By on November 5, 2014

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Yesterday’s announcement of record fines for Hyundai and Kia regarding their incorrect fuel economy claims is the strongest message yet that the Department of Justice ” firm commitment to safeguarding American consumers, ensuring fairness in every marketplace, protecting the environment, and relentlessly pursuing companies that make misrepresentations and violate the law.” But if your cars kill scores of people due to neglience, you’re getting off easy.

As Ryan Beene of Automotive News reports

“…Hyundai and Kia will pay a $100 million civil penalty, spend $50 million to establish an independent fuel economy certification group and forfeit some 4.75 million greenhouse gas emission credits the companies have banked under the EPA’s tailpipe emissions regulations — estimated to be worth more than $200 million, according to a joint statement by the Justice Department and EPA.”

All totaled, up, that’s about $350 million worth of penalties. GM paid about one-tenth of that in relation to federal safety law violations stemming from the now-infamous Chevrolet Cobalt ignition switch deaths.

The penalties in the Hyundai/Kia case come despite Hyundai’s voluntary reimbursement program for owners of the affected vehicles. Hyundai/Kia aren’t the only ones to have enacted such a program either. Ford set up a similar program for owners of the C-Max and Fusion, but hasn’t been fined by the EPA for similar misstatement of fuel economy numbers.

Maybe we ought to revisit the way we test for fuel economy figures altogether?

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52 Comments on “Of Penalties And Priorities...”


  • avatar
    FormerFF

    I drive one of the affected Fords. I’m not sure why they had to reinstate the figures, it’s the only car I’ve ever owned where I could routinely beat the EPA numbers.

    • 0 avatar
      Quentin

      Your anecdote does not matter. I’ve had cars where it was easier to beat the EPA number and others where it is difficult. That depends on your cycle and how the car fits your cycle.

      Ford restated it because they used completely flawed logic in determining the “official” rating for the C-max. The loophole was that you could use the same rating if the powertrain was the same and, I think, the footprint was within a certain variance. The purpose is to save automakers from having to test every single variation of their cars rather than using the same rating for a vehicle that is much heavier with much different aerodynamics. Like someone says below, it was technically legal but it was not in the spirit of the law.

      The 2nd time around, the restate was because they were using incorrect data when they did the setup of the dynos for the fuel economy test. It wasn’t applying a realistic amount of drag to the dyno, so the vehicle was using less fuel in the test.

      http://www.consumerreports.org/cro/news/2014/06/ford-revises-c-max-fusion-mkz-hybrid-fiesta-fuel-economy-ratings/index.htm

      • 0 avatar

        “The loophole was that you could use the same rating if the powertrain was the same”
        Yes, but it’s hardly the markets fault that a loophole exist. Cheating and playing smart are different factors. The PR considerations were Fords poker chips and so far public perception of a company isn’t regulated so far as I know.

    • 0 avatar
      jconli1

      same for my wife’s ’13 Rio… I understand the flap is about calculation and regulation and not at all about anecdotal evidence, but… we find it interesting the sticker of her 2013 Rio said 30/40/33, which they then adjusted to 28/36/31. Whenever I drive it on a mix of hilly city/highway, I average 41mpg, wheras she routinely gets 37. Over 20k miles, we’re both over even the “inflated” numbers.

      But, the reimbursement program has covered 75% of our routine service so far… so… there’s that.

  • avatar

    “But if your cars kill scores of people due to neglience, you’re getting off easy.”

    I hope this isn’t another GM airbag swipe becaue at least any quarter-ass driver can retain control of the car, unlike the Takata airbags where you literally have a time-bomb of unknown countdown primed and ready to detonate in your face.

    • 0 avatar
      Loki

      Yeah, those victims had it coming. They totally deserve to die for not being as awesome a driver as you and I, amirite?

      • 0 avatar

        As has been covered innumerable times, some of those people who heavily intoxicated and/or operating their vehicle in an unsafe/illegal manner before their crashes.

        • 0 avatar
          28-Cars-Later

          True -and not to be a nag- but the air bag should have deployed. Now if one wants to argue by not deploying it cleansed the gene pool a bit I won’t disagree. But my understanding is it could have happened to anyone driving those vehicles with the key weight condition.

  • avatar
    sirwired

    IIRC, Ford was following the letter of the regulations (saying the need not re-run economy tests if the drivetrain stays the same) even though they were ignoring the spirit.

    While Ford got shamed into more realistic numbers and restitution, it does not surprise me that they have not been fined, since they were following the letter.

