5 car companies that (apparently) don’t cheat

Does every automaker cheat or cover up safety problems?

There are times when it certainly seems so. Volkswagen (VOW3.DE) is only the latest big carmaker to get busted for breaking the rules, with "defeat devices" on 450,000 U.S. diesel models that shut down emission controls during normal driving, allowing the cars to spew pollution. That revelation comes after a record year for recalls in 2014 and some high-visibility tussles between regulators and many of the biggest brands on showroom floors.

Critics of the auto industry contend that rule-breaking is widespread, with regulators legally and financially outgunned by huge companies that have been calling the shots for decades. So we decided to research whether every big automaker has been tarred by scandal recently, or if there are still some brands customers can purchase with a perfectly clear conscience.

We started with a list of the 12-biggest automakers by sales volume, then identified those with prominent regulatory problems during the last several years. A safety recall in itself doesn’t qualify as a regulatory problem, because automakers are actually fixing a defect when they issue a recall, as they’re supposed to do. When the government has to force an automaker to issue a recall, however, that’s a red flag suggesting a cover-up, because the company didn’t handle the problem on its own.

These automakers have had significant run-ins with regulators since 2010:

General Motors (GM). Last year’s long overdue recalls involving defective ignition switches on millions of cars are linked with more than 100 deaths, one reason the government fined GM a hefty $900 million.

Ford (F) overstated fuel economy on the Fiesta, Lincoln MKZ hybrid and several other models in 2013 and 2014. While the automaker said it was a mistake, regulators monitored the fixes, including rebates Ford sent to more than 200,000 customers ranging from $125 to $1,050.

Toyota (TM). In 2014, Japan’s biggest automaker paid a $1.2 billion fine—the largest ever for a car company in the United States—for concealing information about defective gas pedals and floor mats in millions of vehicles that could cause unintended acceleration and were linked with several deaths.

Fiat Chrysler (FCAU) was fined $110 million this year and forced to offer buybacks on 200,000 flawed vehicles relating to a sweeping series of recalls.

Honda paid a $70 million fine earlier this year for failing to inform the government about 1,700 incidents involving deaths, injuries or important safety issues. Such delays might have exacerbated safety shortcomings that led to deaths in Honda vehicles.

Hyundai. Like Ford, this Korean automaker (which includes Kia) overstated fuel economy on several models, including the Hyundai Accent and Elantra and the Kia Ria and Soul. The government said the mileage overstatement, which affected 1.2 million cars, was “systemic,” and it fined Hyundai $300 million.

Volkswagen. This year’s biggest auto-industry scandal (so far) is the apparently deliberate effort by VW to turn off emission controls on all of its diesels—except when software is able to detect that an emissions test is underway. Fixing the software could reduce the vehicle’s gas mileage or power, or both, which is likely to inflame VW customers.

With those seven automakers ruled out, there are five left that apparently play by the rules, or at least haven’t been caught breaking them: Nissan, BMW, Mercedes, Subaru and Mazda. But some caveats are in order.

First, all of those manufacturers are parties to the huge recall involving faulty air bags supplied by Takata, which dates to 2008 and has been mushrooming ever since. That means the government is scrutinizing whether the automakers turned over relevant safety records quickly enough in the past. That could uncover weak reporting practices that may have been a de facto industry standard at the time, leading to penalties such as that leveled against Honda earlier this year.

Regulators have also forced Mercedes to lower MPG ratings on some C Class models, and BMW to do the same on a few variants of the Mini. But the discrepancies have been minor—as small as 1 MPG—and the changes affect relatively few cars. And neither company has been fined. Mercedes' parent Daimler-Benz was also nabbed in an overseas bribery scandal, settled in 2010, which we generously consider a non-disqualifyingn footnote to this list, since it didn't affect automobiles sold in the United States.

Most automakers say they’re tightening up safety practices and their compliance with government rules. But the aggressive prosecution of lapses may not be over. “What's really changed is the government's willingness to chase these things down and hold automakers accountable,” says Karl Brauer of car-research site Edmunds.com. “We'll likely see more in the future.” That will make cars safer, eventually, but for the time being, it could reinforce the car business's image as an industry of cheaters.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.

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