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The U.S. Justice Department has offered Fiat Chrysler Automobiles a possible settlement over its emissions-cheating EcoDiesel engine. But it will likely cost FCA a large chunk of cash. Bloomberg obtained a copy of the settlement offer that was sent to FCA's lawyers. The key detail of the proposed settlement says the settlement “must include very substantial civil penalties” that discourage others future violations and that “adequately reflect the seriousness of the conduct that led to these violations.” The proposed settlement doesn't mention an end of the criminal investigation by the Justice Department. Spokespeople for FCA did not respond for comment. Bloomberg also obtained a term sheet sent by FCA to Government lawyers back in December. In the sheet, FCA acknowledged that the final settlement would include "civil penalties, an emissions fix for the diesel vehicles and environmental mitigation efforts." The mitigation efforts could include "projects to promote low- or zero-emissions “mobility projects”." The saga of FCA's EcoDiesel mess dates back to last January when the Environmental Protection Agency (EPA) accused the automaker of having multiple defeat devices installed on the 3.0L EcoDiesel V6 - used in the Ram 1500 and Jeep Grand Cherokee. Since then, FCA has been working with the EPA and Justice Department on trying to clear this mess up. The automaker has also brought their 2017 and 2018 models equipped with the EcoDiesel into compliance via new software and hopes to do the same for the older models. Source: Bloomberg View full article -
The U.S. Justice Department has offered Fiat Chrysler Automobiles a possible settlement over its emissions-cheating EcoDiesel engine. But it will likely cost FCA a large chunk of cash. Bloomberg obtained a copy of the settlement offer that was sent to FCA's lawyers. The key detail of the proposed settlement says the settlement “must include very substantial civil penalties” that discourage others future violations and that “adequately reflect the seriousness of the conduct that led to these violations.” The proposed settlement doesn't mention an end of the criminal investigation by the Justice Department. Spokespeople for FCA did not respond for comment. Bloomberg also obtained a term sheet sent by FCA to Government lawyers back in December. In the sheet, FCA acknowledged that the final settlement would include "civil penalties, an emissions fix for the diesel vehicles and environmental mitigation efforts." The mitigation efforts could include "projects to promote low- or zero-emissions “mobility projects”." The saga of FCA's EcoDiesel mess dates back to last January when the Environmental Protection Agency (EPA) accused the automaker of having multiple defeat devices installed on the 3.0L EcoDiesel V6 - used in the Ram 1500 and Jeep Grand Cherokee. Since then, FCA has been working with the EPA and Justice Department on trying to clear this mess up. The automaker has also brought their 2017 and 2018 models equipped with the EcoDiesel into compliance via new software and hopes to do the same for the older models. Source: Bloomberg -
FCA Gets Hit With A $105 Million Fine Over Jeep/Ram Recalls
William Maley posted an article in Chrysler
he National Highway Traffic Safety Administration (NHTSA) and Fiat Chrysler Automobiles (FCA) have entered a consent agreement that will see FCA paying a record $105 million civil penalty after the Government investigated 23 different recalls into the company since 2009. “Today’s action holds Fiat Chrysler accountable for its past failures, pushes them to get unsafe vehicles repaired or off the roads and takes concrete steps to keep Americans safer going forward. This civil penalty puts manufacturers on notice that the department will act when they do not take their obligations to repair safety defects seriously,” said Transportation Secretary Anthony Foxx. As part of the consent agreement, FCA admitted that it "failed to timely provide an effective remedy” in three recall campaigns, and that it failed to comply with “various reporting requirements” of U.S. laws governing recalls in a timely manner. The $105 million civil penalty is made up of a $70 million payment to NHTSA, $20 million to revamping their efforts in terms of safety, and $15 million in additional penalties if FCA doesn't meet the terms. Along with the penalty, FCA will also have to buy back more than 500,000 vehicles - mostly Ram trucks - due to defective suspension parts that could cause drivers to lose control. Also, owners of Jeep Grand Cherokee and Liberty SUVs with rear-mounted gas tanks will be able to trade their vehicles for above-market value or take a take a “financial incentive” to have a trailer hitch installed. The final part of the agreement will see FCA bring in a independent monitor that will monitor issues at the company for the next three years. "We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate. Accordingly, FCA US has agreed to address certain industry objectives, such as identifying best practices for recall execution and researching obstacles that discourage consumers from responding to recall notices," FCA said in a statement. Source: The Detroit News, Fiat Chrysler Automobiles Press Release is on Page 2 FCA US Reaches Consensual Resolution of NHTSA Investigation on 23 Recall Campaigns July 26, 2015 , London, UK - FCA US LLC (FCA US) today announced it has entered into a consent order with the National Highway Traffic Safety Administration (NHTSA) which resolves the issues raised by NHTSA with respect to FCA US’s execution of 23 recall campaigns in NHTSA’s Special Order issued to FCA US on May 22, 2015 and further addressed at a NHTSA public hearing held on July 2, 2015. The consent order includes an admission by FCA US that in three specified campaigns it had failed to timely provide an effective remedy, and that it did not timely comply with various reporting requirements under the National Traffic and Motor Vehicle Safety Act of 1966. Pursuant to the consent order, FCA US has agreed to make a $70 million cash payment to NHTSA and to spend $20 million on industry and consumer outreach activities and incentives to enhance certain recall and service campaign completion rates. An additional $15 million payment will be payable by FCA US if it fails to comply with certain terms of the consent order. FCA US has also agreed to undertake specific actions to improve its recall execution. The consent order will be supervised by an independent monitor and will remain in place for three years subject to NHTSA’s right to extend for an additional year in the event of FCA US' noncompliance with the consent order. FCA US LLC Consent Order Response July 26, 2015 , Auburn Hills, Mich. - FCA US LLC acknowledges the admissions in its Consent Order with the National Highway Traffic Safety Administration. We also accept the resulting consequences with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us. We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate. Accordingly, FCA US has agreed to address certain industry objectives, such as identifying best practices for recall execution and researching obstacles that discourage consumers from responding to recall notices. -
he National Highway Traffic Safety Administration (NHTSA) and Fiat Chrysler Automobiles (FCA) have entered a consent agreement that will see FCA paying a record $105 million civil penalty after the Government investigated 23 different recalls into the company since 2009. “Today’s action holds Fiat Chrysler accountable for its past failures, pushes them to get unsafe vehicles repaired or off the roads and takes concrete steps to keep Americans safer going forward. This civil penalty puts manufacturers on notice that the department will act when they do not take their obligations to repair safety defects seriously,” said Transportation Secretary Anthony Foxx. As part of the consent agreement, FCA admitted that it "failed to timely provide an effective remedy” in three recall campaigns, and that it failed to comply with “various reporting requirements” of U.S. laws governing recalls in a timely manner. The $105 million civil penalty is made up of a $70 million payment to NHTSA, $20 million to revamping their efforts in terms of safety, and $15 million in additional penalties if FCA doesn't meet the terms. Along with the penalty, FCA will also have to buy back more than 500,000 vehicles - mostly Ram trucks - due to defective suspension parts that could cause drivers to lose control. Also, owners of Jeep Grand Cherokee and Liberty SUVs with rear-mounted gas tanks will be able to trade their vehicles for above-market value or take a take a “financial incentive” to have a trailer hitch installed. The final part of the agreement will see FCA bring in a independent monitor that will monitor issues at the company for the next three years. "We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate. Accordingly, FCA US has agreed to address certain industry objectives, such as identifying best practices for recall execution and researching obstacles that discourage consumers from responding to recall notices," FCA said in a statement. Source: The Detroit News, Fiat Chrysler Automobiles Press Release is on Page 2 FCA US Reaches Consensual Resolution of NHTSA Investigation on 23 Recall Campaigns July 26, 2015 , London, UK - FCA US LLC (FCA US) today announced it has entered into a consent order with the National Highway Traffic Safety Administration (NHTSA) which resolves the issues raised by NHTSA with respect to FCA US’s execution of 23 recall campaigns in NHTSA’s Special Order issued to FCA US on May 22, 2015 and further addressed at a NHTSA public hearing held on July 2, 2015. The consent order includes an admission by FCA US that in three specified campaigns it had failed to timely provide an effective remedy, and that it did not timely comply with various reporting requirements under the National Traffic and Motor Vehicle Safety Act of 1966. Pursuant to the consent order, FCA US has agreed to make a $70 million cash payment to NHTSA and to spend $20 million on industry and consumer outreach activities and incentives to enhance certain recall and service campaign completion rates. An additional $15 million payment will be payable by FCA US if it fails to comply with certain terms of the consent order. FCA US has also agreed to undertake specific actions to improve its recall execution. The consent order will be supervised by an independent monitor and will remain in place for three years subject to NHTSA’s right to extend for an additional year in the event of FCA US' noncompliance with the consent order. FCA US LLC Consent Order Response July 26, 2015 , Auburn Hills, Mich. - FCA US LLC acknowledges the admissions in its Consent Order with the National Highway Traffic Safety Administration. We also accept the resulting consequences with renewed resolve to improve our handling of recalls and re-establish the trust our customers place in us. We are intent on rebuilding our relationship with NHTSA and we embrace the role of public safety advocate. Accordingly, FCA US has agreed to address certain industry objectives, such as identifying best practices for recall execution and researching obstacles that discourage consumers from responding to recall notices. View full article
