U.S. hits Volvo Group North America with $130 million penalty over delayed recalls
By David Shepardson
WASHINGTON (Reuters) - A U.S. auto safety agency said Monday it was imposing a $130 million civil penalty on AB Volvo unit Volvo Group North America, following an investigation that found the manufacturer of heavy-duty trucks and buses failed to recall vehicles in a timely fashion.
The National Highway Traffic Safety Administration (NHTSA) said Volvo Group agreed to a three-year consent order that includes one of the largest-ever penalties for violations under the recall law.
Volvo Group North America agreed to oversight by an independent third-party auditor and will meet regularly with NHTSA to ensure it addresses any potential safety issues, the agency said.
"NHTSA will use the full scope of our authorities to protect the public from safety defects and from manufacturers that create potential safety problems by failing to comply with the law," Acting NHTSA Administrator Ann Carlson said.
Volvo Group North America is the parent company to Mack Trucks, Nova Bus, Prevost Car (US), VNA Holding and Volvo Group Canada.
The company said it appreciated "the opportunity to summarily resolve this matter, and we look forward to continuing our close work with NHTSA to identify and close any compliance gaps. Wide-ranging improvements in our North American safety processes and systems are already underway."
NHTSA opened an investigation in October 2018 into the company's compliance with recall requirements, including recall timeliness, manufacturer communications and early warning reporting requirements.
NHTSA said Volvo Group also failed to submit certain quarterly recall reports, manufacturer communications and did not report some death and injury incidents and submit certain field reports.
Volvo Group must pay $65 million within 60 days and $45 million is due if it fails to comply with the agreement.
Volvo is spending $20 million to develop "a safety data analytics infrastructure to enhance its ability to detect and investigate potential safety defects," NHTSA said, adding the company will develop written procedures and training for its employees on compliance.
NHTSA may extend the agreement for up to two additional years if required.
The third party auditor must evaluate all of its recalls since July 2013 and recommend any changes warranted.
Volvo Group is a separate entity from Volvo Cars.
(Reporting by David Shepardson; Editing by Chizu Nomiyama and Bernadette Baum)