Most of my readers know I am a Ducati and Harley fan. So there is no love lost when I report that one of the largest Honda power sports dealerships is under investigation, by federal and state authorities, for allegedly selling unsafe motorcycles, dirt bikes and all-terrain vehicles. Is it an attack on rice rockets, or is there merit to the allegations?
Honda Powersports Investigation
Chattanooga Tennessee based Southern Honda Powersports,1 is under investigation that was launched by the National Highway Traffic Safety Administration (NHTSA). The investigation began in May, by the U.S. Attorney’s Office and last month by the Attorney General’s Office.
Unsafe Assembly Allegations
This could be a real boon for products liability attorneys and here’s why. According to former Southern Honda marketing consultant Ernest Vickers III, when he consulted for the dealership from February 2004 through May 2007, he said he told federal regulatory agencies, who failed to act five years ago that approximately 25,000 new motorcycles, dirt bikes and ATVs were assembled unsafely. Vickers said federal regulatory agencies also failed to act 2010.
Former Southern Honda employees and Vickers say unsafe vehicle assembly continued until at least 2010 and illegal sales were made by the dealership. They claim that between 2004 and 2010 there were hundreds or thousands of new vehicles sold illegally, which were under safety recall by the federal government, without correcting the issues prior to selling them.
Ex Employee Allegations are Damning
If true, the accusations the former Southern Honda employees and Vickers have made, mean that there are virtually tens of thousands of people who are riding potentially dangerous motorcycles, dirt bikes and ATVs. The accusations also show federal safety regulators may be unsuccessful in ensuring product and highway safety.
Consumer auto safety advocate Sean Kane of Safety Research & Strategies, said that it is extremely distressing that the NHTSA did not independently investigate the allegations brought to them by Mr. Vickers, which were corroborated by other people that worked with him. Kane said this appears to be a tendency of the NHTSA, to believe it’s ‘regulatory partners’ are the companies they are supposed to regulate, instead of the motoring public. Tim Kelly, owner of Southern Honda, said there is no substance to the allegations made by Vickers and he said the supposed assembly problems are “utter balderdash.”
Kelly said that he recently fired a salesman for selling a vehicle that was under recall. He said that while some bikes were delivered prior to recall work being performed, the owners were notified and their vehicles repaired. He claims that safety is their first priority.
Along with Vickers, there have been nine other former employees, who have reported vehicle safety at Southern Honda is ignored, including seven who in 2010 signed notarized affidavits alleging safety problems.
Letters, emails and the signed affidavits that detailed the allegations were sent by Vickers to; American Honda the manufacturer, the NHTSA, which regulates motorcycle safety, the regulator of dirt bike and ATV safety, and the Consumer Product Safety Commission (CPSC).
According to Vickers, neither of the federal agencies contacted him or took any enforcement steps.
During an eight-month investigation by USA Today, in May the NHTSA was questioned about Vickers accusations and they confirmed there was an investigation being started into the alleged vehicles sales by Southern Honda, under ten recalls.
The Tennessee Attorney General’s Office and U.S. Attorney’s Office in Nashville, had similar questions and began their investigation last month. They both had meetings with Vickers and with Southern Honda’s general manager from 2007 through 2010, John Gore. Vickers said that it is beyond your understanding that the NHTSA, American Honda, CPSC, along with other state and federal agencies he contacted did not act during the past five years. There were many consumers who were endangered, after buying vehicles, he said. Vickers said the agencies investigating Southern Honda, should recall every vehicle ever sold to ensure it is safe.
The He Said—They Said Syndrome
Vickers claims American Honda knew about the alleged unsafe assembly of vehicles and the illegal sales of recalled vehicles by Southern Honda. He said they should have taken action against their biggest dealer and they were obligated by law to report the safety problems to federal regulators.
Bill Savino, spokesman for American Honda said, they have always complied with all of the applicable regulations issued by the NHTSA and CPSC. He said those included ones related to product safety defects and safety recalls.
Savino said that nothing has been found from Vickers allegations and he said Vickers has a vendetta against Southern Honda. According to Savino there was an investigation years ago by the NHTSA and CPSC and while he does not deny there were some issues, he said every problem was addressed and Southern Honda Powersports corrected the situation.
Former Southern Honda sales and service department employee Deano Swims, worked for the dealership from June of 2006 through January 2009. Swims said he reported to American Honda his concerns about Southern Honda’s overlooking safety in August of 2009.
The manufacturer’s set-up checklist to ensure safety not used by assemblers who were untrained and sales personnel did not go over safety checklists customers, Swims said. Swims said he was ordered by Southern Honda management to sign documents that falsely certified the checklists were followed, which included some documents that were related to vehicles he had never seen. He said management had a stamp made with his name on it for other employees to use to sign documents, after he refused to sign them.
American Honda attorneys were informed by Vickers at Southern Honda assemblers not safely assembling vehicles using torque wrenches in the Southern Honda was not adhering to the safety checklists.
In an affidavit David Ray Tyler, who assembled ATVs Southern Honda from mid-2006 through January 2008, stated the entire time he worked at Southern Honda all critical nuts that are supposed to be to torqued by builder, was never done.
