NHTSA praises GM for dealer recall fix incentives

David Shepardson
Detroit News Washington Bureau

New York — The head of the National Highway Traffic Safety Administration praised General Motors Co. for taking steps to ensure its new car dealers repair recalled vehicles before they are sold.

NHTSA Administrator Mark Rosekind also urged other auto dealers and automakers to take similar steps.

"GM's got this really innovative thing now that's kind of an interesting carrot and stick model," Rosekind told reporters. "The point is we didn't tell them to do it. They came up with the idea and they are actually going to do it system wide."

GM is identifying the economic benefits to dealers of completing recall repairs in new vehicles. "It's going come up and basically say the sales incentives you were looking for — you are not getting them until you actually show us you've done them. So there is positives as well as negative," Rosekind said.

GM didn't immediately comment on its incentives to dealers to complete recalls. GM issued a record setting 84 recall campaigns with more than 26 million vehicles in the United States in 2014.

NHTSA fined two dealers last year — including a GM dealer — for failing to fix recalled vehicles before they were sold. Under federal law, dealers must repair new cars before selling them, but isn't required to do so for used cars. The Obama administration has proposed requiring used car and rental car companies to also fix vehicles before they are sold or leased.

The NHTSA fines include a $50,000 fine for Chapman Chevrolet LLC in October in Philadelphia and a $110,000 fine for Gwinnett Place Nissan in Georgia in December.

Recently, the National Automobile Dealers Association met with Rosekind and asked NHTSA to do more to make it easier for dealers to get "batch data" to check for outstanding recalls, said NADA President Peter Welch last week. NHTSA said it faces some budget issues, Welch said.

Rosekind also praised GM for offering gift cards and offering other creative efforts to boost ignition switch recall completion rates. "You don't need an act of Congress or NHTSA to tell you to do it: do it," said Rosekind.

GM says of 2.34 million vehicles worldwide recaled for ignition switch issues, it has repaired 1.63 million, or nearly 70 percent — including 71 percent of the 1.93 million vehicles recalled in the United States through Monday.