Daimler Trucks On the Hook for $30 Million in Recall Fiasco

Recalls in the automotive industry are inevitable. There will be times that defective parts, design flaws, or faulty installation cause failures, and automakers recognize their responsibility to notify the public. But Daimler Trucks North America is facing a recall fiasco it probably wishes was in the rearview mirror.

The company may be on the hook for millions of dollars in penalty fees after failing to promptly recall more than a million vehicles. And the consequences could dig even deeper into Daimler Trucks’ pockets if the commercial vehicle manufacturer doesn’t meet a federal order’s demands.

Daimler Trucks North America’s delayed recall of 1.4 million vehicles

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The trouble began in 2017. That’s when Daimler Trucks issued safety recalls for millions of vehicles. But it hadn’t acted quickly enough, CarComplaints.com reports. The company failed to notify customers about the recall within the government-mandated 60-day window. That’s when the National Highway Traffic Safety Administration stepped in.

CarComplaints.com reports that “safety regulators alleged Mercedes failed to timely notify customers in 2017 regarding about 1.4 million recalled vehicles.” The NHTSA opened an investigation in 2018. It eventually concluded that Daimler Trucks failed to recall its affected vehicles on time. It was a mistake that will end up costing the company millions.

The NHTSA ultimately investigated Daimler Trucks’ handling of seven recalls. In a statement, a Daimler representative said there have been “no known accidents or injuries” related to its voluntary recalls. 

Bloomberg reported the NHTSA shook a finger at the automaker, suggesting the company needs to recognize the urgency of safety recalls. 

Daimler Trucks’ costly blunder

After concluding its probe, the NHTSA recently slapped Daimler Trucks with a consent order. It requires the company to pay the federal agency a penalty fee of $10 million.

Daimler could also be on the hook for an additional $15 million if it doesn’t meet the requirements of another consent order regarding past recalls, CarComplaints.com reports.

Plus, the agency cited the company for a “performance obligation amount” of $5 million. That money will go toward research and analytics for advanced early detection developments.

The company’s conflicting responses

https://twitter.com/DaimlerTrucksNA/status/1344662345167958018

Daimler Trucks responded cooperatively to the NHTSA’s consent order. The company said it would “administratively resolve these issues.” However, it didn’t openly agree with the agency’s findings that it failed to recall its vehicles on time. According to NHTSA regulations, companies must notify customers of safety recalls by mail within 60 days of alerting the NHTSA.

The automaker also committed other violations concerning the 1.4 million vehicle recall. Daimler’s website became a source of contention when the NHTSA said vehicle identification number tools stymied consumers’ attempts to get info about recalls, CarComplaints.com reports. Daimler also had trouble informing its dealerships about which vehicles would be recalled and how many were affected.

The NHTSA also faulted Daimler for failing to “perform its legal duties,” which made the agency’s investigation process more difficult. The company even reportedly ignored the agency’s inquiries. 

This isn’t Daimler’s only trouble

This isn’t the first time Daimler, Mercedes-Benz’s parent company, has found itself in hot water. It also got caught up in “Dieselgate,” largely centered on Volkswagen’s attempt to cheat emissions guidelines. But other automakers ended up paying fines for violations. In fact, Daimler said it had “reached agreements costing nearly $3 billion,” Reuters reported in August 2020.

Daimler may be facing some steep penalties ahead. But it’s regulations like the ones governed by the NHTSA that keep consumers safe.