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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
June 2011:
Auto Safety:
NHTSA Has Options to Improve the Safety Defect Recall Process:
GAO-11-603:
GAO Highlights:
Highlights of GAO-11-603, a report to congressional requesters.
Why GAO Did This Study:
In 2010, auto manufacturers recalled more vehicles than any other
year, according to the National Highway Traffic Safety Administration
(NHTSA), the federal oversight authority for vehicle recalls. However,
many recalled vehicles are never fixed, posing a risk to vehicle
operators, other drivers, and pedestrians. After the recent recalls of
Toyota vehicles, Congress raised questions about the auto safety
defect recall process, including the sufficiency of NHTSA’s oversight
authorities and whether vehicle owners are being effectively motivated
to comply with recalls.
In response, GAO reviewed laws and documents and interviewed NHTSA and
stakeholders about the (1) extent of NHTSA’s role in the recall
process, and how its authorities compare to selected federal and
foreign agencies that oversee recalls; (2) benefits and challenges of
the recall process for NHTSA and manufacturers; and (3) options for
improving the recall process. GAO also conducted focus groups with
vehicle owners to better understand their perspectives.
What GAO Found:
NHTSA monitors manufacturers’ recall campaigns and completion rates
(the number of defective vehicles that are fixed) and provides
information and guidance to the public. NHTSA is responsible for
reviewing the planning and implementation of recall campaigns to
ensure compliance with legal requirements. To this end, the agency is
responsible for reviewing, among other things, the manufacturer’s
description of vehicles affected by a safety defect, actions the
manufacturer plans to take to remedy those vehicles through a recall,
and notification letters the manufacturer plans to send to the vehicles’
owners. NHTSA also monitors the effectiveness of manufacturers’ recall
campaigns, based in large part on the data manufacturers are required
to submit on completion rates. In addition, the agency provides
information and guidance to the public on recalls, primarily through
its Web site. NHTSA generally has similar authorities to those of
selected federal and foreign agencies GAO reviewed that oversee
recalls—the Consumer Product Safety Commission, the Food and Drug
Administration, the U.S. Department of Agriculture, and agencies in
Canada, Germany, Japan and the United Kingdom—although some
differences exist in how they can implement their authorities.
Auto industry stakeholders are generally satisfied with the recall
process, but several challenges may affect recall completion rates,
and thus, the number of defective vehicles that are removed from the
road. Manufacturers cited NHTSA’s role in the process as a key
benefit, reporting clear requirements and open communication. Although
franchised dealerships had some concerns related to manufacturers’
communication and availability of repair parts, they were also
generally satisfied with how manufacturers reimbursed them.
Nevertheless, NHTSA faces challenges that may affect recall completion
rates; for example, focus group participants reported that 1) they
preferred notification letters with certain elements and may be more
likely to comply if the letters included the VIN number and clarified
the severity of the defect and 2) they were unfamiliar with NHTSA’s
primary means of communicating defect information to the public—its
Web site. Furthermore, according to GAO’s review, although recall
completion rates vary considerably by certain factors, NHTSA has not
consistently used the data it collects to identify which factors make
some recalls more successful than others. Finally, NHTSA does not have
authority to notify potential used car buyers of a defect.
Based on these challenges, NHTSA has the following and other options
for improving the recall process and, more importantly, recall
completion rates. First, NHTSA could modify the way manufacturers must
present information in safety defect notification letters and
publicize information resources, like NHTSA’s Web site, so that
vehicle owners are better motivated and informed. Second, NHTSA may be
able to use manufacturers’ data to identify what factors make some
recalls more or less successful than others to better target
monitoring of recall campaigns and identify best practices. Finally,
expanding NHTSA’s recall authorities may help identify more defective
vehicles and improve recall completion rates.
What GAO Recommends:
GAO recommends that NHTSA (1) modify requirements for notification
letters; (2) enhance and publicize its Web site (3) better use
manufacturers’ data; and (4) seek legislative authority to notify
potential used car buyers of recalls.
NHTSA agreed to consider GAO’s recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-11-603] or key
components. For more information, contact Susan A. Fleming at (202)
512-2834 or flemings@gao.gov.
[End of section]
Contents:
Letter:
Background:
NHTSA Conducts Oversight of Safety Defect Recalls, and Other Selected
Agencies Generally Share Similar Authorities:
Auto Industry Stakeholders Are Generally Satisfied with the Recall
Process for Safety Defects, but Several Challenges May Affect Recall
Completion Rates:
Options Exist to Improve NHTSA's Safety Defect Recall Process:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Defect Notification Letters and Envelopes Used in Focus
Groups:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Minimum Completion Rate for Possible NHTSA Follow-up
Notification Request or Requirement:
Table 2: Federal Agencies' Authorities to Order Recalls and Impose
Penalties for Selected Products:
Table 3: NHTSA and Selected Foreign Agencies' Auto Safety Recall
Authorities:
Table 4: Foreign Agencies with Safety Recall Authority That GAO
Interviewed:
Table 5: Auto Manufacturers GAO Interviewed:
Table 6: Franchised Dealerships and Used Dealerships GAO Interviewed:
Table 7: Comparison of All NHTSA Recall Data for Safety Defects from
2000 through 2008 to Data Analyzed by GAO:
Table 8: Component Categories Used in GAO Analysis of NHTSA's Artemis
Database:
Figures:
Figure 1: The Role of Stakeholders in the Auto Safety Defect Recall
Process:
Figure 2: Total Voluntary and Influenced Safety Defect Recalls for
Motor Vehicles, 2000-2009:
Figure 3: Average Recall Completion Rates by Manufacturer, 2000
through 2008:
Figure 4: Variation in Recall Completion Rates, by Component Recalled:
Abbreviations:
ACRA: American Car Rental Association:
CPSC: U.S. Consumer Product Safety Commission:
EU: European Union:
FDA: U.S. Food and Drug Administration:
MLIT: Ministry of Land, Infrastructure, Transport and Tourism (Japan):
NHTSA: National Highway Traffic Safety Administration:
ODI: Office of Defects Investigation:
OVSC: Office of Vehicle Safety Compliance:
RSS: Really Simple Syndication:
TREAD: Transportation Recall Enhancement, Accountability and
Documentation:
UK: United Kingdom:
USDA: U.S. Department of Agriculture:
VIN: vehicle identification number:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
June 15, 2011:
The Honorable Elijah Cummings:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives:
The Honorable Edolphus Towns:
House of Representatives:
From 2000 to 2009, manufacturers of motor vehicles and vehicle
equipment conducted almost 6,300 recalls to address safety issues
ranging from malfunctioning airbags to defective child safety seats.
The vast majority of products affected by these recalls were vehicles,
such as cars, sport utility vehicles, and pickup trucks. In 2010, a
record 14.9 million vehicles were recalled by manufacturers, according
to the National Highway Traffic Safety Administration (NHTSA), the
federal agency that oversees vehicle recalls. However, owners of
vehicles subject to a recall do not always get them fixed, posing a
risk to owners, as well as to vehicle passengers, other drivers, and
pedestrians. According to NHTSA, on average only about 70 percent of
vehicles subject to a recall are fixed within the 18-month period
during which manufacturers provide recall completion data to the
agency. After the highly publicized recalls regarding the sudden
unintended acceleration of Toyota vehicles in 2009 and 2010, Congress
expressed concerns about the auto recall process, including whether
NHTSA has the authorities it needs and whether vehicle owners are
being effectively motivated to get their vehicles remedied.
Congress has also expressed concern about federal oversight of recall
processes for other products. For example, in 2008, the Consumer
Product Safety Improvement Act was enacted, which gave the Consumer
Product Safety Commission (CPSC) enhanced authorities regarding safety
standards and recalls.[Footnote 1] Similarly, the Food and Drug
Administration (FDA) Food Safety Modernization Act[Footnote 2] was
signed into law in January 2011 to give FDA enhanced recall authority,
allowing it to mandate a manufacturer to recall an unsafe food
product.[Footnote 3] In addition, Congress has raised questions
regarding how NHTSA's authorities to regulate motor vehicle safety
compare with other countries, such as Canada and Japan.
In this context, this report addresses the following questions: (1)
What is the extent of NHTSA's role in the auto safety defect recall
process, and how do its authorities compare with those of other
selected federal and foreign agencies with safety recall authority?
(2) What are the benefits and challenges of the auto safety defect
recall process for NHTSA and the manufacturers? (3) What options exist
for improving NHTSA's auto safety defect recall process?
To describe the extent of NHTSA's role and authorities in the auto
safety defect recall process, we reviewed applicable legislation,
including the National Traffic and Motor Vehicle Safety Act, as
amended, relevant federal regulations, and NHTSA's guidance on the
safety defect recall process. In addition, we conducted interviews
with NHTSA officials about the agency's role in the defect recall
process and its recall authority. To compare NHTSA's authorities with
those of other federal agencies, we reviewed legislation and
interviewed officials at selected federal agencies that, similar to
NHTSA, have product safety oversight responsibilities, including CPSC,
FDA, and the U.S. Department of Agriculture (USDA), to determine what
differences and similarities exist between the agencies' recall
authorities and those of NHTSA. To compare NHTSA's authorities with
selected foreign agencies with safety recall authority, we interviewed
officials from agencies in four countries (Canada, Germany, Japan, and
the United Kingdom) about their authorities and involvement in the
auto safety recall processes of their countries. We selected these
agencies based on recommendations from NHTSA and industry officials
with whom we spoke and to reflect a range of safety recall processes
and authorities. We also interviewed auto industry organizations in
the selected countries to get their perspectives on the authorities of
the selected foreign agencies, as well as officials from the European
Union (EU) to understand how EU legislation may impact two countries
in our review, Germany and the United Kingdom (UK).
To examine the benefits and challenges in the auto safety defect
recall process, as well as potential options for improving the
process, we conducted and analyzed interviews with stakeholders in the
auto safety defect recall process, including NHTSA, auto
manufacturers, third-party data providers, franchised and used-car
dealerships, rental car companies, consumer groups, and industry
organizations. In addition, to determine vehicle owners' awareness of
recalls, their understanding of defect notification letters, and their
willingness to comply with defect notices, we convened 10 focus groups
in five cities--Chicago; Dallas; Richmond, Virginia; Salina, Kansas;
and Seattle, Washington. These cities were selected to provide
geographic variation and both rural and urban environments. We also
analyzed NHTSA data to determine the average completion rate--that is,
the number of defective vehicles that are remedied--of auto safety
defect recalls from 2000 through 2008 (the last year for which a full
six quarters of recall completion rate data is available) and to
examine what variations exist across completion rates. See appendix I
for more information about our scope and methodology.
We conducted this performance audit from June 2010 through June 2011
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
The National Traffic and Motor Vehicle Safety Act of 1966 established
safety standards for motor vehicles.[Footnote 4] NHTSA was established
by the Highway Safety Act of 1970 to carry out safety activities,
which range from setting vehicle safety standards to working with
states and local communities to reduce drunken driving.[Footnote 5] In
2000, in response to the highly publicized recall of Firestone tires
due to serious safety defects, Members of Congress expressed concern
about NHTSA's oversight of vehicle and equipment safety. Subsequently,
the Transportation Recall Enhancement, Accountability and
Documentation--TREAD--Act was signed into law, which enhanced NHTSA's
authority to ensure that manufacturers provide the agency with early
notification of potential safety defects in motor vehicles and
equipment and that manufacturers quickly take actions to remedy them.
