Hyundai Reserves $764 Million for Engine Lawsuit
Hyundai Motor Co. and its Kia Motors affiliate have set aside 900 billion won ($764 million) to settle a U.S. class-action lawsuit over engine stalling, fires and other problems.
The company says it will book the charge against earnings for the July-September quarter.
The planned settlement covers 4.2 million Hyundai and Kia vehicles equipped with the company’s family of “Theta II” gasoline engines. The company has recalled about 1.6 million of the powerplants over fire concerns.
The National Highway Traffic Safety Administration has been conducting a criminal investigation into why Hyundai made the recalls in three steps over two years rather than fixing all affected engines under one campaign. In March several states announced their own probes into the issue.
Hyundai says the planned class-action lawsuit settlement includes engine repairs, extended warranties, cash compensation payments and a software update for the engines’ knock sensor system.
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