Ford Motor Company was just hit with a nine-figure fine and a three-year consent order.
On Thursday, the National Highway Traffic Safety Administration (NHTSA) hit Ford with a $165 million civil penalty for the automaker’s failure to effectively recall vehicles in a timely manner — a violation of the National Traffic and Motor Vehicle Safety Act.
Specifically, the agency contends Ford Motor Company did not act quickly enough to recall models with defective rearview cameras and “failed to provide accurate and complete recall information” in the process. The consent order, as a formal part of the NHTSA’s penalty against Ford, includes a $65 million upfront payment. Depending on Ford’s ability to comply with provisions laid out over the next three years (possibly four, if it doesn’t comply to the agency’s satisfaction), it may assess an additional $55 million deferred fine and $45 million for “performance obligations”.
The NHTSA’s latest penalty comes in as its second largest to its $200 million fine levied against Takata for its defective airbag inflators, which led to the recall of several million vehicles.
In its announcement, the NHTSA specifically cites an investigation into a recall Ford opened in September 2020. In that recall (NHTSA number 20V-575), Ford included 620,246 vehicles in the recall population for having potentially defective rearview cameras, where the noncompliance with safety standards came about because of “insufficient electrical conductivity within the printed circuit board (PCB) internal to the camera leading to intermittent rearview camera operation”. The agency’s Office of Defects Investigation (ODI) opened an investigation in August 2021 to determine whether Ford’s timeliness and scope with the recall were appropriate, and whether it actually complied with reporting requirements. However, in Thursday’s consent order, the agency is requiring Ford to make changes to its recall process to bring it into compliance with federal law.
Ford issued two additional recalls for the same issue — one in 2022 and the other in 2024.
The NHTSA lays out requirements for Ford to improve its recall decisions
Beyond the financial hit, the agency decreed through this consent order that Ford will review its last three years’ worth of recalls “to ensure they have been properly scoped and, if necessary, file new recalls.” It must also build a new test lab focusing on low-voltage electronics integrity and invest in a vehicle identification number-based traceability system to track components at the VIN level. Under the order, the NHTSA further says, “Ford is required to develop and implement safety data analytics infrastructure as well as an end-to-end information and document interface platform with all relevant information for internal and NHTSA-initiated safety investigations.”
Ford Motor Company, for its part, did not publish a release responding to the agency’s action, at least at time of writing. A company spokesperson told Automotive News: “We appreciate the opportunity to resolve this matter with NHTSA and remain committed to continuously improving safety and compliance at Ford.” To that end, the company will be required to meet with NHTSA quarterly during the consent order time frame.
Editorial: Depending on the outcome of Ford reviewing its recalls, the company could face more massively expensive repair work to bring itself into line with the terms of the NHTSA’s consent order.
The company issued more than 100 recalls throughout 2022 and 2023, covering millions of vehicles for some massively expensive issues. Throughout 2023, Ford spent around $4.8 billion on recall repairs (per a Bloomberg report). CEO Jim Farley implemented a “build-and-hold” approach to catch issues before they escalate to a costly recall campaign. Even with that effort, though, the Blue Oval has issued 58 recalls so far in 2024 — tying for first place with Chrysler.
While Ford likely already has systems in place for traceability along the lines of the NHTSA’s order, the “performance obligations” it lays out compels the automaker to spend a certain amount of money improving those processes. For example, it must spend $20 million on “advanced safety data analytics capabilities”. Ford must also spend $10 million on the end-to-end information and document interface platform, $10 million on the multi-modal test lab to analyze low-voltage electronics (including rearview cameras), and $5 million on “enhancing and developing its information technology solution” to more effectively trace vehicle components. The company will also have to certify to the NHTSA every six months that its VIN lookup tool is compliant with the Department of Transporation’s Code of Federal Regulations (CFR).