[Footnote 6]
NHTSA has two primary missions in its oversight of vehicle safety:
[Footnote 7]
* Oversight of auto and equipment manufacturers' compliance with
safety standards established by the agency. NHTSA's Office of Vehicle
Safety Compliance (OVSC) is responsible for ensuring that new vehicles
or equipment comply with Federal Motor Vehicle Safety Standards.
[Footnote 8] By law, manufacturers must provide certification
indicating that their vehicles and equipment meet these standards, a
process also known as self-certification. OVSC also tests and inspects
new vehicles to ensure that they meet these standards. Auto
manufacturers are also expected to periodically inspect and test
vehicles throughout their production period to ensure they comply with
safety standards.
* Oversight of the identification and remedy of vehicle and equipment
defects that could pose an unreasonable safety risk--safety defects.
The agency's Office of Defects Investigation (ODI) conducts
investigations and identifies possible safety defects in vehicles or
equipment that create an unreasonable safety risk and oversees
manufacturer actions to remedy them. ODI identifies and reviews a
variety of information for trends that could indicate the presence of
a safety defect in a motor vehicle or piece of equipment. These
information sources include consumer complaints submitted to the
agency and information on fatalities, injuries, property damage
claims, and consumer complaints collected by manufacturer and provided
to the agency. Auto manufacturers also conduct their own
investigations of potential safety defects in their motor vehicles.
As part of its mission, NHTSA is responsible for overseeing two types
of recalls. Compliance recalls are initiated when vehicles or vehicle
equipment is determined to be noncompliant with applicable federal
vehicle safety standards, as identified by NHTSA or a manufacturer.
Compliance recalls have ranged from design issues with vehicle safety
belts to improper placement of warning labels for airbags. From 2000
through 2009, compliance recalls accounted for about 18 percent of
vehicle recalls. Safety defect recalls, which accounted for the
remaining, majority share of vehicle recalls, are initiated when a
defect in a vehicle or vehicle equipment creates an unreasonable
safety risk, as determined by NHTSA or a manufacturer. For example,
the potential for a steering column to break and suddenly cause
partial or complete loss of vehicle control could represent a safety
defect and warrant a safety defect recall.
Although NHTSA also oversees compliance recalls, this report focuses
on NHTSA's oversight of safety defect recalls, which as previously
discussed represent the majority of recalls overseen by the agency and
are initiated when a defect poses an unreasonable risk to safety. In
addition, we have limited our scope to safety defect recalls that have
been initiated for passenger vehicles, including cars, pickup trucks,
sport utility vehicles, large passenger vans, and minivans (NHTSA also
oversees recalls for other vehicles, such as motorcycles, recreational
vehicles, and commercial trucks). Finally, because the U.S. Department
of Transportation Office of Inspector General is examining NHTSA's
activities related to the investigation of potential safety defects in
motor vehicles and equipment, we did not include safety defect
investigations in our review.[Footnote 9]
The auto safety defect recall process for motor vehicles is a
concerted effort involving five stakeholders:
* auto manufacturers--businesses that manufacturer, assemble, or
import motor vehicles;
* NHTSA--the federal agency that oversees vehicle safety;
* franchised dealerships--businesses that sell or lease an auto
manufacturer's new vehicles;
* third-party data providers--businesses that collect and interpret
data for clients and assist manufacturers in identifying postal
addresses of vehicle owners with a vehicle affected by a recall; and:
* vehicle owners--purchasers or lessors of a vehicle.[Footnote 10]
As depicted in figure 1, these stakeholders, in particular NHTSA and
auto manufacturers, engage in a number of steps during the safety
defect recall process.
Figure 1: The Role of Stakeholders in the Auto Safety Defect Recall
Process:
[Refer to PDF for image: process illustration]
Sharing information:
Auto manufacturers: Investigates potential safety defects based on
data related to fatalities, injuries, warranty claims, property damage
claims, consumer complaints, and other sources;
NHTSA: Investigates potential safety defects based on manufacturer
data, complaints to the agency, and reports of recalls in foreign
countries, among other sources.
NHTSA: Determines defect creates unreasonable safety risk; Requests
that manufacturer conduct recall or, if necessary, orders recall;
Auto manufacturers: Determines defect creates unreasonable safety
risk; plans recall campaign to remedy it; Provides notification of
defect and recall plan to NHTSA.
Auto manufacturers: Sends repair guidance to franchised dealerships;
drafts recall notification letters for vehicle owners; Provides copies
of notices for franchised dealerships and vehicle owners to NHTSA;
NHTSA: Reviews recall notices for owners for compliance with
regulations; Approves or requests changes to recall notification
letters.
Auto manufacturers: Sends notices to vehicle owners via first-class
mail; Third-party data provider identifies owner addresses or
manufacturer uses internal data.
Auto manufacturers: Franchised dealerships perform recall remedy;
submit claims to manufacturer for reimbursement of recall remedy work.
Auto manufacturers: Monitors effectiveness of recall campaign;
responsible for sending follow-up notifications; Provide data on
status of recall campaign to NHTSA;
NHTSA: Monitors effectiveness of recall campaign; Can require
manufacturer to send follow-up notifications.
Source: GAO analysis of NHTSA documents and interviews with agency
officials, auto manufacturers, and industry organizations.
[End of figure]
According to NHTSA officials, since 2000 all safety defect recalls for
passenger vehicles have been conducted voluntarily by manufacturers.
Although some of these recalls were conducted based on NHTSA's
investigations of safety defects--known as influenced recalls--most
were initiated by manufacturers without influence from agency
investigations--known as voluntary, or "uninfluenced," recalls (see
figure 2). For example, in April 2011, a manufacturer expanded the
scope of vehicles included in one of the company's safety defect
recalls based, in part, on NHTSA's own investigation of the defect.
Moreover, NHTSA also has the authority to order a vehicle manufacturer
to conduct a recall.[Footnote 11] According to NHTSA officials, the
agency has not ordered any vehicle recalls since prior to 2000, and
since the agency was established, it has ordered seven recalls for
motor vehicles or equipment.
Figure 2: Total Voluntary and Influenced Safety Defect Recalls for
Motor Vehicles, 2000-2009:
[Refer to PDF for image: stacked vertical bar graph]
Year: 2000;
Influenced Recalls: 75;
Voluntary Recalls: 357.
Year: 2001;
Influenced Recalls: 57;
Voluntary Recalls: 322.
Year: 2002;
Influenced Recalls: 75;
Voluntary Recalls: 310.
Year: 2003;
Influenced Recalls: 118;
Voluntary Recalls: 311.
Year: 2004;
Influenced Recalls: 118;
Voluntary Recalls: 375.
Year: 2005;
Influenced Recalls: 126;
Voluntary Recalls: 346.
Year: 2006;
Influenced Recalls: 74;
Voluntary Recalls: 341.
Year: 2007;
Influenced Recalls: 94;
Voluntary Recalls: 408.
Year: 2008;
Influenced Recalls: 189;
Voluntary Recalls: 338.
Year: 2009;
Influenced Recalls: 80;
Voluntary Recalls: 290.
Source: GAO analysis of NHTSA data.
Note: According to NHTSA officials, the agency did not order any
vehicle recalls during this time frame.
[End of figure]
NHTSA Conducts Oversight of Safety Defect Recalls, and Other Selected
Agencies Generally Share Similar Authorities:
As part of its oversight role, NHTSA is responsible for reviewing auto
manufacturers' planning and implementation of safety defect recalls to
ensure compliance with legal requirements. To this end, the agency is
responsible for reviewing, among other things, the manufacturer's
description of vehicles affected by a safety defect, actions the
manufacturer plans take to remedy those vehicles through a recall, and
notification letters the manufacturer plans to send to owners of
affected vehicles. NHTSA also monitors the effectiveness of recall
campaigns being conducted by manufacturers based, in large part, on a
manufacturer's quarterly reports showing the completion rate of a
campaign. In addition, the agency provides information and guidance to
the public on recalls, primarily through its Web site, [hyperlink,
http://www.safercar.gov]. NHTSA and most other selected federal
agencies we reviewed generally share similar authorities in recall
processes, but the agencies' authorities differ with regard to
penalizing manufacturers and ordering recalls. For example, in
contrast to NHTSA's recall authority over motor vehicles, FDA's recall
authority over some products includes a mandatory requirement for
manufacturers to recall a product regardless of any challenges a
manufacturer may have to the order.[Footnote 12] Foreign agencies we
reviewed also generally had similar authorities to NHTSA, with a few
exceptions. For example, unlike NHTSA, officials from the Federal
Motor Transport Authority--Germany's agency that oversees vehicle
safety--told us they can revoke the registration of vehicles with an
outstanding safety recall.
NHTSA Oversees the Planning and Implementation of Safety Defect
Recalls:
First, NHTSA is responsible for oversight of planning efforts by auto
manufacturers for safety defect recalls. Specifically, NHTSA reviews
an auto manufacturer's required notification to the agency that
describes a safety defect and the manufacturer's plan to remedy it
through a recall. The agency reviews several pieces of information
that manufacturers must include in these notifications, including the
following:
* a description of vehicles containing the safety defect, including
the make, model year, and date the vehicles were manufactured;
* the number of vehicles potentially containing the defect and an
estimate of what percentage actually have the defect;
* a chronology of principal events leading up to the manufacturer's
decision that there is a safety defect in the vehicle; and:
* a description of the manufacturer's plan to remedy the defect
through a recall campaign.
As stated earlier, though all recalls since 2000 have been either
voluntary recalls or influenced recalls, NHTSA can also order a
manufacturer to conduct a recall. Before NHTSA can order a recall, the
agency must provide the manufacturer with an opportunity to respond to
NHTSA's initial decision. Prior to completion of the administrative
process, the manufacturer may conduct the recall voluntarily.
According to NHTSA officials, the agency tries to convince
manufacturers to conduct influenced recalls based on NHTSA's
investigations rather attempt to prove the case for an ordered recall
through court, which the officials said can take a long time and
require substantial agency resources. NHTSA officials also told us
that manufacturers generally conduct a recall voluntarily if the
agency informs the manufacturer that it has decided that one is
necessary because, according to the officials, a manufacturer does not
want to risk receiving negative publicity in an argument against the
agency's decision. Similarly, some manufacturers told us that if NHTSA
decides that a recall to remedy a safety defect is necessary, it is
usually in a manufacturer's best interest to conduct one even if the
manufacturer believes it is not necessary due to the risk of negative
publicity and consumer opinion.
Second, NHTSA oversees a manufacturer's implementation of a safety
defect recall. Among other things, this includes reviewing the
manufacturer's letter to vehicle owners notifying them of the safety
defect and the manufacturer's recall to remedy it. In particular,
NHTSA reviews each manufacturer's draft recall notification letter and
envelope to ensure that it includes several pieces of required
information about the safety defect, meets the legal requirement to
mail the initial notification via first class postage, and adequately
motivates owners to make their vehicles available for remedy work.
