More Automobiles Were Recalled in 2014 Than Any Year In History

Auto Industry Galvanized After Record Recall Year – NYTimes_com

Auto Industry Galvanized After Record Recall Year

By BILL VLASIC and HILARY STOUTDEC. 30, 2014  New York Times

DETROIT — Spurred by a decade-old ignition-switch defect in millions of General Motors vehicles, the auto industry this year has issued more recalls involving old models — those made five or more years ago — than ever before, an analysis of federal recall records by The New York Times shows.

More than 60 million vehicles have been recalled in the United States, double the previous annual record in 2004. In all, there have been about 700 recall announcements — an average of two a day — affecting the equivalent of one in five vehicles on the road.

The eight largest automakers have each recalled more vehicles in the United States this year than they have on average since 1966, when data collection began, with G.M., Honda and Chrysler each setting corporate records, the review by The Times found.

While automakers are cleaning up years of defects that previously went undetected or ignored, driving has become statistically safer, partly because of added technology in newer vehicles. Yet the lapses of the past cover a wide range of parts used in multiple models, driving up the number of recalls.

The G.M. ignition switch defect, affecting various models between 2003 and 2011, has been linked to at least 42 deaths.

“What you’re seeing is the makeover of the entire industry,” said Bob Carter, Toyota’s senior sales executive in the United States.

The auto industry’s intense focus on neglected safety issues has changed the way it approaches even the most basic safety practices.

Like most automakers, Toyota routinely notifies car owners of safety recalls with the minimum legal requirement of mailing a first-class letter.

But in recent months, the automaker has taken the unusual measure of hiring outside companies to track down owners of vehicles equipped with defective airbags that can explode. The contractors have been instructed to make direct contact with the owners by telephone.

“Sending out letters just isn’t enough anymore,” Mr. Carter said. “We need to call the consumer and explain the importance of getting their cars repaired.”

The attention to safety has also awakened car owners. The National Highway Traffic Safety Administration, the nation’s top auto regulator, is on pace this year to receive 80,000 complaints from consumers about possible defects — about double the average annual number.

“I keep getting recall letters as I’m waiting for one thing and no parts available for another,” a driver of a 2013 Dodge Durango complained to safety regulators this month. “How is one supposed to feel safe, knowing my car can ‘stall without warning,’ have an ‘under hood fire’ or have my ‘brakes fail’ at any moment?”

David Friedman, who has served as N.H.T.S.A.’s temporary chief this year, said in an interview that the agency, which has been criticized by lawmakers for being too lenient with automakers, had put the industry on notice that problematic vehicles needed to be identified and repaired more quickly — or automakers will risk maximum punishment.

To that end, Mr. Friedman held individual conferences with executives of a dozen car companies last summer. Before the meetings, he urged them to read an internal report on G.M.’s ignition-switch problems to understand the consequences when a company neglects to fix a deadly defect, he said.

“There were some clear lessons learned that I wanted to make sure every automaker knew regarding the poor way G.M. handled this,” he said.

G.M. has led the pack in cleaning up problems, issuing about 80 recalls covering more than 26 million vehicles, including 2.2 million small cars with the defective ignition switches.

Honda commissioned an outside audit that found it had underreported deaths and injuries in accidents to regulators, and the company promised organizational and staffing changes to better comply with federal laws.

Fiat Chrysler, which is recalling Jeeps with gas tanks that can catch fire in a high-speed collision, created a new department overseeing vehicle safety led by a senior executive.

Toyota overhauled its safety practices a few years ago after a spate of recalls for unintended acceleration resulted in a criminal penalty in March of $1.2 billion, the largest ever for a carmaker in the United States. Still the company this year has had to take further steps to improve its recall rates on vehicles with defective airbags made by the supplier Takata.

Even auto suppliers are scrambling to revise contracts with carmakers to clarify responsibility for parts that turn out to be defective.

“They’re scared,” said Thomas Manganello, a Detroit lawyer who represents supplier firms. “The concern is they are building to the automaker’s specifications, and then being held liable.”

While G.M. has spent billions of dollars fixing recalled cars and setting up a fund to compensate ignition-switch accident victims and their families, the company has had to take extreme measures to restore trust in its products and management.

G.M. has reorganized its sprawling engineering organization and centralized all safety functions under a new vice president, Jeff Boyer.

In his first extensive interview on G.M.’s new direction, Mr. Boyer said that a hundred people had been added to his safety team, including 35 product investigators.

The biggest change, he said, was the close involvement of executives in monitoring safety investigations, potential recalls and repairs.

“We have executive leadership defined at each phase of the process,” Mr. Boyer said, adding that he regularly updates Mary T. Barra, the chief executive, as well as the G.M. board on any active safety issues.

As far as consumers are concerned, Mr. Boyer said G.M. is reaching out to owners of recalled vehicles by letter, email, social media and phone banks. “We need to make sure we reach out in the most effective way possible,” he said.

The G.M. crisis, in particular, has prompted concern in Washington that carmakers have become lax on safety, combative with regulators and insensitive to consumers.

After seven congressional hearings and, in G.M.’s case, multiple continuing state and federal investigations, some lawmakers say they are convinced that only stiffer fines and the threat of criminal prosecution will motivate companies to make safety a top priority.

And even with its internal changes, the company’s reputation for quality and safety will take years to rebuild. “G.M. has changed on the surface, but it has yet to walk the walk,” Mr. Blumenthal said.

It is unclear how much bipartisan support will emerge in Congress for new safety laws that, among other things, could hold auto executives criminally liable for deliberately concealing safety defects.

Mr. Blumenthal said he planned to introduce four sweeping auto safety bills in the next legislative session in response to the year’s crises. But Representative Fred Upton, Republican of Michigan, who led the House investigative hearings on G.M., said legislative solutions cannot be “quick fixes,” and stressed the need for stricter enforcement by N.H.T.S.A. of existing regulations.

“Whatever changes Congress makes, the federal agency that serves as the public’s watchdog must be vigilant,” he said.

One safety advocate suggested that the government mandate completion rates of 85 percent on recalls, a marked improvement over the average industry rate of about 70 percent.

“The only way we are going to get the recall rates to go up is to force the companies to do more,” said Sean Kane, president of the firm Safety Research and Strategies.

Improved technology could play a larger role in reaching consumers about recalls.

Analysts said automakers would soon be able to transmit recall information directly to cars on the road. N.H.T.S.A. introduced an app this spring for Apple and Android phones that allows users to enter the make, model and year of their vehicle and receive recall notifications directly from the government.

N.H.T.S.A. is expected to bolster its own investigative efforts with additional personnel to handle the rising number of vehicle complaints from consumers.

And while Mr. Friedman is soon to be replaced by a new, full-time administrator, he says he delivered a blunt message on how the government will police automakers that fail to live up to what he called “the new normal” in safety practices.

“At the end of the day, we are going to judge you by actions, not words,” he said he told the auto executives during his meetings over the summer. “If you fail to live up to the new normal, we will hold you accountable.”

Bill Vlasic reported from Detroit and Hilary Stout from New York. Danielle Ivory and Rebecca R. Ruiz contributed reporting from New York.

A version of this article appears in print on December 31, 2014, on page A1 of the New York edition with the headline: Auto Industry Galvanized After Record Recall Year.

 

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