U.S. auto safety regulator awards over $24 mln to Hyundai Motor…

US auto safety regulator gives its first-ever reward to whistleblower: Hyundai worker is given $24M after reporting in 2016 that the South Korean car maker failed to fix designs flaws that led to engines seizing up and catching fire

  • Kim Gwang-ho will be awarded $24 million after providing key information about safety lapses at Hyundai Motor Co. He was an engineer at the automaker 
  • It is the first-ever reward to a whistleblower under the US Motor Vehicle Safety Whistleblower Act signed into law by Congress in 2015
  • In 2016, Kim reported to NHTSA that Hyundai was failing to address a design flaw in its Theta II engines, which were prone to seizing up and even catching fire
  • In 2020, Hyundai and Kia’s US units agreed to a $210 million civil penalty after NHTSA said they failed to recall vehicles for engine issues in a timely fashion
  • In a statement, Hyundai said they have since made efforts to regulate and enforce safety standards

A whistleblower will be paid $24 million after providing key information about safety lapses at Hyundai Motor Co, The US auto safety regulator announced on Tuesday. 

The reward to ex-Hyundai Motor engineer Kim Gwang-ho is the first-ever to a whistleblower under the US Motor Vehicle Safety Whistleblower Act, and the biggest ever in a whistleblower case in the auto sector globally. 

‘I am pleased that I have been justly compensated for the risks I took to protect owners of these defective cars, and grateful that the US´s legal system had a program in place to make this possible,’ Kim said in a statement on Tuesday. 

Kim worked as an engineer for the automaker in South Korea. In 2016, he reported to the National Highway Traffic Safety Administration that Hyundai was failing to address a design flaw linked to its Theta II engines, which were prone to seizing up and even catching fire. 

In 2020, Hyundai and affiliated Kia’s US units agreed to a record $210 million civil penalty after NHTSA said they failed to recall vehicles for engine issues in a timely fashion.  

The award to ex-Hyundai Motor engineer Kim Gwang-ho (pictured) is the first-ever to a whistleblower under the US Motor Vehicle Safety Whistleblower Act, and the biggest ever in a whistleblower case in the auto sector globally

In 2016, Kim reported to the National Highway Traffic Safety Administration that Hyundai was failing to address a design flaw linked to its Theta II engines, which were prone to seizing up and even catching fire

‘I am pleased that I have been justly compensated for the risks I took to protect owners of these defective cars, and grateful that the U.S.´s legal system had a program in place to make this possible,’ he said on Tuesday

‘This award is the maximum percentage allowed by law,’ NHTSA said in a statement announcing the award. 

News of the award comes as NHTSA’s and the US Department of Transportation prepare to propose regulations related to the automotive whistleblower program Congress created in 2015.

‘Whistleblowers play a crucial role in bringing information to NHTSA about serious safety problems that are hidden from the agency,’ said Steven Cliff, NHTSA´s Deputy Administrator.

Citing an internal report from Hyundai´s quality strategy team to management, Kim had told NHTSA the company was not taking enough action to address an engine fault that increased the risk of crashes.

NHTSA found that Hyundai and its Kia subsidiary had delayed recalling affected vehicles, and that the automaker had provided inaccurate information about the problems.

More than 4.7 million vehicles have been recalled, while another 3.7 million had installed software alerting drivers of possible engine failures as part of a ‘product improvement campaign’ by Hyundai and Kia

‘I hope my reporting leads to real safety improvements, both at Hyundai and throughout the industry,’ Kim said.

In 2017, US safety regulators began to investigate if the recalls had covered enough vehicles and were done in a timely fashion. That followed the concerns reported by Kim to the US auto safety regulator.

In 2018, NHTSA reportedly received complaints of more than 3,100 fires, 103 injuries, and one death.

More than 4.7 million vehicles have been recalled, while another 3.7 million had installed software alerting drivers of possible engine failures as part of a ‘product improvement campaign’ by Hyundai and Kia. 

The payout to Kim is the first under the US Motor Vehicle Safety Whistleblower Act by Congress in 2015 to create a whistleblower reward program in the Department of Transportation for industry insiders who provide information to safety regulators about defects in vehicles.

In a statement to FOX News, Hyundai maintained that the safety of their customers was their priority and that after the $210 million payout the company had made efforts to regulate and enforce safety standards. 

‘Hyundai takes safety seriously and fosters a culture of transparency and accountability. In late 2019, Hyundai Motor North America created the role of Chief Safety Officer (CSO),’ the statement read. 

‘The CSO is responsible for infusing and enforcing the highest standards of motor vehicle safety throughout the organization. We value our collaborative and cooperative relationship with the U.S. Department of Transportation and NHTSA, and are committed to a best-in-class U.S. safety office,’ it concluded. 

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