Hyundai Will Invest $50 Million in Michigan Safety Center As Part of Recall Settlement

Hyundai Will Invest $50 Million in Michigan Safety Center As Part of Recall Settlement
  • because of problems with some engines in 1.6 million hyundai and kia vehicles from a decade or so ago, nhtsa issued a consent order with the car companies last fall. one part of the deal was that hyundai would have to spend $25 million on a safety lab.
  • hyundai announced today that it will spend twice that much on a new safety test and investigation laboratory (stil) next to its existing tech center in michigan. only $25 million counts toward the total $140 million the company must spend under nhtsa's rules.
  • hyundai also has to spend $15 million on a new safety data analytics team to spot potential safety issues earlier in the process.

    last fall, the national highway traffic safety administration (nhtsa) and hyundai and kia agreed to two consent orders (one for each automaker) over what nhtsa called “untimely recalls" of 1.6 million 2011–2014 model year vehicles that used hyundai's theta ii engines, including the santa fe sport and sonata. the two consent orders required the companies to pay a combined $210 million in fines, with hyundai to pay $140 million and kia for the other $70 million.

    at the chicago auto show today, hyundai announced that, to fulfill and go beyond its obligations under the consent order, it will build a safety test and investigation laboratory (stil) with an investment of at least $50 million. the new lab will be part of the hyundai america technical center (hatci) in superior township, michigan, near ann arbor, and will open in fall 2023. the consent order defines how hyundai must spend some of the $140 million by creating "performance obligation amounts." hyundai’s poa required the automaker to spend $25 million on a test and inspection laboratory and another $15 million on a “safety data analytics infrastructure.” nhtsa also required hyundai to pay $54 million when the consent order was announced and "an additional $46 million deferred penalty that may become payable if specified conditions are not satisfied.

    the $50 million investment in stil is double the $25 million the automaker had to spend on the facility, something that hyundai motor north america's chief safety officer, brian latouf, said was the natural result of the automaker looking at what it needed to build safer vehicles. currently, hyundai motor north america benefits from safety research done at the automaker's global headquarters in south korea.

    "we looked at what we needed [for the consent order] and also what makes sense for us in the future of hatci as well as our regional needs as we grow,” he told car and driver. "this is the plan that made sense to us, as a company."

    the stil will be housed in a new building with a forensics lab, a high-voltage battery lab, and a vehicle dynamics area (vda) pad. there will also be a 500-meter "high speed" track and an outdoor crash facility at the site. with these tools, hyundai engineers will be able to take cars from the field and tear them down at the stil, latouf said, in order to respond more quickly to problems that might happen in the u.s. "it’s hard to ship crashed vehicles," he said.

    getting out in front of safety issues

    the $15 million to be spent on safety data analytics could end up preventing major problems like the recall of the theta ii engines. hyundai's u.s. safety group, which is currently based in california, features a team of data scientists that form both an emerging-issues group and a safety forensics group.

    "oems are data rich," latouf said, pulling in information about the real-world problems with their vehicles from warranty data, customer complaints, people writing in to nhtsa, and field reports from dealers and other sources. somewhere in there you might be able to spot a problem before it grows, he said.

    "this group is really focusing on the early buds of the issue and then we focus on it and go through an investigation process," he said. "the faster we can respond to a field issue, the less safety risk, less chance for injuries and we minimized the scope."

    and less chance for future consent orders, of course.

    "we don't ever want that to happen again," he said. "we are building things differently now. we're all about being best in class for safety."

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