Should There Be A Cap On Fines If An Automaker Ignores Safety Issues?

Major automakers will not object to higher fines for violating safety rules, but oppose a congressional proposal that would remove the cap on the maximum penalty.

Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers, said in a statement on Wednesday that civil penalties should not exceed a reasonable limit.

The current maximum is $5,000 per violation with a $16.4 million cap, which safety advocates complain is an ineffective deterrent.

Draft legislation spurred by U.S. government scrutiny of recalls of 6.5 million Toyota Motor Corp vehicles would raise fines to $25,000 per violation and remove the maximum cap.




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Joe_Limon - 5/6/2010 11:19:11 AM

+1 Boost

How does the cap avoid big recalls? Doesn't it encourage hiding them if they know they could potentially make more than the cap by ignoring them?

Agent009 - 5/6/2010 12:20:19 PM

0 Boost

Joe-Limon- That is the question exactly. Toyota paid the 16 mil fine for the delays. But probably it would have cost them more to fight it.
Besides 16 mil to Toyota is chump change, and they said they saved more with delays than it cost them when they got caught. So they won either way when it comes to the bottom line.

0to60 - 5/6/2010 12:02:06 PM

+1 Boost

Nope. There shouldnt.

Steve - 5/6/2010 12:20:48 PM

+2 Boost

I imagine that removing the cap would equate to potentially astronomically high penalties for being a bad-boy who does not tend to safety. This would hopefully motivate car makers to attend to consumer suspicions promptly.

The potential down-side to this interpreting what is a defect, versus driver error, versus not reading the manual, etc.

CarCrazedinCali - 5/6/2010 12:33:45 PM

+1 Boost

No cap sounds good to me, maybe they will just make safe cars to avoid the penalties