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Daimler's U.S. Truck Unit Fined $30 Million by the NHTSA for Delaying Recalls

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【Summary】Daimler AG’s North American truck unit on Thursday agreed to pay a $30 million civil penalty from the National Highway Traffic Safety Administration (NHTSA) to resolve an investigation over delayed recalls. It’s the second time since 2019 the German automaker has agreed to settle a probe by U.S. auto safety regulators.

FutureCar Staff    Dec 31, 2020 11:30 AM PT
Daimler's U.S. Truck Unit Fined $30 Million by the NHTSA for Delaying Recalls

No automaker wants to be in a position where they are forced to recall a vehicle for safety issues. In addition to addressing passenger and vehicle safety, a recall can also impact an automaker's sales numbers and reputation.  

But in order to sell their vehicles in the U.S., global automakers must make sure their vehicles are problem free, a task that falls on the National Highway Traffic Safety Administration (NHTSA). Not complying with the NHTSA's guidance to address a recall in a timely fashion can lead to hefty fines, which is what happened to Mercedes Benz's parent company Dailmer.

Daimler AG's North American truck unit on Thursday agreed to pay a $30 million civil penalty to resolve an investigation over delayed recalls. It's the second time since 2019 the German automaker has agreed to settle a probe by U.S. auto safety regulators.

Daimler's U.S. truck brands include Freightliner and Western Star.

The NHTSA said Daimler Trucks North America failed to recall vehicles in a timely fashion and comply with reporting requirements after the agency opened a probe in April 2018 of about 464,000 vehicles.

"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," NHTSA Deputy Administrator James Owens said in a statement.

There are no known accidents or injuries associated with any of Daimler's voluntary recalls.

Automakers can either issue voluntary recalls for any problems, which most do, or the NHTSA can impose a recall by court order for more serious safety problems. Most recall investigations however originate from drivers filing complaints with the NHTSA.

As part of the settlement with the NHTSA, Daimler Trucks agreed to establish an advanced data analytics program to enhance its ability to detect and to investigate potential safety defects. The analytics program was part of a two-year consent order that the NHTSA had the power to extend for one additional year.

As part of the restitution with the NHTSA, Daimler Trucks must pay $10 million upfront and spend an additional $5 million on various projects to enhance safety. The agreement includes an additional $15 million deferred penalty if Daimler does not comply with the consent order.

Daimler Trucks agreed to meet with NHTSA on at least a monthly basis as part of the settlement.

Daimler Trucks said in a statement that its focused on "building safe, efficient and reliable commercial vehicles." "We appreciate the opportunity to summarily resolve this matter," the company added.

In December 2019, Daimler's Mercedes-Benz USA unit agreed to a $20 million civil penalty over its handling of U.S. vehicle recalls after NHTSA said it failed to notify owners in a timely fashion in some recalls, did not submit all reports and did not launch at least two recalls in a timely fashion.

Although the recent fines imposed by the NHTSA involve Daimler truck models, Mercedes Benz was forced to recall thousands of passenger vehicles in 2016.

In 2016 Mercedes-Benz recalled 6,858 2017 E300 Sedan and E300 Sedan 4Matic models over concerns with the fuel system. The problems could lead to damage to the fuel pump, pressure sensor, or fuel gauge could occur resulting in a possible engine stall. The remedy was to repair a wiring harness.

The National Traffic and Motor Vehicle Safety Act of 1966 gives NHTSA the authority to issue vehicle safety standards and to require manufacturers to recall vehicles that have safety-related defects or do not meet Federal safety standards. 

Since the Act was enacted, the NHTSA has recalled more than 390 million cars, trucks, buses to address safety concerns.

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