Polaris to Pay Fine for ATV Failures
February 14, 2005
Filed under Features
Polaris Industries Inc. says it will pay the Consumer Products Safety Commission (CPSC) $950,000 to settle claims alleging that the company violated the Consumer Product Safety Act (CPSA).
The CPSC said two separate investigations found that Minnnesota-based Polaris allegedly made engineering changes to certain ATV models after receiving injury and accident reports, but before informing the government of any problems, as federal law requires.
According to the commission, Polaris received 88 reports between December 1998 and May 2000 of throttles sticking on its Scrambler, Sport and Xplorer 400 models. The company reported the problems in May 2000, prompting a recall that August.
The CPSC says a second issue involved defective oil lines on Polaris’ Xpedition, Trail Boss and Magnum 325 models. Between March 1999 and February 2001, the company received nearly 1,450 reports of incidents involving the defect, according to the commission. Again, according to the CPSC, Polaris allegedly made engineering changes before reporting problems and an eventual recall.
Polaris and the CPSC have been discussing the two matters for more than four years. Polaris says it conducted a recall and contacted consumers soon after identifying the potential problems.
The manufacturer, in a prepared statement, said it vigorously disagrees with the CPSC allegations that it violated the CPSA requirements concerning the timeliness of its reports.
Nevertheless, it approved the settlement agreement to avoid continuing legal costs associated with protracted litigation.
“We take the safety of our riders and products very seriously,” said Bennett Morgan, vice president and general manager of ATVs for Polaris.
“That includes addressing potential safety problems immediately and timely reporting of any issues to the CPSC. That has always been and always will be our company’s philosophy.”
With annual 2003 sales of $1.6 billion, Polaris designs, engineers, manufactures and markets ATVs, snowmobiles, Victory motorcycles and the Polaris RANGER recreational and -utility vehicle.
Polaris said it has adequately reserved for the CPSC payment as of Sept. 30, 2004. The company said the payment will not have an adverse impact on financial results for the fourth quarter of 2004.
Polaris Industries Inc. trades on the New York Stock Exchange and Pacific Stock Exchange under the symbol “PII.” Polaris shares were up 81 cents on Jan. 14 to $64.95 following the announcement.