Federal and state authorities are investigating allegations that the
country's largest Honda power sports dealership sold unsafe motorcycles,
all-terrain vehicles and dirt bikes.
The investigations of
Southern Honda Powersports in Chattanooga, Tenn., were launched by the
National Highway Traffic Safety Administration (NHTSA) in May and by the
U.S. Attorney's Office in Nashville and the Tennessee Attorney
General's Office last month.
Former Southern Honda marketing
consultant Ernest Vickers III says federal regulatory agencies failed to
act five years ago - and in 2010 - when he told them that about 25,000
new motorcycles, ATVs and dirt bikes were assembled unsafely when he
consulted for the dealership February 2004 through May 2007.
who uses the nickname Pug, and former Southern Honda employees say
unsafe vehicle assembly continued until at least 2010. They say the
dealership illegally sold, from 2004 through 2010, hundreds to thousands
of new vehicles that were under safety recall by the federal government
without first correcting the problems.
If the accusations of
Vickers and former Southern Honda employees are true, tens of thousands
of people are riding potentially unsafe motorcycles, ATVs and dirt
bikes. Their accusations may also point to an ineffectiveness of federal
safety regulators in ensuring product and highway safety.
extremely troubling that NHTSA did not independently investigate the
claims brought to them by Mr. Vickers that were apparently corroborated
by many others who worked with him," says consumer auto safety advocate
Sean Kane of Safety Research & Strategies. "Unfortunately, this
appears to be in line with a trend that NHTSA believes its 'regulatory
partners' are the companies it regulates rather than the motoring
Southern Honda's owner, Tim Kelly, says there "is no substance" to
Vickers' allegations, and says alleged assembly problems are "utter
Kelly says "some bikes were delivered" before recall
work was performed, but their owners were notified and their vehicles
were repaired. He says he recently fired a salesman for selling a
vehicle under recall.
"Safety is our first priority," Kelly says.
nine former employees besides Vickers - including seven who, in 2010,
signed notarized affidavits alleging safety problems - report a
disregard for vehicle safety at Southern Honda.
letters, e-mails and the signed affidavits detailing his allegations to:
the manufacturer, American Honda; NHTSA, which regulates motorcycle
safety; and the Consumer Product Safety Commission (CPSC), the regulator
of ATV and dirt bike safety.
Neither federal agency contacted him to discuss the allegations or took enforcement action, Vickers says.
May - after USA TODAY asked questions about Vickers' accusations during
the course of the newspaper's eight-month investigation - NHTSA
confirmed it was launching an investigation of Southern Honda's alleged
sales of vehicles that were under 10 recalls.
were raised with the U.S. Attorneys Office in Nashville and the
Tennessee Attorney General's Office. Both offices subsequently began
investigations last month in meetings with Vickers and John Gore,
Southern Honda's general manager from 2007 through 2010.
incomprehensible that American Honda, NHTSA, CPSC and other federal and
state agencies I contacted during the past five years didn't act,
because the safety of many consumers who bought vehicles was
endangered," Vickers says. "Now that the agencies are investigating,
every vehicle that Southern Honda ever sold should be recalled to ensure
it is safe."
He said, they said
American Honda was fully aware of Southern Honda's alleged unsafe
assembly of vehicles and illegal sales of recalled vehicles. American
Honda should have cracked down on its biggest dealer and, by law,
reported the safety problems to federal regulators, he says.
prepared statement, American Honda says it "always has complied with all
applicable regulations issued by NHTSA and CPSC, including those
related to product safety defects and the conduct of safety recalls."
Honda spokesman Bill Savino says Vickers has "a vendetta" against
Southern Honda, and "nothing has come out of" his allegations.
says NHTSA and CPSC "did some investigation of the dealership years
ago." The spokesman says he's "not denying there were some issues," but
"everything was addressed," and "Southern Honda Powersports rectified
Deano Swims, who worked in Southern Honda's sales
and service departments from June 2006 through January 2009, says he
reported to American Honda in August 2009 his concerns about Southern
Honda's disregard for safety.
Swims says vehicle assemblers were
untrained and didn't use the manufacturer's set-up checklists to ensure
safety, and sales personnel did not go over safety checklists with
Southern Honda management ordered Swims to sign
documents falsely certifying the checklists were adhered to, including
documents related to vehicles he had never seen, Swims says. When he
refused, management created a stamp with Swims' name on it for other
employees to use to sign the documents, Swims says.
he informed American Honda lawyers that Southern Honda assemblers were
not using torque wrenches for safe assembly of vehicles, and that
Southern Honda was not following safety checklists.
nuts are supposed to be torqued by the builder, which has never been
done the entire time I was at Southern Honda," David Ray Tyler, who
assembled ATVs at Southern Honda from mid-2006 through January 2008,
states in an affidavit.
