Whistleblower secures record $ 24 million for exposing Hyundai and Kia safety breaches

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SeongJoon Cho / Bloomberg / Getty Images

SeongJoon Cho / Bloomberg / Getty Images

The U.S. auto safety regulator announced its first-ever whistleblower award on Tuesday, handing over $ 24 million to a former Hyundai employee who provided key insights into the southern automaker’s safety breaches -Korean.

According to law firm Constantine Cannon, which represented Kim, the award for former Hyundai Motor engineer Kim Gwang-ho is the largest ever awarded in a worldwide automotive industry whistleblower case.

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 automobile whistleblower program created by Congress in 2015.

Kim reported to NHTSA in 2016 that Hyundai was not fixing a design flaw with its Theta II engines, which tended to seize up and even catch fire.

“This award is the maximum percentage allowed by law,” NHTSA said in a statement announcing the award.

“Whistleblowers play a crucial role in providing information to NHTSA about serious security issues that are hidden within the agency,” said Steven Cliff, deputy administrator of NHTSA.

Citing an internal report from Hyundai’s quality strategy team to management, Kim told NHTSA that the company was not taking enough action to remedy an engine failure that increased the risk of accidents.

The NHTSA found that Hyundai and its subsidiary Kia had delayed the recall of the affected vehicles and that the automaker had provided inaccurate information about the issues.

In 2020, U.S. units Hyundai and Kia accepted a record civil fine of $ 210 million after NHTSA said it failed to recall vehicles for engine problems in a timely manner.

“I am happy to have been fairly compensated for the risks I took to protect the owners of these faulty cars, and grateful that the US legal system has a program in place to make this possible,” Kim said in a press release Tuesday.

“I hope my reports will lead to real improvements in safety, both at Hyundai and throughout the industry,” he added.

In 2017, US safety regulators began investigating whether the recalls covered enough vehicles and were completed in a timely manner. This followed concerns that Kim reported to the U.S. auto safety regulator.

The payment to Kim is the first under the US Motor Vehicle Safety Whistleblower Act, passed by Congress in 2015 to create a whistleblower reward program within the Department of Transportation for industry insiders who provide information to safety regulators on vehicle faults.

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