Auto Recalls: An Overview.

Automobiles are highly complex systems, and despite quality control efforts, various mechanical or software flaws can make it into production. A standard way of dealing with such issues is though recalls, in which the manufacturer notifies customers to bring affected vehicles to a dealer for repair or replacement. The initiation of a recall from an automaker is a huge project and of great expense. The factors leading to such recalls tend to be a response to consumer complaints and government pressure. The impact of not recalling these vehicles are numerous accidents and risk of injury and death for those consumers driving these vehicles.

The early twenty-first century saw a series of high-profile auto recalls with varying impacts on the automotive industry and consumers. Most notable was the scandal surrounding faulty airbags made by the Takata Corporation, which led to ongoing recalls of tens of millions of vehicles by many different automakers beginning in 2013. Other major examples include a 2010 recall of 5 to 8 million Toyotas, General Motors' (GM) recall of more than 13 million vehicles between January and August 2014 due to faulty ignition switches, and a series of vehicle safety recalls affecting 11 million vehicles issued by Fiat Chrysler Automobiles (FCA) in 2015 that were the subject of a public hearing held by the US Department of Transportation's National Highway Traffic Safety Administration (NHTSA). While most recalls affect a relatively small number of vehicles, these prominent larger cases brought heightened public scrutiny of the auto industry and safety regulations.

Understanding the Discussion

Federal Motor Vehicle Safety Standards (FMVSS): Regulations and standards, issued by the US National Highway Traffic Safety Administration under the US Department of Transportation, established for motor vehicles to which auto manufacturers must conform and provide certified compliance.

Legislative Mandate: A mandate or authority granted by the legislative authority of the US Congress.

United States Department of Transportation (USDOT): A Cabinet-level department responsible for all issues related to the transport of individuals and commerce in the US. The USDOT works with the air, rail, roadways, and river ways of the nation. This department exercises a variety of regulatory authority, as well as security for mass transit.

United States National Highway Traffic Safety Administration (NHTSA): An agency within the Department of Transportation that is responsible for vehicle and traffic safety on American roadways. The NHTSA possesses a variety of regulatory authorities.

History

In the free-market system of the United States, the responsibility for consumer safety and protection was traditionally assumed by the consumer, thus the old saying caveat emptor, or "let the buyer beware." Through the early years of development, auto manufacturers, lacking the technology that exists today, could only utilize trial and error in the development of their products. In many cases, this could result in serious injury and death. Consumers, as well as the manufacturers, could expect persistent problems with newer models of vehicles, as manufacturers worked out problems after their initial release. Attempts to recover any financial losses from these malfunctions would involve individual civil litigation. Unless the individual consumers could fight through a long legal process against large manufacturers, the consumer needed to be a well-informed buyer.

With the expansion of government in multiple areas of oversight and regulation in the 1930s, protection of consumer rights began to be assumed and expanded at the federal level, reaching a high point in the late 1960s and following a postwar economic boom and significant growth in the American auto industry. The growing affluence of the middle class in this period, combined with the development of and migration to the suburbs, resulted in an increased demand for auto transportation. This growing demand for automobiles translated into rapid economic growth for the auto industry.

With the rapid growth and competition of this sector of the markets, auto manufacturers attempted to rapidly bring new development and technology into the marketplace. This would, at times, lead to widespread failures in various models of automobiles. In some cases, these failures resulted in serious injuries and death. Consumer advocates, such as Ralph Nader, would push government to take action to protect consumers, who had neither the means nor capacity to pursue legal actions.

The US Government's Department of Transportation, through the National Highway Traffic Safety Administration (NHTSA), acquired a legislative mandate from the US Congress establishing the authority of the NHTSA to create vehicle safety standards and regulations and certify compliance. These standards are identified as the Federal Motor Vehicle Safety Standards (FMVSS), and were introduced on March 1, 1967. These standards identified specific expectations for the safety of automobiles and their respective manufactured parts, which were manufactured after January 1, 1968.

