In sensational language, Attorney General Eric Holder today announced the biggest enforcement action ever against a greenhouse gas violator, as the federal government penalized automaker Hyundai Group up to $350 million.
“This will send a strong message that cheating is not profitable and any company that violates the law will be held to account,” Holder said. “This announcement illustrates that this type of conduct quite simply will not be tolerated.”
What did they do to deserve the biggest spanking since the Supreme Court, in 2007, gave the EPA power to regulate greenhouse gases?
Hyundai Group overestimated the miles-per-gallon rating in about a quarter of their Kia and Hyundai models.
That means they’ve had to downgrade their fleet-wide 2012 fuel efficiency average from 27 all the way down to 26 MPG.
That 1 MPG variance apparently constitutes a high crime.
According to the EPA, the fine is the largest in Clean Air Act history, which the automakers violated when they sold close to 1.2 million vehicles that will emit approximately 4.75 million metric tons of greenhouse gases in excess of what the automakers certified to EPA.
The biggest part of the penalty comes in the form of lost carbon credits. Hyundai already compensated some 900,000 customers for the MPG misstatement, and characterizes the settlement as a welcome end to a two-year government inquisition.
“We’re going to be working with the EPA to make sure that the guidelines are easy to follow. … So we’re getting slapped on the wrist here [but] we did have an error, and we fixed this. It’s not going to happen again. We’re paying a penalty and it’s time to move on,” [Hyundai spokesman Jim] Trainor said.
While the issue may be behind Hyundai, the rest of the industry can’t breathe easy yet.
[EPA Administrator Gina McCarthy] said Hyundai’s conduct was the most “egregious” and “systemic,” but didn’t close the door on possible investigations against Ford Motor Co. or other automakers who have overstated mpg. Ford, BMW AG and Daimler AG have restated mileage ratings on vehicles over the last year.
Of course, corporations don’t pay fines any more than they pay taxes. You and I pay for all of it. So, now that you’ve been chastised, I hope we won’t have to have this conversation again.