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American Honda, DOJ, EPA and CARB Settle Issue

9 June 1998

American Honda, DOJ, EPA and CARB Settle Issue Regarding On-Board Emissions Diagnostic System
    TORRANCE, Calif., June 8 -- American Honda Motor Co., Inc.,
has reached an agreement with the U.S. Department of Justice (DOJ), the U.S.
Environmental Protection Agency (EPA) and the California Air Resources Board
(CARB) to settle issues regarding compliance of certain Honda and Acura
vehicles with On-Board Diagnostic Systems Stage II (OBDII) regulations.  A
vehicle's OBDII system is an on-board computer which monitors the performance
of the vehicle's emission control systems, but does not actually control a
vehicle's emission levels.  The agreement is now pending approval from the
federal court.
    "American Honda acknowledges that, regrettably, the company interpreted
these regulations differently than the EPA and CARB.  After considerable
discussion, Honda has agreed to settle the issue in a positive manner that
will reassure our customers that their vehicle emission systems are
functioning properly," said Bill Willen, American Honda's Managing Counsel.
    The problem in question pertains to minor misfire detection.  Under
certain driving conditions, the system stops monitoring temporarily (called
"disablement").  This is done to prevent a false detection and to avoid
alarming the driver needlessly with a Check Engine light when nothing is
wrong.  The government allegation was that the Honda system might never detect
certain types of minor misfire.
    To settle these issues, American Honda has agreed to pay $10.1 million in
federal fines and $2.5 million in California state fines.  Honda also will
extend its emissions warranty to 14 years/150,000 miles for emission control
parts and will implement a one-time service campaign for ignition parts
replacement.  Additionally, Honda will provide $1 million to fund federal
environmental research projects and $3.5 million to fund California state
environmental research projects.
    The agreement applies to 1.7 million Honda and Acura vehicles, including
the 1995 Honda Accord V-6, Acura NSX and Acura 2.5 TL models; and all 1996 and
1997 Honda and Acura models, except the Acura Integra Type-R, Acura SLX and
the Honda Passport.  If approved by the federal court, it is anticipated that
American Honda will begin notifying customers and implementing the service
campaign in the fall of 1998.  Customers may call 1-800-999-1009 for further
information.
    "This agreement provides significant assurances for our affected customers
and will provide them with confidence in their OBDII systems and emission
components," said Willen.  "We are positively responding to our customers and
the government requests through the warranty and service elements of this
agreement, and we are demonstrating good faith toward society with significant
environmental research funding.  Today's action reinforces American Honda's
long-standing commitment to the development of cleaner-burning, low-emission
and non-polluting vehicles."
    Honda has been a leader in bringing environmental benefits and reduced
emissions technology to its automobiles.  These efforts have resulted in
several leading-edge accomplishments, beginning with the 1975 Honda Civic CVCC
-- the first automobile to meet the Federal Clean Air Act without the use of a
catalytic converter.
    Today, Honda's clean air technology is available in several models: the
Civic and Accord Low-Emission Vehicles (LEVs), the first LEVs available in all
50 states; the Accord Ultra-Low Emission Vehicle; and the Civic GX Natural Gas
Vehicle, the cleanest automobile ever certified by the California Air
Resources Board, with almost zero emissions.