U.S. DOT Fines Spartan Motors Inc. and Forest River Inc. for Failure to Announce Recalls and Report Safety Defects to NHTSA
Thursday, July 9, 2015
Contact: Gordon Trowbridge, 202-366-9550, Public.Affairs@dot.gov
Failure to meet Early Warning Requirements led to the civil penalties
WASHINGTON – U.S. Transportation Secretary Anthony Foxx today announced civil penalties and other enforcement actions against two heavy-duty vehicle manufacturers for violating requirements to report safety defects and other critical information to the department’s National Highway Traffic Safety Administration.
The companies, Spartan Motors Inc. and Forest River Inc., each acknowledged failure to launch timely safety defect recalls as required by the Motor Vehicle Safety Act, and to report critical data such as technical service bulletins and Early Warning Report data.
“Safety is a critical shared responsibility, and when manufacturers fail to meet their responsibility, the Department will enforce the law,” Secretary Foxx said. “Today’s action sends a message to these manufacturers and to others that withholding critical safety information is not an option.”
The investigations resulted in part from NHTSA’s efforts to tighten its enforcement of safety reporting requirements. In the past 10 months, the agency has imposed significant civil penalties against Honda and Ferrari for failure to meet Early Warning Report requirements to provide information on deaths, injuries, warranty claims and other data and has imposed civil penalties against manufacturers including Hyundai and Graco for untimely recalls.
Forest River, an Indiana-based maker of recreational vehicles, acknowledged it failed to report early warning data and failed to launch two safety recalls in a timely fashion. Forest River agreed as part of a consent order to pay a $35 million civil penalty, including a $5 million cash penalty and a $30 million deferred amount.
The company also is required to retain an independent monitor to conduct periodic audits of the company’s safety practices. Failure to resolve any issues discovered in those audits will result in deferred portions of the civil penalty coming due -- $3 million for a first violation, $7 million for a second and $20 million for a third. Forest River also is required to hire an in-house consultant to assist in meeting requirements of the consent order.
Spartan Motors, a Michigan-based maker of specialty heavy-duty vehicle chassis, emergency-response vehicles and other products, acknowledged that it failed to report service bulletins to NHTSA as required by law and that Spartan did not launch three previously-initiated safety recalls in a timely manner. Under a consent order, between NHTSA and Spartan, Spartan is required to launch recalls to remedy three additional safety defects that NHTSA identified in previously undisclosed service bulletins. Spartan also will pay a total civil penalty of $9 million, including a $1 million cash penalty. The company commits to spending $3 million on compliance with requirements of the consent order; the remaining $5 million will come due immediately if Spartan fails to comply with the consent order.
The consent order requires the company to undergo a third-party audit of its reporting practices; develop new written reporting procedures; and engage in an education and outreach campaign aimed at increasing awareness of reporting requirements in the medium and heavy-duty vehicle industry.
“These companies face not just financial penalties, but increased oversight designed to ensure these safety lapses are not repeated,” said NHTSA Administrator Mark Rosekind. “NHTSA will continue to use its enforcement authority in innovative ways to protect public safety.”
The Department of Transportation is seeking enhanced safety enforcement authority as part of the GROW AMERICA Act, a comprehensive transportation investment proposal. One provision in the proposed act would improve the department’s safety authority by increasing the statutory cap on NHTSA civil penalties from $35 million to $300 million. Another would add imminent hazard authority to address safety risks more quickly.
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