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Hyundai, Kia Get Hit With $350 Million In Federal Penalties
William Maley posted an article in Automotive Industry
Hyundai and Kia have been hit with the largest penalty in the history of the federal Clean Air Act. The two automakers agreed to a total of $350 million in penalties for overstating the fuel economy ratings for a number of vehicles from the 2011 to 2013 model year. The total was reached through cooperation between the Environmental Protection Agency, the Department of Justice, and the California Air Resources Board. Here's how the $350 million breaks down: $100 Million Fine to the Federal Government Surrender fuel economy credits valued at $200 Million Spend $50 Million to upgrade its fuel economy testing procedures “Greenhouse gas emission laws protect the public from the dangers of climate change, and today’s action reinforces EPA’s commitment to see those laws through,” said EPA Administrator Gina McCarthy. “Businesses that play by the rules shouldn’t have to compete with those breaking the law. This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact.” This comes from the mess Hyundai and Kia found themselves in 2012 when they had to revise the fuel economy ratings on a number of vehicles from the 2011 to 2013 model years after it was found the numbers were a bit too high than what consumers got. The EPA accuses the two automakers of implementing a testing protocol that inaccurately inflated fuel-economy ratings, and then picking the higher numbers to put on their estimates. Hyundai and Kia argue that the government-mandated testing has vagueness within certain parameters such as tire condition during testing that allow for inconsistencies to appear. Hyundai also cites a "data processing error related to the coastdown testing method" in the testing procedure. But for their part, Hyundai and Kia are forming "an independent certification test group" to supervise testing, training and reporting. The two will also be auditing the fuel economy figures on 2015-2016 model year vehicles for accuracy. Source: EPA, Hyundai Press Releases are on Page 2 November 3, 2014 United States Reaches Settlement with Hyundai and Kia in Historic Greenhouse Gas Enforcement Case Hyundai and Kia to pay record $100 million penalty for selling vehicles that emit more greenhouse gases than automakers certified to EPA Washington – The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice today announced an historic settlement with the automakers Hyundai and Kia that will resolve alleged Clean Air Act violations based on their sale of close to 1.2 million vehicles that will emit approximately 4.75 million metric tons of greenhouse gases in excess of what the automakers certified to EPA. The automakers will pay a $100 million civil penalty, the largest in Clean Air Act history, to resolve violations concerning the testing and certification of vehicles sold in America and spend approximately $50 million on measures to prevent any future violations. Hyundai and Kia will also forfeit 4.75 million greenhouse gas emission credits that the companies previously claimed, which are estimated to be worth over $200 million. Automakers earn greenhouse gas emissions credits for building vehicles with lower emissions than required by law. These credits can be used to offset emissions from less fuel-efficient vehicle models or sold or traded to other automakers for the same purpose. The greenhouse gas emissions that the forfeited credits would have allowed are equal to the emissions from powering more than 433,000 homes for a year. “Greenhouse gas emission laws protect the public from the dangers of climate change, and today’s action reinforces EPA’s commitment to see those laws through,” said EPA Administrator Gina McCarthy. “Businesses that play by the rules shouldn’t have to compete with those breaking the law. This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact.” “This unprecedented resolution with Hyundai and Kia underscores the Justice Department’s firm commitment to safeguarding American consumers, ensuring fairness in every marketplace, protecting the environment, and relentlessly pursuing companies that make misrepresentations and violate the law,” said Attorney General Eric Holder. “This type of conduct quite simply will not be tolerated. And the Justice Department will never rest or waver in our determination to take action against any company that engages in such activities – whenever and wherever they are uncovered.” The complaint was filed today jointly by the United States and the California Air Resources Board in the U.S. District Court for the District of Columbia. It alleges that the car companies sold close to 1.2 million cars and SUVs from model years 2012 and 2013 whose design specifications did not conform to the specifications the companies