Major Penalty Imposed on Ford for Safety Compliance Failures

Ford Motor Co. faces a potential $165 million penalty from the National Highway Traffic Safety Administration for delayed and inaccurate vehicle recalls, primarily involving defective rearview cameras.

At a Glance

Ford to pay up to $165 million for slow recall actions and inaccurate information.
Penalty is second-largest in NHTSA history, following Takata’s airbag inflator fine.
Over 620,000 vehicles in the U.S. affected by faulty rearview cameras.
Ford agrees to consent order, including $65 million payment and compliance improvements.
Independent third party to oversee Ford’s recall performance for at least three years.

Ford’s Costly Misstep in Vehicle Safety

Ford Motor Co. is grappling with a potentially record-setting $165 million penalty from the National Highway Traffic Safety Administration (NHTSA) due to significant delays and inaccuracies in its vehicle recall actions. The fine, which primarily stems from defects in rearview cameras, stands as one of the largest civil penalties ever imposed by the regulatory authority, second only to the infamous Takata airbag incident.

The penalty comes after an NHTSA investigation revealed that Ford violated multiple laws by delaying recalls and providing inaccurate information. The problematic recall, initiated in September 2020, involved over 620,000 vehicles in the U.S. and more than 700,000 in North America, including popular models such as F-Series pickups, Mustangs, and various SUVs.

NHTSA fined Ford $165 million for being slow to issue a recall for defective rearview cameras.https://t.co/hniAkVbgFE

— Motor1 (@Motor1com) November 14, 2024

Consent Order and Compliance Measures

Under a consent order with NHTSA, Ford has agreed to a $65 million immediate payment, with an additional $45 million earmarked for compliance improvements. The remaining $55 million is deferred and can potentially be reduced if Ford demonstrates significant improvements in its defect identification and reporting processes.

“Timely and accurate recalls are critical to keeping everyone safe on our roads. When manufacturers fail to prioritize the safety of the American public and meet their obligations under federal law, NHTSA will hold them accountable.” – Sophie Shulman

As part of the agreement, an independent third party will oversee Ford’s recall performance for at least three years. The automaker must also review all recalls from the past three years and improve its recall decision-making process. To enhance its capabilities, Ford will invest $45 million in advanced data analytics, a new document system, and a testing lab.

Ford’s Response and Future Outlook

While Ford has disagreed with some of NHTSA’s assertions, the company has expressed commitment to improving safety and compliance. In a statement, Ford acknowledged the opportunity to resolve the matter and emphasized its dedication to enhancing safety measures.

“We appreciate the opportunity to resolve this matter with NHTSA and remain committed to continuously improving safety. Wide-ranging enhancements are already underway with more to come, including advanced data analytics, a new in-house testing facility, among other capabilities.” – Ford

The penalty comes at a challenging time for Ford, as the company works to address high warranty and recall costs that have affected its profits. CEO Jim Farley has emphasized a focus on cost reduction and efficiency, stating, “We’re going to continue to stay laser-focused on cost and getting leaner as a company.” This renewed commitment to safety and compliance will be crucial as Ford navigates ongoing investigations into other recall issues and strives to regain consumer trust in the competitive automotive market.