Auto Recalls Increase in 2007 – Should you be Concerned?

2007 was a banner year for automobile recalls, with recalls up 30% from the previous year. Leading the pack was the Ford Motor Company, with more than 5.5 million recalls. Ford’s main problem was a faulty cruise control switch which has caused over 10 million recalls in the last 10 years, including 3.6 million in August 2007 alone. DaimlerChrysler AG came in second with 1.47 million recalls, which was actually a reduction from their 2.4 million recalls in 2006. Volkswagen was hit particularly hard in 2007 as well, with a decade high record of 1.4 million recalls.

Ironically, while Ford had the highest number of recalled vehicles last year, several of their vehicles appeared on the list of top Insurance Institute of America (IIHS) safety picks for the first time. So, while the recall numbers are surprisingly high, at least in Ford’s case it was due primarily to one faulty component. Of Ford’s 5.5 million recalls, 69% (3.8 million) can be attributed to the faulty cruise control switch.

Toyota appeared to fare well in 2007 with a little over 583,190 recalls, which was down dramatically from their record of about 2.1 million in 2005. GM also had a good year, with the lowest number of recalls in 10 years. GM and Toyota have been battling for status as number one automaker in the world, with GM recently edging out Toyota for top honors. Toyota’s growth has not been without controversy, however.

An Auto Giant Fumbles

In January 2008 a California jury decided that Toyota was not at fault for the death of a man trapped by an alleged faulty seatbelt, however the family of the victim plans to appeal. This lawsuit further darkens Toyota’s previously sterling reputation for quality and safety, especially after a November 2007 lawsuit filed by an auditor in a Toyota plant who claimed that bonus pay was tied to a reduction in defects. According to the lawsuit, this focus on a reduction in defects no matter what the cost allegedly lead to whistle-blower retaliation and defect cover-ups in a California plant that Toyota jointly manages with General Motors.

Auto industry analysts are cautioning that Toyota needs to work harder to guard their reputation for quality as their global footprint increases and they jockey for first place with GM. Lawsuits notwithstanding, Toyota has been accused of placing quantity over quality, as Consumer Reports removed several Toyota models from its list of recommended vehicles, stating that Toyota was “showing cracks in its amour”. The negative perceptions of Toyota’s quality even prompted their president Katsuaki Watanabe to publicly urge Toyota workers to take quality very seriously, in a speech at the Detroit Auto Show.

Toyota has also been under fire by environmental groups, as the pioneering manufacturer of the wildly popular “green” Toyota Prius introduced the gas guzzling Tundra pickup truck, and then joined the Alliance of Automobile Manufacturers. The Alliance is an auto manufacturing lobby group, which opposed recent legislation aimed at increasing fuel efficiency standards. Environment groups have accused Toyota of hypocrisy, as Toyota works to lead the market for hybrid “green” vehicles while at the same time lobbying to prevent an increase in CAFE standards and selling a pickup truck that gets an average of 17 MPG.

Impact of the TREAD Act on Auto Recalls

Media reports about the rise in recalls have noted that while any increase in defects is troubling, it could be worse. Most people remember the Firestone tire fiasco of 2000, which earned the Ford Explorer vehicles upon which they were installed the dubious nickname of Ford “Exploder”. In response to the massive 10 million Firestone tire recall, the National Highway Traffic Safety Administration (NHTSA) enacted the TREAD Act.

The TREAD (Transportation Recall Enhancement, Accountability, and Documentation) Act requires vehicle and equipment manufacturers to periodically provide the NHTSA with timely information about foreign recalls, other safety campaigns, or information that may indicate a problem with a particular product. The act also requires that recalled products like tires not be sold or passed on to other consumers, and must be properly disposed of. Manufacturers that do not follow the provisions of the TREAD Act face increased civil and criminal penalties. The TREAD Act also outlines new tire labeling requirements, tire testing standards, and requires the installation of tire pressure monitoring systems in new vehicles.

Auto recalls rose sharply after implementation of the TREAD Act in 2000. Congress determined that problems with the tires would have been detected sooner if the NHTSA had obtained reports about problems with the tires in a timelier manner. Many regulators and safety advocates are of the opinion that more recalls shows that the system works. Instead of manufacturers taking their time disclosing problems, they are now required by law to communicate with the government and consumers as quickly as possible when a defect is discovered. While more defects are being made public, the impact on the driving public is less, as many defects are found and corrected early in a vehicle’s life.

The Houston based law firm of Vujasinovic & Beckcom cares about your safety and wants to hold negligent manufacturers responsible for their mistakes. Their attorneys are not intimidated by powerful manufacturers who try to dodge responsibility for the injuries and deaths that occur due to their products’ defects. Our experienced attorneys understand that you placed trust in these companies the moment that you paid for the product or service the companies provided. If you or someone you love has been injured or killed in an auto accident or by a defective or dangerous product, and you feel the manufacturer is liable for the damages, contact the attorneys at Vujasinovic & Beckcom today

Vujasinovic & Beckcom P.L.L.C
1001 Texas Avenue, Suite 1020
Houston, TX 77002
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Fax: 713.224.7801