certified to EPA, which led to the misstatements of greenhouse gas emissions. These allegations concern the Hyundai Accent, Elantra, Veloster and Santa Fe vehicles and the Kia Rio and Soul vehicles. Additionally Hyundai and Kia gave consumers inaccurate information about the real-world fuel economy performance of many of these vehicles. Hyundai and Kia overstated the fuel economy by one to six miles per gallon, depending on the vehicle. Similarly, they understated the emissions of greenhouse gases by their fleets by approximately 4.75 million metric tons over the estimated lifetime of the vehicles. In order to reduce the likelihood of future vehicle greenhouse gas emission miscalculations, Hyundai and Kia have agreed to reorganize their emissions certification group, revise test protocols, improve management of test data and enhance employee training before they conduct emissions testing to certify their model year 2017 vehicles. In the meantime, Hyundai and Kia must audit their fleets for model years 2015 and 2016 to ensure that vehicles sold to the public conform to the description and data provided to EPA. EPA discovered these violations in 2012 during audit testing. Subsequent investigation revealed that Hyundai’s and Kia’s testing protocol included numerous elements that led to inaccurately higher fuel economy ratings. In processing test data, Hyundai and Kia allegedly chose favorable results rather than average results from a large number of tests. In November 2012, Hyundai and Kia responded to EPA’s findings by correcting the fuel economy ratings for many of their 2011, 2012 and 2013 model year vehicles and establishing a reimbursement program to compensate owners for increased fuel costs due to overstated fuel economy. This case involves five different entities: Hyundai Motor Company, Hyundai Motor America, Kia Motors Corporation, Kia Motors America, and Hyundai America Technical Center, Inc. The California Air Resources Board joined the United States as a co-plaintiff in this settlement, and will receive $6,343,400 of the $100 million civil penalty. The proposed consent decree is subject to a 30-day public comment period and court review and approval. A copy of the consent decree is available on the Department of Justice website at http://www.justice.gov/enrd/Consent_Decrees.html. HYUNDAI RESOLVES U.S. EPA INVESTIGATION OF 2012 FUEL ECONOMY RATINGS RESTATEMENT Automaker’s New Fuel Economy Testing Program Approved by EPA in October 2012 FOUNTAIN VALLEY, Calif., Nov. 3, 2014 – Hyundai today announced that it has entered into an agreement with the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) to resolve the government’s investigation of its 2012 restatement of fuel economy ratings. The adjustment affected approximately one-quarter of Hyundai 2011-13 model year vehicles, reducing their combined city/highway fuel economy by 1-2 miles per gallon (mpg). As part of the agreement, Hyundai will pay a $56.8 million civil penalty, forgo the use of approximately 2.7 million greenhouse gas (GHG) emission credits – the credits representing the difference between original and restated emission data – and continue to implement a series of measures including the formation of an independent certification test group to oversee the automaker’s fuel economy testing, training, data management and reporting. Additionally, Hyundai will continue to audit model year 2015-16 vehicles to confirm the accuracy of their fuel economy ratings. “Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of its investigation,” said David Zuchowski, president and CEO of Hyundai Motor America. “We are pleased to put this behind us, and gratified that even with our adjusted fuel economy ratings, Hyundai continues to lead the automotive industry in fuel efficiency and environmental performance.” According to the EPA Fuel Economy Trends Report, Hyundai’s adjusted fuel economy ratings are 27.2 mpg for 2011, 28.3 mpg for 2012 and 29.0 mpg for 2013 model year vehicles.[1] Similarly, the Union of Concerned Scientists recently named Hyundai the “Greenest Automaker” for the 2013 model year based on emissions of nitrogen oxide, non-methane organic gas and CO2. Importantly, Hyundai believes its process for testing the fuel economy of its vehicles is consistent with government regulations and guidance, which afford broad latitude to vehicle manufacturers in determining test conditions. Outside of a data processing error related to the coastdown testing method by which Hyundai calculated resistance or “road load,” it was Hyundai’s regulatory interpretation within this broad latitude that was responsible for the ratings restatement. Hyundai has corrected the error, and the EPA in October 2012 approved the automaker’s new fuel economy testing program. Over the past 30 years, the EPA has acknowledged the variability of its coastdown testing,[2] and currently is working to develop new guidance for the industry in order to improve its precision, repeatability and accuracy. “Hyundai is committed to partnering with the government to innovate fuel economy testing procedures in order to achieve more accurate and reliable ‘real-world’ results for consumers,” said Zuchowski. There is no environmental impact resulting from Hyundai’s fuel economy ratings restatement, and the automaker will continue to hold a surplus of GHG credits – approximately 20 million – following implementation of today’s