PII - Has Polaris Industries Really Conquered Its Off-Road Vehicle Fire Hazard Problem?
Polaris Industries (NYSE: PII) had a massive problem with its off-road vehicles catching fire several years ago that caused several deaths and numerous injuries, and led to it initiating dozens of recalls. So pervasive was the problem that the company ended up being fined $27 million by the Consumer Products Safety Commission for failing to notify it in a timely manner of the situation.
Although Polaris reported no recalls related to fires last year, suggesting the reforms it initiated resolved the problem, that doesn't seem to be the case at all. Polaris ORVs are apparently still catching fire, but the company is not notifying the CPSC about them, so they're not being addressed in the same way.
That's not only putting Polaris at risk of new fines from the agency, but because ORV sales are only just beginning to recover, a recurrence of the "thermal hazard" problem could cause a drop in sales of the vehicles it is counting on for growth.