TIME Autos

Honda Faces a $35 Million Fine for Not Reporting U.S. Injury and Death Claims

Japan Honda Air Bag Death
A man walks past a Honda model on display at Honda Motor Co. headquarters in Tokyo on April 25, 2014. Koji Sasahara—AP

The violation could be one of the biggest in history

Honda Motor Co. could face a $35 million fine for failing to report more than 1,700 claims of death or serious injuries from the past 11 years, according to a summary of a National Highway Traffic Safety Administration (NHTSA) review.

The company said it under-reported the incidents between July 1, 2003 and June 30, 2014 because of “inadvertent data entry or computer program errors,” Bloomberg News reports.

“The audit identifies difficult facts where we did not meet our obligations,” said Rick Schostek, executive vice president of Honda North America, on a conference call with reporters.

Honda reported only 1,144 serious injury claims during the period. The omissions came to light partly because of recent investigations into air-bag recalls by Takata Corp. Honda said that eight of the unreported cases involved Takata air-bag inflator ruptures and that the NHTSA was aware of them.

A former NHTSA administrator told Bloomberg that Honda will “absolutely” get a $35 million fine, which is the maximum civil penalty for violating the Transportation Recall Enhancement, Accountability and Documentation Act. (Car companies face $7,000 in fines per day per violation.)

“It’s quite shocking Honda would behave this way,” consumer-safety advocate Joan Claybrook said. “They’ve put their company reputation at risk.”

The NHTSA audit is ongoing.

[Bloomberg]

MONEY Autos

Audi A3 is Made for Millennials

The new entry-level Audi is elegant and understated. Plus, it will read incoming text messages out loud for you.

A number of years ago I met with Audi executives, who wanted to deliver a message: keep an eye on us. They told me that Audi is going to get better and better and then challenge Mercedes and BMW.

That kind of statement sticks with you, but the Audi guys made good on their promise. Audi has now racked up 45 consecutive months of record sales in the U.S. because it can offer a full lineup of elegantly engineered automobiles, from the wondrous R8 sports car to the latest new model, the entry-level A3. The company is banking on winning conquests from Asian makers — maybe Lexus or Acura drivers who want a little more panache — and clearly it wants to take on its German rivals head-to-head.

And in the A3, which starts at around $30,000, Audi has a good case. Let’s be clear, though: If you’re looking for whistles and bells, for over-the-top (as in Italian) styling, or for lots of ornaments on your auto, you probably should go elsewhere. The A3 is luxury defined as restrained elegance, with quality if quiet materials, and a ride that is powerful enough without calling too much attention to itself. You may buy an A3 to announce that you’ve moved up into the 90th percentile, but you’re not going to shout about it.

That was true even with the color of the car we tested. Yes, the Scuba Blue hue was an extra $550. But unlike, say, the cornflower blue of the BMW M3 we drove a couple of weeks before, which was screaming, “I’m TOH-tally cool blue,” this color projected strength. And so did the engine, where it really counts. We were running the bigger of the two power plants that Audi offers in the A3, a turbocharged, 2.0 liter, 220-horsepower, 4–cylinder engine and all-wheel drive that brings the price to $32,900. The 1.8 liter, 170-hp front-wheel drive version gets you in at $30,795, which means you’re giving up a lot of power and torque for two thou. Both versions are equipped with a six-speed, dual-clutch automatic transmission, and that’s not a small thing. It’s a lot of fun looking at the tachometer as you rev through the gears; although the needle races left to right and back again, the smooth transition up and down the gearbox is very impressive.

As for the ride, you can be comfortably aggressive however you like to drive, but the Audi, like lots of refined autos, offers you a couple of modes to tune your wheels. Choose the sport mode, and the electronic steering digs in a little harder and the pedal gets more jumpy, yet the feeling is calm and the interior is quiet enough to enjoy the sound system.

Inside, the A3 dashboard is like a German winter — cool and dark — with a couple of round aluminum AC ports to interrupt the rich leather panel. But it can be brightened by the MMI navigation package, which features a pop-up screen that rises out of the dash like a submarine periscope: Drive! Drive!

The center console is the control room with the commands dished out by a center dial and a four-corner touch panel to handle navigation, audio, and communication. The top of the dial also serves as a touchpad that allows you to write in the destination you want the navigation system to find. It all sounds a bit complex, but after two days I had a really good feel for it — something I can’t say for other vehicles with similar systems.