    This isn’t evidence of some sort of pro-Detroit bias; it’s how the law works.

    And I’m pretty sure GM has further fines coming; it took quite a few years for all the fines for the Toyota fiasco to get levied. The wheels of the Justice dept. turn slowly.

    • 0 avatar
      Scoutdude

      Yup Ford followed the letter of the law in giving the C Max its ratings. Hyundia and Kia on the other hand made a “mistake” in converting the raw dyno data to the sticker ratings.

    • 0 avatar
      Quentin

      I thought rev 2 of the C-max ratings were related to the road dyno spec. The first rev was definitely them using the Fusion hybrid numbers.

      • 0 avatar
        Scoutdude

        All numbers are derived from stationary dyno numbers. That raw data is then converted into the numbers on the sticker by factoring the aerodynamic drag among other things. The loophole was that you can use the same aero calcs on a different car and the aero between the coupe like roof line Fusion and the station wagon like and more upright C Max are significant. The original intention of that loophole was for purely badge engineered models, not entirely different vehicles.

        • 0 avatar
          Quentin

          http://www.consumerreports.org/cro/news/2014/06/ford-revises-c-max-fusion-mkz-hybrid-fiesta-fuel-economy-ratings/index.htm

          There were 2 revisions. The first was using the loophole. The second was related to them using faulty data when setting up the dyno to run the test. The H/K fines were very similar to the 2nd time that Ford revised the C-max numbers, IIRC.

    • 0 avatar
      brn

      Ford hasn’t been fined YET. Don’t think it’s not coming.

      Hyundai got fined FIRST, because theirs was much more across the board and affected a lot more vehicles.

  • avatar
    Hummer

    We should just drop government mandated fuel economy figures. If someone wants to know a vehicles fuel economy they can find reviews from users. If reviewers are pursuaded by money they won’t last long.

    The money spent to increase mpg now that most economy cars get 40 is wasteful, we have worked on this for half a century, and the difference from a geo metro to a Prius 25 years later is insignificant. Not to ignore everything else in the car is better, but diminishing returns is a heavy deal.

    • 0 avatar
      Erikstrawn

      I’m in the market for a car and I routinely check cars against fueleconomy.gov. I am happy that our government runs a website where there is a standard, even if it is weaker than optimum. It beats visiting fanboi sites or reading 5-star reviews that were obviously written by marketing people.

    • 0 avatar
      sirwired

      “User reviews”? Really?

      No standard fuel economy test will capture anybody’s exact driving behavior. But putting every car through the same test provides at least some standard of comparison. Reading random reviews of owners is not a standard of comparison at all.

      And what are people interested in buying a new model or new drivetrain combo supposed to do? No user reviews to read…

      Lastly, the fact that fuel economy can stay the same while delivering a car that is superior in every respect ain’t bad at all.

      • 0 avatar
        Scoutdude

        Yup user reviews are useless unless said user is comparing multiple vehicles over the exact same use patterns. A good example is the car that my son now drives. It made the rounds from being my Wife’s daily driver, to mine and now my son’s. My wife typically got 21mpg, I pulled down only 20mpg, while my son does 23mpg. All could be considered “mixed” and actually cover many of the same roads, but all are done at different times of the day with different traffic patterns.

      • 0 avatar
        Lou_BC

        @sirwired – agreed. A government mandated and reported standard testing system may not be perfect in relation to real world driving but it does offer a starting point for comparison.

    • 0 avatar
      schmitt trigger

      ” the difference from a geo metro to a Prius 25 years later is insignificant.”
      In terms of MPG this statement is correct.

      Otherwise, they are light years away in all other performance, comfort and reliability metrics.

    • 0 avatar
      sportyaccordy

      “If reviewers are pursuaded by money they won’t last long.” Who would regulate this?

    • 0 avatar
      Xeranar

      How many times does this argument need to get kicked down before folks stop making it? I dare you to drive a Geo Metro back to back with either a Prius or another econo-car that gets 40+ MPG and then rate their ‘real world’ mileage. You’re going to find that the modern cars beat that metro hands down in every department including fuel savings. The newer cars handle better, have better safety ratings, more features, and if we account for inflation actually cost about the same or only slightly more than the Metro did brand new.

