Poor regulations let Toyota, GM willfully endanger drivers

March 24, 2014 

The following editorial appeared in the New York Times:

The delayed recalls of millions of defective cars by Toyota and General Motors put the American public at risk and shows glaring deficiencies in enforcement of auto safety regulations.

Last week, Toyota agreed to pay $1.2 billion to settle a four-year-long federal criminal investigation that found the company had concealed information from regulators and the public in 2009 and 2010 about a defect that caused some of its most popular cars to accelerate suddenly. And GM recently recalled 1.6 million cars to replace ignition switches that the company, for more than a decade, knew to be faulty.

Auto-safety advocates have long called for changes in the recall and regulatory rules that might have prevented deaths and injuries in these cases. Even Congress, which will soon hold hearings on the GM recall, may no longer be able to ignore these demands.

One good starting point would be the Motor Vehicle Safety Act, a sensible measure that Congress failed to pass in 2010 because of opposition from the auto industry and Republican lawmakers. That proposal would have provided more money to the National Highway Traffic Safety Administration to investigate auto defects, instructed the agency to make more information available to the public and given the regulator power to levy bigger fines against companies that did not recall faulty cars.

The federal safety agency says it is protecting consumers even with its current resources, noting that traffic fatalities are at their lowest levels in decades and that its investigations have led to 929 recalls of more than 55 million vehicles in the past seven years.


But the Toyota and GM cases suggest that some significant defects can readily escape the agency’s notice. This may be a growing problem because the complexity of electronics and other technology in cars makes it harder to identify flaws and their causes. At the same time, the agency’s resources have not kept pace. It had 28 investigators last year, barely up from 26 in 2001 just after Congress passed the last major auto-safety law in the wake of the Ford Explorer-Firestone tire debacle. In that case, the treads peeled off tires, causing the sport utility vehicles to roll over, a defect that was eventually linked to 271 deaths.

The agency’s annual budget for investigating defects and seeking recalls is a modest $10.6 million, which has barely grown in recent years. Safety regulators say the agency started using software from IBM in 2012 to detect patterns in databases that contain tens of thousands of consumer complaints and reports of possible defects filed by automakers. Had that software been in place earlier, the safety agency might have been able to identify a pattern that would have prompted it to open an investigation into GM’s ignition switches.

Congress clearly needs to increase NHTSA’s resources. The 2010 proposal, for example, would have doubled its vehicle safety budget. Lawmakers should also give the agency the power to levy bigger fines. The law currently allows fines of up to $5,000 per car, up to a maximum of $35 million, on carmakers that fail to disclose a defect in a timely manner. Either lawmakers should eliminate that upper limit or raise it substantially to deter automakers from delaying or avoiding recalls.

Legislators should also consider giving officials the power to pursue criminal penalties in cases where automakers actively conceal information about defects. (The Justice Department charged Toyota with breaking a criminal wire fraud law, but that statute may not be applicable in every case.) And the agency should be required to disclose to the public detailed accident and defect reports submitted by car companies to its early warning system.

There is no question that in these cases the automakers failed the public. But federal regulators – and a Congress that has denied them the weapons they need – are complicit in that failure.

The New York Times

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