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Tuesday, January 31, 2023

Hyundai whistleblower to collect $24 million from NHTSA

The U.S. National Highway Traffic Safety Administration (NHTSA) announced Tuesday that it will give its first-ever whistleblower cash award to a former Hyundai employee, awarding Kim Gwang-ho more than $24 million — the maximum allowed by law — after an investigation found that Hyundai had withheld defect information from regulators.

“This award is the maximum percentage allowed by law of the $81 million in cash collected by the United States and is the first award NHTSA has issued under its authority,” NHTSA said in its announcement. The total penalties against Hyundai amounted to $210 million, the regulator said. 

“Whistleblowers play a crucial role in bringing information to NHTSA about serious safety problems that are hidden from the agency,” said Dr. Steven Cliff, NHTSA’s Deputy Administrator. “This information is critical to public safety and we are committed to rewarding those who bring information to us.”

It comes as the U.S. regulator, the National Highway Traffic Safety Administration (NHTSA), and the U.S. Department of Transportation prepare to propose regulations related to an automotive whistleblower program Congress created in 2015.

Kim reported to NHTSA in 2016 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. Kim was fired in November, 2016, for allegedly leaking information to media and later reinstated by Hyundai after a ruling by a South Korean government body under whistleblower protection laws. 

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. In 2020, Hyundai and Kia’s U.S. units agreed to the record civil penalty after NHTSA said they failed to recall vehicles for engine issues in a timely fashion.

This article contains reporting by Reuters.

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