[Footnote 13] Among other information, a recall notification letter
must include the following items:
* an opening statement that states "This notice was sent to you in
accordance with the requirements of the National Traffic and Motor
Vehicle Safety Act";
* a clear description of the safety defect and the malfunction that
may result from it;
* an evaluation of the risk to vehicle safety related to the defect;
* a description of what a vehicle owner can do to get the defect
remedied;
* a statement of precautions, if any, a vehicle owner should take to
reduce the risk that the malfunction will occur before the defect is
remedied;
* a statement indicating that remedy work is free of any cost to the
vehicle owners, unless the manufacturer is exempt from providing it
free of cost;[Footnote 14] and:
* on the envelope of the notification letter, inclusion of the words
"SAFETY," "RECALL," and "NOTICE" in all capital letters and in a font
size that is larger than that used in the address information.
NHTSA is also responsible for receiving manufacturer notifications to
franchised dealers that perform recall remedy work, which must include
information about the safety defect involved in the recall, how to
remedy it, and an estimate of when they can expect to be able to
conduct the remedy work. According to NHTSA officials, the agency may
review these notifications and provide feedback to manufacturers.
NHTSA Monitors Recall Campaign Completion Rates:
NHTSA evaluates the effectiveness of safety defect recalls based on
several considerations, including a recall campaign's completion rate,
which, is calculated by dividing the total population of affected
vehicles by the number of vehicles that have been remedied. To
determine the completion rate for a recall campaign, NHTSA uses data
submitted by the manufacturers. Specifically, manufacturers are
required to submit completion rate data to NHTSA through reports to
the agency every quarter for six consecutive quarters (18 months)
after the start of a recall campaign.[Footnote 15] These reports must
show the total number of vehicles recalled, the number of vehicles
inspected and remedied, and the number of vehicles determined by the
manufacturer to be unreachable for inspection due to reasons such as
theft, scrapping, or export to foreign countries. NHTSA assesses these
reports against agency guidelines, or thresholds (see table 1) and
considers other factors such as the severity of the defect and the
amount of time since and the effectiveness of the manufacturer's last
notification to vehicle owners. According to NHTSA, the agency
generally uses an internal guideline on completion rates to assess
whether renotification is warranted. When the completion rate is
considered low, the agency may require a follow-up notification. NHTSA
officials could not tell us how frequently they required follow-up
notifications.
Table 1: Minimum Completion Rate for Possible NHTSA Follow-up
Notification Request or Requirement:
Quarter of recall campaign: 1;
Minimum completion rate (percent): 10%.
Quarter of recall campaign: 2;
Minimum completion rate (percent): 20%.
Quarter of recall campaign: 3;
Minimum completion rate (percent): 30%.
Quarter of recall campaign: 4;
Minimum completion rate (percent): 45%.
Quarter of recall campaign: 5;
Minimum completion rate (percent): 55%.
Quarter of recall campaign: 6;
Minimum completion rate (percent): 65%.
Source: GAO analysis of NHTSA document.
[End of table]
According to NHTSA officials we spoke with, after the 18-month period
in which these quarterly reports are generally required, the agency
can require the manufacturer to continue sending reports on the
completion rate. Several manufacturers also told us that they often
continue to monitor recall campaigns and send follow-up notifications
beyond the first 18 months of a recall campaign whether NHTSA requires
it or not.
While the factors just described provide some guidance to the agency
regarding a campaign's effectiveness, agency officials told us that a
variety of factors can also impact a campaign and are taken into
account during the agency's review of recall campaigns. For example,
agency officials told us that vehicle owners' perception of the
severity of a safety defect may impact the completion rate of a
campaign. In addition, the officials said that factors such as the age
and type of vehicles in a campaign could impact completion. NHTSA
officials also told us that the completion rate of recalls with older
vehicles tends to be lower because owners of older vehicles are less
likely to make their vehicles available for recall remedy work. Though
factors such as these can impact the completion rate of a recall
campaign, agency officials told us that they do not analyze trends in
completion rate data of recall campaigns.
NHTSA Provides Guidance and Information to Public:
NHTSA also provides the public with guidance and information on safety
recalls, primarily through its Web site, [hyperlink,
http://www.safercar.gov]. On the Web site, NHTSA maintains a database
in which the public can search for safety recalls by entering year,
make, and model of a vehicle. The agency's Web site also provides
basic guidance on what to do in the event of a safety recall. For
example, the Web site offers guidance to vehicle owners about what to
do if they do not receive a recall notification letter but believe
that their vehicle may be affected by a recall. In addition, NHTSA
officials told us they occasionally issue press releases and consumer
advisories on safety recalls; in one case, they issued consumer
advisories for a recall on faulty cruise control systems in one
manufacturer's vehicles that could cause vehicles to catch fire.
NHTSA and Other Federal and Foreign Agencies Share Similar Recall
Authorities, but a Few Differences Exist:
As table 2 shows, NHTSA and most other selected federal agencies we
reviewed are generally authorized to order a recall, but differences
exist in their ability to implement this authority, which we will
describe in this section.
Table 2: Federal Agencies' Authorities to Order Recalls and Impose
Penalties for Selected Products:
Agency: NHTSA;
Selected products reviewed: Motor vehicles;
Can issue recall order? Yes;
Recall order is mandatory? No;
Can impose civil money penalties? Yes[B].
Agency: CPSC;
Selected products reviewed: Consumer products;
Can issue recall order? Yes;
Recall order is mandatory? No;
Can impose civil money penalties? Yes.
Agency: FDA;
Selected products reviewed: Foods not exclusively regulated by USDA;
Can issue recall order? Yes;
Recall order is mandatory? Yes;
Can impose civil money penalties? Yes.
Agency: FDA;
Selected products reviewed: Medical devices;
Can issue recall order? Yes;
Recall order is mandatory? Yes;
Can impose civil money penalties? Yes.
Agency: FDA;
Selected products reviewed: Human drugs;
Can issue recall order? No;
Recall order is mandatory? No;
Can impose civil money penalties? No.
Agency: USDA;
Selected products reviewed: Meat, poultry, egg products;
Can issue recall order? No[A];
Recall order is mandatory? N/A;
Can impose civil money penalties? Yes[C].
Source: GAO analysis of applicable laws and regulations.
[A] USDA officials told us that although they cannot order a recall,
they can request manufacturers to conduct one voluntarily. In
addition, agency officials told us that USDA's authority to seize and
detain products was sufficient and that, therefore, authority to order
a recall was not necessary.
[B] In certain cases, where NHTSA does not have authority to impose
civil penalties, it can refer the matter to the U.S. Department of
Justice for civil proceedings where civil penalties may be imposed.
[C] USDA can impose civil monetary penalties of up to $7,500 for egg
products. Criminal penalties can be imposed for meat and poultry.
[End of table]
All of the agencies can impose penalties for some or all of the
selected products[Footnote 16]; however, there is some variation in
the penalties. For example, NHTSA can currently impose fines on
manufacturers up to $17.350 million for violations of requirements
relating to the recall process for safety defects.[Footnote 17] In
2010, the agency twice imposed the maximum penalty of $16.375 million
each from Toyota for failing to timely notify the agency of defects
involving accelerator pedals. CPSC can impose a similar maximum fine
of $15 million, while FDA can impose maximum fines that range from
$500,000 for food products to $1 million for medical devices;[Footnote
18] however, the agency does not have authority to impose monetary
fines for violations related to the recall process for human drugs.
USDA can impose a maximum fine of $7,500 for egg products; USDA
officials told us they can also impose administrative penalties.
[Footnote 19] For example, the officials told us that USDA can
withhold the "USDA Inspected and Passed" mark of inspection,
effectively shutting down a manufacturer's operations. Once a product
is in commerce, USDA may detain the product and petition a U.S. court
to seize it.
In addition, we found that while three of the four agencies have the
authority to order a recall, only one--FDA--has mandatory recall
authority, which sets a mandatory requirement for a manufacturer to
conduct a recall based on an agency's determination of a safety defect
regardless of any challenge the manufacturer may have to the recall
order. Specifically, though NHTSA and CPSC have authority to order
manufacturers of selected products that they regulate to conduct a
recall, manufacturers can challenge either agency's order in court and
during this challenge can refrain from conducting a recall campaign
and continue to sell the potentially unsafe product pending the
outcome of the challenge.[Footnote 20] Unlike NHTSA and CPSC, FDA has
mandatory recall authority, meaning manufacturers whose products are
subject to this authority face a mandatory requirement to conduct a
recall and refrain from distributing their product to retailers,
regardless of any challenge the manufacturer may make to the order. In
addition, CPSC's authority applies to retailers of products affected
by a recall order, which includes a requirement for retailers to
refrain from selling the affected product. Moreover, CPSC has
authority to issue public health and safety findings in order to warn
the public about products that the agency determines pose a safety
risk.[Footnote 21] CPSC officials added that in some cases this
authority has proven sufficient in convincing manufacturers to conduct
recalls voluntarily. FDA's mandatory recall authority applies to some,
but not all, products regulated by the agency and included in our
review. Specifically, although FDA has mandatory recall authority over
food products and medical devices, it does not have mandatory recall
authority over human drugs.
USDA is the only agency we reviewed that does not have the authority
to order a manufacturer to conduct a recall, or require the
manufacturer to replace or refund the cost of an unsafe product. USDA
officials told us, however, that they do not consider this a challenge
in addressing unsafe products regulated by the agency because the
agency has the authority to detain products deemed unsafe by the
agency for 20 days if a manufacturer does not do so voluntarily. FDA
and CPSC also have authority to detain some of the products that they
regulate.
NHTSA's authorities in the auto safety recall process are also
generally similar to those of agencies with auto safety recall
authority in Canada, Germany, Japan, and the UK (see table 3), with
some exceptions.[Footnote 22] For example, officials from all of the
agencies we reviewed told us their agency can establish requirements
for safety recall campaigns. Moreover, officials from all but one of
the selected foreign agencies we reviewed told us manufacturers must
notify them of safety defects. Similarly, officials from all but one
of the foreign agencies we spoke with told us they have authority to
impose penalties, such as fines, if manufacturers do not comply with
laws or regulations.
However, the authorities of the foreign agencies we spoke with
differed to some extent. For example, unlike NHTSA or the other
foreign agencies, Germany's Federal Motor Transport Authority has the
authority to revoke the registration of a vehicle for owners who have
not complied with an auto safety recall notice. Specifically, the
officials we spoke with from the Federal Motor Transport Authority
said that if the risk of the safety defect is determined to pose a
threat to persons other than the vehicle owner, then they can revoke
the registration on that vehicle until the recall remedy is completed,
unlike in the United States, where NHTSA has no such authority.
According to the officials, in 2010, Germany revoked owners'
registration due to outstanding safety recalls more than 1,000 times,
and in general the agency regularly uses this authority. In addition,
among the agencies we reviewed, only Transport Canada, Canada's agency
that oversees auto safety, does not have the authority to order a
manufacturer to conduct a recall. Officials from Transport Canada we
spoke with added, however, that the agency can prosecute a
manufacturer on criminal charges if the manufacturer does not notify
vehicle owners after identifying a safety defect. Moreover, officials
from the Ministry of Land, Infrastructure, Transport and Tourism
(MLIT)--Japan's agency that oversees auto safety--told us that while
auto manufacturers are required to notify the agency about safety
recalls, they are not required to notify it about safety defects.