Tyler said he was told for months to sign safety checklists for vehicles that he had not assembled, in order to get old files ready for American Honda auditors. He said that no Southern Honda assemblers had any training to properly build a vehicle.Tyler said he has never built a motorcycle in his life; however he signed many safety checklists for new motorcycles.
According to Vickers after he informed American Honda about the checklists, Southern Honda was informed by the manufacturer they would be inspecting documents. Prior to American Honda inspecting documents months later, Vickers and Gore said Kelly ordered the employees and hired temporary workers to falsify or forge signatures of employees and customers on the documents. Kelly says to his knowledge nothing was ever falsified and no American Honda lawyers came to look at the paperwork.
According to the former general manager Gore, who says from 2007 through 2010 over 1,000 motorcycles, dirt bikes and ATVs were unsafely assembled. He said at least 1,000 vehicles that were under recall were sold, without being fixed prior to sale.
Gary Griffith former Southern Honda sales manager said the vehicles were assembled by untrained and low-paid workers, and in some instances he had to get a wrench to fix them. He said that hundreds of vehicles run out under safety recall, prior to being fixed.
While managing the dealership, said he received a letter from CPSC, but was never contacted by the NHTSA. The letter from CPSC stated that Southern Honda had sold ATVs, without repairs were safety issues.
During the USA Today investigation the letter dated September 22, 2010 from the CPSC was obtained. In the letter the CPSC stated “they have obtained information that demonstrates Southern Honda Powersports has sold recalled ATVs, without making the required recall repairs.
The letter said it appears that Southern Honda Powersports sold recalled ATVs, without making repairs and after stop sale notices, which were issued by American Honda, in the last five publicly announced ATV recall notices.
CPSC said they received copies of two letters from American Honda in 2008, in which they cautioned Southern Honda about selling recalled products. The letters went on to state that information in their possession indicates recalled products are continuing to be sold by your dealership, after receiving the letters.
The CPSC demanded Southern Honda stop selling recalled vehicles at once, before making the proper repairs to them and they ordered the dealership to contact all customers, who had bought these vehicles.
Southern Honda and Gore, according to the agency may be liable for a fine up to $15 million for the sales and requested a detailed report of all sales of recalled unrepaired products.
The letter scared Gore. Then he with the help of Kelly prepared a return letter to the CPSC, which was a list of ATVs that were sold under recall, without being repaired prior to the sales. Gore said thousands of postcards were sent to buyers of the recalled ATVs from Southern Honda, however approximately 10 percent or less of the buyers returned for repairs.
He said it is probably amazing how many ATVs are still out there that were not repaired. Gore said a lot of buyers probably did not get the postcards, since they were sold to buyers in 50 states. Gore said he did not have contact with the CPSC again. Kelly said that the CPSC affairs occurred years ago and he cannot remember what the response he made to the CPSC. The CPSC will not comment on the incident.
The U.S. Attorney’s Office made a request for these documents and the request was refused by the CPSC. The reply by the CPSC said that all questions must be submitted under a Freedom of Information Act filing and by law, they could not discuss a specific company.
USA TODAY was also refused by the CPSC and when they told the agency that Vickers information met three criteria in the law that would permit the CPSC to comment, they did not reply. After weeks of refusing to comment to USA TODAY, last month CPSC spokesman Scott Wolfson said they could not answer questions, because they had launched a related investigation. The next day Wolfson said he had made an error, the agency is looking into a related matter, but they have not opened an investigation, yet.
Then Wolfson said the CPSC would make a statement, to the media organization, but it would have to be cleared through Honda first. The NHTSA said it did not act in 2010 on the information it obtained from Vickers, because it chiefly dealt with repair related internal inspection protocols and company specific standards, which the NHTSA does not regulate, they said in written statements.
The NHTSA said that Vickers allegations were broad pertaining to the recalls and did not provide information that would support the claim. According to consumer groups Safety Research & Strategy and Consumer Federation of America, both said state and federal agencies should have acted on the information from Vickers and taken action to guarantee consumer safety.
Why Didn’t the NHTSA Act?
It is amazing that the NHTSA did not act on the information Vickers provided years ago, Kane of Safety Research & Strategy said. Kane said it is unbelievable they did not pursue Vickers allegations ardently, with the first hand accounts of what was occurring by multiple employees. Consumer Federation of America product safety director and senior counsel Rachel Weintraub, has worked on many CPSC and state ATV safety issues and she was floored by the “compelling evidence” that Vickers had provided.
She said that this information raises serious safety issues involving dirt bikes and ATVs, how they are repaired, sold and how consumers who bought the dirt bikes and ATVs from this dealership were unknowingly at a much higher risk of severe injury or death. State and federal authorities must act to review this information and conduct in-depth investigations. http://i.ytimg.com/vi/Mbj_Sj5m4JQ/0.jpg must use their complete authority in protecting consumers. In any event, there is a lot of sorting out to be done and it appears that a lot of injuries and deaths on motorcycles could have been prevented and a chain is only as strong as its weakest link. To learn more, contact us at www.ehlinelaw.com/ Ehline Law Firm PC 633 W 5th St. #2890 Los Angeles, CA 90071. 213.596.9642.