Hyundai and Kia to pay $137 million fine for delayed U.S. recalls

Hyundai and Kia be forced to pay $137 million in fines and safety improvements simply because they moved too slowly to recall over A million vehicles with engines that can fail.

The National Highway Traffic Safety Administration announced the penalties on Friday. They resolve a three-year government probe in to the companies' behavior involving recalls of multiple models dating towards the 2011 model year.

“It's critical that manufacturers appropriately recognize the urgency of the safety recall responsibilities and supply timely and candid information towards the agency about all issues of safety,” NHTSA Deputy Administrator James Owens said inside a statement.

Hyundai pays $54 million and invest $40 million to enhance safety operations under an agreement reached with the agency. The company must develop a field test and inspection laboratory in the U.S. and set new computer systems in place to analyze data to recognize issues of safety. Another $46 million in penalties will be deferred so long as the Korean automaker meets safety conditions, NHTSA said in a prepared statement.

Kia, which is affiliated with Hyundai, must pay $27 million and invest $16 million on safety performance measures. Another $27 million payment will be deferred so long as Kia behaves.

Kia will set up a U.S. safety office headed with a chief safety officer. Both companies will have to hire a completely independent third-party auditor to review their safety practices, plus they dedicated to organizational improvements to identify and investigate potential U.S. safety issues.

“We value a collaborative and cooperative relationship using the U.S. Department of Transportation and NHTSA, and can continue to cooperate using the agency to proactively identify and address potential issues of safety,” Brian Latouf, Hyundai's chief safety officer, said inside a prepared statement.

Kia denied the allegations from the U.S. but said Friday that it wanted to avoid a protracted legal fight.

“We are pleased to be able to direct our attention to improving and enhancing our recall management processes, and our priority remains making things right for our customers,” the company said inside a prepared statement.

The U.S. safety agency opened its probe in 2021 after Hyundai recalled about 470,000 vehicles in September of 2021 because debris from manufacturing could restrict oil flow to connecting rod bearings. That may make the bearings wear out and fail, potentially causing the four-cylinder engines to stall or catch fire. The repair was an expensive engine block replacement.

NHTSA said in investigation documents that Hyundai limited the recall to engines made before April of 2012, saying it solved the manufacturing problem after that. Additionally, Kia didn't recall its cars and SUVs with the same 2.4-liter and 2-liter “Theta II” engines, contending these were made on the different assembly line at a plant in Alabama.

But 18 months after the 2021 recall, both automakers announced recalls of 1.2 million more vehicles for the similar problem, including models the automakers originally said weren't affected, NHTSA said when it opened your research.

Engine failure and fire issues with Hyundais and Kias have plagued the businesses in excess of five years, affecting the owners in excess of 8 million vehicles.

In June of 2021, NHTSA opened two more investigations from the automakers which have yet to be resolved. The company said hello had owner complaints in excess of 3,100 fires, 103 injuries and one death. It granted a petition choosing the probes filed by the nonprofit Center for Auto Safety, someone advocacy group.

Jason Levine, executive director from the center, said they petitioned NHTSA seeking a study because no one appeared to be listening to complaints from Hyundai and Kia owners.

“Only time will tell if this kind of deferred penalty and mandated investments in safety operations will in fact deter similar behavior later on by these or other manufacturers,” Levine said.

The new investigations, one for Hyundai and the other for Kia, covered non-crash fires in almost 3 million vehicles over the model lineups of the affiliated Korean automakers.

In documents, NHTSA reported that it had received complaints of engine compartment fires, as well as fires involving other components including tail light housings, wiring harnesses, and lightweight bulbs.

Later the affiliated Korean automakers acknowledged the engine block replacements might not have been properly done in all cases by dealers. Kia said a pipe carrying high-pressure fuel might have been damaged, misaligned or improperly tightened throughout the repairs, allowing gas to leak and hit hot engine parts, causing more fires.

More recalls followed. Hyundai and Kia have recalled a lot more than 4.7 million vehicles, plus they did a “product improvement campaign” covering another 3.7 million to install software that will alert drivers of possible engine failures.

Data collected by the Center for Auto Safety show 31 U.S. fire and engine-related recalls from Hyundai and Kia since 2021. The recalls involve more than 20 models from the 2006 through 2021 model years totaling over 8.4 million vehicles.

In some cases, for example nearly 200,000 vehicles recalled in September for braking system electrical shorts, the automakers urged owners to park them outside because fires could start following the vehicles were turned off. There also were recalls for brake fluid leaks, fuel pump cracks, damaged catalytic converters and issues with fuel igniting prematurely within the cylinders, which could set engines ablaze.