- The National Highway Traffic Safety Administration (NHTSA) penalized Volvo AB VLVLY North America by $130 million under a three-year consent order.
- The action followed an investigation that found the company failed to recall vehicles promptly and to comply with other recall and reporting requirements, including notifying owners of recalls and reporting death and injury incidents.
- Volvo Group North America has agreed to oversight by an independent third-party auditor and keep in touch with the NHTSA to ensure that it addresses potential safety issues.
- Volvo Group North America will develop and implement a safety data analytics infrastructure to enhance its ability to detect and investigate potential safety defects.
- The consent order requires the company to make an upfront payment of $65 million and spend an additional $20 million on the specific performance obligation. It includes an additional $45 million deferred penalty.
- NHTSA may extend the term of the consent order for up to two additional years.
- NHTSA launched an investigation in October 2018 into the company's compliance with recall requirements, including recall timeliness, manufacturer communications, and early warning reporting requirements, Reuters reports.
- Price Action: VLVLY shares closed at $19.74 on Monday.
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