Act.

BMW admitted that it violated the requirements to issue a timely recall of vehicles that failed to comply with minimum crash protection standards. The automaker also acknowledged that it did not informed owners about the recalls in a timely manner and failed to provide accurate information regarding its recalls to the NHTSA.

In 2012, BMW violated the similar requirements and was ordered to pay a civil penalty of $3 million.

BMW must put safety at the top of its priority list

In a statement, Department of Transportation Secretary Anthony Foxx, said, “NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety. 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.”

On the other hand, NHTSA Administrator Mark Rosekind emphasized that it is a must for automakers to follow its requirements to launch recalls and notify consumers in a timely fashion upon discovery of a safety defect or non-compliance. According to him, the requirements are “fundamental to our systems for protecting the traveling public.”

Mr. Rosekind added, “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.”

NHTSA Consent order against BMW

Under the Consent Order of the NHTSA, the $40 million civil penalty against BMW includes $10 million due in cash, $20 million in deferred penalties that will come due if the company fails to comply with the Order of commits other safety violations, and the automaker is required to spend at least $10 million to meet performance obligations.

Aside from paying civil penalties, the NHTSA required BMW to do the following:

1. Retain an NHTSA-approved independent safety consultant to help in developing best practices to comply with the Motor Vehicle Safety Act and NHTSA regulations. The automaker is required to submit those best practices to the agency.
2. Evaluate all safety and compliance related issues under the guidance of the independent consultant and provide a monthly written report about those issues.
3. Launch a pilot program to determine whether it can use data analytics capabilities to detect emerging safety-related defect trends.
4. Establish a plan to prevent BMW dealers from selling new vehicles with un-remedied safety defects. This requirement stemmed from the fact that an NHTSA representative purchased a new vehicle with an open safety recall from a BMW dealer during the investigation.

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