Table 3: NHTSA and Selected Foreign Agencies' Auto Safety Recall
Authorities:
Country: United States;
Agency: NHTSA;
Requires auto manufacturers to notify agency about safety defects: Yes;
Can order auto manufacturer to conduct a recall: Yes;
Can establish requirements for auto manufacturer recalls: Yes;
Can revoke registration of vehicles with an outstanding safety recall:
No;
Can impose penalties on auto manufacturers: Yes.
Country: Canada;
Agency: Transport Canada;
Requires auto manufacturers to notify agency about safety defects: Yes;
Can order auto manufacturer to conduct a recall: No;
Can establish requirements for auto manufacturer recalls: Yes;
Can revoke registration of vehicles with an outstanding safety recall:
No;
Can impose penalties on auto manufacturers: Yes.
Country: Germany;
Agency: Federal Motor Transport Authority;
Requires auto manufacturers to notify agency about safety defects: Yes;
Can order auto manufacturer to conduct a recall: Yes;
Can establish requirements for auto manufacturer recalls: Yes;
Can revoke registration of vehicles with an outstanding safety recall:
Yes;
Can impose penalties on auto manufacturers: Yes.
Country: Japan;
Agency: MLIT;
Requires auto manufacturers to notify agency about safety defects: No;
Can order auto manufacturer to conduct a recall: Yes;
Can establish requirements for auto manufacturer recalls: Yes;
Can revoke registration of vehicles with an outstanding safety recall:
No[A];
Can impose penalties on auto manufacturers: No[B].
Country: United Kingdom;
Agency: Vehicle Operator and Services Agency;
Requires auto manufacturers to notify agency about safety defects: Yes;
Can order auto manufacturer to conduct a recall: Yes;
Can establish requirements for auto manufacturer recalls: Yes;
Can revoke registration of vehicles with an outstanding safety recall:
No;
Can impose penalties on auto manufacturers: Yes.
Source: GAO analysis of U.S. laws and regulations and foreign
agencies' authorities based on comments of officials representing the
foreign agencies.
[A] According to MLIT officials, the agency can order users to repair
their vehicles if the defects of the recalled vehicles are serious and
should be removed immediately.
[B] According to MLIT officials, both criminal and administrative
penalties are determined by the court according to the provisions in
laws. In the case of criminal penalties, including fines and
imprisonment, MLIT can report violations to the prosecutor's office.
Based on MLIT's report, the prosecutors will indict auto manufacturers
or employees of the companies for the violation of the law. Then based
on the judgment of the court, auto manufacturers may face such
penalties. In the case of administrative penalties including fines,
MLIT can report the violation to the court. Then, based on the
decision of the court, auto manufacturers pay fines to the government
coffer.
[End of table]
Auto Industry Stakeholders Are Generally Satisfied with the Recall
Process for Safety Defects, but Several Challenges May Affect Recall
Completion Rates:
Although industry stakeholders were generally satisfied with the
recall process for safety defects, certain challenges may affect the
completion rate of recalls. For example, about half of the auto
manufacturers we spoke with told us that NHTSA's regulatory
requirements were clear in conveying what was expected of them in the
recall process. Likewise, many manufacturers said NHTSA fostered open
communication, allowing for two-way interaction that aided in prompt
resolution of problems when they arose. Franchised dealerships were
generally pleased with how manufacturers reimbursed them during the
recall process for safety defects, although some expressed concerns,
such as sometimes learning about safety defect recalls at the same
time as the public and not always having the parts available for
repair when recalls are announced. In addition, we found five
challenges that may affect the completion rate of safety recalls:
* identifying and notifying vehicle owners of auto safety defects,
* motivating vehicle owners to comply with notification letters,
* providing better information to vehicle owners and the public,
* using existing data to improve completion rates of recall campaigns,
and:
* lacking the authority to require manufacturers to notify used-car
dealerships of recalls and to require used-car dealerships to notify
potential buyers of the existing defect.
Manufacturers Reported Clear Requirements and Open Communication as
Benefits of NHTSA's Role in the Recall Process for Safety Defects:
Manufacturers we spoke with were generally satisfied with the recall
process for safety defects and stated that NHTSA's role in this
process is a key benefit. Many manufacturers reported that the process
is working well because the regulatory requirements are clear and, as
a result, they know exactly what is expected of them in the process
and by when. For example, some manufacturers stated that requirements
for the auto safety defect recall process were well-defined and,
because of this, there is little confusion about what manufacturers
needed to do after a recall decision is made. Some manufacturers also
reported that a benefit of the safety defect recall process is the
open and cooperative communications between NHTSA and the
manufacturers. For example, some manufacturers pointed out that they
and NHTSA have established clear points of contact for addressing
issues during recall campaigns. These channels of communication made
it easier and less time consuming to resolve issues when they arose.
Likewise, manufacturers told us they were generally pleased with how
promptly NHTSA approved their defect notification letters--sometimes
within 1 to 2 days--which facilitates their ability to implement
recalls for safety defects in a timely manner.
Other benefits were cited, as well. Most manufacturers we spoke with
stated that the requirement to use first-class mail to notify vehicle
owners of safety defects was appropriate and effective because, for
example, postal mail is a recognizable form of communication to most
vehicle owners, allows uniform delivery of the same message to all
affected vehicle owners, and allows the manufacturer to track the
receipt of notification letters. Additionally, one manufacturer we
spoke with noted that the National Traffic and Motor Vehicle Safety
Act had been around for decades, and questions and concerns had
already been litigated--resulting in a well-understood law.
Franchised Dealerships Reported Reimbursement for Recall Remedy Work
as a Benefit of the Recall Process for Safety Defects but Expressed a
Few Concerns:
Franchised dealerships we spoke with generally told us they were
satisfied with how manufacturers reimburse them for remedying vehicles
with safety defect recalls. Moreover, several franchised dealerships
told us that service work related to recalls is profitable for
dealerships. One of these dealerships added that this served as an
incentive to the dealer to seek out and repair used vehicles in their
inventory that may have an outstanding recall.
However, the franchised dealerships we interviewed also expressed a
few concerns. First, some dealerships told us that manufacturers do
not notify them as promptly as they would like about recalls; as a
result, they learn about some recalls at the same time as the general
public through the media. Consequently, the dealership may have
inquiries from customers about bringing their cars in for repair
before the dealer knows about the recall. Second, dealerships
expressed concern that parts are not always readily available when
recalls are announced, which they said can be an inconvenience to
customers who come to the dealership expecting to immediately have the
remedy work completed. Two manufacturers told us that the delay in
supplying dealerships with parts has, in part, resulted from many
parts suppliers going bankrupt or out of business during the recent
economic crisis and that they are working to address the problem.
[Footnote 23]
Five Key Challenges May Affect Recall Completion Rates:
Identifying and Notifying Vehicle Owners of Auto Safety Defects:
Some manufacturers told us that notifying vehicle owners about safety
defects can be difficult for a few reasons. For example, one
manufacturer said the process was challenging because not all vehicle
owners keep their address information up-to-date with state motor
vehicle registration offices. In addition, several other manufacturers
told us that identifying the current mailing addresses for older
vehicles is especially difficult because these vehicles often have
multiple changes of ownership and, thus, mailing addresses, which
compounds the problem. NHTSA and several manufacturers told us that
the completion rates for recall campaigns with older vehicles were
generally lower than the rates for campaigns with newer model
vehicles, although NHTSA officials stated they have not conducted any
formal analyses to confirm this. Third-party data providers that
manufacturers use to collect owner information confirmed the
challenges associated with identifying current vehicle owner
addresses. For example, one of the third-party data providers we spoke
with stated that mailing addresses for owners of newer vehicles are
more current and become less reliable as vehicle ownership changes
hands. In addition, they highlighted several other challenges to
obtaining up-to-date information, including state privacy laws--some
of which require the signature of the vehicle owner before a state
motor vehicle agency can release contact information.
Focus group participants and some manufacturers we spoke with also
indicated that new or additional methods of communicating recall
information to consumers--in addition to the postal mail notifications
currently in use--could help increase recall completion rates.
[Footnote 24] For example, some focus group participants indicated
that they would be more likely to respond to defect notices if they
received notice of the defect by phone or through e-mail, in addition
to the standard first-class mailing, and some focus group participants
recommended the use of multiple contact methods.
Motivating Vehicle Owners to Comply with Notification Letters:
Our focus groups with vehicle owners demonstrated that NHTSA and
manufacturers may face difficulties in motivating vehicle owners to
comply with recall notification letters. Although manufacturers are
responsible for drafting notification letters and notifying vehicle
owners of a defect, NHTSA is responsible for approving the letters'
contents. As stated earlier, NHTSA is responsible for ensuring that
the letters contain certain items that (1) inform owners of defects in
a clear and understandable manner and (2) effectively motivate owners
to have their vehicles remedied. However, our focus group participants
revealed that though some of them would comply with a recall notice in
any circumstance, the willingness of others to comply depends on
vehicle owners' perceptions of three primary factors:
* the severity of the defect--how urgent vehicle owners perceive the
recall to be;
* the convenience of the defect remedy--the time projected to fix the
defect, as well as whether the dealership provides an alternate mode
of transportation during service; and:
* the cost of the recall remedy--the perception of how much it will
cost the vehicle owner to have the defect remedied (by law, a recall
remedy is free of cost to vehicle owners who purchased the vehicle
within 10 years of the defect being identified and, according to
NHTSA, is generally provided free in all cases).
Moreover, while NHTSA has no ability to control many aspects of a
recall campaign, such as the severity of the defect, the agency can
control how these and other issues are presented in the defect
notification letters, which may affect whether vehicle owners are
motivated to comply. Focus group participants responded that they
preferred letters that included certain elements. As a result,
including these elements in a defect letter may positively affect
whether and how quickly they respond to a recall. The focus groups we
convened reviewed three defect notification letters from three
separate manufacturers and indicated they would prefer the following
elements in a defect letter, which may lead to higher rates of
responding to a defect notice:[Footnote 25]
* a clear explanation of the severity of the defect, including an
explanation that does not use jargon, which can be confusing. For
example, instead of using the acronym "ABS," focus group participants
would prefer the words "anti-lock brake system."
* the word "urgent" to indicate the seriousness of the defect.
* a question-answer format because, as one participant described, it
spells out the issue, provides an immediate answer, and allows
recipients to pick and choose the parts that are most necessary to
read.
* an apology from the manufacturer.
* the owner's vehicle identification number (VIN) information. As one
participant explained, including a VIN in the body of the defect
notification letter clarifies whether this recall applies to the
owner's vehicle.
* readable font size.
* an indication of whether there is any cost involved with the recall
remedy.
