Last week we wrote about the millions of automobiles that have been recalled this year for dangerous and potentially deadly defects. In addition to the General Motors recall alleging defective ignition switches, some 14 million vehicles made by Honda and others have been recalled due to potentially dangerous airbags. All vehicles recalled used airbags manufactured by a Japanese company called Takata.
It is one thing to experience defects in design or manufacturing. This is to be expected at times due to the complexity of modern automobiles and the high volume of production. What is inexcusable, however, is trying to hide known defects from the public, thereby delaying an important recall by months or even years. This behavior has been a problem with most major auto manufacturers selling in the United States.
South Korean automaker Hyundai Motor Co. is currently embroiled in a legal battle over damages stemming from a 2011 lawsuit. The families of two teenage cousins in Montana sued Hyundai after the teens were killed in a car accident caused by an allegedly defective steering knuckle. When the knuckle broke, the driver reportedly lost control of the vehicle and crashed.
The plaintiffs had already won their case, but Hyundai has been appealing the jury award in order to seek a reduction in punitive damages. Recently, a judge denied that request and kept the total jury award at $81 million.
The judge noted that Hyundai had received approximately 127 warranty reports about problems with steering knuckles but failed to investigate or fix the problem. She added: “The defendants had over a decade of notice of problems or defects with their steering knuckles in their passenger vehicles -- which problems or defects were contrary to their own material specifications -- and apparently took no steps whatsoever to investigate.”
Automobile defects may be inevitable from time to time. But auto manufacturers have an important choice to make when defects become known. They can either issue a recall or they can focus more on their bottom line than on the safety of their customers. The correct choice should be obvious.
Source: Bloomberg, "Hyundai Must Pay $73 Million Punitive Award, Judge Says," Margaret Cronin Fisk, September 22, 2014