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Daimler Reaches $20 Million Settlement Agreement Over Vehicle Recalls

Tesla Motors, Inc vs Mercedes

Mercedes-Benz USA, a company under Daimler AG, has agreed to a civil penalty of $20 million. This penalty is in regards to the way the company handled recalls of US-based vehicles and was brought after a government investigation in regards to a recall of 1.4 million vehicles. The investigation took a year to reach its conclusion.

A Settlement Spanning $20 Million

In accordance with the settlement’s terms, the Germany-based automaker will pay $13 million towards faces, with a further $7 million fine should the company not comply with the set agreement. The US National Highway Traffic Safety Administration, or NHTSA, stated that the automaker had failed to notify its vehicle owners in a proper fashion. Daimler also was unable to submit all relevant reports, or launch at least two recalls in the appropriate timeframe.

Mercedes-Benz USA (MBUSA), the company that caused the issue to begin with, gave a public statement about the matter. The company holds the opinion that it did nothing wrong. According to MBUSA, the company “unfortunately” missed deadlines when it comes to informing the regulating agency while “fulfilling their requirements.” However, the company seemed to have agreed on trying to “resolve this matter in an effort to answer NHTSA’s questions and move forward.”

Further Mandated Monitoring

The NHTSA will meet with the company after every quarter in order to properly discuss its recall performance. This will happen for at least a year, going forward. Daimler is accordingly “developing more robust procedures” when it comes to the reporting of “noncompliance concerns.”

Daimler Reaches $ Million...

Interestingly enough, the NHTSA has also taken into consideration that there was a “substantial financial investment that MBUSA has made” in regards to this situation. Things like the development and rollout of its automated recall management tool, as well as the hiring of additional personnel and ongoing training.

Even so, the NHTSA has raised particular concerns about “recurring and unannounced failures” in regards to the automaker’s data system. This data system is in charge of supplying information to the NHTSA’s Vehicle Identification Number lookup tool. This tool allows vehicle owners to see if their respective vehicle has been recalled.

Striving For Consumer Protection

The NHTSA explained that the agency’s requirements in reporting recalled vehicles would “help ensure that consumers are protected.” The service will allow the spread of information on “how to get recalls repaired,” according to the NHTSA. James Owens, the Acting Administrator of the NHTSA, was the one who gave the official statement about the matter. He further explained that the agency expects manufacturers to properly follow their “legal obligations to the agency and consumers in carrying out safety recalls.”

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Ali Raza

A journalist, with experience in web journalism and marketing. Ali holds a master degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.