In addition, we asked focus group participants to review three defect
notification envelopes to gauge their perceptions of the envelope
style and format and the likelihood that they would be willing to open
each envelope. Though the focus groups reached less consensus on what
style and format of envelope they would be most likely to open,
participants did reveal that they preferred envelopes that included
the word "urgent," and some preferred envelopes that did not have
technical or confusing language. For example, one participant stated
that she liked the envelope that said "urgent air bag safety" because
it described the issue in concise terms. In addition, several focus
group participants liked the use of color--red shadowing, for example--
to indicate the envelope's importance, and were more in favor of
envelopes without VIN information on the envelope itself.
Providing Better Information to Vehicle Owners and the Public:
Our focus groups revealed that many vehicle owners may not be familiar
with the Web site [hyperlink, http://www.safercar.gov]--NHTSA's
primary means of communicating defect information to the public. While
the Web site is meant to provide vehicle owners and the public with
valuable safety defect information, discussions with focus group
participants revealed that few knew that the Web site existed or ever
used the Web site to learn of recalls. For example, none of the almost
90 participants said they were familiar with [hyperlink,
http://www.safercar.gov] and more noted that they use Google when they
search for information related to safety defects.[Footnote 26]
Among other things, [hyperlink, http://www.safercar.gov] allows
vehicle owners and the public:
* to set up an RSS--Really Simple Syndication--feed that provides
recall information via a computer or mobile device, updated daily, on
safety-related recalls for vehicles, among other things.[Footnote 27]
* to subscribe to NHTSA's Recall Notification E-mail System and elect
to receive a weekly e-mail that summarizes the vehicle recalls for the
past 7 days or to select up to five vehicles by make, model, and year
about which to receive recall notifications.
* to search a recall database for vehicle recalls by make, model,
year, and component, among other things.
However, the information NHTSA provides on its Web site could be more
useful. In particular, a centralized database (developed by NHTSA or
another party) that allows consumers to search for recall information
by VIN would allow vehicle owners to determine if their specific
vehicle is affected by a recall. Several used and franchised car
dealerships we spoke with noted that having a database to search for
recalls by VIN would allow those who may not have been informed of
recalls through a notification letter to determine whether the
vehicles they possess have outstanding safety recalls. Although NHTSA
has not developed a centralized VIN database, most of the
manufacturers we interviewed allow their customers to access VIN-
specific recall information for their vehicles in a few ways. Some
manufacturers, for example, provided their customers and the public
with online access to VIN-specific recall information, but only if
their customers registered on the manufacturer's Web site first. Other
manufacturers, however, allowed their customers access to this
information online without requiring customer registration. Seven of
the manufacturers that provide online VIN-specific recall information
told us it would be beneficial to have a centralized NHTSA Web page
that provides links to online VIN information. Manufacturers that did
not provide online access to VIN recall information allowed their
customers to call the manufacturers' toll-free customer service number
or sign up for e-mail notifications to obtain VIN recall information
on their vehicles.
NHTSA officials we spoke with agreed that additional efforts could be
made to improve the awareness of [hyperlink, http://www.safercar.gov]
and told us that the agency is currently redesigning its Web site to
consolidate information so that consumers can more easily find
information on vehicle 5-Star Safety Ratings and auto safety recall
information.[Footnote 28] According to agency officials, upgrading the
Web site to include VIN information would be helpful for vehicle
owners but would require significant resources to implement. However,
the agency is in the process of purchasing software to facilitate a
VIN-based search engine on its Web site.
Using Data to Improve Completion Rates of Recall Campaigns:
NHTSA is not consistently using the data it collects from
manufacturers to improve the completion rates of recall campaigns. As
previously discussed, according to NHTSA officials, on average about
70 percent of all vehicles subject to a recall are fixed within the 18-
month period during which manufacturers provide recall completion data
to the agency. However, our analysis of NHTSA's completion rate data
for passenger vehicle recalls from 2000 through 2008 found
considerable underlying variation in completion rates in several
areas. Overall, we found that annual recall completion rates varied
substantially by year--from about 55 percent to 75 percent--for all
passenger vehicles with safety defect recalls, with an average across
all years of about 65 percent.[Footnote 29] In addition, our analysis
revealed that within any given year, some manufacturers have safety
defect recall completion rates as low as 23 percent to 53 percent per
year, whereas other manufacturers have completion rates between 90
percent and 96 percent (see figure 3). Furthermore, some manufacturers
have consistently higher or lower rates across the 9 years we included
in our analysis.
Figure 3: Average Recall Completion Rates by Manufacturer, 2000
through 2008:
[Refer to PDF for image: illustrated horizontal bar graph]
Year: 2000;
Highest manufacturer completion rate: 92%;
Average manufacturer completion rate: 69%;
Lowest manufacturer completion rate: 53%.
Year: 2001;
Highest manufacturer completion rate: 96%;
Average manufacturer completion rate: 75%;
Lowest manufacturer completion rate: 49%.
Year: 2002;
Highest manufacturer completion rate: 93%;
Average manufacturer completion rate: 62%;
Lowest manufacturer completion rate: 50%.
Year: 2003;
Highest manufacturer completion rate: 94%;
Average manufacturer completion rate: 62%;
Lowest manufacturer completion rate: 30%.
Year: 2004;
Highest manufacturer completion rate: 93%;
Average manufacturer completion rate: 69%;
Lowest manufacturer completion rate: 23%.
Year: 2005;
Highest manufacturer completion rate: 94%;
Average manufacturer completion rate: 60%;
Lowest manufacturer completion rate: 51%.
Year: 2006;
Highest manufacturer completion rate: 93%;
Average manufacturer completion rate: 66%;
Lowest manufacturer completion rate: 31%.
Year: 2007;
Highest manufacturer completion rate: 91%;
Average manufacturer completion rate: 55%;
Lowest manufacturer completion rate: 39%.
Year: 2008;
Highest manufacturer completion rate: 94%;
Average manufacturer completion rate: 69%;
Lowest manufacturer completion rate: 34%.
Source: GAO analysis of NHTSA data.
Note: The figure includes the automobile manufacturer completion rates
for the 1,028 passenger vehicle recalls that were initiated from 2000
through 2008. The completion rate is calculated after the 6th quarter
following the initiation of the recall.
[End of figure]
Similarly, completion rates for safety defect recalls involving
components--items such as brakes and fuel systems--varied from 46
percent to as high as about 80 percent (see figure 4). In particular,
recall completion rates involving air bags and vehicle speed control
(e.g., cruise control) systems resulted in some of the lowest
completion rates across all components at 60 percent and 46 percent,
respectively.
Figure 4: Variation in Recall Completion Rates, by Component Recalled:
[Refer to PDF for image: horizontal bar graph]
Defective component: Parking Brakes (14);
Completion rate: 58%.
Defective component: Tires (16);
Completion rate: 77%.
Defective component: Equipment (21);
Completion rate: 79%.
Defective component: Wheels (22);
Completion rate: 82%.
Defective component: Latches/Locks/Linkages (25);
Completion rate: 65%.
Defective component: Structure (25);
Completion rate: 61%.
Defective component: Seats (27);
Completion rate: 62%.
Defective component: Vehicle Speed Control (44);
Completion rate: 46%.
Defective component: Visibility (44);
Completion rate: 63%.
Defective component: Exterior/Interior Lighting (47);
Completion rate: 72%.
Defective component: Engine and Engine Cooling (58);
Completion rate: 67%.
Defective component: Seat Belts (65);
Completion rate: 68%.
Defective component: Suspension (68);
Completion rate: 73%.
Defective component: Steering (70);
Completion rate: 65%.
Defective component: Power Train (75);
Completion rate: 73%.
Defective component: Electrical System (84);
Completion rate: 65%.
Defective component: Air Bags (85);
Completion rate: 60%.
Defective component: Service Brakes (90);
Completion rate: 73%.
Defective component: Fuel System (145);
Completion rate: 69%.
Source: GAO analysis of NHTSA data.
Notes: The figure includes recall completion rates, averaged across
all years, for component categories as defined by NHTSA. The
completion rates are associated with passenger vehicle recalls
initiated from 2000 through 2008.
Components in the "visibility" category refer to items that affect
vehicle lighting such as headlamps, side marker lamps, reflectors, and
tail lamps. Components in the "equipment" category include vehicle
accessories and after-market equipment, including lighting, trailer
hitches, bike racks, and heated car seat covers, among other things.
[End of figure]
We found less variation across vehicle types; from 2000 through 2008,
the average recall completion rate was 67 percent for passenger cars,
72 percent for sport utility vehicles and passenger vans, and 65
percent for pickup trucks.
Using the data that NHTSA collects to conduct a broader aggregate-
level analysis across all campaigns may help NHTSA determine some of
the factors that are associated with higher or lower rates of
compliance. As mentioned previously, NHTSA monitors recall campaign
completion rates by collecting data on a quarterly basis, including
the date a vehicle owner is notified of a recall, the number of
vehicles involved, the number of vehicles remedied, and the number of
vehicles that are unreachable (e.g., stolen, scrapped, unable to
notify owner, and so forth). In particular, NHTSA officials told us
they evaluate the effectiveness of a recall campaign by comparing a
specific recall campaign's progress to similar campaigns based on
factors such as the age of vehicles recalled and the number of
vehicles recalled. However, the agency does not currently use the data
it collects to conduct a higher-level analysis across all campaigns to
systematically look for potential factors related to higher or lower
recall completion rates that might be helpful in identifying
successful recall campaigns because conducting such analyses is
resource intensive. Based on our analysis of NHTSA data, without
conducting a broader aggregate-level analysis to look for outliers,
patterns, or trends, the agency may be missing an opportunity to
identify underlying factors that affect recall campaign completion
rates.
NHTSA officials told us that although their goal for each recall
campaign is a 100 percent completion rate, there are a number of
factors affecting completion rates that are outside of NHTSA's
control--such as whether vehicle owners read recall notices or their
perception of the severity of a defect. In addition, NHTSA officials
explained that monitoring recalls on a campaign-by-campaign basis
provides them with the flexibility necessary to capture the unique
aspects of each recall campaign and that by focusing on communication
and discussion with manufacturers, the agency can develop solutions to
improve completion rates when a campaign is achieving a completion
rate that is below its expectation. While we agree that completion
rates are affected by a number of factors, including a vehicle owner's
perception of defect severity, conducting additional analyses could
help the agency determine some of the factors that are associated with
higher or lower rates of compliance.
Limited Authorities:
Under federal law, NHTSA can order a manufacturer to give notification
of a defect or noncompliance with motor vehicle safety standards to
the owners, purchasers, and franchised dealers, as well as order the
manufacturer to remedy the defect.[Footnote 30] However, NHTSA cannot
require used-car dealers (or franchised dealerships that sell used
vehicles) to notify potential buyers of an outstanding safety defect
or require that they get the defect remedied prior to sale.[Footnote
31] Used-car dealerships we spoke with told us that when they become
aware of a vehicle defect, they either remedy the defect before the
sale of the vehicle or notify potential buyers of the safety defect
because it is a good business practice. Nevertheless, in some
instances, a used-car dealer may not be aware that an outstanding
safety defect exists in a vehicle. In particular, a used-vehicle
dealer association with over 20,000 members told us that because used
dealers do not have a franchise agreement with the manufacturers, they
do not receive the defect notices that manufacturers send to
franchised dealers. Moreover, used-car dealers we spoke with told us
that generally they do not receive defect notices from manufacturers,
except in certain cases, such as when a used dealer purchases
previously leased vehicles directly from a manufacturer.