These NHTSA standards were the basis for numerous recalls in the decades since their introduction and subsequent updates. In 1971, General Motors recalled 6.7 million vehicles for faulty motor mounts. This was followed by a 1972 Volkswagen recall of 3.7 million vehicles for detached windshield wipers, and a 1972 recall from Ford of 4.1 million vehicles for seatbelt harnesses detaching. In 1973, General Motors initiated another recall of 3.7 million vehicles due loss of steering assemblies from road debris due to a lack of protection for the steering and front wheel units.

Subsequently, substantial recalls have occurred fairly regularly over the decades. In 2000, for example, the NHTSA initiated an inquiry into Ford and Firestone Tire Company for incidents with injury involving tire "blowouts" and rollovers for sports utility vehicles (SUV). Ford initiated its own investigation, with the potential of an NHTSA investigation and possible recall. Ford's internal investigation identified that specific 15-inch Firestone tires tended to have a higher incidence of rollovers than similar vehicles using Goodyear tires of a similar size. Their finding was further supported when the incidence of rollovers declined with the replacement of the Firestone tires. Since the creation of the NHTSA, major auto corporations have become conditioned to attempt to be preemptive in an instance like the SUV rollovers, and they have traditionally responded to these safety issues with recalls of their respective products. In many instances, the automakers have initiated the recalls either because of government action or because they were anticipating government action.

Auto Recalls Today

Toyota made media headlines in 2009 with its massive recall of automobiles for acceleration issues. Between 2009 and the early months of 2010, an estimated 24.9 million vehicles were recalled by the major auto manufacturers. These numbers far outpaced the 8.6 million cars recalled in 2008 and the 13.2 million recalled in 2007. Toyota drew the most attention, with news stories of vehicles running out of control at high speeds and resulting in some instances of serious injury, including thirty deaths that may be related to the acceleration problems.

This drew the attention of members of the US Congress, calling on Toyota to answer questions in February 2010 by members of the House Committee on Energy and Commerce. The members of the committee directed their questions in regards to negligence on the part of Toyota for not properly testing the parts of the automotive system in question, and malfeasance in what is believed to be misleading the public once the acceleration problems came to light. Secretary of Transportation Ray LaHood cited that the NHTSA had not found any conclusive evidence suggesting that the electronic throttle systems in the Toyotas were defective. According to a Rasmussen poll released in February 2010, 59 percent of Americans retained a favorable view of Toyota as a company despite the recalls. The poll found that 22 percent of respondents viewed Toyota "very favorably," with 29 percent viewing the company unfavorably.

In autumn 2012, Toyota was forced to carry out two more extensive recalls—one of 7.4 million cars globally due to power-window switches that could potentially catch fire, and another of 670,000 Prius hybrids for potentially defective steering systems.

The spate of high-profile, serious recalls led to calls for stronger regulation to protect consumers. Outcries for action ranged from a Federal Grand Jury, to members of Congress calling for an extensive overall of the NHTSA standards and expanding the regulatory authority of the federal government in providing safety for its citizens and consumers. The head of the NHTSA, David Strickland, noted that the agency was thoroughly examining its authority in creating standards and enforcing compliance.

On July 2, 2015, the NHTSA held a public hearing over Fiat Chrysler's handling of twenty-three recalls issued between 2013 and 2015 that had affected more than 11 million vehicles. At issue was whether or not the carmaker had "reasonably met its obligations to remedy recalled vehicles and to notify NHTSA, owners, and purchasers of recalls," according to a transcript of the hearing. On July 26, 2015, the NHTSA found that FCA did not adequately remedy safety defects and often delayed responding to safety problems. The NHTSA announced that it was imposing enforcement actions and penalties, including a civil fine of $105 million, on FCA. The civil penalty was the largest the agency had ever imposed to date. In addition to paying the fine, FCA promised improvements in product safety practices, the appointment of an independent overseer to ensure compliance, trade-in incentives, and a buy-back program for affected vehicles. However, the last two measures, intended to clear the roads of defective FCA vehicles, proved confusing for owners who wished to participate.

