Honda Motor Co. (NYSE:HMC) In Trouble Over Unreported Deaths
Honda Motor Co. (NYSE:HMC) revealed that it has been unsuccessful to report over 1,700 injury or death claims that involved its vehicles to American regulatory authorities. This is not a simple matter and will receive a lot of outcry from public, law and government alike and the automakers might end with a hefty fine worth $ 35 million.
The National Highway Traffic Safety Administration received a synopsis from the automobile company that presents an in-depth review of the violation. Honda Motor Co. (NYSE:HMC) has placed the blame on accidental data entry glitch or a programming error that has affected data that spans over 11 years.
The NHTSA continues to investigate and hasn’t revealed any details of the filed synopsis. The Honda Motor Co. (NYSE:HMC) executive VP of North American region, Rick Schostek has stated that the company has been honest in identifying where the fault lies with the company and where it is due to a mere systematic glitch.
A total of 1,144 injury-claim reports seem to have been omitted from the Honda Motor Co. (NYSE:HMC) records. This information might have stayed hidden, if it wasn’t for the investigation into the Takata Corp. air-bag evocation. In other more serious instances, Honda Motor Co. (NYSE:HMC) refrained from sharing integral information from police reports with NHTSA.
NHTSA is currently engaged in investigating Honda Motor Co. (NYSE:HMC)’s failure to inform the regulators of death related to air-bag problems at the appropriate time. Honda Motor Co. (NYSE:HMC) has submitted their response with the investigative committee that is working on uncovering more facts.
The company president stated that the automaker management team seemed to have misinformation on safety regulations that fell under the US law. The Japanese government is currently forming teams that are overlooking the Takata air-bag recalls in addition to supervising the Honda Motor Co. (NYSE:HMC)’s reporting errors.
Honda Motor Co. (NYSE:HMC) claims that of 1,729 incidents that involved Takata air-bag inflator issues, NHTSA knew about eight of these cases.
A former NHTSA administrator views this situation as quite shocking on Honda Motor Co. (NYSE:HMC)’s part to have behaved this way and feels the company will inevitably be hit with $35 million fine.
The company faces approx. $7,000fine on per violation per day basis for not following the law. According to other sources, the fine might even exceed $35 million in view of the severe instances of law breaking.
So far, NHTSA has hit Ferrari with maximum fine last month, which was worth $3.5 million. The motor sport company had failed to inform regulators of severe defects that resulted in three deaths.
Honda Motor Co. (NYSE:HMC) is correcting its data to keep a record of all injury and death claims that were omitted in the past.
These allegations will have severe effect on the repute that Honda Motor Co. (NYSE:HMC) has in the market. The company stocks have gone up 1.4% in the Japanese market, to 3,741.50 yen. This is a 14% decline as opposed to a hike of 8.2% witnessed by Topix index.