The rental car companies we spoke with each told us that, unlike used-
car dealerships, they generally receive defect notification letters
regarding affected vehicles in their fleets, and although they are not
required to remedy a defect, they have developed a system for dealing
with recalls. One company described a two-tiered system to address
safety defects in which vehicles are placed on a "soft-hold"--meaning
that the cars can still be rented but will be put in the queue for
service--if the defect is not a safety issue. If the defect is a
safety issue, these vehicles will be placed on a "hard-hold"--meaning
that the cars will be taken out of service immediately and will not be
rented until the repair has been made. Each of the rental car
companies described a similar system that they used to address recall
safety issues.
The stakeholders we interviewed had mixed views on whether used-
vehicle dealerships and rental car companies should be required to
notify potential buyers of outstanding safety recalls prior to sale.
Several manufacturers we spoke with indicated that it was reasonable
to require used-car dealerships to notify the potential buyer of a
defect prior to sale. A number of the manufacturers also supported
requiring dealerships to get used vehicles with safety defects
remedied before selling them to the public. However, the used-vehicle
dealer industry association and used-vehicle dealerships we spoke with
cited a few difficulties in doing so. First, as previously discussed,
used-vehicle dealers do not receive the defect notification letters
that manufacturers send to franchised dealers, and as a result, they
are generally not notified of a safety defect. Second, there is no
single source of information on safety recalls--such as a centralized
VIN database--that can be accessed to determine if a car in a
dealership's possession has an outstanding recall. Instead, according
to the used-car dealerships we spoke with, they must go through ad-hoc
channels to find out about a defect--often by purchasing vehicle
history reports such as CarFax (which may not always have up-to-date
and accurate information, according to the dealerships) to determine,
vehicle by vehicle, whether cars on their lots are subject to
outstanding recalls.[Footnote 32] Since NHTSA cannot require that used-
car dealers receive notification of defects, in some cases the used-
car dealers may be unable to notify potential buyers of outstanding
defects. With over 35 million used cars sold by used and franchised
dealerships in the United States in 2009 alone, this could pose a
significant risk to the safety of millions of vehicle drivers and may
have a negative impact on recall completion rates.[Footnote 33]
In addition, although NHTSA has the authority to order a recall, the
agency does not have "imminent hazard" authority. As initially
proposed in the 111th Congress, imminent hazard authority would permit
NHTSA to order manufacturers to stop further production, sale, or
distribution of vehicles containing a defect found to present an
imminent hazard to public safety that may result in death or serious
bodily harm.[Footnote 34] According to NHTSA, imminent hazard
authority would allow the agency to bypass the lengthy, resource-
intensive court process currently needed to prove that a safety defect
exists before ordering a recall. NHTSA officials told us that if they
were to obtain imminent hazard authority, they could more
expeditiously enforce a recall when severe safety defects are present.
Options Exist to Improve NHTSA's Safety Defect Recall Process:
Based on our interviews with industry stakeholders, our interviews
with focus group participants, foreign agencies, and NHTSA, and
legislation proposed in the 111th Congress, we have identified several
recurring options or changes that could address some of the challenges
to the safety recall process. Most of the options have both advantages
and disadvantages that will require careful consideration before they
are adopted.
Adopting Additional Defect Notification Methods:
Notifying vehicle owners of a recall through other methods in addition
to postal mail may increase recall completion rates. As we previously
described, participants in the focus groups indicated that they might
be more encouraged to respond to a recall notice if they were notified
of a recall by methods other than postal mail. In fact, other federal
agencies and some manufacturers use other notification techniques to
notify consumers of a defect:
* FDA and USDA issue press releases about recalls since the owners of
many products they regulate are not identifiable through a
registration process. However, the level of publicity that press
releases receive in the media (for example, on television and in
newspapers) is subject to discretion of the media outlets, which one
manufacturer noted can be inconsistent and unpredictable.
* A few manufacturers we spoke with encourage dealerships to
communicate with vehicle owners through phone calls and e-mails to
notify the vehicle owner of a recall and encourage them to bring the
vehicle in for service.
* Finally, a few manufacturers have begun or are currently pursuing
the use of telematic systems (such as GM's OnStar technology) to alert
vehicle owners to recalls in real time by calling or sending messages
directly to vehicles notifying owners of outstanding recalls.
However, according to some manufacturers we interviewed, there are
disadvantages to using e-mail and phone calls as ways of communicating
recall information to consumers. First, several manufacturers noted
that vehicle owners change e-mail addresses and phone numbers
frequently. In addition, they noted that there is no requirement that
a vehicle owner must register a phone number or an e-mail address with
a state motor vehicle agency, unlike postal mailing addresses--which
are tied to vehicle registration.
Modifying Safety Defect Notification Letters:
NHTSA may have opportunities to improve recall completion rates by
modifying the requirements for manufacturers' safety defect
notification letters. Responses from our focus group participants
indicated they would prefer defect notices to include additional
information, which would likely lead to higher rates of consumer
responses to these notices. Specifically, as we previously noted,
focus group participants reported that notification letters they
reviewed did not always convey a clear description of the defect or
the severity of the defect. Such confusion could affect their
willingness to take their vehicles in for service and, ultimately,
reduce the recall completion rates for certain recall campaigns. In
addition, focus group participants indicated they may be more likely
to respond to a notification letter identifying that the defect
affected their vehicle specifically and that explained that vehicle
owners could have their vehicles repaired at no charge.
Though some information is already required by law and regulations,
NHTSA has the ability to add requirements to the defect notification
letters, as previously described.[Footnote 35] Rental car companies we
spoke with also stated that a better indication of the severity of the
recall would help them determine how to treat recalled vehicles in
their fleets and reduce confusion. For example, the rental car
companies told us that understanding the urgency of a safety recall is
especially important because rental car companies must use the defect
notification letters they receive to make decisions about whether to
continue to rent vehicles to consumers before the car is repaired or
ground an entire fleet of vehicles, which could result in a
significant loss in revenue. NHTSA officials told us that the agency
has recommended to the rental car companies that they should not rent
recalled vehicles until the defect has been repaired.
In addition, NHTSA officials we spoke with told us that they review
and approve each defect owner notification letter to make sure it
meets the current requirements but have not developed a standard
template for notification letters because each recall is different. In
addition, NHTSA officials told us that although they are working
toward increasing recall campaign completion rates, they believe that
adding content to the notification letters could be distracting and
that the fundamental information needed to convey the defect, the
actions the owner should take, and the remedy program is covered by
the current requirements. While we agree that adding lengthy and
complex information to the notification letters is unnecessary, our
focus groups have shown that a more clear description of the severity
of a defect without the use of jargon and the addition of content such
as the owner's VIN may encourage vehicle owners to comply with defect
notifications.
Publicizing Existing Resources and Making VINs Available to Vehicle
Owners and the Public:
As previously described, our focus groups with vehicle owners
indicated that the public may not be aware of NHTSA's Web site, the
primary method of communicating information on recalls to consumers.
In addition, a few industry associations told us that it would be
useful to provide vehicle owners with the ability to search more
easily for recall information using their VINs. As such, NHTSA has an
opportunity to make vehicle owners and the public more aware of its
Web site and to include more useful information. In order to so, NHTSA
could develop public service announcements and additional press
releases or collaborate with auto manufacturers to develop methods of
informing vehicle owners about available resources. NHTSA officials we
spoke with agreed that additional efforts could be made to improve the
awareness of [hyperlink, http://www.safercar.gov] and told us that the
agency is currently redesigning its Web site to consolidate
information so that consumers can more easily find information on
vehicle 5-Star Safety Ratings and auto safety recall information. In
addition, legislation from the 111th Congress contained provisions
that would have required NHTSA to improve public accessibility to
information on its vehicle safety websites.[Footnote 36]
NHTSA officials told us they are interested in finding additional ways
to improve vehicle owners' access to specific information about
recalls, and to that end, they are in the process of purchasing
software to facilitate a VIN-based search engine on its Web site.
However, the agency noted that developing a centralized VIN database
would require significant additional resources to fully implement. In
addition, agency officials told us that VIN searches can present
problems because vehicle owners may not enter VIN information
correctly into a Web site. NHTSA officials are currently exploring
ways to address this issue.
Developing National Standards and Guidance for Vehicle Owners and
Operators:
Representatives of the rental car industry stated that developing
guidance for vehicle owners on how to categorize the severity of a
recall and whether to operate a vehicle once that determination has
been made could help ensure that recalls are handled consistently and
remove confusion from the process. Currently all vehicle owners,
including rental companies, must decide whether to continue to operate
vehicles subject to a recall based on the information provided by the
manufacturer in the recall notice. The law does not require the
manufacturer to advise whether the vehicle should continue to be
operated until the defect or noncompliance is remedied. All of the
rental car companies we spoke with, as well as some of the focus group
participants we interviewed, stated that some defect notification
letters are confusing and do not provide a clear description of the
severity of the defect. In addition, the rental car companies noted
that notification letters rarely provide guidance as to whether the
vehicle can continue to be operated. Rental car company and industry
representatives suggested that clear national standards--as determined
by NHTSA and the manufacturers--for how to categorize the nature of a
defect (including the potential for harm) and whether the vehicle can
continue to be operated would be helpful to consumers and rental car
companies. In particular, the American Car Rental Association (ACRA)
has proposed that NHTSA issue separate bulletins for when a vehicle
can be operated pending completion of a recall or when a vehicle needs
to be grounded until the vehicle can be serviced. NHTSA officials
stated that while they had not reviewed ACRA's proposal, they are
opposed to publishing classifications of defects, ranking them, or
otherwise suggesting to vehicle owners that certain safety defects are
more serious than others. Moreover, NHTSA officials told us that
suggesting that some defects are more risky may have dangerous
consequences--namely, that many safety defects, all of which involve
an unreasonable risk, will be ignored. This could result in fewer
consumers remedying their vehicles due to the fact that NHTSA has
categorized the recall as "less serious," and therefore, consumers may
perceive the safety risk to be decreased.
Using Data More Effectively:
Although NHTSA uses manufacturer data to track the average annual
recall completion rate for all vehicle recall campaigns, NHTSA does
not currently use its data to conduct aggregate analyses of completion
rates across factors such as manufacturer, component, and vehicle type
or by analyzing completion rates based on the characteristics of the
defect notification letters, such as the format of the letter mailed
to vehicle owners. Conducting these types of trend analyses could help
NHTSA identify risk factors that might be associated with lower recall
completion rates. As discussed earlier in this report, our analysis
has shown that completion rates vary considerably across manufacturers
and components and, to some extent, vehicle types. Additionally, NHTSA
officials told us that other factors may also affect completion rates,
including the perception of the severity of the defect and the age of
a vehicle at the time of the recall. NHTSA has the opportunity to
analyze its data in ways that capture the underlying complexities and
variation in the risk factors associated with lower completion rates.
With that information NHTSA could target new recall campaigns that
include such risk factors and take additional steps to monitor those
campaigns.