In September 2015, Volkswagen was caught in an emissions-cheating scandal, in which the manufacturer programmed testing software to make it appear as though emissions were lower for its diesel cars than they really were. Volkswagen then had to recall 580,000 vehicles in the United States, many of which it bought back. A US District Court fined Volkswagen $2.8 billion on criminal fraud charges, and the company settled a $1.5 billion civil suit for environmental regulations violations.

The largest-ever auto recall, involving Takata airbag inflators used by nineteen carmakers, began as early as 2013 but attracted national attention beginning the next year. A chemical igniter in the affected inflators degraded through extended exposure to humidity, causing airbags to fill with too much pressure and explode during collisions. The issue was linked to at least twenty-four deaths and three hundred injuries worldwide by early 2019, including sixteen deaths in the United States. An estimated 42 million vehicles were recalled, mainly model years 2002–15, with additional models added to the list in stages into 2019. Complicating matters, the parts maker did not initially understand what was wrong and production, distribution, and installation of a safe replacement was delayed. In February 2017, Takata Corporation was fined $25 million on criminal fraud charges and agreed to a settlement of $975 million to compensate carmakers and injured riders. The company filed for bankruptcy protection later that year, and in 2018 a trust fund was created to provide compensation to victims of the faulty inflators.

Other prominent recalls occurred even as the Takata airbag recalls continued. One such incident that earned headlines was electric vehicle maker Tesla's recall of approximately 123,000 Model S sedans in 2018 due to corrosion on bolts that could potentially compromise power steering. Although relatively small in total numbers of affected vehicles, the recall was significant as it represented nearly half of Tesla's all-time output. It contributed to a sharp decline in the company's stock price and also illustrated the challenges of Tesla's direct-sales model, as the lack of a traditional dealership network complicated recall service. Also in 2018 Ford recalled 2 million F-150 pickup trucks due to fire issues related to seatbelts.

• These essays and any opinions, information or representations contained therein are the creation of the particular author and do not necessarily reflect the opinion of EBSCO Information Services.

Bibliography

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McDonald, Kevin M. Shifting Out of Park: Moving Auto Safety from Recalls to Reason. Tucson: Lawyers & Judges, 2006. Print.

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Snavely, Brent. "Volkswagen Ordered to Pay $2.8B for Cheating on Diesel Emissions." Detroit Free Press (MI), 21 Apr. 2017. Points of View Reference Center, search.ebscohost.com/login.aspx?direct=true&db=pwh&AN=2W6904005527&site=pov-live. Accessed 24 Apr. 2017.

Wald, Matthew L., and Christopher Jensen. "Auto Safety Agency Ready to Point Finger at GM in Ignition Flaw." New York Times 1 Apr. 2014: B1–2. Print.

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Eisenstein, Paul A. "Fiat Chrysler Buy-Back, Recall: Here's What You Need to Know." NBC News. NBCNews.com, 30 July 2015. Web. 19 Oct. 2015. http://www.nbcnews.com/business/autos/fiat-chrysler-buy-back-recalls-heres-what-you-need-know-n401046.

Eisenstein, Paul A. "Tesla Recalls Almost Half the Cars It Ever Built, As Shares Tank and Musk's Billions Shrink." NBC News, 30 Mar. 2018, www.nbcnews.com/business/autos/tesla-recalls-almost-half-cars-it-ever-built-shares-tank-n861421. Accessed 21 Aug. 2019.

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Miller, Mary Helen. "Toyota Recall: Tire-Pressure Warning Problem." Christian Science Monitor Christian Science Monitor, 8 Mar. 2011. Web. 19 Oct. 2015. http://www.csmonitor.com/Business/2011/0308/Toyota-recall-tire-pressure-warning-problem.

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