settlement. To compensate the national program to reduce GHG emissions and improve fuel economy, Hyundai will amend the GHG reports it submitted to the EPA before understanding that its interpretation of industry test procedures differed from the government’s reading of the same procedures. About Hyundai’s Fuel Economy Restatement and Customer Reimbursement Program On November 2, 2012, Hyundai announced the voluntary adjustment of fuel economy ratings for approximately one-quarter of its 2011-13 model year vehicles, reducing their combined city/highway fuel economy by 1-2 miles per gallon, and relabeled affected vehicles still in dealer showrooms. In order to compensate affected customers, Hyundai provided a lifetime reimbursement program to cover the additional fuel costs associated with the rating change plus a 15 percent premium in acknowledgment of the inconvenience. The majority of customers affected by the ratings restatement enrolled in the automaker’s reimbursement program and are being compensated based on their actual mileage and the fuel costs for the region in which they live. While customers responded favorably to the reimbursement program, Hyundai through a recent class action settlement offered the option of a single lump sum cash payment for those customers who would rather not return to a dealership to have their mileage verified. So, through either the one-time lump sum payment or original lifetime reimbursement program, customers have the option of being made fully whole for Hyundai’s ratings restatement. -
Hyundai and Kia have been hit with the largest penalty in the history of the federal Clean Air Act. The two automakers agreed to a total of $350 million in penalties for overstating the fuel economy ratings for a number of vehicles from the 2011 to 2013 model year. The total was reached through cooperation between the Environmental Protection Agency, the Department of Justice, and the California Air Resources Board. Here's how the $350 million breaks down: $100 Million Fine to the Federal Government Surrender fuel economy credits valued at $200 Million Spend $50 Million to upgrade its fuel economy testing procedures “Greenhouse gas emission laws protect the public from the dangers of climate change, and today’s action reinforces EPA’s commitment to see those laws through,” said EPA Administrator Gina McCarthy. “Businesses that play by the rules shouldn’t have to compete with those breaking the law. This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact.” This comes from the mess Hyundai and Kia found themselves in 2012 when they had to revise the fuel economy ratings on a number of vehicles from the 2011 to 2013 model years after it was found the numbers were a bit too high than what consumers got. The EPA accuses the two automakers of implementing a testing protocol that inaccurately inflated fuel-economy ratings, and then picking the higher numbers to put on their estimates. Hyundai and Kia argue that the government-mandated testing has vagueness within certain parameters such as tire condition during testing that allow for inconsistencies to appear. Hyundai also cites a "data processing error related to the coastdown testing method" in the testing procedure. But for their part, Hyundai and Kia are forming "an independent certification test group" to supervise testing, training and reporting. The two will also be auditing the fuel economy figures on 2015-2016 model year vehicles for accuracy. Source: EPA, Hyundai Press Releases are on Page 2 November 3, 2014 United States Reaches Settlement with Hyundai and Kia in Historic Greenhouse Gas Enforcement Case Hyundai and Kia to pay record $100 million penalty for selling vehicles that emit more greenhouse gases than automakers certified to EPA Washington – The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice today announced an historic settlement with the automakers Hyundai and Kia that will resolve alleged Clean Air Act violations based on their sale of close to 1.2 million vehicles that will emit approximately 4.75 million metric tons of greenhouse gases in excess of what the automakers certified to EPA. The automakers will pay a $100 million civil penalty, the largest in Clean Air Act history, to resolve violations concerning the testing and certification of vehicles sold in America and spend approximately $50 million on measures to prevent any future violations. Hyundai and Kia will also forfeit 4.75 million greenhouse gas emission credits that the companies previously claimed, which are estimated to be worth over $200 million. Automakers earn greenhouse gas emissions credits for building vehicles with lower emissions than required by law. These credits can be used to offset emissions from less fuel-efficient vehicle models or sold or traded to other automakers for the same purpose. The greenhouse gas emissions that the forfeited credits would have allowed are equal to the emissions from powering more than 433,000 homes for a year. “Greenhouse gas emission laws protect the public from the dangers of climate change, and today’s action reinforces EPA’s commitment to see those laws through,” said EPA Administrator Gina McCarthy. “Businesses that play by the rules shouldn’t have to compete with those breaking the law. This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact.” “This unprecedented resolution with Hyundai and Kia underscores the Justice Department’s firm