    • 0 avatar
      George B

      Hummer, I agree with the concept of standardized, mandated fuel economy tests. What I disagree with are “highway” fuel economy numbers that don’t account for actual highway speeds in 2014. Drivers can drive across the United States from Atlantic to Pacific with speed limits of either 70 mph or 75 mph on rural interstate with significant chunks of 80 mph. I would bet that if you asked the average American their expectation for the speed for the “highway” number, they would guess 70 mph. The test cycle needs to include higher speeds with more aerodynamic drag to provide useful numbers for comparison.

      http://en.wikipedia.org/wiki/Speed_limits_in_the_United_States

    • 0 avatar
      ajla

      “We should just drop government mandated fuel economy figures. If someone wants to know a vehicles fuel economy they can find reviews from users.”

      I do not like this idea.

    • 0 avatar

      I agree with Hummer. various power bands by various motors there really isn’t too much consumer value in a fuel economy test. Further, it forces car companies to design efficiency within the testing parameters rather than in what our realistic driving conditions are these days. Little old ladies would gain from a Buick that is peak at 55 mpg, while younger careless people would save more gas if the car was designed with peak efficiency at 75.

      Further, this is one more extra regulation and test that adds the the high cost of our vehicles. I’d be comfortable buying a car that had good brakes, and steering suspension components and leaving the rest to chance/skill. Heck I might even bolt in a 5 pt harness for good measure. Other folks would be more comfortable in a car that resembles the Mars rover landing balloons in an accident. IMO occupant collision safety shouldn’t be regulated, but I understand your car needs to be up to standards in order to not put fellow drivers at undue risk (whatever that means)

      • 0 avatar
        VoGo

        Let me see if I fully understand your hypothesis. The federal government tests are junk, because the carmakers design their powertrains to excel at them. So if you eliminated them, there would be private market tests to take the place of the EPA tests.

        But then won’t carmakers just design around the private market tests?

        How is that different?

      • 0 avatar
        Astigmatism

        “Further, this is one more extra regulation and test that adds the the high cost of our vehicles.”

        Could we please drop this utter denial of reality? Cars today are better, faster, safer, bigger, more comfortable, last longer, and – yes – cheaper than they were in the past. As Derek helpfully pointed out with the inflation-adjusted price of a 1989 “Honda Accord with 98-horsepower, no ABS, crank windows and no A/C,” which sold for $11,700 at the time, or $200 _more_ than a 2014 Accord (which may as well be a private jet by comparison) as adjusted for 1989 dollars.

        • 0 avatar
          danio3834

          If you don’t think these sorts of things add to the cost of vehicles, you’re the one in denial. The best argument that you can hope to make is that the added cost is offset by dramatic cost improvements elsewhere. It doesn’t mean that if these regulations didn’t exist that the cars wouldn’t in fact be cheaper. The consumer does pay for them in the end.

          • 0 avatar
            VoGo

            We’re acting as if the biggest waste of money by the federal government is the requirement that carmakers use a standardized algorithm to determine their fuel mileage.

            Judging by the results of yesterday’s election, I’d say you are in the minority. The country just returned the same party to power that put the EPA and CAFE in place in the first place.

          • 0 avatar
            Pch101

            The GOP has changed quite a bit since the 1970s. It has morphed from being an industrialists party that included liberals and moderates to a Southern theocracy-business coalition party with no liberals and virtually no centrists.

            CAFE is not a hot button issue, so it isn’t a priority. If there was political value on the right in opposing CAFE, then they would do it, but the average American thinks of CAFE as a place to get coffee. And I would imagine that most conservatives like to be provided with an estimation of how much their fuel their vehicles are supposed to use, if only for the sake of budgeting.

          • 0 avatar
            319583076

            “The country” did not put them into power. A majority of the folks that actually got out and voted (allegedly) did.

          • 0 avatar
            Astigmatism

            danio, you’re right that they add to the cost of vehicles – my point is that vehicles are not, in fact, expensive. And more to the point, the cost of the entire industry complying with uniform safety regulations is a lot lower than the cost of the industry not _having_ uniform safety regulations, leaving a patchwork of state laws that have no uniform federal framework to preempt them, together with endless lawsuits when people get killed in their unregulated, less-safe cars and all of this stuff gets hashed out by personal injury lawyers.

  • avatar

    I think the relative attention paid to the GM ignition switch and the Takata airbag issues is interesting.

    It’s also interesting that Honda, which seems to be enthusiasts’ fair haired boy, has had some ethical issues in its North American history.

  • avatar
    bunkie

    Correct me if I’m wrong, but wasn’t the GM fine the maximum amount allowed under the current law?

    The story paints a picture in which GM got special treatment which is, clearly, not the case. One can argue that the fines allowed by the law are inadequate (I believe that they are), but GM did get the maximum penalty.

