Ford Hit With $165 Million Penalty on Recall Failure
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Ford Motor Co. agreed to a $165 million civil penalty to settle allegations the company failed to recall cars with defective rearview cameras in a timely manner, the second largest fine ever levied by the National Highway Traffic Safety Administration.
Ford must pay a $65 million fine with an additional $55 million deferred until NHTSA determines the company has fulfilled the obligations of its consent order, the agency said a statement Nov. 14. The automaker must also spend $45 million to develop a safety data analytics system and make other investments to improve its compliance with safety rules, according to the deal’s terms.
The penalty further complicates Ford’s efforts to stem rising warranty costs that are weighing on profits and driving up costs. CEO Jim Farley has said the company’s costs put the automaker at a disadvantage to rivals and he is pressuring executives to slash billions from the company’s warranty repair bill.
Now, the most-recalled automaker in the U.S. will face additional scrutiny from the regulator.
Ford will review all of its recalls during the last three years to assess whether all affected vehicles had been called back. The company also agreed to provide the agency with a monthly list of safety issues it is evaluating, the company said in a securities filing. The company will meet with agency officials each quarter to review and answer questions about items on the list.
The automaker agreed to hire an independent third party of NHTSA’s choice to assess its compliance with the consent order and U.S. auto safety rules, according to Ford’s filing. The consent order will last for three years, with an option to extend for an additional year at the agency’s choice.
“When manufacturers fail to prioritize the safety of the American public and meet their obligations under federal law, NHTSA will hold them accountable,” NHTSA Deputy Administrator Sophie Shulman said in a statement.
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Ford said in a statement “we appreciate the opportunity to resolve this matter with NHTSA and remain committed to continuously improving safety and compliance at Ford.”
The consent order follows an investigation launched by NHTSA in 2021 into a 2020 recall by Ford of more than 600,000 pickups, SUVs, vans and cars over faulty rearview cameras. No reports of deaths or injuries were involved in the callback.
NHTSA opened the so-called recall query “to investigate both the timeliness and scope of Ford’s rearview camera recall, and Ford’s compliance with reporting requirements.”
