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Brett Emison
Brett Emison
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New Recall Fines Will Make Drivers Safer

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Proposed Recall Fines Will Make Highways SaferNew recall fines included in the transportation bill passed in the Senate (but awaiting approval in the House of Representatives) will make our highways safer. The bill permits the National Highway Transportation Safety Administration (NHTSA) to levy hefty fines against auto makers who know about safety defects, but fail to recall vehicles in a timely manner. The current fine – capped at $17 million – would increase to a maximum of $250 million.

Consumer Reports' advocacy group says the increase is necessary to prevent car makers worth billions of dollars from considering a $17 million fine simply a cost of doing business. That's just what Toyota appeared to do in delaying recalls due to its sudden acceleration problems.

NHTSA concluded that Toyota unreasonably delayed two separate sudden acceleration recalls and fined Toyota the maximum amounts of $32 million. But Toyota – in internal documents – bragged about saving $100 million by delaying the recall. Under the current fine cap, it was cost-effective for Toyota to delay a critical safety recall and pay NHTSA fines rather than protect the public. The fines proposed in the pending transportation bill will alter that formula.

If companies can't be counted on to do the right (and safe) thing for their customers, perhaps they will do it for their bottom line.

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(c) Copyright 2012 Brett A. Emison

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