Graco to pay $3 million fine for delayed reporting

ATLANTA—Graco Children’s Products, Inc., a subsidiary of Newell Rubbermaid, has reached an agreement with the National Highway Traffic Safety Administration (NHTSA) in connection with the company’s reporting of consumer complaints about difficulty opening car seat buckles.

U.S. Transportation Secretary Anthony Foxx announced that Graco Children’s Products has been fined $10 million after the company failed to provide timely notification of a defect in more than 4 million car seats. Graco must pay a fine of $3 million immediately to the federal government and an additional $7 million is due in five years unless they spend at least the same amount on new steps to improve child safety.

The penalties close an investigation launched last year by NHTSA into whether the company failed its obligations, under the National Traffic and Motor Vehicle Safety Act, to begin what ended up as the largest ever recall of child seats. The seats had buckles that could stick or become stuck in a latched position, potentially placing child occupants at risk in an emergency.

“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.”

Graco will create a plan and procedures for addressing certain targeted performance requirements, which may include methods to increase effectiveness of consumer product registration of car seats, which allows parents to be notified of defects, identifying potential safety trends affecting car seats industry wide and launching a child safety awareness campaign. According to NHTSA, on average, only 40 percent of people who have recalled car seats get them fixed. That’s in comparison to an average of 75 percent of people who have recalled light vehicles, for which registration is required by law.

The company also must provide certification from an independent, third-party that it has met its cost obligations; if Graco fails to meet those obligations, it must pay the balance of the $10 million civil penalty.