commitment to safeguarding American consumers, ensuring fairness in every marketplace, protecting the environment, and relentlessly pursuing companies that make misrepresentations and violate the law,” said Attorney General Eric Holder. “This type of conduct quite simply will not be tolerated. And the Justice Department will never rest or waver in our determination to take action against any company that engages in such activities – whenever and wherever they are uncovered.” The complaint was filed today jointly by the United States and the California Air Resources Board in the U.S. District Court for the District of Columbia. It alleges that the car companies sold close to 1.2 million cars and SUVs from model years 2012 and 2013 whose design specifications did not conform to the specifications the companies certified to EPA, which led to the misstatements of greenhouse gas emissions. These allegations concern the Hyundai Accent, Elantra, Veloster and Santa Fe vehicles and the Kia Rio and Soul vehicles. Additionally Hyundai and Kia gave consumers inaccurate information about the real-world fuel economy performance of many of these vehicles. Hyundai and Kia overstated the fuel economy by one to six miles per gallon, depending on the vehicle. Similarly, they understated the emissions of greenhouse gases by their fleets by approximately 4.75 million metric tons over the estimated lifetime of the vehicles. In order to reduce the likelihood of future vehicle greenhouse gas emission miscalculations, Hyundai and Kia have agreed to reorganize their emissions certification group, revise test protocols, improve management of test data and enhance employee training before they conduct emissions testing to certify their model year 2017 vehicles. In the meantime, Hyundai and Kia must audit their fleets for model years 2015 and 2016 to ensure that vehicles sold to the public conform to the description and data provided to EPA. EPA discovered these violations in 2012 during audit testing. Subsequent investigation revealed that Hyundai’s and Kia’s testing protocol included numerous elements that led to inaccurately higher fuel economy ratings. In processing test data, Hyundai and Kia allegedly chose favorable results rather than average results from a large number of tests. In November 2012, Hyundai and Kia responded to EPA’s findings by correcting the fuel economy ratings for many of their 2011, 2012 and 2013 model year vehicles and establishing a reimbursement program to compensate owners for increased fuel costs due to overstated fuel economy. This case involves five different entities: Hyundai Motor Company, Hyundai Motor America, Kia Motors Corporation, Kia Motors America, and Hyundai America Technical Center, Inc. The California Air Resources Board joined the United States as a co-plaintiff in this settlement, and will receive $6,343,400 of the $100 million civil penalty. The proposed consent decree is subject to a 30-day public comment period and court review and approval. A copy of the consent decree is available on the Department of Justice website at http://www.justice.gov/enrd/Consent_Decrees.html. HYUNDAI RESOLVES U.S. EPA INVESTIGATION OF 2012 FUEL ECONOMY RATINGS RESTATEMENT Automaker’s New Fuel Economy Testing Program Approved by EPA in October 2012 FOUNTAIN VALLEY, Calif., Nov. 3, 2014 – Hyundai today announced that it has entered into an agreement with the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) to resolve the government’s investigation of its 2012 restatement of fuel economy ratings. The adjustment affected approximately one-quarter of Hyundai 2011-13 model year vehicles, reducing their combined city/highway fuel economy by 1-2 miles per gallon (mpg). As part of the agreement, Hyundai will pay a $56.8 million civil penalty, forgo the use of approximately 2.7 million greenhouse gas (GHG) emission credits – the credits representing the difference between original and restated emission data – and continue to implement a series of measures including the formation of an independent certification test group to oversee the automaker’s fuel economy testing, training, data management and reporting. Additionally, Hyundai will continue to audit model year 2015-16 vehicles to confirm the accuracy of their fuel economy ratings. “Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of its investigation,” said David Zuchowski, president and CEO of Hyundai Motor America. “We are pleased to put this behind us, and gratified that even with our adjusted fuel economy ratings, Hyundai continues to lead the automotive industry in fuel efficiency and environmental performance.” According to the EPA Fuel Economy Trends Report, Hyundai’s adjusted fuel economy ratings are 27.2 mpg for 2011, 28.3 mpg for 2012 and 29.0 mpg for 2013 model year vehicles.