WASHINGTON — Honda and Ford Motor companies agreed Monday to pay $24.9 million in civil penalties and other costs--as well as to recall certain automobile models--to settle allegations that they had tampered with emissions control systems on vehicles sold in the United States.
The largest settlement costs were incurred by Honda, including $12.6 million in civil penalties--the most ever incurred for violation of the Clean Air Act, according to Justice Department officials. Also as part of the settlement, Honda agreed to spend $4.5 million to implement projects to reduce pollution--including $3.5 million to fund state environmental research in California. Ford will spend $7.8 million in its settlement with the Justice Department and the Environmental Protection Agency.
The Honda investigation that led to its settlement began with the California Air Resources Board a year ago, then was expanded nationwide by the EPA.
Cars are the leading source of the smog that blankets Southern California as well as other urban areas, and under federal and state regulations, new vehicles are supposed to emit only minuscule concentrations of pollutants.
Honda was alleged to have altered computer emission control diagnostic systems on 1.6 million 1996 and 1997 Accords, Civics, Preludes, Odysseys and Acuras, as well as on 1995 Honda Civics.
Under the change in the monitoring device, the system's malfunction indicator light will not operate, leaving the vehicle owner unaware that the engine needs to be serviced. This, in turn, may result in increased exhaust emissions of hydrocarbons, according to Justice and the EPA. The Honda settlement "will help eliminate thousands of tons of exhaust emissions from . . . vehicles across our nation," Atty. Gen. Janet Reno said in announcing the agreement.
Bill Willen, American Honda's managing counsel, said that the company made the change to the emissions systems to avoid frequent false alarms when there was no emission problem. Willen attributed the problem to a difference in interpreting clean air regulations.
"Honda has agreed to settle the issue in a positive manner that will reassure our customers that their vehicle emission systems are functioning properly," he said.
In the case of Ford, officials with the Justice Department and the EPA alleged that it illegally installed a device which inadvertently defeated the emissions control systems in 60,000 1997 Econoline vans. The government and Ford agreed that the company acted to enhance fuel economy, but the EPA said that the move caused smog-causing nitrogen oxide emissions to increase well beyond Clean Air Act standards when the vans are driven at highway speeds.
Sara Tatchio, a Ford spokeswoman, said that the nitrogen oxide spurt was unintentional and that the company halted shipment of the vans and investigated the matter in March 1997, within two days of being notified of the EPA's concerns.
The Ford settlement includes $2.5 million in civil penalties, $1.3 million to recall and deactivate the device that caused the increased emissions and $1.5 million for projects to reduce future harmful pollutants in the air.
The EPA discovered the defect in the device when the vans were driven at speeds of more than 40 mph. In addition to stopping the sale of Econolines to fix the problem, Ford also issued a special service instruction to dealers, resulting in eliminating the problem in about 25% of the 60,000 Econolines and the remainder will be recalled, Justice and the EPA said.
The 1.6 million Hondas with the disabled emission-tracking systems include 290,000 in California.
Under the agreement filed in federal court and a related agreement between Honda and the California Air Resources Board, Honda will extend the emissions warranty for all affected models to 14 years or 150,000 miles. This replaces a series of warranties ranging from three to eight years and 36,000 to 80,000 miles, according to Art Garner, public relations manager at American Honda in Torrance.
The company also will perform an engine check and make emissions-related repairs between 50,000 and 75,000 miles and provide a free tune-up between 75,000 and 150,000 miles.
The government estimated that those steps would cost Honda at least $250 million, but Garner questioned that figure, citing the "typically low return rate" on recalls and adding that the company "had no idea" of the basis for the government estimate.
Both the Honda and Ford settlements must be approved by a federal court in Washington.
Officials with the California board said that they could not tell whether the Honda emissions systems were intentionally designed to violate standards and allow excessive pollution. But they said there has been a pattern of similar problems with other auto makers.
General Motors was fined $11 million in 1995 for allegedly designing faulty emissions systems in Cadillacs.
John Dunlap, chairman of the California board, said that Honda representatives "have now acknowledged limitations" in the emissions systems for their vehicles and have worked closely with the agency "to reach a remedy that ensures no adverse impact on air quality and provides vehicle owners with long-term consumer protection."
"It's the biggest settlement we've ever had against a car company in California, said board spokesman Jerry Martin.
Ostrow reported from Washington and Cone from Los Angeles. Times staff writer Julius Wamey contributed to this story.