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BMW hit with $40m penalty over safety lapses

By Dave Leggett | 22 December 2015

The US National Highway Traffic Safety Administration (NHTSA) has imposed a US$40m civil penalty and performance requirements on BMW North America for a series of safety violations.

It said in a statement that BMW acknowledged that it "violated requirements to issue a timely recall of vehicles that did not comply with minimum crash protection standards, to notify owners of recalls in a timely fashion, and to provide accurate information about its recalls to NHTSA". NHTSA said it imposed a US$3m civil penalty to BMW in 2012 for similar violations.

"NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety," said US Transportation Secretary Anthony Foxx. "The Consent Order NHTSA has issued not only penalises this misconduct, it requires BMW to take a series of steps to remedy the practices and procedures that led to these violations."

The Consent Order resolves a NHTSA investigation into whether the company failed to issue a recall within five days of learning that 2014 and 2015 Mini Cooper models failed to meet regulatory minimums for side-impact crash protection.

In October 2014, a Mini 2 Door Hardtop Cooper failed a crash test designed to determine whether the vehicle met crash-protection minimums. The company responded that the vehicle was listed with an incorrect weight and would pass the test if conducted at the proper weight rating, but agreed to conduct a recall to correct the incorrect weight rating on the vehicle's Tyre Information Placard and to conduct a voluntary service campaign, short of a recall, to add additional side-impact protection.

In July 2015, NHTSA conducted a second crash test at the corrected weight rating on a vehicle with the additional side-impact protection, and the vehicle again failed. At that time, NHTSA learned that BMW had not launched the service campaign it had agreed to conduct. Under the Consent Order, BMW acknowledges that it failed to recall the noncompliant vehicles in a timely fashion. It also acknowledges additional violations discovered in NHTSA's investigation, including failing in multiple recalls since its 2012 consent order to notify owners and dealers of recalls in a timely fashion and to provide required quarterly recall completion reports on time.

"The requirement to launch recalls and inform consumers in a timely fashion when a safety defect or noncompliance is discovered is fundamental to our system for protecting the traveling public. This is a must-do," said NHTSA Administrator Mark Rosekind. "For the second time in three years, BMW has been penalised 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."

The order's US$40m civil penalty includes US$10m due in cash, a requirement that the company spend at least US$10m meeting the order's performance obligations, and US$20m in deferred penalties that will be due if the company fails to comply with the Order or commits other safety violations.