    • 0 avatar
      Russycle

      The Cobalt and other cars affected by the ignition fiasco have been out of production for years, and the geniuses who decided to pinch pennies instead of fixing the problem bailed out with their golden parachutes years ago. What’s the point in punishing the current executives and shareholders? GM may not be paying much in fines, but they’re paying plenty in recalls.

  • avatar
    bball40dtw

    Can Ford revise the C-Max numbers again so that I can get a check again? Please?

  • avatar
    TW5

    If you get bogged-down in the politics of apparent unfairness, it’s easy to accuse the EPA of impropriety, but if you revisit the Ford vs. EPA, the reason for the disparity is clear.

    Hyundai violated testing procedures for their ICE models, and the EPA determined that it was intentional and widespread. Furthermore, the EPA tests are set up for ICE-only models so even small disparities are reason for pause. Ford, on the other hand, gamed the system by using hybrid technology and exploiting loopholes in the rules for testing powertrains across various models. Toyota does the same thing with the Prius on the 10-15 mileage cycle in Japan. When tested on the new JC08 standards, for which Prius is not optimized, fuel economy fell 15%. Gaming the system with electric-only capability is part of the mileage compliance bloodsport, and considering how much Ford whined about Japanese protectionism, perhaps they felt justified in gaming the US system to put C-Max/Fusion Hybrid in an unfairly positive light.

    The EPA had no case against Ford, and Ford’s first course of action was to play with the software governing the electric-only mode on their vehicles. When the software change failed to ameliorate the discrepancy, the EPA investigated Ford and entered into negotiations. It seems clear that Ford admitted guilt to avoid fines and restore public faith in the EPA test, which forms the backbone of our CAFE regulations. Ford revised their EPA estimates, set up a compensation fund for customers, and then moved forward with impunity, promising to help the EPA make better testing standards.

    This July, the EPA pitched an idea for real-world road testing, since the standard tests will probably never be compatible with hybrid-electric powertrains.

  • avatar
    TW5

    Lost to the filter. Oh well. Hyundai broke the testing regs, an the EPA determined it was intentional. Ford gamed the system, in new egregious ways, like Toyota does in Japan with Prius. EPA didn’t really have grounds for a fine.

    This July EPA pitched real world testing to alleviate the inaccuracy regarding advanced powertrain testing.

  • avatar
    APaGttH

    I’m not sure about the comment on killing scores of people.

    Toyota got it’s clock cleaned for over $1.6 billion in total payouts – and paid at the time record fines.

    It didn’t just happen in a blink with Toyota either, it took years.

    GM is still in play – we’ll see where it goes – but to say they have, “gotten off,” is a bit premature.

    Takata is just unfolding – and in the big scheme of things, compared to trapped floor mats, misshapen gas pedals and low ignition cylinder torque – life ending shrapnel blowing into your face from a device meant to protect you in a crash is something no one can anticipate, regardless of how good of a driver you claim to be.

  • avatar
    stuki

    “… firm commitment to …..”

    get our mediocre faces on TV and in other media, so that stupid little us can be famous too!!!! And generations of semi literate indoctrinates can cheer for us as we rob people to fund our pensions. Like any good government agency.

  • avatar
    Conslaw

    What were the problems in Hyundai’s methodology for determining MPG that justified the fine? I heard all about Ford using the Fusion’s test data to rate the C-Max, but I don’t know what Hyundai did wrong. Ford probably wasn’t fined because the rules (arguably) allowed using the figures from vehicles with the same weight and powertrain. (Ethically, Ford isn’t off the hook because it knew that the C-Max had a significantly higher drag coefficient than the Fusion.) I’m a happy C-Max owner. Ford’s checks made 2 of my first 16 car payments. I still get 42-44 MPG.

    • 0 avatar
      highdesertcat

      The methodology didn’t matter because the 2011 Elantra I helped buy for my grand daughter NEVER even came close to the mpg on the new-car window sticker. I just filled it up whenever it needed filling up.

      OTOH, she cruised at over 85mph on Hwy 70 to/from college. What kind of gas mileage should we expect at those speeds?

      I am certain that the Hyundai/KIA mpg figures were rooted in more sedate driving, at lower speeds, and under controlled conditions.

