NHTSA fines Honda the Max — But Honda Should Be Paying More

Under pressure from the National Highway Traffic Safety Administration, Honda has agreed to pay $70 million in fines for concealing vital information about 1,729  fatalities and injuries in its cars, as well as important warranty information,  in violation of federal auto safety laws.

To its credit, NHTSA is assessing Honda the maximum allowed by law — $35 million, for two separate violations, for a fine totaling $70 million. Plus NHTSA now has more ability to monitor Honda’s compliance with the laws in the future.

But — Honda should be paying more. For a huge multi-national, multi-billion-dollar company like Honda, and such repeated serious offenses, $70 million is not enough to act as a real deterrent.

Why isn’t Honda paying more? Because Congress has failed to act, to give NHTSA the authority to levy higher fines. The Obama Administration has been asking Congress to raise the cap on fines for egregious violations of auto safety laws to $300 million. But so far, only Democrats in Congress have introduced bills to raise or outright eliminate the cap. Despite all the hearings and all the hoopla, no Republican has stood up to the auto industry on behalf of the motoring public and proposed giving NHTSA the authority to levy higher fines.

It’s particularly troubling that U.S. Rep. Fred Upton (R-MI), Chair of the House Commerce Committee, keeps blasting NHTSA for not doing more, but has been totally AWOL when it comes to doing anything to give the agency the authority and resources it needs to do the job. So far, he’s failed to propose a single bill.  He talks a good fight, and can play the tough guy when the cameras are rolling, but when it comes to improving auto safety protections for American families, he has delivered exactly zilch.

Bottom line: thanks to behind-the-scenes special-interest lobbying in Congress against desperately needed, reasonable, effective auto safety reforms, Honda just saved itself a cool $530 million.

 

 

 

 

 

 

 

 

CarMax – Too Risky for Wise Investors?

Thinking of investing in CarMax? You may want to take a close look at their breathtakingly risky practice of selling unsafe, recalled cars to consumers.

CarMax is already under fire from consumer groups,  faces potential action by the Federal Trade Commission, and has been repeatedly exposed in undercover investigations by TV news organizations, including ABC’s 20/20, over its sales of unsafe, recalled cars to consumers.

Here’s the rub:  CarMax advertises that all their cars must pass a “rigorous 125+ point inspection” before they can be sold as “CarMax Quality Certified” cars.  But how can a car with a killer defect possibly pass a rigorous inspection and meet their standards?

Despite the mounting scrutiny, CarMax recklessly persists in selling “CarMax Quality Certified” unsafe, recalled cars at retail to consumers. Case in point:  Even when competitors like AutoNation have wisely announced their decision to cease selling used cars with unrepaired Takata air bags, CarMax continues to sell them anyway.

Defying common sense and responsible business practices, CarMax somehow seems unable to bring itself to stop selling consumers cars with the notoriously defective air bags, which can explode on impact, hurling shrapnel at the driver and front-seat passenger’s face and neck..  In cases that are making global headlines, the defective air bags have caused  serious injuries, including blindness, while other hapless victims have bled to death.

This particular defect  remains the focus of Congressional investigations in the U.S. Senate and House of Representatives. Takata also faces possible legal action by the National Highway Traffic Safety Administration, and by the US Department of Justice.

So — what does AutoNation know and take into account that CarMax doesn’t seem to grasp?

Is CarMax waiting for a total PR catastrophe, before they stop making that added bit of profit by selling lots of unsafe, defective, recalled cars to consumers, instead of having them repaired or selling them for a somewhat lower price, at wholesale?

Whatever CarMax’s motivation, wise investors may wish to rethink the company’s self-inflicted level of exposure.

 

Graco recalls child safety seats

Graco Children’s Products announced that it’s recalling almost 3.8 million car seats because faulty buckles can stick, leaving children trapped. Some parents have had to cut the straps in order to get their children out of the seats. In addition to being a pain to deal with, the child seats pose a serious hazard to infants and children if the vehicle is in a crash or catches fire.

The National Highway Traffic Safety Administration says that the recall does not include an additional 1.8 million Graco child seats that have the same buckles, and should also be recalled and repaired. NHTSA has indicated that if Graco does not recall the rest of the affected seats, the agency may take legal action to force a wider recall.

The seats in the recall are the 2009 to 2013 model years of the Cozy Cline, Comfort Sport, Classic Ride 50, My Ride 65, My Ride with Safety Surround, My Ride 70, Size 4 Me 70, Smartseat, Nautilus, Nautilus Elite and Argos 70.

Read more: New York Times: Graco recalls child safety seats

WARNING!! Unfortunately, you can’t trust car dealers to make sure that safety recalls are performed before they sell you a used car. Dealers keep getting caught selling unsafe, recalled vehicles to consumers, claiming they’re perfectly safe, when they are not. Dealers are opposing legislation in Congress and in California that would help protect car buyers and their families from unsafe, recalled automobiles.

Read more:  Car dealers play “Used Car Roulette” with customers’ lives

Tesla earns best crash test ratings — ever

The National Highway Traffic Safety Administration has announced that the Tesla Model S earned a 5-star rating — in each crash configuration — front, side, rear, and rollover.

The agency’s testing also showed that the Model S set a new record for the lowest likelihood of injury to occupants, based on specific scoring.

According to Tesla, the vehicle’s unique design creates major injury-prevention advantages. The California-based automaker explained, “The Model S has the advantage in the front of not having a large gasoline engine block, thus creating a much longer crumple zone to absorb a high speed impact. This is fundamentally a force over distance problem – the longer the crumple zone, the more time there is to slow down occupants at g loads that do not cause injuries.”

The sedan’s low center of gravity and the mid-mount position of the battery pack also make the vehicle remarkably stable and unlikely to tip over, particularly when compared with SUVs and minivans with much higher centers of gravity.

Despite its stellar safety performance, Tesla still faces an uphill battle with auto dealers, who seek to force the company to stop selling vehicles directly to the public, instead of making its customers spend an average of 4 hours at a car dealership in order to drive a Tesla home.