The only drawback to the interior is the back seat, which can hold three passengers, but only if you really don’t like the one stuck in the middle. Some reviewers have found it downright cramped, but this is what entry-level luxury means in a small sedan. Same thing with the trunk, which I found to be adequate, if just barely.

How can you make a German luxury car that sells for $30,000? Don’t build it in Germany. The A3 is assembled in Gyor, Hungary, and 35% of the parts are Hungarian-made. It’s actually a good deal: Hungary’s wages are lower than Germany’s, which helps keep the price down, yet at the same time it has a very skilled labor force.

But also keep in mind that $30,000 is bare and spare, with no rear-view camera or blind-spot mirrors. The nav and communications system adds $2,600, and the A3 Premium Plus model tacked on $2,550 for heated power front seats and mirrors and other goodies. Paddle shifter? That will be $600. The price for the total package we drove was $40,000 and change. So while the entry-level price is reasonable, the finishing price could boost the bill depending on your choices. That said, if you do choose the A3, you have chosen well.

TIME Autos

Everything You Need to Know About Takata’s Air-Bag Recall

So far, 7.8 million cars have been recalled from 10 manufacturers over explosive airbags

Even the normal deployment of an airbag is a violent event. It is initiated by a controlled explosion inside an inflator setting off a chemical reaction that forms nitrogen gas that rapidly expands the airbag, propelling it toward your head at speeds up to 200 mph, all within 20 to 30 milliseconds. That’s the kind of violence needed to dissipate the energy being created by a car involved in a crash. But this explosion shouldn’t hurl shards of metal toward the driver’s face and neck, which has happened in some cars with airbags designed by Takata, a major safety system supplier to the auto industry. Here’s everything you need to know about the widespread recall:

How severe is this problem?
There have been five fatalities linked to Takata’s airbags and the National Highway Traffic Safety Administration (NHTSA) has already issued a recall of 7.8 million cars from 10 manufacturers that have the suspect airbags installed. All are relatively old cars, from model years 2000 to 2008.

How can I find out if my car is affected?
You can call the NHTSA’s hotline : 1-888-327-4236. Or you can go to its website. You will need your vehicle’s identification number (VIN), which can usually be found on the front left of the dashboard near the window.

Why are the cars being recalled?
The propellant Takata used to set off the airbag’s inflator—ammonium nitrate—apparently becomes unstable in humid climates and degrades. The explosion triggering the airbag becomes less controllable, even fatally so. That’s why the original recall focused on cars operating in humid areas of the country including Florida, Puerto Rico, and parts of Texas, Alabama, Mississippi, Georgia, and Louisiana near the Gulf of Mexico. But now the Department of Transportation and NHTSA have called on Takata to issue a national recall for all cars that have the suspect airbag inflators. NHTSA has also demanded more information from Takata about whether and when it knew about the design and manufacturing flaws, with a due date of Dec. 5. The company said it will comply.

Are these the only dangerous airbags?
Three companies supply most of the world’s airbags; Takata, TRW and Autoliv. Only Takata’s airbags are in question, though, because only Takata used ammonium nitrate as a propellant (and it no longer does).

Why did they use ammonium nitrate in their airbags?
Ammonium nitrate provides more bang in a smaller volume than other propellants, which allows the company to offer a more compact device to manufacturers. That’s a potential competitive advantage. In a story in the New York Times outlining Takata’s switch to ammonium nitrate in 2000, the company denied using ammonium nitrate to save costs.

What is Congress doing about the recalls?
At a hearing in Washington D.C. on Thursday, Takata officials were eviscerated by members of the Senate Commerce, Science, and Transportation Committee over the faulty airbags and the company’s failure to notify NHTSA about them. Sen. Bill Nelson of Florida demanded that automakers provide loaner cars or rentals to consumers who were waiting to get replacement airbags in their own cars “by virtue of the fear that has already gripped the public,” he said. Honda is already doing that.

Nelson also displayed a large photo of the damage done to the face of one woman, former Air Force Lt. Stephanie Erdman. She was severely injured in one eye by the flying shrapnel produced by an exploding Takata airbag after the 2002 Honda Civic she was driving was involved in a fender bender. “What happened to me was gruesome,” she testified, and called out Honda for allowing her to drive a defective car. “They did nothing to warn me,” she said.

