Honda to pay $17 million in pollution settlement> Clean Air Act violation results in largest penalty ever

WASHINGTON — Honda Motor Co. agreed Monday to pay $17.1 million and extend warranties to settle charges that it disabled pollution monitoring equipment in 1.7 million cars and vans.

The consent agreement announced by the Justice Department is the largest civil penalty ever for violation of the Clean Air Act. It could cost Honda as much as $267 million if future free auto repair work is included, officials said.

In a separate action, the Justice Department also announced that Ford Motor Co. had agreed to a $7.8 million settlement in a case involving tampering with emission controls on 60,000 Econoline vans in an effort to get better gas mileage. Ford agreed to recall the vans to fix the defect and pay a $2.5 million civil fine.

The consent agreements with Honda and Ford — as well as a 1995 emissions tampering case involving General Motors and 570,000 Cadillacs — demonstrates the Clinton administration will pursue automakers who use sophisticated equipment to counter emission controls, said Lois Schiffer, assistant attorney general for environment.

The Honda agreement stems from the manufacturer calibrating a computerized emission control monitoring system in such a way that it failed to trigger a dashboard warning light when there were certain emission problems.

Because the light was not triggered, motorists were unaware of any problem and would not take the vehicles in for servicing, leading to “thousands of tons” of additional pollution over the life of the vehicles, said Steven Herman, head of enforcement at the Environmental Protection Agency.

Bill Willen, an attorney for American Honda, said the company set the computer to avoid frequent false alarms when there was no emission problem. He said the dispute resulted from a different interpretation of the 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,” Willen said in a statement.

The allegedly improper calibrations were uncovered during inspections by the California Air Resources Board and then pursued by the EPA, as well as state officials.

The settlement applies to 1.7 million 1995 through 1997 cars, according to Honda. They are the 1995 Accord, Acura NSX and Acura 2.5 TL, and the 1996 and 1997 Accord, Civic, Prelude, Odyssey and Acura (except Integra Type-R and SLX models).

As part of the consent agreement filed in U.S. District Court here and a related agreement with the California Air Resources Board, Honda will extend the emissions warranty for all affected models to 14 years or 150,000 miles, provide an engine check and any emissions-related repairs needed between 50,000 and 75,000 miles of use, and provide a free tuneup between 75,000 and 150,000 miles of use.

“This settlement means cleaner air for the American people,” said Attorney General Janet Reno. “It will help eliminate thousands of tons of exhaust emissions. And it will help save Honda owners money because they will get an early warning that their car needs repair.”

The Justice Department decided against pressing for a recall of the vehicles, which the automakers claimed would have cost as much as $500 million. Schiffer called the settlement “an environmentally better approach than a recall” because Honda will have to extend free repairs on all emission equipment, including the monitoring light, over a number of years.

In the separate action involving the Econoliner vans, Ford agreed to pay $2.5 million in civil penalties, to spend another $5.3 million on environmental programs, and to recall the vehicles involved. The problem already has been corrected in about 15,000 of the vans.

The government alleged that Ford illegally installed a device that defeated the emissions control system in the 1997 vans, increasing fuel economy but causing higher tailpipe emissions at highway speeds.

“This action is another step taken by this administration to ensure that companies fulfill their responsibility to protect public health and environment,” said EPA Administrator Carol Browner of the Ford settlement.

“High levels of smog can cause breathing problems for millions of Americans and aggravate asthma attacks in our children.”