Why Are So Many Cars Being Recalled?
More Enforcement and Growing Use of Shared Parts Play Roles
Updated: 03/09/2015 - by John O'Dell, Contributor
Safety recalls for automobiles sold in the U.S. are soaring, and that's leaving many consumers wondering whether the big numbers mean automotive reliability and safety are declining.
It's a valid question.
The number of passenger vehicle recalls in 2014 set a new record, 324 campaigns, exceeding the previous record of 224 campaigns in 2004 by almost 45 percent.
Worse than the climbing total of recall campaigns, though, is that the number of cars and light trucks subject to those recalls is soaring. More than 63 million passenger vehicles were recalled in 2014. That's more than triple the total for 2013 and slightly more than double the 30 million vehicles recalled in 2004. One positive note is that more than two-thirds of the recalls launched in 2014 were instituted by the automakers themselves, and not by NHTSA.
"We are much more proactive than [we were] a few years ago," says automotive quality consultant Marc Trahan, former head of quality for Volkswagen of America. "You can hide and cover up an issue, or you can admit it and fix it. We learned long ago that it's better to acknowledge and fix it."
Should You Worry?
Most of the vehicles recalled in recent years have been older models with newly discovered problems, not new cars. One example is the 2014 recall of 7 million 1997-2014 General Motors Corp. cars and trucks with faulty ignition switches that can cause sudden power loss and keep airbags from functioning in collisions. The recall came when GM acknowledged the problem after not doing so for several years. Most of the vehicles are in the 2004-'10 model years.
The growing use of common parts across multiple model lines, and even by multiple automakers, has ensured that the numbers of affected vehicles can be substantial when a faulty component or software program forces a recall.
Add to that the stepped-up oversight of automakers by NHTSA and the Justice Department, as well as media pressure and a greater degree of self-reporting than ever before, and it becomes easier to see why 2014 was a year for the recall record book. GM alone recalled 26.8 million vehicles for a variety of reasons in 78 different campaigns.
That doesn't mean that car shoppers should put their buying plans on hold. Safety specialists, automakers and regulators alike insist that though the number and volume of recalls is record-setting, there is no indication that cars are less safe than in the past.
On the contrary, says Russ Rader, a spokesman for the nonprofit Insurance Institute for Highway Safety. "This doesn't mean that vehicles are getting less safe; it's just the opposite. They have never been safer," with the death rate of just 1 fatality per 100 million miles of vehicle travel, he says. That is the lowest mark since record keeping began.
Safety advocate Clarence Ditlow, head of the independent Center for Auto Safety and no apologist for automakers or regulators, agrees that a record number of recalls isn't an indication that things have deteriorated on the safety front.
Instead, he says, "vehicles have gotten substantially safer since the 1990s," especially with active features such as collision avoidance braking, lane keeping systems and active cruise control.
Federal Agency Pressure Is On
Why, then, are there so many recalls?
Edmunds asked that question of most of the major automakers, federal regulators and independent auto safety groups and got strikingly similar answers.
One key ingredient is stepped up government pressure on automakers to order recalls. Congress and the media have been lambasting NHTSA for missing signs that could have resulted in a much earlier recall of GM vehicles with faulty ignition switches. But the agency has made it clear to automakers that avoiding recalls can lead to fines and tons of bad publicity.
Right now, NHTSA has limited fining authority. The maximum allowed is $35 million, which is pocket change for most car companies. But the agency is asking Congress in the proposed Grow America Act to increase that to $300 million per incident and to give it additional enforcement powers it now lacks, such as authority to order an immediate recall when it determines that public safety is at stake. That process can now take months of negotiations with the affected automaker. If NHTSA gets that authority, expect it to be more aggressive in ordering recalls over the objections of carmakers, something that rarely happens now.
Even without new authority for NHTSA, it appears that some positive change is coming.
Ever since the Justice Department fined Toyota $1.2 billion for dragging its feet and hiding information during a probe of vehicles suspected of accidental unintended acceleration, and the adverse publicity GM has gotten from its ignition switch recall, there's been a sea change in how the industry looks at recalls, Ditlow says.
Other automakers have taken note of the Toyota fine and said. "'Gee, we don't want to be fined $1 billion, so we'd better look to see what kinds of problems we might have noted but not acted on in the past, and then do recalls on them now,'" he says.
Much of the recall volume this year, Ditlow says, "is from these make-up recalls."
Common Parts Contribute to More Recalls
Another contributor to the soaring number of recalls is the industry's ever-increasing use of common parts and the sheer complexity of the modern automobile, including heavy dependence on electronics and software that is often developed outside the automotive companies.
Decades ago, a faulty steering system part on a car likely would have resulted in a recall of just that one model. Today, though, the same steering system part might be used on many models within a single manufacturer's lineup. It's a practice that helps automakers cut costs by simplifying their parts inventories and benefiting from economies of scale.
