Ford hit with near-record $165mn penalty on recall failure

This is the second-largest fine imposed by the National Highway Traffic Safety Administration.

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 Thursday. 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.

The penalty further complicates Ford’s efforts to stem rising warranty costs that are driving up costs and weighing on profits. Chief Executive Officer 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 bills.

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Now, the automaker that recalls more cars than any other manufacturer in the US will face additional scrutiny from its federal safety regulator.

Ford will review all of its recalls during the last three years to assess whether all affected vehicles have been called back. The automaker also agreed to provide the agency with a monthly list of safety issues it’s evaluating, according to a securities filing. The company will meet with agency officials every quarter to review and answer questions about items on the list.

Ford agreed to hire an independent third party of NHTSA’s choosing to assess its compliance with the consent order and US auto safety rules, according to its filing. The consent order will last three years, with an option for the agency to extend for an additional year.

“When manufacturers fail to prioritise 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 the agency’s statement.

Ford said in a statement that it remains committed to continuously improving its safety and compliance.

The consent order follows an investigation NHTSA launched in 2021 into a 2020 recall of more than 600,000 Ford pickups, SUVs, vans and cars over faulty rearview cameras. There were no reports of deaths or injuries related to the defect.

NHTSA opened the recall query to investigate both the timeliness and scope of Ford’s recall, as well as its compliance with reporting requirements.

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