Hyundai Raided in South Korea Over Theta II Engine Recall

Matt Posky
by Matt Posky

In 2017, United States safety regulators opened a formal investigation into the recall of roughly 1.7 million vehicles built by Hyundai Motor Co and its affiliate, Kia Motor Corp, after being tipped off by a former employee. The informant claimed the automaker wasn’t handling the issue properly. That same year, South Korean civic group YMCA filed a complaint with local prosecutors alleging the automakers delayed fixing engine defects that prompted the same recalls.

According to Reuters, South Korean prosecutors raided the offices of Hyundai Motor Group’s quality division in Seoul on Wednesday. While the investigation concerns the company’s Theta II engines, both investigations seek to nail down a timeline of the recalls and establish whether or not Hyundai handled the situation responsibly.

Kim Gwang-ho, the former Hyundai engineer who flew to Washington tell the NHTSA the company should have recalled more vehicles, also reported several alleged safety lapses to both U.S. and South Korean authorities — citing internal documents.

Hyundai recalled 470,000 U.S. Sonata sedans in 2015, claiming potential engine failure could result in stalling or even a fire. While most consumer complaints didn’t mention fire, engine seizures had become uncomfortably common. The automaker attributed the problem to metallic debris left behind from the manufacturing process — an issue that had cropped up before, forcing Hyundai to alter its deburring process several years earlier.

By March of 2015, the company expanded its recall to include 572,000 Sonata and Santa Fe Sport vehicles, while Kia tacked on 618,160 Optima, Sorento, and Sportage vehicles equipped with the Theta II four-cylinder.

At this time, it’s unclear what Hyundai did or didn’t know about the engines. Both it and Kia have denied allegations that they mishandled the recalls, pledging their cooperation with authorities, but the quality control problem remains a longstanding issue. The debris problem had become common knowledge prior to Kim’s whistleblowing; Hyundai vowed to improve the way it handled safety-related defects in 2014 — after the NHTSA lapped with with a $17.35 million fine over brake defects.

Kim alleges the problem with the Theta II have as much to do with the debris issue as it does its design. He believes Hyundai intentionally delayed recalls because it knew the costs needed for a comprehensive fix would be astronomical. While the manufacturer denies this, it was good enough for South Korea’s transport ministry to issue a compulsory recall of over 240,000 vehicles and apparently raid Hyundai’s corporate offices in Seoul.

[Image: Hyundai]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Saturnotaku Saturnotaku on Feb 21, 2019

    Hopefully the next shoe to drop in this saga will revolve around the poor QC of the 7-speed dual-clutch transmission in the 15-17 Sonata/Optima Eco and 16-17 Tucson.

  • Cognoscenti Cognoscenti on Feb 21, 2019

    What, no jokes about a South-Korean YMCA? Either the health clubs or the song would do as the subject...

    • ToolGuy ToolGuy on Feb 21, 2019

      "Young man, there's no need to feel down... There's no need to be unhappy... ...there's a place you can go" ...Toyota?

  • Pau65792686 I think there is a need for more sedans. Some people would rather drive a car over SUV’s or CUV’s. If Honda and Toyota can do it why not American brands. We need more affordable sedans.
  • Tassos Obsolete relic is NOT a used car.It might have attracted some buyers in ITS DAY, 1985, 40 years ago, but NOT today, unless you are a damned fool.
  • Stan Reither Jr. Part throttle efficiency was mentioned earlier in a postThis type of reciprocating engine opens the door to achieve(slightly) variable stroke which would provide variable mechanical compression ratio adjustments for high vacuum (light load) or boost(power) conditions IMO
  • Joe65688619 Keep in mind some of these suppliers are not just supplying parts, but assembled components (easy example is transmissions). But there are far more, and the more they are electronically connected and integrated with rest of the platform the more complex to design, engineer, and manufacture. Most contract manufacturers don't make a lot of money in the design and engineering space because their customers to that. Commodity components can be sourced anywhere, but there are only a handful of contract manufacturers (usually diversified companies that build all kinds of stuff for other brands) can engineer and build the more complex components, especially with electronics. Every single new car I've purchased in the last few years has had some sort of electronic component issue: Infinti (battery drain caused by software bug and poorly grounded wires), Acura (radio hiss, pops, burps, dash and infotainment screens occasionally throw errors and the ignition must be killed to reboot them, voice nav, whether using the car's system or CarPlay can't seem to make up its mind as to which speakers to use and how loud, even using the same app on the same trip - I almost jumped in my seat once), GMC drivetrain EMF causing a whine in the speakers that even when "off" that phased with engine RPM), Nissan (didn't have issues until 120K miles, but occassionally blew fuses for interior components - likely not a manufacturing defect other than a short developed somewhere, but on a high-mileage car that was mechanically sound was too expensive to fix (a lot of trial and error and tracing connections = labor costs). What I suspect will happen is that only the largest commodity suppliers that can really leverage their supply chain will remain, and for the more complex components (think bumper assemblies or the electronics for them supporting all kinds of sensors) will likley consolidate to a handful of manufacturers who may eventually specialize in what they produce. This is part of the reason why seemingly minor crashes cost so much - an auto brand does nst have the parts on hand to replace an integrated sensor , nor the expertice as they never built them, but bought them). And their suppliers, in attempt to cut costs, build them in way that is cheap to manufacture (not necessarily poorly bulit) but difficult to replace without swapping entire assemblies or units).I've love to see an article on repair costs and how those are impacting insurance rates. You almost need gap insurance now because of how quickly cars depreciate yet remain expensive to fix (orders more to originally build, in some cases). No way I would buy a CyberTruck - don't want one, but if I did, this would stop me. And it's not just EVs.
  • Joe65688619 I agree there should be more sedans, but recognize the trend. There's still a market for performance oriented-drivers. IMHO a low budget sedan will always be outsold by a low budget SUV. But a sports sedan, or a well executed mid-level sedan (the Accord and Camry) work. Smaller market for large sedans except I think for an older population. What I'm hoping to see is some consolidation across brands - the TLX for example is not selling well, but if it was offered only in the up-level configurations it would not be competing with it's Honda sibling. I know that makes the market smaller and niche, but that was the original purpose of the "luxury" brands - badge-engineering an existing platform at a relatively lower cost than a different car and sell it with a higher margin for buyers willing and able to pay for them. Also creates some "brand cachet." But smart buyers know that simple badging and slightly better interiors are usually not worth the cost. Put the innovative tech in the higher-end brands first, differentiate they drivetrain so it's "better" (the RDX sells well for Acura, same motor and tranmission, added turbo which makes a notable difference compared to the CRV). The sedan in many Western European countries is the "family car" as opposed to micro and compact crossovers (which still sell big, but can usually seat no more than a compact sedan).
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