Does Takata acknowledge its responsibility for injuries and deaths?
That’s exactly what Nevada Sen. Dean Heller asked during the Senate hearing. But Takata executives were both evasive and tongue-tied by language issues. Takata’s Hiroshi Shimizu, senior vice president for global quality assurance said via an interpreter that the company recognized three victims’ cases were linked to the Takata airbags but said two others were being investigated. So let’s take the three, said Heller. Does Takata take full responsibility for those three deaths? “My understanding is our products in these accidents worked abnormally,” said Shimizu, before stipulating, “From that sense, yes.”

Do regulators also deserve some blame?
The Senate committee member faulted the NHTSA for not being able to stay ahead of defects. Heller, a car enthusiast, chafed about the length of time the agency waits from when a defect is found and until a recall is ordered. “NHTSA is not recognizing the defects fast enough, he said. To help the agency speed up a bit, Heller and several other members of the committee are proposing a Motor Vehicle Safety Whistleblower Act that would encourage auto industry employees to identify defects to NHTSA with the prospect of collecting a share of any fines of more than $1 million.

MONEY The Economy

$3 Gas Makes Driving Cheaper, but Not Flying

A big drop in fuel prices — sparked by an oversupply of oil — means Americans have been enjoying the prices at the pump.

TIME Transportation

What Happened to the Car Industry’s Most Famous Flop?

A 1958 Edsel Convertible
A 1958 Edsel convertible made by Ford Underwood Archives / Getty Images

Market researched failed in a major way

Any crossword puzzler knows there’s a five-letter word for a Ford that flopped: Edsel.

At the heart of any big flop–like when Ford ended the Edsel 55 years ago, on Nov. 19, 1959–lies high expectations. The Edsel was named after Henry Ford’s son, no small honor, and it had its own division of the company devoted to its creation. As TIME reported in 1957 when the car debuted, the company had spent 10 years and $250 million on planning one of its first brand-new cars in decades. The Edsel came in 18 models but, in order to reach its sales goals, it would have to do wildly better than any other car in 1957 was expected to do. The September day that the car first went on the market, thousands of eager buyers showed up at dealers, but before the year was over monthly sales had fallen by about a third.

When Ford announced that they were pulling the plug on the program, here’s how TIME explained what had gone wrong:

As it turned out, the Edsel was a classic case of the wrong car for the wrong market at the wrong time. It was also a prime example of the limitations of market research, with its “depth interviews” and “motivational” mumbo-jumbo. On the research, Ford had an airtight case for a new medium-priced car to compete with Chrysler’s Dodge and DeSoto, General Motors’ Pontiac, Oldsmobile and Buick. Studies showed that by 1965 half of all U.S. families would be in the $5,000-and-up bracket, would be buying more cars in the medium-priced field, which already had 60% of the market. Edsel could sell up to 400,000 cars a year.

After the decision was made in 1955, Ford ran more studies to make sure the new car had precisely the right “personality.” Research showed that Mercury buyers were generally young and hot-rod-inclined, while Pontiac, Dodge and Buick appealed to middle-aged people. Edsel was to strike a happy medium. As one researcher said, it would be “the smart car for the younger executive or professional family on its way up.” To get this image across, Ford even went to the trouble of putting out a 60-page memo on the procedural steps in the selection of an advertising agency, turned down 19 applicants before choosing Manhattan’s Foote, Cone & Belding. Total cost of research, design, tooling, expansion of production facilities: $250 million.

A Taste of Lemon. The flaw in all the research was that by 1957, when Edsel appeared, the bloom was gone from the medium-priced field, and a new boom was starting in the compact field, an area the Edsel research had overlooked completely.

Even so, the Edsel wasn’t a complete loss for Ford: the company was able to use production facilities build for Edsel for their next new line of, you guessed it, compact cards.

Read the full report here, in the TIME Vault: The $250 Million Flop

TIME Companies

Toronto Wants to Kick Uber Out of the City

Uber Toronto
The Uber Technologies Inc. logo and website are displayed on an Apple Inc. iPhone 5s and laptop computer. Bloomberg/Getty Images

"Uber's operations pose a serious risk to the public"

Toronto is the latest city trying to give Uber the red light.

The City of Toronto has filed an application for injunction against Uber Canada, requesting the end of the company’s activities in the Ontario city, officials announced in a Tuesday statement. The statement said that Uber has been operating in Toronto without a license since 2012.

Like other major cities cracking down on Uber, Toronto is concerned that “Uber’s operations pose a serious risk to the public, including those who are signing on as drivers.”

The City is specifically worried that a lack of vehicle inspection and driver training is threatening both passenger and driver safety. Officials also say Uber’s insurance covering passengers and drivers in the event of an accident is below what’s required by the Municipal Code. Outside of safety concerns, the City cites unregulated fares and Uber’s “possible threat to the taxi industry.”

