The GM Debacle
The thing about General Motors’ faulty ignition switches, which tended to shut off the car engine (and the air bags) while in motion, is that the National Highway Traffic Safety Administration and other regulators had opportunities to catch the problem early, but they failed to do so. GM’s bankruptcy and reorganization during the Great Recession go a long way towards explaining why even a major problem like the ignition switches would fall through the cracks, but even so evidence and fatal examples were piling up without anyone reading or acting on GM’s internal reports.
It took until 2014, around a decade after the problem first showed up on GM’s internal tests, before a new CEO and a barrage of personal injury and wrongful death suits forced GM’s hand into issuing a recall. And while the NHTSA would eventually issue a then-record $35 million fine for GM’s failure to take action, the government regulator had to face the public pressure to do its job instead of simply approving of whatever internal policing efforts the automakers bothered to perform.
The Takata Disaster
What started out as the recall of a few thousand Honda vehicles back in 2008 wound up expanding into the biggest vehicle recall in US history thanks to how practically every Takata air bag made since the turn of the century has required a replacement for one reason or another.
Once again, however, the regulators weren’t responsible for bringing this issue to light: instead, it was a combination of Honda inspections that revealed troubling issues with the air bags and a pair of wrongful death lawsuits that pointed to the air bags as the responsible party. These lawsuits encouraged Honda and other Takata customers to take a closer look at their air bags, and what they discovered led Japanese automakers to recall 3.4 million vehicles by the start of 2013 and 34 million by the end of 2015.
The FCA Shift
In December 2014, the NHTSA got a new head administrator, Mark Rosekind, who was determined to make his agency an active entity in the field of vehicle safety. He got his opportunity in July of 2015, when the NHTSA leveled what’s now the biggest fine in the agency’s history: $105 million. Fiat Chrysler Automobiles was the recipient, and it was for the company’s overall failure to identify defects, report them to regulators, and to issue timely recalls to their customers.
Furthermore, FCA was hit with another $70 million fine before the year was out. In this case the fine was more specifically to penalize the company for underreporting the number of crashes its cars experienced. By law, car manufacturers are required to report significant crashes to the NHTSA, particularly ones involving injuries or deaths, so that the agency can determine if a design defect is responsible and needs a recall repair. However, FCA wasn’t sending all of its accident data on to the regulator, a fact uncovered by the increased scrutiny attached to the earlier fine.
Other automakers are also feeling the NHTSA’s new fangs. Honda got the same $70 million fine for underreporting accidents for 12 years back in November of 2014, and BMW saw a $40 million fine in December 2015 after it failed to warn its customers of an air bag design flaw in one kind of Mini Cooper and then failed to fix the design flaw before the NHTSA reviewed it again a year later.
With auto accidents accounting for so many injuries and deaths every year, it’s good to see a government agency finally get on the ball about regulating automobile safety. However, civil cases filed by private parties are still an important means of holding automakers responsible for their mistakes, and that fact is unlikely to change even if the NHTSA gets the funding and the attitude it needs to be effective.