Two years ago, Korean auto makers Hyundai and Kia admitted that the efficiency of their vehicles was exaggerated.
I remember doing a local radio interview two years ago and this very topic came up. I was asked if it would hurt the company’s sales. I answered that it could have a small impact on sales short term but they would be doing just fine in the long run. I was right on that. What couldn’t be foreseen was how much it would cost the company in terms of finances.
As it turns out, it will cost the companies a whopping $800 million USD. Even Warren Buffet would gasp at the thought of losing that much money.
The Environmental Protection Agency and the US Department of Justice announced today that both companies have agreed to pay $100 million USD as a civil penalty and to pay any other monetary costs.
Those other costs include agreeing to pay $50 million USD to pay for an independent fuel consumption verification body and to hand over $200 million USD in greenhouse gas credits earned by the companies.
Previously, Hyundai and Kia agreed to settle a class action lawsuit filed in both Canada and the United States with the settlements totaling $7 million CAN and $395 million USD respectively.
That brings the grand total of the entire blunder to $800 million USD. This likely also sets precedent for any other automotive manufacturer that may find themselves in similar shoes as the Korean twins.
What do you think? Is this over punishment for what Hyundai and Kia call an honest mistake, something they owned up to immediately? Or is this just what big companies need to ensure they cannot take advantage of consumers?
