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Ford Motor Company (F) Pays Maximum Fine Over Escape Recall

DETROIT (AP) — Ford Motor Company (NYSE:F) has paid the top penalty of $17.35 million to settle government allegations that the company was slow to recall nearly a half-million SUVs last year.

Ford Motor Company (NYSE:F)The fine announced Thursday is linked to the July 2012 recall of nearly 485,000 Ford Escape SUVs from the 2001 to 2004 model years. The SUVs, equipped with 3-Liter V-6 engines, were recalled to fix sticking gas pedals that could cause crashes. It’s the maximum fine that safety regulators are allowed to levy against an automaker.

The National Highway Traffic Safety Administration contends that Ford knew about the problem in May of 2011, but failed to take action until the agency began investigating the Escapes in July of 2012. The probe was started after a teenage Arizona girl died in an Escape crash in January of last year.

Regulators felt they had a case that Ford Motor Company (NYSE:F) violated the law by delaying the recalls, although Ford denied any violations, according to a June 28 settlement agreement posted online by NHTSA.

It’s the third time in less than a year that an automaker has paid a fine or reached a settlement with NHTSA to sidestep lengthy public battles with the agency. In December, Toyota Motor Corporation (ADR) (NYSE:TM) paid the maximum fine in a case that also involved a delayed recall. Earlier this year, Chrysler reached a deal to install trailer hitches on some older Jeep Grand Cherokees and Libertys, avoiding a wider recall.

Recall delays are a significant problem, said Joan Claybrook, NHTSA administrator under President Jimmy Carter and a leading auto safety advocate. If an automaker can delay a recall, the number of vehicles affected declines, she said.

“In the past, a lot of companies have delayed, delayed, delayed and tried not to face the music, only to have it become a big public issue,” Claybrook said. “When it becomes a big public issue, they will act immediately.”

Ford Motor Company (NYSE:F) agreed to the recall in July 2012, a week after it was asked for information about the Escapes. Eventually Ford turned over the information, and NHTSA found evidence that Ford knew about the problem more than a year earlier.

“It is our job to ensure that manufacturers are held accountable to address safety issues promptly and responsively,” NHTSA said in a statement. “Recalls are a serious safety matter.”

At the time of the recall, NHTSA said it had 68 complaints about the Escape problem, including 13 crashes, nine injuries and the death in Arizona.

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