Business / Corporate

U.S. examines whether Honda failed to report fatal air bag incidents

Bloomberg

The U.S. has begun a formal investigation of whether Honda Motor Co. failed to tell regulators about deaths and injuries relating to Takata Corp. air bags that can shoot shrapnel at car passengers.

Honda must now produce documents and answer questions under oath, the National Highway Traffic Safety Administration said in an emailed statement Monday.

The automaker has recalled more than 6 million cars worldwide to fix air bags.

The agency has already been conducting an investigation of the Takata defect and said last month it had been in contact with Honda over its compliance in reporting air bag incidents.

NHTSA now says it is concerned that Honda’s failure to use properly the government’s “early warning reports” system may go beyond the Takata air bag incidents. If found in violation, Honda could be fined as much as $35 million.

“Early warning reporting information is one of many data sources we rely on to spot potential defects,” David Friedman, the agency’s deputy administrator, said in the statement. “Honda and the other automakers are legally obligated to report this information to us and failure to do so will not be tolerated.”

Honda is one of 10 automakers involved in an air bag recall covering more than 7.8 million U.S. vehicles. Millions more have been recalled overseas.

Honda will announce the results of a third-party audit into its faults reporting as soon as they are out, spokeswoman Akemi Ando said.

Regulators in the U.S. have stepped up pressure to complete the recall in recent weeks because of the severity of the defect, which has been linked to four fatalities, all involving Honda vehicles.

Last month, Honda said it asked a third party to determine whether it had underreported fatalities and injuries. The audit began in September and will be shared with NHTSA, the company said.

On Oct. 31, Ferrari SpA agreed to pay a $3.5 million fine for failing to report customer complaints, alleged defects and three deaths to U.S. regulators. It was the largest fine NHTSA has ever levied for early warning reporting violations.

Takata has been sued by Florida consumers seeking damages for the lost economic value of their vehicles.

The consumers, who filed the claim as a proposed class action on behalf of all Florida owners of vehicles recalled for air bag repairs, also sued Honda Motor Co., Chrysler Group LLC, General Motors LLC and Toyota Motor Sales USA. The lawsuit was filed last Friday in federal court in Miami.

The Florida lawsuit joins at least four others filed in U.S. courts in the past week as proposed class actions, all claiming Takata and others withheld information of a potential defect, causing vehicle values to plummet as the recalls were announced.

“Takata and Honda jointly failed to report the full extent of the danger to drivers and passengers and did not issue appropriate recalls,” the Florida consumers said in the lawsuit. The defendants “were on notice as early as 2008 after Honda first notified regulators of problems with Takata air bags,” they said.

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