Recalls: Fines, Politics, and Conspiracy Theories

By: Jerry G. Reynolds
April 14, 2014

Recall logoAs I recently reported, 2013 set a new record for the number of recalls of automobiles, as automakers became more cautious and proactive.

For 2013, 632 different recalls were announced in the United States, covering over 22 million vehicles. This information was announced by the National Highway Traffic Safety Administration. This was up from 2012 when 16.4 million vehicles were recalled in just over 580 safety campaigns.

For 2014, in less than four months, the total number of cars recalled in the United States tops 9 million, putting this year on pace for over 30 million recalls, more than twice the number of cars that will be sold. So what is fueling this sudden increase? Frankly, it is fear.

In years past, we’ve seen no real urgency in car companies announcing recalls. Automakers often dragged their feet and waited until there was another huge breaking news story to announce a recall, hoping people would not notice. An old trick I used to see a lot was recall announcements late on Friday afternoons. Toyota was fined 1.2 billion dollars for not acting quickly enough. Now, we have GM in the hot seat over ignition switch issues.

Here are the words that send shivers down the spines of automaker execs: CRIMINAL CHARGES. It seems pretty clear that NHTSA is stepping up its enforcement. Fining a car company is one thing, criminal charges are a game changer. GM not only did not recall the cars with ignition problems, it appears they may have covered up those facts, purely for economic gain. The problem is, most of the people who made that decision are on the beach or golf course now. This explains the sudden increase in auto recalls this year, and I doubt the end is in sight.

This may also explain the sudden departure of former GM CEO Dan Akerson. I have no proof, but suspect, he knew what was coming. He was applauded for pushing the promotion of Mary Barra as the first automotive CEO. Did he set her up to fail? We may never know, but she did not do herself any favors with her testimony before Congress. GM is currently being fined $7000 a day for not answering questions quickly enough. GM’s other concern should be if the government will be harder on them due to their affiliation with their bailout of 2009. Barra worked at GM when the alleged cover-up was taking place.

Recalls are nothing new. The first recall of an automobile was in 1966. Since then, over 450 million vehicles have been recalled. In 2010, over 20 million vehicles were recalled, which is roughly 5 million more than were produced. This followed 2009 when over 15 million vehicles were recalled.
The interesting thing about recalls is people tend to ignore them, even when lives are at stake. The GM ignition case has been blamed in crashes, the Ford/Firestone recall years ago lead to many deaths and all people had to do to eliminate the risk was go to any Ford dealership and get a brand new set of tires. Free. I was in the Ford business at the time, we had hundreds of our customers who never came in. We hounded them by phone, by mail, and any other way we could think of. Still no response, no concern.

There is no evidence people associate recalls with over quality of a vehicle, Toyota has proven this. However, if you are not sure whether your car may have an unfixed recall, get your Vehicle ID number and call your closest dealer, they can tell you quickly if there are any open recalls. Most recalls are simple and easy and always done at no charge. Some recalls, left unfixed, can be the difference between life and death and should not be ignored.

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