GM Recall Case delayed by NHTSA

The GM recall caseGM Logo delayed by NHTSA caution begins with the history of the regulatory agency. Though the story behind the General Motors recall in March 2014 of 1.3 million cars for power-steering system problems actually began some ten years ago, the slow-motion action which guided the recall really began back with NHTSA legal issues in the 1970s.

The National Highway Traffic Safety Administration (NHTSA) was aware for years that GM had received thousands of complaints over power steering problems in Saturn Ions; but because of previous developments, the agency was powerless to take any definitive action until it could secure statistics which could legally back the growing numbers of anecdotal accounts. It is a problem not unlike adverse events reported to the FDA for a given drug, another government agency which will not take action until it possesses enough long-term studies and statistics to demonstrate some threshold level of increased risk.

GM denies Steering Problems

Despite numerous anecdotal accounts, GM denied for years that a loss of power steering could pose a serious safety risk. Because GM did not take any unilateral action to address the problem, government regulators were then forced to prove that GM did indeed have a problem. That process for 2004-2007 Saturn Ions took a decade. In the interim, Saturn owners reported steering problems four times more often than owners of two competing models, according to analysis of government records by the Wall Street Journal.

The GM recall for power steering glitches shows a blind spot in the regulatory system. The result is that people can get hurt when a car maker resists government regulators’ recall efforts. NHTSA officials and other safety experts say the obstacles which the agency faced in this latest GM recall case began with another GM recall some 30 years ago.

The biggest obstacle to any recall begun by NHTSA now is that the agency must first marshal statistics that can sustain a legal challenge in order to prove that a defect presents a present danger.

NHTSA’s acting administrator David Friedman told a Senate panel in April 2014: “What I would like to see, frankly, is when we provide evidence to auto makers that there’s a defect, that they act right away.”

NHTSA calls for Stiffer Penalties

Friedman and Transportation Secretary Anthony Foxx asked Congress to raise the fine an auto maker could face for moving too slowly to fix safety problems to $300 million. The maximum fine today is just $35 million, which is not substantial enough, in their estimation, to prompt car makers to act quickly on safety issues.

In a written statement to the Wall Street Journal,   Friedman also said NHTSA wants more authority to halt sales of vehicles which it considers safety threats.

Car makers issue 600 or more voluntary recalls each year which are influenced – but not necessarily ordered – by NHTSA. Sometimes auto makers recall their problem vehicles before the agency investigates them.

Friedman wrote: “If we have a strong indication of a possible defect, we will push hard for a recall. If the manufacturer resists and does not agree with our view on whether a safety defect exists, NHTSA has demonstrated its increased willingness to conduct a hearing.”

GM Chief Executive Mary Barra told Congress in May 2014 that GM was putting a higher priority on safety and wanted “productive,” as opposed to “adversarial” rapport with NHTSA.

A GM spokesman told WSJ: “GM is doing things differently today and we’re determined to set a new industry standard for safety and quality. (We) are now bringing greater rigor and discipline to our analysis and decision-making process involving recalls and other potential safety-related matters.”

Barra’s and GM’s entreaties to congress can be traced all the way back to the 1970s. In that decade, NHTSA beat car companies six times in court over challenges to its safety recalls. But NHTSA lost a lawsuit battle to GM in the 1980s after it had ordered GM to recall its new generation of front-wheel drive cars after the agency had received hundreds of complaints about rear brakes locking up.

The downside for drivers of that NHTSA loss was that even thousands of customer complaints could no longer suffice to legally prove that a given defect existed. NHTSA now must rely primarily on data, on statistics, rather than on anecdotal evidence or stories from customers.

Owners began to report Saturn steering problems – perhaps triggered by a system that used an electric motor instead of a hydraulic pump to help turn the wheels – soon after the vehicles hit the road. GM called the complaints a “customer-satisfaction” issue, explaining to NHTSA: “The impact on the driver’s ability to control these relatively small and light vehicles was limited.”

WSJ identified more than 6,000 complaints received by NHTSA from 2004 to 2014 that contained difficulty in steering the eight models, including the Ion, that GM would later recall for power-steering problems. By the end of 2009, according to WSJ analysis, the Ion was cited in four complaints for every 10,000 cars GM sold while the vehicle was on the market. In comparison, Honda’s rival cars “Accord and Civic each received less than one steering complaint per 10,000 cars sold during the equivalent period.”

WSJ reported on June 22, 2014: “On March 1, 2010, GM officials told NHTSA that the company would recall more than a million cars, but only Cobalts and G5s. The Saturn Ion was excluded, even though the 382,000 sold by then had the same steering motor as the Cobalt and G5. Instead, GM extended the warranty for the Ion. Owners who had steering problems could get the electric motors replaced free—as long as they complained to dealers about the problem and had less than 100,000 miles on their cars.”

Saturn told NHTSA the Ion didn’t need recalling because its owners had complained less often than Cobalt and G5 owners.

The rubber hit the road in 2011 (pun intended) when NHTSA investigators performed an experiment that used 15 Ion drivers whose power steering could be switched off. While drivers navigated a course and made a left turn, investigators cut the power steering. All but one driver avoided hitting cones. But did that controlled experiment rival live driving conditions?

Investigators found that drivers with the power steering disabled needed four to five times greater force to turn the wheel at speeds up to 40 miles an hour. Three drivers said they felt safe driving the car without power steering; eleven thought it unsafe; one “only marginally safe.”

Nevertheless,  NHTSA officials said they needed more data to prove that a defect existed; they claimed the exercise simulated a worst-case scenario few real-life drivers would have.

The investigation remained open until March 31, 2014, the day before GM head Ms. Barra testified before Congress to explain why GM took ten years to recall vehicles with a fatal ignition defect.

Two weeks after GM announced a series of recalls — including one that covered the Saturn Ion for unexpected loss of power steering — NHTSA closed its Ion investigation.

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•  GM Recall Case delayed by NHTSA

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