[1] Similarly, the Union of Concerned Scientists recently named Hyundai the “Greenest Automaker” for the 2013 model year based on emissions of nitrogen oxide, non-methane organic gas and CO2. Importantly, Hyundai believes its process for testing the fuel economy of its vehicles is consistent with government regulations and guidance, which afford broad latitude to vehicle manufacturers in determining test conditions. Outside of a data processing error related to the coastdown testing method by which Hyundai calculated resistance or “road load,” it was Hyundai’s regulatory interpretation within this broad latitude that was responsible for the ratings restatement. Hyundai has corrected the error, and the EPA in October 2012 approved the automaker’s new fuel economy testing program. Over the past 30 years, the EPA has acknowledged the variability of its coastdown testing,[2] and currently is working to develop new guidance for the industry in order to improve its precision, repeatability and accuracy. “Hyundai is committed to partnering with the government to innovate fuel economy testing procedures in order to achieve more accurate and reliable ‘real-world’ results for consumers,” said Zuchowski. There is no environmental impact resulting from Hyundai’s fuel economy ratings restatement, and the automaker will continue to hold a surplus of GHG credits – approximately 20 million – following implementation of today’s settlement. To compensate the national program to reduce GHG emissions and improve fuel economy, Hyundai will amend the GHG reports it submitted to the EPA before understanding that its interpretation of industry test procedures differed from the government’s reading of the same procedures. About Hyundai’s Fuel Economy Restatement and Customer Reimbursement Program On November 2, 2012, Hyundai announced the voluntary adjustment of fuel economy ratings for approximately one-quarter of its 2011-13 model year vehicles, reducing their combined city/highway fuel economy by 1-2 miles per gallon, and relabeled affected vehicles still in dealer showrooms. In order to compensate affected customers, Hyundai provided a lifetime reimbursement program to cover the additional fuel costs associated with the rating change plus a 15 percent premium in acknowledgment of the inconvenience. The majority of customers affected by the ratings restatement enrolled in the automaker’s reimbursement program and are being compensated based on their actual mileage and the fuel costs for the region in which they live. While customers responded favorably to the reimbursement program, Hyundai through a recent class action settlement offered the option of a single lump sum cash payment for those customers who would rather not return to a dealership to have their mileage verified. So, through either the one-time lump sum payment or original lifetime reimbursement program, customers have the option of being made fully whole for Hyundai’s ratings restatement. View full article
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Transportation Secretary Anthony Foxx wants to increase the maximum fine for automakers who fail to recall vehicles in a timely fashion from the current $35 million fine to a much more painful $300 million fine. The increase is part of a new transportation reauthorization bill whose primary focus is to fund maintenance for highways, bridges, and other infrastructures. On a conference call with reporters, Foxx said the fines on automakers need to be “more than a rounding error” to act as a deterrent. The department “wants to make sure there’s an ability to make it count and ensure that there’s enough of an effect across the industry,” Foxx said. The bill also includes giving the National Highway Traffic Safety Administration the power to require auto manufacturers to remove automobiles from being sold if a defect is discovered. It would also force rental car companies to repair recalled vehicles before they are rented again. Source: The Detroit News William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
Transportation Secretary Anthony Foxx wants to increase the maximum fine for automakers who fail to recall vehicles in a timely fashion from the current $35 million fine to a much more painful $300 million fine. The increase is part of a new transportation reauthorization bill whose primary focus is to fund maintenance for highways, bridges, and other infrastructures. On a conference call with reporters, Foxx said the fines on automakers need to be “more than a rounding error” to act as a deterrent. The department “wants to make sure there’s an ability to make it count and ensure that there’s enough of an effect across the industry,” Foxx said. The bill also includes giving the National Highway Traffic Safety Administration the power to require auto manufacturers to remove automobiles from being sold if a defect is discovered. It would also force rental car companies to repair recalled vehicles before they are rented again. Source: The Detroit News William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
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Last month, the National Highway Traffic Safety Administration (NHTSA) sent General Motors a 27 page document with 107 questions that dealt with the massive ignition switch recall that affects 2.8 million vehicles worldwide and is linked to 13 deaths. NHTSA gave the company a deadline of April 3rd to finish answering all of the questions. Well its a week after the deadline, NHTSA has announced it will fine GM $7,000 per day starting on April 3rd because the company hasn't answered all of the questions and being slow to respond. At this current time, the total fine stands at $28,000. In a letter released last night, NHTSA said General Motors hasn't answered a third of its questions, including several that required no special technical expertise such as what data it looked at when deciding not to issue a recall before this year. "These are basic questions concerning information that is surely readily available