The National Highway Traffic Safety Administration fined Volvo for allowing 32,000 potentially-defective vehicles to remain on highways longer than necessary. The car maker allegedly violated federal regulations that demand timely product recalls on vehicles in Illinois and around the country.
Products liability law protects consumers from the negligence of manufacturers who make unsafe products or hide news about dangerous products. Volvo apparently was late in notifying the NHTSA and consumers that some of its cars had unsafe air bags, stall-prone engines and incorrect tire-pressure labeling.
The car maker paid a $1.5 million fine to settlement the government's claim.
A vehicle manufacturer is obligated to let the government know within five days when one of its products is defective. The NHTSA accused Volvo, which heavily promotes the safety of its vehicles, of delaying seven recalls in 2010 and 2012. A car maker that willfully hesitates to inform the government and the public of product problems endangers innocent drivers and passengers.
Volvo agreed to the settlement without taking blame for the late notifications. The car maker escaped paying a heftier fine of more than $17 million, the upper limit of NHTSA fines doled out for delayed recalls. A new transportation proposal that is current before lawmakers might double that limit.
Volvo's settlement was also lower than civil penalties collected from some of its competitors. BMW was fined $3 million earlier this year for illegally postponing 2010 recalls for almost 340,000 cars. Toyota paid the government more than $16 million in 2010 when it did not quickly recall over 2 million vehicles for accelerator problems.
The fines are meant to discourage all car manufacturers from waiting to let the public know about vehicle safety problems. By settling out of court, Volvo did not admit that it broke the law. Volvo company officials promised that the car maker worked to improve its quality and safety controls.
Source: New York Times, "Government Fines Volvo $1.5 Million for Delaying Recall Reports," Christopher Jensen, July 3, 2012