“With Uber, Torontonians have enjoyed real competition and greater choice,” an Uber spokesman told Bloomberg in an e-mail. “It’s disappointing that city bureaucrats have deployed expensive legal tactics to attempt to halt progress.”

Similar claims have successfully banned the car service in two German cities, major losses that Uber has managed to avoid in major hubs like New York and London.

Cities’ opposition to Uber is only one of many problems being tackled by the company, which is known for its ability to overcome several dead-serious controversies. Most recently, Uber CEO Travis Kalanick offered a Twitter apology after reports that an Uber exec said he wanted to hire researchers to dig up dirt on journalists criticizing the company.

 

 

TIME Autos

Feds Demand Nationwide Recall for Millions of Cars Over Air Bag Problem

The Takata Corp. logo is displayed outside the company's headquarters in Tokyo.
The Takata Corp. logo is displayed outside the company's headquarters in Tokyo. Bloomberg/Getty Images

Regulators say they'll enforce the recall if Takata doesn't agree

Federal regulators said Tuesday they are calling for a nationwide recall of millions of cars with Takata driver’s-side air bags after an incident occurred outside a previous recall’s parameters.

The National Highway Traffic Safety Administration (NHTSA) said its push for a recall expansion was prompted by an incident involving a defective air bag in a car in North Carolina. North Carolina wasn’t covered by a previous recall which targeted the Gulf Coast region due to safety problems related to high humidity.

“We now know that millions of vehicles must be recalled to address defective Takata air bags and our aggressive investigation is far from over,” NHTSA Deputy Administrator David Friedman said in a statement.

High levels of airborne moisture can cause the propellant in the Japanese-manufactured air bags to burn too quickly, causing them to inflate with excess force, potentially causing injuries to drivers and passengers. Some victims have also suffered from shrapnel wounds due to the explosion of the air bags, which are found in over a dozen major automotive brands.

NHTSA said that it will use its regulatory authority to enforce the nationwide recall if Takata does not voluntarily agree to the recall.

TIME Autos

Ford Recalls 65,000 Fusion Vehicles

There are no known accidents caused by the issue

Ford has recalled 65,000 Fusion cars for noncompliance with a regulation on “theft protection and rollaway prevention.

The automaker announced Tuesday said that it is not aware of any accidents or injuries caused by the issue, but said that it would voluntarily fix the more than 56,000 affected vehicles in the United States, as well as 6,000 in Canada and 2,300 in Mexico.

The 65,000 vehicles recalled Tuesday is small in comparison to General Motors’ notorious recall this year, when more than 1 million vehicles worldwide were pulled over a faulty ignition switch that caused the deaths of at least 30 people.

TIME Autos

Toyota’s ‘Mirai’ Fuel-Cell Car Gets 300 Miles to a Tank

JAPAN-AUTO-TOYOTA-EARNINGS
A customer admires Japanese auto giant Toyota Motor's fuel cell vehicle which will go on sale end of this year at Toyota's showroom in Tokyo on November 5, 2014. Yoshikazu Tsuno—AFP/Getty Images

Toyota disclosed the vehicle's name, 'Mirai,' hours before a Honda news conference

Toyota unveiled its hydrogen-powered concept vehicle ‘Mirai’ on Monday, stealing thunder from a scheduled press conference on a hydrogen-powered vehicle from rival automaker Honda.

“The future has arrived, and it’s called, ‘Mirai,'” said Toyota chief executive Akio Toyoda in a video announcement posted to YouTube (the word ‘mirai’ actually means ‘future’ in Japanese). Toyoda said the vehicle could travel 300 miles on a single tank of hydrogen.

The announcement went live several hours before Honda was scheduled to disclose new details of its own fuel cell vehicle, the Wall Street Journal reports.

The Mirai is expected to go on sale by the end of the year, once again getting the jump on Honda’s hydrogen-powered vehicle, which is expected to go on sale by spring of 2016 at the latest.

MONEY Autos

Jaguar F-Type R Coupe: This Beast Eats Up the Road

Don't let this Jag's understated British heritage fool you. The car goes from zero to 60 in four seconds, and can hit 186 miles per hour.

“So how fast were you going?” a friend asked when I told him I’d taken a Jaguar F-Type R coupe out on a race track.

The answer is that I’m not quite certain, because when the speedometer goes north of 100 miles per hour, the last thing you should be doing is looking at it, especially with a sharp left turn coming up.