GM's ignition switch recall, for example, stems from a flawed switch supplied by an outside vendor. Court documents show that some company insiders knew about the problem for years before GM was pushed by NHTSA to begin recalling vehicles. The campaign spans cars from the 1997 Chevrolet Malibu to the 2014 Chevrolet Camaro. The switch led to numerous accidents and deaths and the recall of more than 7 million GM vehicles. Most are in the 2005-'10 model years, including the Chevrolet Cobalt. Other GM nameplates involved are Buick, Cadillac, Oldsmobile, Pontiac and Saturn.
Airbags and Seatbelts Add to Recall Volume
Sometimes the same part is used by multiple manufacturers, which can really cause numbers to soar when problems arise.
That's been the case twice with parts from Takata Corp., which is a major supplier of safety equipment including seatbelt and airbag systems.
Takata most recently has been wrestling with an airbag inflator issue. The inflator can explode and spray shrapnel around the passenger cabin. Since 2008, the Takata airbag recalls have involved almost every major automaker and more than 24 million vehicles worldwide. Since 2013, 10 automakers have recalled 7.8 million Takata airbag-equipped vehicles in the U.S.
In 1995, a Takata seatbelt recall sparked by defective seatbelt buckles affected 8.7 million 1986-'91 model year cars and trucks from 11 automakers. Some of the vehicles covered in the recall still haven't been repaired, which is a common problem that leads to the sale in the used-car market of thousands of recalled-but-unrepaired vehicles every year.
To make it easier for people to discover unresolved recalls, NHTSA recently launched a recall lookup tool that lets consumers check any vehicle to see if it has been subject to a recall but hasn't had the proper inspection or repair.
Sell More Cars, Recall More Cars
Success in the marketplace also adds to recall volume. Toyota, one of the best-selling automotive brands in the U.S., recalled more than 5.9 million cars, vans and trucks in 2014, following the recalls of more than 3.4 million vehicles in 2013. The recall campaigns, 25 in 2014 and 11 in 2013, stem from a variety of problems, including those Takata airbags. Much of the volume comes from use of common parts across various model lines.
Still, the company has no plans to stop designing its vehicles to share parts, says John Hanson, safety and quality issues spokesman for Toyota Motor Sales U.S.A.
"If a part is defective it will affect a larger population of vehicles [than before it was used across many models]. That's just a risk that you run," he says, adding that despite such large recall numbers, "I truly believe that the quality of cars continues to improve year by year. We are getting very good at this."
What Automakers Say
Car companies are notoriously shy about commenting on recall issues, seeming to believe that no news is the best kind of news. But representatives of several major automakers talked to Edmunds, provided that their names were not used.
The gist of their comments is that carmakers are more sensitive to public opinion these days and more willing to order a recall without being required by NHTSA to do so, as consultant Trahan told Edmunds. They acknowledge, though, that NHTSA has gotten a bit tougher on them in the past year.
Car companies also have seen that prompt recalls can save money because assembly-line errors can be corrected or faulty parts fixed before being installed in vehicles and affecting a larger number of them.
Some automakers acknowledge privately that they have ordered recalls this year for issues that in the past would have been handled without fanfare through technical service bulletins. The bulletins are notices to dealership service departments to check for and fix a particular problem when a customer brings a vehicle in for a regular service or repair.
"This year was a bit of an aberration because of the GM recalls, but in the future we will see the number of recall campaigns growing, but the number of vehicles per campaign will be smaller because automakers will be quicker to pull the trigger," said one Washington, D.C.-based auto industry insider who works closely with car companies and safety regulators.
Automakers also maintain that the general improvements in vehicle reliability that have extended the life of most cars also add to the numbers when recalls are ordered. That's because many recalls involve older vehicles and more of them remain road-worthy. American Honda, for instance, says that 75 percent of all the cars it has sold in the past 25 years are still in operation.
The Regulator's Role
NHTSA declined to make then acting administrator David Friedman available for an interview for this article, citing his crowded schedule. Friedman, a former automotive fuel economy and safety advocate, took over when NHTSA Administrator David Strickland resigned in December 2013. (Friedman resumed his post as NHTSA deputy director after the Senate confirmed Mark Rosenkind as the agency's 15th administrator.)
In an e-mailed statement attributed to him, Friedman said that the agency "has a proven record of aggressively investigating and pursuing recalls."
In the past decade, the statement said, the agency has been directly responsible for ordering 1,299 recalls involving more than 95 million passenger and commercial vehicles and pieces of safety-related equipment, such as child safety seats. The agency also has issued more than $140 million in fines since 2009.
As a result of its activities, Friedman's statement said, "The agency believes the industry is getting the message."
Lesson Learned?
The big question is whether lessons learned in the past year or so will stick.
"We've had significant issues in the past, like the Ford Pinto gas tank defects, the Firestone Tire-Ford Explorer rollovers and the Toyota sudden acceleration claims, and all those generated lots of recalls," says Ditlow. "But after three or four years the message got lost. It always seems to take another crisis to remind automakers that doing recalls is better than hiding problems."
Still, he says, "I'm hopeful that this time the message really will sink in."
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