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Honda settles emissions suit
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June 8, 1998: 3:56 p.m. ET
Company fined $17 million, will spend $250 million to remedy altered controls
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WASHINGTON (CNNfn) -- Honda Motor Co. was fined more than $17 million and will have to spend an estimated $250 million to settle claims that it violated the Clean Air Act by selling vehicles with disabled emission control diagnostic systems.
Justice Department and Environmental Protection Agency officials who announced the settlement Monday in Washington characterized the settlement as the largest ever under the Clean Air Act.
It includes $12.6 million in civil penalties and $4.5 million to implement environmental projects to reduce pollution. However, Honda also will spend about $250 million to provide free emissions inspections, tune-ups and emissions-related repairs. It also will extend the warranties of affected vehicles.
The U.S. government alleged that on many models Honda had disabled a part designed to check the vehicles' emission performance. Specifically, the government claimed the manufacturer disabled the "misfire monitoring device" on 1.6 million 1996 and 1997 Accords, Civics, Preludes, Odysseys and Acuras and 1995 Civics.
The "misfire monitoring device" is part of the vehicle computer system that Honda calls the "On-Board Diagnostic System."
The agreement was filed Monday in U.S. District Court in Washington. Officials said Honda cooperated with the EPA and Justice during the investigation.
Separately, the EPA also reached a smaller Clean Air Act settlement with Ford Motor Co. In that settlement, Ford agreed to pay a $2.5 million fine to settle charges it sold about 60,000 vans that contained illegally installed devices that defeated the emissions control system.
Ford has agreed to recall and repair the affected vans, which will cost the automaker an estimated $1.3 million.
Had the government ordered Honda to recall its affected vehicles, it could have cost the company as much as $500 million. Officials said instead of demanding a recall, Honda agreed to extend emissions warranties of affected vehicles to 14 years or 150,000 miles.
Although the government announced only civil action against the car makers, Assistant Attorney General Lois Schiffer didn't rule out a possible criminal investigation against the automakers. Schiffer refused to say whether a criminal investigation has begun.
Justice and the EPA didn't directly accuse Honda and Ford of intentionally violating environmental laws, but left little doubt the violations were not accidental.
"The engineers knew what they were doing. But the next step is, did they know it violated the law," said Bruce Ferguson, an EPA staffer who worked on the case.
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