Tyler states that no Southern Honda
assemblers had any training to "properly build" a vehicle, and he was
told "for months" to sign safety checklists for vehicles he did not
assemble "in order to get these old files ready" for American Honda
Tyler states that he signed many safety checklists for new motorcycles, "but I have never built a motorcycle in my life."
says that after he informed American Honda about the safety checklists,
the manufacturer then informed Southern Honda it would be inspecting
Before American Honda inspected documents months
later, Kelly ordered employees and hired temporary workers to falsify or
forge signatures of employees and customers on the documents, Vickers
and Gore say.
Kelly says Southern Honda "never falsified anything, to my knowledge," and "no Honda lawyers ever came to look at paperwork."
the former general manager, says that from 2007 through 2010 more than
1,000 motorcycles, ATVs and dirt bikes were assembled unsafely, and at
least 1,000 of the vehicles under recall were sold without first being
Former Southern Honda sales manager Gary Griffith says
untrained, low-paid workers assembled the vehicles, and he sometimes had
to get a wrench to fix them. "Hundreds of units went out under safety
recall before being fixed," he says.
Gore says he was never
contacted by NHTSA about unsafe motorcycles but, while managing the
dealership, received a letter from CPSC stating that Southern Honda had
sold recalled ATVs without first repairing their safety problems.
letter, dated Sept. 22, 2010, and obtained by USA TODAY, says the CPSC
"has obtained information demonstrating that Southern Honda Powersports
sold recalled ATVs without the required recall repairs being made."
CPSC said, "It appears that Southern Honda Powersports sold recalled
ATVs without repairs after multiple stop sale notices were issued by
American Honda ... in the last five publicly announced ATV recalls."
CPSC said it received copies of two American Honda letters in 2008
"cautioning" Southern Honda about selling recalled products, but
"information in our possession indicates that your dealership continued
to sell recalled products" after receiving the letters.
requested that Southern Honda immediately stop selling recalled vehicles
before repairing them and contact all customers who had bought such
The agency said Gore and Southern Honda might be liable
for a fine up to $15 million and requested "a detailed report of all
sales of unrepaired, recalled products."
Gore tells USA TODAY that
the letter frightened him and Kelly, and he helped prepare - for a
return letter to the CPSC - a list of ATVs that had been sold under
recall without first being repaired. .
Southern Honda also sent
"thousands of postcards" to buyers who had bought such ATVs, but only
10% or fewer of the buyers came back for repairs, Gore says.
sold ATVs to buyers in 50 states, and a lot probably didn't get
postcards," Gore says. "It's probably mind-blowing how many ATVs are
still out there that didn't get fixed."
Gore says the CPSC didn't
contact him again. Kelly says the CPSC matters occurred "some years
ago," and he cannot recall what response he made to the CPSC.
CPSC refuses to talk
CPSC refused a request from the U.S. Attorneys Office for documents
about these matters, and it refused to answer repeated USA TODAY
The CPSC said that, by law, it could not discuss a
specific company, and all questions must be submitted under a Freedom of
Information Act filing.
When USA TODAY told the agency that
Vickers' information met three criteria in the law that allows the CPSC
to comment, the agency did not reply.
Last month - weeks after
refusing to answer USA TODAY's questions - CPSC spokesman Scott Wolfson
said the agency couldn't answer, because it had launched a related
A day later, Wolfson said that he had misspoken -
the agency is looking into a related "matter" but hadn't begun an
Wolfson said the CPSC would provide a statement to
USA TODAY that would first have to be "cleared through Honda." USA TODAY
has not received a statement.
In written statements, NHTSA says
it didn't act in 2010 on information provided by Vickers because it
primarily pertained to "repair-related internal inspection protocols and
company-specific standards that NHTSA does not regulate."
NHTSA also said Vickers made "a broad allegation about recalls but did not provide information to support that claim."
consumer groups - Safety Research & Strategies and the Consumer
Federation of America - say federal and state agencies should have acted
on the information Vickers provided and taken steps to ensure consumer
Kane of Safety Research & Strategies says it's "remarkable" that NHTSA didn't respond years ago to Vickers' allegations.
the first-hand accounts of what was happening by multiple employees, it
is unfathomable why the agency wouldn't have pursued this vigorously,"
Rachel Weintraub, a Consumer Federation of America
product safety director and senior counsel who has worked on many state
and CPSC ATV safety issues, says she "was struck" by the "compelling
evidence" Vickers provided.
"The information raises very serious
potential safety issues involving all-terrain vehicles and dirt bikes,
how they are sold, how they are repaired and how consumers who bought
ATVs and dirt bikes from this particular dealer are unwittingly at
greater risk of severe injury or death," she says.
state authorities must review this information seriously, must conduct
in-depth investigations and must use their full authority to protect