BMW is on the hook for a $40-million fine after the National Highway Traffic Safety Administration slapped the automaker over not recalling Minis that failed to meet minimum side-impact crash standards.

The civil penalty from NHTSA concerns 2014 and 2015 Mini Cooper hatchback models that "failed a crash test designed to determine whether the vehicle met crash-protection minimums," the government agency said in a press release issued this week. An October 2014 test revealed the first problem, and the Mini was subsequently retested in July, only to fail again and finally prompt a recall of more than 30,000 cars.

But according to NHTSA's investigation that was opened in October, BMW waited too long to issue a recall after it knew the cars did not meet standards and bring them into compliance with more energy-absorbing materials installed by Mini dealers. This is the second time NHTSA slapped BMW with a major penalty, following a $3-million fine back in 2012 failing to report recalls of its cars and motorcycles.

"For the second time in three years, BMW has been penalized for failing to meet that obligation," NHTSA Administrator Mark Rosekind said in the release. "The company must take this opportunity to reform its procedures and its culture to put safety where it belongs: at the top of its priority list."

In a separate release issued this week, BMW Group said it, "is committed to further improving its recall processes to better serve its customers," and that the company, "respects the role of NHTSA and looks forward to working with them to develop solutions for the future."
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National Highway Traffic Safety Administration fines BMW $40 million for failing to meet safety requirements

Fine is auto company's second since 2012

WASHINGTON – The U.S. Department of Transportation's National Highway Traffic Safety Administration has imposed a $40 million civil penalty and a series of performance requirements to automaker BMW North America for a series of violations of the Motor Vehicle Safety Act and NHTSA regulations.

Under terms of a Consent Order issued to BMW, the company acknowledges that it violated requirements to issue a timely recall of vehicles that did not comply with minimum crash protection standards, to notify owners of recalls in a timely fashion, and to provide accurate information about its recalls to NHTSA. NHTSA imposed a $3 million civil penalty to BMW in 2012 for similar violations.

"NHTSA has discovered multiple instances in which BMW failed its obligations to its customers, to the public and to safety," said U.S. Transportation Secretary Anthony Foxx. "The Consent Order NHTSA has issued not only penalizes this misconduct, it requires BMW to take a series of steps to remedy the practices and procedures that led to these violations."

The Consent Order resolves a NHTSA investigation into whether the company failed to issue a recall within five days of learning that 2014 and 2015 Mini Cooper models failed to meet regulatory minimums for side-impact crash protection.

In Oct. 2014, a Mini 2 Door Hardtop Cooper failed a crash test designed to determine whether the vehicle met crash-protection minimums. The company responded that the vehicle was listed with an incorrect weight and would pass the test if conducted at the proper weight rating, but agreed to conduct a recall to correct the incorrect weight rating on the vehicle's Tire Information Placard and to conduct a voluntary service campaign, short of a recall, to add additional side-impact protection.

In July 2015, NHTSA conducted a second crash test at the corrected weight rating on a vehicle with the additional side-impact protection, and the vehicle again failed. At that time, NHTSA learned that BMW had not launched the service campaign it had agreed to conduct. Under the Consent Order, BMW acknowledges that it failed to recall the noncompliant vehicles in a timely fashion. It also acknowledges additional violations discovered in NHTSA's investigation, including failing in multiple recalls since its 2012 consent order to notify owners and dealers of recalls in a timely fashion and to provide required quarterly recall completion reports on time.

"The requirement to launch recalls and inform consumers in a timely fashion when a safety defect or noncompliance is discovered is fundamental to our system for protecting the traveling public. This is a must-do," said NHTSA Administrator Mark Rosekind. "For the second time in three years, BMW has been penalized for failing to meet that obligation. The company must take this opportunity to reform its procedures and its culture to put safety where it belongs: at the top of its priority list."

The order's $40 million civil penalty includes $10 million due in cash, a requirement that the company spend at least $10 million meeting the order's performance obligations, and $20 million in deferred penalties that will come due if the company fails to comply with the Order or commits other safety violations.

In addition to paying the civil penalties, BMW must:
  • Retain a NHTSA-approved independent safety consultant to help the company develop best practices for complying with the Motor Vehicle Safety Act and NHTSA regulations and submit those best practices to NHTSA.
  • Evaluate, under the independent consultant's guidance, all safety or compliance-related issues under the company's review and provide a monthly written report to NHTSA on those issues.
  • Launch a pilot program to determine whether the company can use data analytics capabilities to detect emerging safety-related defect trends.
  • Establish a plan to deter BMW dealers from selling new vehicles with unremedied safety defects, a requirement stemming from the fact that during NHTSA's investigation, a NHTSA representative purchased a new vehicle with an open safety recall from a BMW dealer.


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