to GM at this time. It is deeply troubling that two months after recalling the vehicles, GM is unwilling or unable to tell NHTSA whether the design of the switch changed at any other time," said the agency. NHTSA also warned that it could ask the Department of Justice to force GM's hand. Now NHTSA does state that General Motors sent the agency a note on March 20th saying that it would need more time to answer the questions. Then on on April 4, GM told the agency that it wouldn't be able to answer all the questions since it has an ongoing outside investigation by former U.S. attorney Anton Valukas. He is looking into GM's handling of the recall that goes back to 2001. As you might have guess, NHTSA isn't exactly pleased about this. “You explained that GM did not fully respond because an investigation by Anton Valukas and his team was in progress. This was the first time GM had ever raised Mr. Valukas’ work as a reason GM could not fully provide information to NHTSA in this timeliness investigation. Mr. Valukas’ investigation is irrelevant to GM’s legal obligation to timely respond to the special order and cooperate fully with NHTSA,” said NHTSA general counsel O. Kevin Vincent. General Motors spokesman Greg Martin tells The Detroit News the company has been fully cooperative by handing over 271,000 pages of information. “GM has produced nearly 21,000 documents totaling over 271,000 pages through a production process that spans a decade and over 5 million documents from 75 individual custodians and additional sources. Even NHTSA recognizes the breadth of its inquiry and has agreed, in several instances with GM, to a rolling production schedule of documents past the April 3rd deadline. We believe that NHTSA shares our desire to provide accurate and substantive responses. We will continue to provide responses and facts as soon as they become available and hope to go about this in a constructive manner. We will do so with a goal of being accurate as well as timely,” said Martin. Martin didn't say if the company would contest the fine or not. Source: Automotive News (Subscription Required), The Detroit News, Motoramic William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. -
Last month, the National Highway Traffic Safety Administration (NHTSA) sent General Motors a 27 page document with 107 questions that dealt with the massive ignition switch recall that affects 2.8 million vehicles worldwide and is linked to 13 deaths. NHTSA gave the company a deadline of April 3rd to finish answering all of the questions. Well its a week after the deadline, NHTSA has announced it will fine GM $7,000 per day starting on April 3rd because the company hasn't answered all of the questions and being slow to respond. At this current time, the total fine stands at $28,000. In a letter released last night, NHTSA said General Motors hasn't answered a third of its questions, including several that required no special technical expertise such as what data it looked at when deciding not to issue a recall before this year. "These are basic questions concerning information that is surely readily available to GM at this time. It is deeply troubling that two months after recalling the vehicles, GM is unwilling or unable to tell NHTSA whether the design of the switch changed at any other time," said the agency. NHTSA also warned that it could ask the Department of Justice to force GM's hand. Now NHTSA does state that General Motors sent the agency a note on March 20th saying that it would need more time to answer the questions. Then on on April 4, GM told the agency that it wouldn't be able to answer all the questions since it has an ongoing outside investigation by former U.S. attorney Anton Valukas. He is looking into GM's handling of the recall that goes back to 2001. As you might have guess, NHTSA isn't exactly pleased about this. “You explained that GM did not fully respond because an investigation by Anton Valukas and his team was in progress. This was the first time GM had ever raised Mr. Valukas’ work as a reason GM could not fully provide information to NHTSA in this timeliness investigation. Mr. Valukas’ investigation is irrelevant to GM’s legal obligation to timely respond to the special order and cooperate fully with NHTSA,” said NHTSA general counsel O. Kevin Vincent. General Motors spokesman Greg Martin tells The Detroit News the company has been fully cooperative by handing over 271,000 pages of information. “GM has produced nearly 21,000 documents totaling over 271,000 pages through a production process that spans a decade and over 5 million documents from 75 individual custodians and additional sources. Even NHTSA recognizes the breadth of its inquiry and has agreed, in several instances with GM, to a rolling production schedule of documents past the April 3rd deadline. We believe that NHTSA shares our desire to provide accurate and substantive responses. We will continue to provide responses and facts as soon as they become available and hope to go about this in a constructive manner. We will do so with a goal of being accurate as well as timely,” said Martin. Martin didn't say if the company would contest the fine or not. Source: Automotive News (Subscription Required), The Detroit News, Motoramic William Maley is a staff writer for Cheers & Gears. He can be reached at [email protected] or you can follow him on twitter at @realmudmonster. View full article