NHTSA officials told us they are interested in improving the
completion rates of their recalls. For example, NHTSA officials
explained that they contacted a child safety seat manufacturer that
had experienced higher rates of recall completion compared with other
child safety seat manufacturers, in order to learn how that
manufacturer was achieving a relatively higher completion rate. While
this method--isolating outliers in the data, then following up with a
particular manufacturer to investigate--is not a routine monitoring
activity that NHTSA performs, such an approach could be used more
systematically when noticing differences in recall rates in other
areas identified in the data. NHTSA officials told us they were
currently re-evaluating how they used their data and would consider
ways that additional data analysis could help increase recall
completion rates.
Enhancing NHTSA's Recall Authorities:
Legislation proposed in the 111th Congress, if enacted, would have
modified the authority NHTSA has to recall vehicles. The proposed
bills would have addressed some of the challenges in the recall
process discussed previously in this report, such as NHTSA's authority
over used-car sales and the possibility of allowing NHTSA to declare a
vehicle an "imminent hazard." S. 3302 proposed a provision that would
have protected potential buyers of used cars by requiring that a used-
car dealer not sell or lease a used passenger vehicle until (1) the
dealer clearly and conspicuously notified the purchaser or lessee, in
writing, of any notifications of a defect or noncompliance that have
not been remedied; and (2) the purchaser or lessee acknowledged, in
writing, the receipt of such notifications. Requiring manufacturers to
notify all dealerships that sell used cars about recalls and requiring
such dealerships to notify potential buyers of a defect could result
in increased awareness of recalls, particularly among the group of
vehicle owners that, according to manufacturers and third-party
vendors, are the hardest to identify through postal mail--namely
second and third owners of a vehicle. However, an industry association
and the used-car dealerships we spoke to noted that it is challenging
to identify vehicles with outstanding recalls due to the lack of VIN
data available to the public and because used-car dealerships are not
required to be notified of a safety defect through the use of first-
class mail. NHTSA officials agreed that notifying used-car dealers of
recalls is a challenge, but the agency has not sought this authority.
NHTSA officials indicated that in May 2011, however, the agency
identified several policy proposals to Congress on vehicle safety
issues. One of these proposals is to prohibit, with certain
exceptions, used-car dealers and rental companies from selling or
leasing a vehicle subject to a recall prior to the repair having been
made.
S. 3302 also included a provision to enhance NHTSA's authorities to
include an "imminent hazard" provision, which would have provided
NHTSA with the authority to ensure that vehicles with safety defects
posing a substantial likelihood of death or serious injury are
recalled faster than they currently can be by giving NHTSA authority
to forbid further sales of a vehicle model until the defect has been
addressed. However, a number of manufacturers we interviewed stated
that NHTSA's current authority is adequate; they feel the current
system is generally cooperative and most passenger vehicle recalls are
initiated voluntarily by manufacturers. NHTSA officials stated that
imminent hazard authority would give them an additional tool to remove
unsafe vehicles from the road by significantly decreasing the time and
resources needed currently to order a recall through the judicial
system.
Conclusions:
NHTSA's oversight of the passenger vehicle recall process--one of the
most important safety missions it performs--is generally considered to
be balanced and effective by the auto manufacturers and other auto
industry stakeholders we interviewed. However, our work has shown that
NHTSA could do more to monitor the completion rates of recall
campaigns and encourage vehicle owners to remedy their vehicles, which
could result in removing more unsafe cars from the road. Most of these
opportunities are within the scope of NHTSA's current authorities and
would require minimal investment of staff and other resources. For
example, our focus groups indicated that clearer communication about
the severity of the defect, as well as the addition of an owner's VIN
in the defect notification letter, may reduce confusion about the
defect and encourage more owners to comply with the recalls. In
addition, even though our analysis of NHTSA data on recall completion
rates revealed considerable underlying variation in completion rates
by manufacturers and defective components, NHTSA does not currently
use the data it collects to conduct analyses of completion rates
across recall campaigns. By doing so, the agency has an opportunity to
determine the trends that may be associated with lower rates of
completion and target such campaigns for additional monitoring or
other actions.
NHTSA also currently lacks the authority to require manufacturers to
notify used-car dealerships--which sold 11 million cars in 2009--of
recalls or require these dealerships to notify potential buyers of an
outstanding recall. As a result, many consumers may be unknowingly
putting their lives at risk by purchasing a defective vehicle. Used-
car dealerships we interviewed indicated that they may be willing to
notify potential buyers of outstanding recalls; however, the lack of a
public VIN database for identifying the specific cars that have been
recalled makes such notifications difficult. Although additional
resources may be necessary for NHTSA to implement such a database,
working with manufacturers, many of whom have already developed VIN
search functions, could reduce NHTSA's burden. An expansion of the
information provided on NHTSA's Web site to include a VIN search
capability, as well as publicizing existing and new resources, may
help vehicle owners and other vehicle purveyors, such as used-car
dealerships, identify outstanding recalls, improve recall completion
rates, and increase safety for pedestrians and the motoring public.
Recommendations for Executive Action:
In order to encourage vehicle owners to comply with safety recalls,
provide vehicle owners with specific information about whether their
vehicle is involved in a recall, and identify factors that affect
recall completion rates, among other things, we recommend that the
Secretary of Transportation direct the Administrator of NHTSA to take
the following four actions:
* Modify the requirements for defect notification letters to include
additional information such as (1) the word "urgent" in large type to
obtain readers' attention, and (2) the VIN of the recalled vehicle so
it is clear that the letter pertains to the owner's current vehicle.
* Create a VIN search function on [hyperlink, http://www.safercar.gov]
and publicize the Web site to vehicle owners and the public.
* Develop a plan to use the data it collects on recall campaigns to
analyze particular patterns or trends that may characterize successful
recalls and determine whether these represent best practices that
could be used in other recall campaigns.
* Seek legislative authority to ensure that potential buyers of used
cars are notified of any outstanding recalls prior to sale.
Agency Comments:
We provided a draft of this report to the Department of Transportation
(DOT), as well as CPSC, the Department of Health and Human Services
(HHS), and USDA for review and comment. DOT agreed to consider our
recommendations and both DOT and USDA provided technical comments,
which we have incorporated, as appropriate. CPSC and HHS did not
provide comments on this report.
We are sending copies of this report to the Departments of
Transportation, Agriculture, Health and Human Services, the Consumer
Product Safety Commission, and other interested parties. In addition,
the report is available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-2834 or flemings@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made key contributions
to this report are listed in appendix III.
Signed by:
Susan A. Fleming:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Scope and Methodology:
This report focuses on the National Highway Traffic Safety
Administration's (NHTSA) oversight of safety defect recalls, which
represent the majority of recalls overseen by the agency and are
initiated when a defect poses an unreasonable risk to safety. In
addition, we have limited our scope to safety defect recalls that have
been initiated for passenger vehicles, such as cars, pickup trucks,
sport utility vehicles, and minivans (NHTSA also oversees recalls for
other vehicles, such as motorcycles, buses, recreational vehicles, and
commercial trucks). Moreover, because the U.S. Department of
Transportation Office of Inspector General is examining NHTSA's
activities related to the investigation of potential safety defects in
motor vehicles and equipment, we did not include safety defect
investigations in our review. Our report addresses the following
questions: (1) What is the extent of NHTSA's role in the auto safety
defect recall process, and how do its authorities compare with those
of other selected federal and foreign agencies with safety recall
authority? (2) What are the benefits and challenges of the auto safety
defect recall process for NHTSA and the manufacturers? (3) What
options exist for improving NHTSA's auto safety defect recall process?
To describe the extent of NHTSA's role and authorities in the auto
safety defect recall process, we reviewed applicable legislation,
including the National Traffic and Motor Vehicle Safety Act, as
amended; relevant federal regulations; and NHTSA's guidance on the
safety defect recall process. In addition, we conducted interviews
with NHTSA officials about the agency's role in the defect recall
process and its recall authority. To compare NHTSA's authorities with
those of other federal agencies, we reviewed legislation and
interviewed officials at selected federal agencies that, similar to
NHTSA, have product safety oversight responsibilities, including the
Consumer Product Safety Commission (CPSC), U.S. Food and Drug
Administration (FDA), and U.S. Department of Agriculture (USDA) to
determine what differences and similarities exist between the
agencies' recall authorities and those of NHTSA. We selected these
agencies based on discussions with NHTSA and previous GAO reviews of
federal agencies with safety recall authority.[Footnote 37] To compare
NHTSA's authorities with selected foreign agencies with safety recall
authority, we interviewed officials from agencies in four countries
(Canada, Germany, Japan, and the United Kingdom) about their
authorities and involvement in the auto safety recall processes of
their countries (see table 4). We selected these agencies based on
recommendations from NHTSA and industry officials with whom we spoke
and to reflect a range of safety recall processes and authorities. We
also interviewed representatives of auto industry organizations from
the selected countries to get their perspectives on the authorities of
the selected foreign agencies, including the Canadian Vehicle
Manufacturers' Association, the European Automobile Manufacturers
Associations, the German Association of the Automotive Industry, the
Society of Motor Manufacturers and Traders Limited (a United Kingdom-
based auto industry organization), and the Japan Automobile
Manufacturers Association. To gain a further understanding of the
authorities of the agencies we reviewed in the European Union (EU)--
specifically, those in Germany and the United Kingdom--we interviewed
officials from the European Commission regarding the impact on member
states of EU directives related to the vehicle recall process.
Table 4: Foreign Agencies with Safety Recall Authority That GAO
Interviewed:
Foreign agency location: Canada;
Foreign agency name: Transport Canada.
Foreign agency location: Germany;
Foreign agency name: Federal Motor Transport Authority.
Foreign agency location: Japan;
Foreign agency name: Ministry of Land, Infrastructure, Transport, and
Tourism.
Foreign agency location: United Kingdom;
Foreign agency name: Vehicle Operator and Services Agency.
Source: GAO.
[End of table]
To examine the benefits and challenges in the auto safety defect
recall process, as well as potential options for improving the
process, we conducted and analyzed interviews with stakeholders in the
auto safety defect recall process, including NHTSA, auto
manufacturers, third-party data providers (Experian and R.L. Polk and
Company), franchised and used-car dealerships, rental car companies,
consumer groups (Consumers Union, Public Citizen, and the Center for
Auto Safety), and industry organizations. We identified stakeholders
based on our review of pertinent legislation, regulations, and NHTSA's
guidance documents on the recall process for safety defects, as well
as from interviews with officials and stakeholders in the recall
process. We interviewed 14 auto manufacturers (see table 5) that
together accounted for the majority of U.S. car and light truck sales
in 2009, including those that each had greater than 10 percent market
share (e.g., Ford, GM, Honda, and Toyota) and those with smaller
market share (e.g., BMW, Daimler, and Hyundai).[Footnote 38] We also
interviewed two organizations representing auto manufacturers that
operate in the United States--the Auto Alliance and the Association of
Global Automakers (Global Automakers), formerly known as the
Association of International Automobile Manufacturers (AIAM)--to get
their perspective on the safety defect recalls.
Table 5: Auto Manufacturers GAO Interviewed:
Auto Manufacturer: BMW;
Manufacturers' makes included in review: BMW; Mini.
