From left, Hiroshi Shimizu, senior vice president of global quality assurance at Japanese airbag maker Takata, Rick Schostek, executive vice president of Honda North America, and Scott Kunselman, Chrysler's senior vice president of vehicle safety and regulatory compliance, take their seats on Capitol Hill in Washington, Thursday, Nov. 20, 2014, prior to testifying before the Senate Commerce Committee hearing on airbags linked to multiple deaths and injuries in cars driven in the US. (AP Photo/J. Scott Applewhite)
Honda is admitting that it failed to report more than 1,700 injury and death claims about its vehicles to U.S. safety regulators, a violation of federal law.
The Japanese automaker, in statements issued Monday, also said it became aware of the omissions in 2011, yet it took about three years to take action.
The company said it filed documents detailing the lapses on Monday with the National Highway Traffic Safety Administration, which had demanded an explanation on Nov. 3. The agency said at the time that Honda may have failed to report incidents related to air bags made by Takata Corp. as well as other defective parts. Honda has recalled more than 5 million vehicles in the U.S. since 2008 to fix a potentially fatal defect in air bags made by Japanese auto supplier Takata. The air bag inflators can rupture after a crash and injure occupants with shards of metal.
Honda blamed the lapses on inadvertent data entry and computer programming errors, as well as a misinterpretation of the federal TREAD act, a law passed in 2000 requiring faster reporting of deaths, injuries and safety defects by automakers. Under the law, automakers must report each quarter any claims they receive alleging that defective vehicles or parts caused a death or injury.
But Honda said it did not report 1,729 death and injury claims from July 1, 2003, through June 30, 2014. During that 11-year period, the company only reported 1,144 claims, it said in statements. The numbers are the result of an audit conducted by the law firm of Bowman and Brooke that began on Sept. 23.
The unreported claims included one death and seven injuries attributed to faulty Takata air bag inflators, but Honda's statement said those were reported to NHTSA in other unspecified ways from 2009 to 2013.
The unreported death happened on May 27, 2009. Ashley Parham, 18, of Oklahoma City, was driving a 2001 Honda Accord across a high school parking lot in Midwest City, Oklahoma, when it hit another car. The air bag inflated and sent shards of metal into her neck. Her family sued Honda the following month.
Honda acknowledged in its statements that one of its employees recognized the data entry errors in 2011, and the company was made aware of under-reporting by NHTSA in January of 2012. NHTSA on Monday would not answer questions about what action it took, if any, in 2012. The agency said it is reviewing Honda's documents.
"Honda began looking into the issue at that time, but did not take conclusive action," Executive Vice President Rick Schostek said during a teleconference with reporters. He would not take questions. A spokesman said that was because the matter was legally sensitive and the documents had just been submitted to NHTSA.
The company says it is taking corrective action to make sure the lapses don't happen again.
Honda should get the maximum fine for "massively" violating the law, said Clarence Ditlow, head of the Center for Auto Safety, a nonprofit watchdog group. Honda hid more claims than it reported, so NHTSA should refer the case to the Justice Department for a criminal investigation, he said. Ditlow said it "strains credulity" that a sophisticated company like Honda could make so many errors.
NHTSA has the authority to fine automakers up to $35 million for failing to report defects in a timely manner. The agency wants to increase the maximum fine to $300 million.