What’s more interesting about the F-Type R coupe is how quickly you can get to 100 mph, which is to say bang-your-head-against-the-headrest quick, thanks to a 5.0-liter, 550-horsepower, 32-valve, V-8 engine eager to do your bidding. This works very nicely on a race course, of course — as it did at the Monticello Motor Club, a track where we tested the car, about 100 miles northwest of New York City. But it’s also a deliriously happy experience when entering the FDR Drive on Manhattan’s East Side from an on-ramp that’s about 10 feet long. Put the car in launch mode — from dead stop to heart stop, from 0 to 60 mph in four seconds. Then let that taxi get a just a little closer and then — WHRROOOM — you’re halfway to Harlem in a giddy symphony of exhaust noise. The newest Corvette is actually faster, but the Jag has a top speed of 186 mph, in case you’re trying to make a flight. The F-Type is low, wide and ferociously handsome as it gobbles up curves. Beast.

The V-8 is the biggest power plant offered in the F Series, and the reason that the price tag crests over $100,000 for the R coupe. Those 550 horses don’t work for peanuts. You can chose a V-6 coupe with a 340-hp engine beginning at $65,000, or the coupe Type S for $77,000 that gets you 380 hp. You probably won’t be needing the $8,000 carbon ceramic brake package that our test Jag had. You will, however, be making use of the rear spoiler that pops up when the car hits 70 mph, (pleasingly observable from the rearview mirror), and then retreats below 50 mph. The panoramic glass roof enhances the fighter jet feel.

The F-Type even has a trick in its bag when you’re doing zero: An Intelligent Stop/Start feature shuts the motor off at a traffic light, but touch the gas pedal and the car jumps back to life. It’s quite unexpected, and it helps keeps the fuel consumption in the 20 mpg range. To manage all that muscle, there’s a very smooth eight-speed, paddle-shift automatic transmission.

Much of Jaguar’s history has been caught up in its Britishness, its motorcar-ness. There’s always been a certain amount of understatement to British sports cars, exemplified by bespoke interiors — walnut trim and all that — combined with something quietly aggressive under the hood. The British influence in race engines is unimpeachable when you think of outfits such as Cosworth, which, with Ford’s backing, dominated F1 for years. And Jag’s V-12 was similarly a legend on the LeMans circuit. But by the late 1970s, Jaguar was already floundering, and when Ford bought it in 1989, the company was long on heritage and low on quality.

Ford would fix most of Jag’s problems, eventually producing the outstanding XJ8, a 4.0-liter, 290-hp, 32-valve V-8 jewel that a colleague described as a cross between an F-16 fighter jet and an English manor house. A gorgeous creature, that XJ8.

The F-Type R coupe is a chip off the old XJ8 block, not to mention the classic E-Type, albeit with a new owner. In 2008, Ford dumped just about everything not named Ford, and then borrowed $22 billion to try to save the company — successfully, it turned out — from the financial crisis. The buyer of Jaguar, as well as Range Rover, was Tata Group, the big Indian conglomerate, which added not a little historic irony to the deal: The former colonials were buying two of their former British masters’ most cherished automobile badges.

And in the F-Type, Tata has shown that it has more than respected these brands; indeed, it has upgraded them. The F-Type’s interior is now a combination English manor and rocket ship: luxurious leather reminiscent of the bespoke Jag ancestry; a roof-to-floor racing seat with a 14-way controller and side baffles that get you oh-so-snug for liftoff; dash dials that mean business; and AC that blows in from clever pop-up vents.

Then there’s the switch resting at your right hand, a toggle that allows access to the car’s Dynamic Mode. According to the company, the switch remaps the F-Type’s software to “sharpen the throttle response, increase steering weighting, stiffen suspension and perform gear shifts more quickly at higher engine speeds.” It puts this cat in pounce mode, in other words. I kept looking for a Mini to eat for a snack.

To the right of the gearshift is another button that engages the F-Type’s tuned exhaust system. If you know Mustangs or Harleys, you’re familiar with the distinct sound they make — a sound that is as carefully engineered as a Steinway grand. Jaguar is trying to establish a new note in its pipes, one we might label Get the F-Type Out of My Way. It’s an almost malevolent roar that lets anyone near you know that they soon won’t be. Combine that with the spoiler and the dynamic mode, and it’s a 550-hp drivable video game with a soundtrack from Harley by way of Fender. There’s no stiff upper lip here. This is Cool Britannia, even if it isn’t owned by the Brits.

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