Daimler to settle $20 million civil penalty over vehicle recalls in the US

Daimler AG’s Mercedes-Benz USA has agreed to settle the $20 million civil penalty for vehicle recalls in the US. The government investigation on the 1.4 million recalled vehicles lasted for almost a year.

The German automaker will pay $13 million and another $7 million if the company does not abide by the agreement, as stated on the terms of settlement. The National Highway Traffic Safety Administration (NHTSA) said that Daimler did not notify customers on some vehicle recalls at an opportune time, failed to submit reports and launch at least two recalls.

In a statement, Mercedes-Benz USA said “we believe that we did not deliberately do anything wrong, but unfortunately we missed some deadlines in informing the agency of the measures we had taken in fulfilling their requirements.”

In addition, it said that the company “agreed to resolve this matter in an effort to answer NHTSA’s questions and move forward.”

The company is set to meet with the NHTSA quarterly for over a year regarding its recall performance. The automaker is “currently developing more robust procedures with regard to reporting noncompliance concerns.”

NHTSA said that it has also noted “the substantial financial investment that MBUSA has made in the development and rollout of its automated recall management tool, as well as the hiring of additional personnel and ongoing trainings.”

Aside from that, NHTSA also expressed concerns on “recurring and unannounced failures” in the data system of MBUSA which supplies data to the agency’s Vehicle Identification Number lookup tool. This allows car owners to look up their vehicle and see if it has been recalled.

“The agency’s reporting requirements help ensure that consumers are protected and given important information about how to get recalls repaired,” NHTSA Acting Administrator James Owens said in a statement. “We expect manufacturers to follow their legal obligations to the agency and to consumers in carrying out safety recalls.”