DETROIT (AP) — Ford Motor Company (NYSE:F) has paid the top penalty of $17.35 million to settle government allegations that the company was slow to recall nearly a half-million SUVs last year.
The National Highway Traffic Safety Administration contends that Ford knew about the problem in May of 2011, but failed to take action until the agency began investigating the Escapes in July of 2012. The probe was started after a teenage Arizona girl died in an Escape crash in January of last year.
Regulators felt they had a case that Ford Motor Company (NYSE:F) violated the law by delaying the recalls, although Ford denied any violations, according to a June 28 settlement agreement posted online by NHTSA.
It’s the third time in less than a year that an automaker has paid a fine or reached a settlement with NHTSA to sidestep lengthy public battles with the agency. In December, Toyota Motor Corporation (ADR) (NYSE:TM) paid the maximum fine in a case that also involved a delayed recall. Earlier this year, Chrysler reached a deal to install trailer hitches on some older Jeep Grand Cherokees and Libertys, avoiding a wider recall.
Recall delays are a significant problem, said Joan Claybrook, NHTSA administrator under President Jimmy Carter and a leading auto safety advocate. If an automaker can delay a recall, the number of vehicles affected declines, she said.
“In the past, a lot of companies have delayed, delayed, delayed and tried not to face the music, only to have it become a big public issue,” Claybrook said. “When it becomes a big public issue, they will act immediately.”
Ford Motor Company (NYSE:F) agreed to the recall in July 2012, a week after it was asked for information about the Escapes. Eventually Ford turned over the information, and NHTSA found evidence that Ford knew about the problem more than a year earlier.
“It is our job to ensure that manufacturers are held accountable to address safety issues promptly and responsively,” NHTSA said in a statement. “Recalls are a serious safety matter.”
At the time of the recall, NHTSA said it had 68 complaints about the Escape problem, including 13 crashes, nine injuries and the death in Arizona.
Ford Motor Company (NYSE:F) said in a statement that it agreed in June to pay the fine to avoid a protracted dispute with NHTSA. Spokeswoman Kelli Felker said Ford faced a complex situation with a low number of complaints. The problem was compounded by improper repairs made to the vehicles, she said.
“We are absolutely committed to addressing potential vehicle issues and responding quickly for our customers,” Felker said Thursday.
On the older Escapes the cruise control cables can snag on the plastic cover atop the engine and cause the gas pedals to stick. For the problem to happen, the pedals must be pushed to or near the floor, and the cruise control cables must have been bent or moved from their original position, Ford Motor Company (NYSE:F) said at the time. Cable positions can be changed when the SUVs are serviced, the company noted.
The Escape was redesigned after the 2012 model year,
Dealers were to replace the fasteners on the engine cover, raising them so there’s plenty of room for the cruise control cable.
NHTSA said when the Escapes were recalled that investigators would look into whether the sticky throttles could have been caused by repairs made as part of a 2004 accelerator cable recall.
Felker urged Escape owners who have not had their SUVs repaired to take them to a dealer as soon as possible.
Claybrook said it’s clear that Ford realized it made a mistake. “It’s really important for the agency to penalize these companies for not being timely,” she said.
Last December, Toyota paid a $17.35 million fine for failing to quickly report problems to NHTSA and for delaying a safety recall. At the time, it was the largest single fine ever assessed against a car company over safety defects. In 2010, Toyota paid a total of $48.8 million in fines for three similar violations.
The fines are a tiny fraction of both companies’ earnings. Last week Ford said it made $1.23 billion in the second quarter, while Toyota made $3.2 billion in the first quarter.
A key difference between the two cases is that Ford doesn’t appear to have fought the fine the way Toyota did, Claybrook said.
“If you’re going to have a fight with a government agency, be sure you have good grounds to have that fight,” she said. “Toyota made a lot of mistakes. Ford Motor Company (NYSE:F) is shrewder. They just didn’t want to have that fight.”
The article Ford Pays Maximum Fine Over Escape Recall originally appeared on Fool.com.
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