    • 0 avatar
      pragmatic

      From the EPA web site:

      The EPA subsequently investigated the coastdown test protocol Hyundai and Kia used to measure the road load force of their vehicles. That protocol appears to have included numerous elements that, once aggregated, generated inaccurately low road load forces. For example, Hyundai and Kia restricted their testing to a temperature range where its vehicles coasted farther and faster and prepared vehicle tires for optimized results. In processing test data, Hyundai and Kia chose favorable results rather than average results from a large number of tests. In certain cases, Hyundai and Kia relied predominantly on data gathered when test vehicles were aided by a tailwind.

    • 0 avatar
      pragmatic

      My understanding of Ford is they used some data from the Hybrid Fusion for the CMax hybrid which is allowed. This loop hole is being closed (I think an ANPR has been issued). I have used this loop hole as part of my thoughts that the EPA’s rules do not discouraged MT vehicles (as many insist) when the real problem is OEM’s and dealers not knowing or wanting to manage car and part inventories.

      • 0 avatar
        Exfordtech

        Emission regulation is part of the reason for the reduction in manual transmission vehicles. Certifying a vehicle for emissions is expensive, and a manual equipped car must be certified separately from it’s automatic sibling. It is also more difficult to certify a manual because the driving behavior and shift points are less predictable as they are in human hands. It is also one of the reasons for electronic throttle control. Removing (or mitigating the actions of) the loose nut behind the wheel makes the vehicle behavior more predictable.
        You would be amazed by the driving habits of some people. Years ago dealt with a customer with an intermittent driveability complaint (a pre OBDII Crown Vic). Harsh shifting if I recall. It was always no problem found no matter who looked at it, even test driving with the customer. Ford has a tool we called a flight recorder, essentially a black box with a button that when pressed (you send the customer off with this installed) takes a recording of whatever PCM parameters you programmed it to look for. Set it up to look at brake on/off, throttle position, mass air flow, rpm, vehicle speed, commanded gear. Every recording showed application of the brakes while simultaneously mashing on and off the accelerator at speeds between 10 and 20 mph. You could upload and playback the data in graphical form on the old SBDS. Turned into a Henny Youngman: doc it hurts when I do this and the doctor replies “well don’t do that!”. Guy still killed us on the QC survey.
        The main reason for the lack of manuals however remains to be profit.

        • 0 avatar
          pragmatic

          I don’t deny the added cost of testing manuals, nor the difficulty in getting them through the tests. But if an Accord Coupe is the the same inertia class as the sedan then very limited testing would be required to use the same drivetrains – or have I been too long away from these regulations?

          Of course profit drives all, but I contend most of the profit limits inherent in low production vehicles is related to poor inventory control and not the cost of certification or design. This is why Honda limits color and option choices on the Sport Accord with MT (only three or four vehicle combinations to stock). If the OEMs could figure out how to quickly and efficiently handle custom orders and consumers could accept waiting several (better yet few) weeks for a car and possibly buying sight unseen (all tall orders), there would be more joy for both the OEM and the consumer.

          The last time I tried to order a car the Infinity dealer would not provide and estimate of the delivery date (other than more than 8 weeks) nor stand by a price (if the price changes between now and unknown delivery date you will pay the increase or forfeit your large deposit). Needless to say I purchased from stock elsewhere.

          • 0 avatar
            Exfordtech

            I just don’t think the demand for manuals is strong enough for most automakers to dedicate the necessary investment. As to the emissions regs, it’s not just the cost of the test itself but the cost (and probably of more importance the time) of designing the PCM calibration that passes that test. As for why the automakers that do offer manuals restrict them by color or option package I would imagine there isn’t enough money in it for them to do otherwise. I have nothing against manuals myself, have owned several, but unfortunately I think they are approaching extinction in the U.S.

  • avatar
    dr_outback

    I use the fuelly.com site for owner fuel mileage experience. It has believable fuel economy ratings.

    • 0 avatar
      Brian P

      It stinks when there are multiple engine choices, though. It seems like a lot of the users have no idea what is under the hood of their own cars. There’s no way to distinguish between, say, 1.6 and 2.0 litre engines. They don’t apply any plausibility checks, e.g. “enter trim level – now here is the list of available engines on that trim level, select which one you have”.

  • avatar
    SOneThreeCoupe

    This is a civil matter, not a government matter.

    If people were lied to, and had monetary loss due to that lie, they should have sued in civil court. Part of the purpose of the DoJ is to provide a framework in which wrongs can be righted, without lining the pockets of government itself.

    Here’s the way to test emissions and fuel efficiency: let the manufacturers make the numbers. They’re not going to fudge numbers that aren’t possible because no one will trust them, or they’ll get sued.

    My next vehicle will be purchased on a combination of Fuelly numbers, private reviews and industry reviews.

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