Graco Children's Products Inc. has agreed to pay a $10 million fine for its failure to give a notice on time and its slow action on defective child car seats.
On Friday, March, 20, Graco, a unit of Newell Rubbermaid Inc., said that it will have to pay the initial $3 million straight away. The company has five years to pay off the remaining $7 million, unless it spends this amount or more on improvements pertaining to child safety.
After the company reached an agreement with the National Highway Traffic Safety Administration (NHTSA), the investigation spearheaded by the Department of Transportation over Graco's child car seats now also comes to a close. The child car seats are said to have buckles that get stuck in the latch position.
The department also said that Graco has acknowledged its failure to alert officials at the NHTSA, within five business days as mandated by law, about the issue of the problematic buckles.
"We have worked closely with NHTSA throughout this process and regret that we fell short of NHTSA's expectations for data collection and reporting procedures," said Laurel Hurd, president of Graco Children's Products. "We accept this fine and the additional funding requested by NHTSA for a joint venture involving child passenger safety initiatives in the future. We are eager to work with NHTSA and pleased with their decision to focus this money on children's safety."
In 2014, Graco was forced to recall over 4 million car seats in February, followed by 2 million more in June, owing to the faulty harness buckles, which regulators said could pose a risk in emergency situations if parents were unable to get their child out.
"Parents need to know that the seats they trust to protect their children are safe, and that when there's a problem, the manufacturer will meet its obligations to fix the defect quickly," noted Anthony Foxx, Transportation Secretary.
According to the NHTSA, Graco will look to create ways through which the number of car seats that have been recalled will be fixed faster.
Graco will need to develop initiatives that will tackle the issue and look to enhance child car seats' safety in the near term.
Regulators suggest Graco run a campaign that raises child safety awareness among parents. It could also get parents to register when they are purchasing a car seat, so that they can contact them if a recall happens.
In the event Graco does not spend the $7 million on safety improvements by 2020, it will need to pay the remaining amount as fine to the government.
