Volvo Group North America Recall Failures to Cost $130 Million


Volvo Group North America has agreed to pay $130 million to the National Highway Traffic Safety Administration for alleged failures regarding vehicle recalls.

In a consent order with NHTSA, Volvo agreed to pay the civil penalty of $130 million in what the government called "one of the largest-ever penalties for violations of the Vehicle Safety Act."

The order follows a NHTSA investigation that allegedly found Volvo failed to properly report death and injury incidents, and failed to recall vehicles in a timely fashion.

Safety regulators also allege Volvo failed to properly notify owners about safety recalls.

NHTSA said in addition to the large penalty, an independent third-party auditor will keep watch over Volvo as the automaker meets regularly with NHTSA about potential vehicle safety problems. The auditor's job will also require Volvo be monitored for possible Safety Act regulations violations.

As part of the consent order, employees will receive appropriate training about complying with federal safety regulations.

"The consent order requires the company to make an upfront payment of $65 million and spend an additional $20 million on the specific performance obligation to create a safety data analytics infrastructure, and includes an additional $45 million deferred penalty that may become payable under specified circumstances," NHTSA said.

The consent order is scheduled to have a three-year term unless NHTSA determines possible problems that could extend the order to five years.

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