NHTSA Wants to Increase Maximum Car Recall Fines, GOP Disagrees

In 2010 alone, nearly 20 million vehicles were recalled in the U.S. That’s not necessarily a bad thing: on the contrary, it shows that car manufacturers are constantly monitoring their product for defects and make sure that they are rectified.

At least in theory because in reality, sometimes manufacturers fail to notify the National Highway Traffic Safety Administration (NHTSA) of defects in the five-day deadline mandated by U.S. law and try to avoid costly, and image-damaging, recalls.

Imposing a fine is one way to force carmakers to comply with regulations. The US$32 million Toyota had to pay in 2010 in the notorious sudden acceleration cases is the most notorious example.

Yet the NHTSA administrator, David Strickland, believes that the maximum fine of US$17 million his agency can impose is not enough to deter carmakers, according to a Chicago Tribune report.

“We feel it’s high time the penalties are reflective of the size of the industry”, Strickland said during a House Energy and Commerce subcommittee hearing. He added that businesses with “deep pockets” could ignore the current legislation.

Republican Representatives, who run the House, oppose Strickland’s proposal as they think it may harm the recovering automotive industry and make finding common grounds on highway legislation with the Senate more difficult.

“More mandates are not the answer”, said Republican Representative and vice chairman of the commerce, manufacturing and trade subcommittee Marsha Blackburn. She also added that finding support for increasing fines imposed on carmakers among Republicans “would be very difficult”.

The Alliance of Automobile Manufacturers, unsurprisingly, sided with the Republicans on this matter. The Alliance president and CEO Mitch Bainwol said that “there are plenty of incentives to do the right thing” and increasing fines is not the solution.

While the U.S. administration wants to raise fines over delayed recalls and European nations can also fine companies over this issue, in Japan, state agencies aren’t authorized to do the same.