July 27, 2014 at 10:24 am


Don't overreact to recalls

Proposed legislation to address automobile safety and quality goes too far, won't do much to protect motorists

General Motors is in the midst of its biggest recall in history. (JIM WATSON / AFP/Getty Images)

General Motors Corp. issued yet another recall last week — more than 800,000 vehicles worldwide, including 718,000 in the United States. Those numbers include six GM models recalled for minor defects that have not resulted in any major crashes or deaths.

GM is dealing seriously with these and other safety problems that have arisen in the past few months, demonstrating it has learned the lesson of its egregious neglect of an ignition switch defect tied to accidents in which more than a dozen people died. It’s certainly more forward-looking than the company has been before, and suggests a corporate culture change that now puts the safety of its customers ahead of cost concerns.

The condemnation, congressional investigations and likely cost consequences that resulted from GM’s negligence have been a wake-up call for the industry. It is unlikely an auto company will sit on the kind of vital information GM did, or for as long. That’s a positive self-correction. New protocol will be — and already is — to recall vehicles quickly, to address small problems before they become potential catastrophes.

The new atmosphere of corporate responsibility is a reaction to the GM crisis for sure, and not the product of an industry epiphany. But it is welcome, and should inform Congress as it rushes to pass legislation aimed at codifying what the automakers for the most part are already doing.

Proposed laws would greatly increase the penalties for ignoring defects, even to the point of sending automotive executives to jail over safety related oversights.

Sen. Richard Blumenthal, D-Conn., is offering legislation that would make it a crime to fail to disclose safety defects within 24 hours. Offenders could serve up to five years in prison, and the government would be able to go after employees individually. The law currently gives automakers five days to recall vehicles after ruling on safety defects.

Other proposals from the National Highway Traffic Safety Administration to Congress would vastly expand the authority of the agency, and increase maximum fines on automakers to $300 million, 10 times the current allowed fine.

The new proposals are typical after-the-fact solutions that will further the adversarial relationship between the industry and its regulators.

A better approach would be to ease the “gotcha” atmosphere that now exists and encourage automakers and government to work collaboratively to protect consumers. The government shares in the responsibility for the long delay in recalling the defective GM vehicles, and any legislative response should address that issue as well.

Transportation Secretary Anthony Foxx says he didn’t notice any problems with the pattern in recalled vehicles, nor did his agency’s safety specialists, despite receiving hundreds of similar complaints about ignition failures, and despite connecting one of the deadly accidents to those myriad complaints.

After considering formal probes, NHTSA failed to follow up with further investigation.

Sen. Jay Rockefeller, D-W. Va., thinks the answer is to boost the number of employees at NHTSA, and fund it with a “new-car fee” on automakers. This idea would place a $3-per-vehicle fee on each new car, which would jump to $9 in three years, and then increase with inflation. But the problem in this case wasn’t a shortage of regulators, it was a failure of those regulators to recognize a trend. Adding costs to consumers and expanding the bureaucracy won’t fix that.

Over the past few months, GM has recalled about 30 million vehicles, and reports late last week say its second-quarter net profit was down 80 percent. The recalls and compensation plans cost the company $1.5 billion so far.

Ford recalled more than 100,000 vehicles in early July, and Chrysler recalled almost 800,000 vehicles this month.

The industry is responding to what it clearly recognizes as a serious threat to its viability.

The response from government should not be knee-jerk legislation cobbled together in a hurry. It should be a studied and deliberative effort to determine exactly what went wrong and what, if any, additional legislation would make the process of protecting the public work better.