Hyundai and Kia Misled the US Government

Hyundai and Kia will pay the U.S. government $210 million. The fines relate to two actions. First, the companies were too slow to announce the recall of 1.6 vehicles with their Theta II engines. The second is far more serious and calls the honesty of management into question. According to The National Highway Traffic Safety Administration, “inaccurately reported certain information to NHTSA regarding the recalls.”

Describing the penalties, NHTSA Deputy Administrator James Owens, said “Safety is NHTSA’s top priority. It’s critical that manufacturers appropriately recognize the urgency of their safety recall responsibilities and provide timely and candid information to the agency about all safety issues.”

Based on the consent order, Hyundai will pay a civil penalty that could total $140 million. Part of this is an upfront payment of $54 million. It must also invest $40 million in specified safety performance measures. Finally, it may have to pay another $46 million “if specified conditions are not satisfied.”

Based on a second consent order, Kia is subject to a total civil penalty that could total $70 million. This includes an initial payment of $27 million. It must also spend $16 million on specified safety performance measures. It will have to pay a $27 million deferred penalty if specified conditions are not met.

Finally, “In addition to monetary penalties, Kia will be creating a new U.S. safety office headed by a Chief Safety Officer, and Hyundai will be building a U.S. test facility for safety investigations.”

The misfire belongs at the feet of José Muñoz, the President and CEO, Hyundai Motor North America and President and CEO, Hyundai Motor America, and SeungKyu Yoon, President, and CEO of Kia Motors North America. One has to ask how this happened if they were doing their jobs. One has to wonder what their parent companies think about how the problems were inappropriately handled.