Auto Manufacturer: Chrysler;
Manufacturers' makes included in review: Chrysler; Dodge; Jeep; Ram.
Auto Manufacturer: Daimler;
Manufacturers' makes included in review: Maybach; Mercedes; Smart.
Auto Manufacturer: Ford;
Manufacturers' makes included in review: Ford; Lincoln.
Auto Manufacturer: GM;
Manufacturers' makes included in review: Buick; Cadillac; Chevrolet;
GMC.
Auto Manufacturer: Honda;
Manufacturers' makes included in review: Acura; Honda.
Auto Manufacturer: Hyundai;
Manufacturers' makes included in review: Hyundai.
Auto Manufacturer: Isuzu;
Manufacturers' makes included in review: Isuzu.
Auto Manufacturer: Jaguar Land Rover;
Manufacturers' makes included in review: Jaguar; Land Rover.
Auto Manufacturer: Nissan;
Manufacturers' makes included in review: Nissan.
Auto Manufacturer: Subaru;
Manufacturers' makes included in review: Subaru.
Auto Manufacturer: Toyota;
Manufacturers' makes included in review: Lexus; Scion; Toyota.
Auto Manufacturer: VW;
Manufacturers' makes included in review: Audi; Bentley; Bugatti
Lamborghini VW.
Auto Manufacturer: Volvo;
Manufacturers' makes included in review: Volvo.
Source: GAO.
[End of table]
To understand the perspective of franchised dealerships and used-car
dealerships, we interviewed seven franchised dealerships and two used-
car dealerships (see table 6), as well as an industry organization
representing franchised dealerships, the National Automobile Dealers
Association, and an industry organization representing used vehicle
dealerships, the National Independent Automobile Dealers Association.
The six franchised dealerships were selected to ensure coverage of
multiple vehicle makes. The two used-car dealers we interviewed were
selected based on recommendations from the National Independent
Automobile Dealers Association.
Table 6: Franchised Dealerships and Used Dealerships GAO Interviewed:
Franchised dealership: AutoNation;
Location: Fort Lauderdale, FL.
Franchised dealership: Conklin Motors;
Location: Salina, KS.
Franchised dealership: DARCARS Automotive Group;
Location: Rockville, MD.
Franchised dealership: Fitzgerald Auto Mall;
Location: North Bethesda, MD.
Franchised dealership: Honda of Seattle;
Location: Seattle.
Franchised dealership: Royal Chevrolet;
Location: Richmond, VA.
Franchised dealership: Sewell Automotive Companies;
Location: Dallas.
Used vehicle dealership: Auto Buying Service;
Location: Fairfax, VA.
Used vehicle dealership: Nelson Automotive;
Location: Mount Prospect, IL.
Source: GAO.
[End of table]
In addition, we interviewed three rental car companies--Avis Budget
Group, Incorporated, The Hertz Corporation, and Enterprise Holdings--
that had nationwide operations in the United States, and an industry
organization representing rental car companies, the American Car
Rental Association.
To calculate recall completion rates--that is, the percentage of
defective vehicles that are remedied--of safety defect recalls for
passenger vehicles and to examine what variations exist across
completion rates, we obtained data on vehicle recalls from NHTSA's
Artemis system.[Footnote 39] The Artemis system is a central
repository of data on motor vehicles and motor vehicle equipment
defects. NHTSA provided us with data for recalls that were initiated
from January 2000 through December 2010. We limited our analysis to
safety defect recalls currently being conducted. In addition, we
limited our analysis to recalls initiated through 2008 because final
completion rates are typically measured at 18 months, or 6 quarters,
after a recall campaign begins. Including recall data from 2009 or
2010 would have biased the completion rates for those years downward;
that is, they would have had lower rates of completion than earlier
year recalls because the data do not extend over a full 18-month
period.
Because many of the recalls conducted from 2000 through 2008 were for
nonpassenger vehicles--commercial vehicles, recreational vehicles,
watercraft, and trailers, among others--we eliminated all recalls that
were not passenger vehicles.[Footnote 40] We examined each vehicle
make and model combination and coded them into three categories
consisting of (1) passenger cars, (2) pickups, and (3) SUVs and vans.
For example, a Chrysler 300 was coded as a passenger car, a Dodge 1500
as a pickup, and a Land Rover Discovery as an SUV. In addition,
because there were hundreds of manufacturers (including those for
nonpassenger vehicles) in the database--each with their own set of
makes and models--we excluded all but the top 21 automobile
manufacturers by market share. However, the top 21 manufacturers
represent about 99 percent of all automobiles sold in the United
States. Therefore, the data set we used to calculate the recall
completion rates from 2000 through 2008 included a total of about
1,028 vehicle safety defect recalls after excluding nonpassenger
vehicles from the database and some recall records that contained
missing or anomalous data affecting nearly 125 million vehicles.
In order to make sure that our universe of passenger vehicle recalls
was reasonable, we compared the number of affected vehicles associated
with the 1,028 recalls we retained with the total number of affected
vehicles from a report provided to us by NHTSA. Table 7 shows that,
while we analyzed only about 25 percent of the recalls reported by
NHTSA from 2000 through 2008, the 1,028 recalls we did analyze include
88 percent of all affected vehicles recalled for safety defects from
2000 through 2008.
Table 7: Comparison of All NHTSA Recall Data for Safety Defects from
2000 through 2008 to Data Analyzed by GAO:
Year: 2000;
NHTSA number of recalls†: 432;
NHTSA number of affected vehicles[A]: 20 million;
Number of recalls analyzed by GAO[B]: 163;
Number of affected vehicles analyzed by GAO[B]: 16.6 million;
Percentage of NHTSA recalls analyzed by GAO: 38%;
Percentage of affected vehicles analyzed by GAO: 83%.
Year: 2001;
NHTSA number of recalls†: 379;
NHTSA number of affected vehicles[A]: 11.8 million;
Number of recalls analyzed by GAO[B]: 120;
Number of affected vehicles analyzed by GAO[B]: 10.5 million;
Percentage of NHTSA recalls analyzed by GAO: 32%;
Percentage of affected vehicles analyzed by GAO: 89%.
Year: 2002;
NHTSA number of recalls†: 385;
NHTSA number of affected vehicles[A]: 17.6 million;
Number of recalls analyzed by GAO[B]: 106;
Number of affected vehicles analyzed by GAO[B]: 15.3 million;
Percentage of NHTSA recalls analyzed by GAO: 28%;
Percentage of affected vehicles analyzed by GAO: 87%.
Year: 2003;
NHTSA number of recalls†: 429;
NHTSA number of affected vehicles[A]: 15.3 million;
Number of recalls analyzed by GAO[B]: 112;
Number of affected vehicles analyzed by GAO[B]: 13.5 million;
Percentage of NHTSA recalls analyzed by GAO: 26%;
Percentage of affected vehicles analyzed by GAO: 88%.
Year: 2004;
NHTSA number of recalls†: 493;
NHTSA number of affected vehicles[A]: 28.3 million;
Number of recalls analyzed by GAO[B]: 151;
Number of affected vehicles analyzed by GAO[B]: 24.7 million;
Percentage of NHTSA recalls analyzed by GAO: 31%;
Percentage of affected vehicles analyzed by GAO: 87%.
Year: 2005;
NHTSA number of recalls†: 472;
NHTSA number of affected vehicles[A]: 18.2 million;
Number of recalls analyzed by GAO[B]: 104;
Number of affected vehicles analyzed by GAO[B]: 16.3 million;
Percentage of NHTSA recalls analyzed by GAO: 22%;
Percentage of affected vehicles analyzed by GAO: 90%.
Year: 2006;
NHTSA number of recalls†: 415;
NHTSA number of affected vehicles[A]: 8.7 million;
Number of recalls analyzed by GAO[B]: 96;
Number of affected vehicles analyzed by GAO[B]: 8 million;
Percentage of NHTSA recalls analyzed by GAO: 23%;
Percentage of affected vehicles analyzed by GAO: 92%.
Year: 2007;
NHTSA number of recalls†: 502;
NHTSA number of affected vehicles[A]: 14.2 million;
Number of recalls analyzed by GAO[B]: 83;
Number of affected vehicles analyzed by GAO[B]: 13.7 million;
Percentage of NHTSA recalls analyzed by GAO: 17%;
Percentage of affected vehicles analyzed by GAO: 96%.
Year: 2008;
NHTSA number of recalls†: 527;
NHTSA number of affected vehicles[A]: 8.6 million;
Number of recalls analyzed by GAO[B]: 93;
Number of affected vehicles analyzed by GAO[B]: 6.3 million;
Percentage of NHTSA recalls analyzed by GAO: 18%;
Percentage of affected vehicles analyzed by GAO: 73%.
Year: Total;
NHTSA number of recalls†: 4,034;
NHTSA number of affected vehicles[A]: 142.7 million;
Number of recalls analyzed by GAO[B]: 1,028;
Number of affected vehicles analyzed by GAO[B]: 124.9 million;
Percentage of NHTSA recalls analyzed by GAO: 25%;
Percentage of affected vehicles analyzed by GAO: 88%.
Source: NHTSA and GAO analysis of NHTSA data.
[A] The number or recalls and the number of affected vehicles were
obtained from a report NHTSA provided us listing all recalls by year
from 1966 through 2009. That report also contained information on
safety defect recalls and compliance recalls. The numbers above are
for safety defect recalls.
[B] These values were obtained from our analysis of safety defect
recalls for noncommercial passenger vehicles obtained from NHTSA's
Artemis database.
[End of table]
To analyze completion rates for defective components by year, NHTSA
provided us with a list of 387 components used by NHTSA to classify
the defective component associated with each recall. We recoded these
components into 19 main categories. (See table 8). For the most part,
this was a straightforward process, as the component names were
grouped into similar hierarchical items such as "Suspension: Front,"
"Suspension: Front: Shock Absorber," "Suspension: Front: Control Arm,"
and so forth. All but a few of the components fit into logical, clear
categories like steering, suspension, or engine and cooling. However,
we had to use our judgment in a few cases, including "traction
control"--which we placed in the "steering" category.
Table 8: Component Categories Used in GAO Analysis of NHTSA's Artemis
Database:
Parking brake;
Equipment;
Tires:
Structure;
Wheels:
Latches/locks;
Seat belts;
Visibility;
Speed control;
Exterior/interior lighting;
Engine and cooling;
Seats;
Suspension;
Steering;
Power train;
Air bags;
Electrical system;
Service brakes;
Fuel system;
Other[A].
Source: GAO analysis of component categories in NHTSA's Artemis
database.
[A] The "Other" category was associated with only three recalls. Those
recalls were not included in the component completion rate analysis
presented in the report because there were so few of them.
[End of table]
In order to calculate the completion rate across manufacturers,
vehicle types, and components, we adopted the formula used by NHTSA.
That is, for each recall, we divided the number of involved vehicles
reported by the manufacturer (minus those exported, stolen, scrapped,
or "other") by the sum of number of vehicles corrected, the number of
vehicles inspected only and not needing correction, and the number of
vehicles returned to inventory.
In order to assess the reliability of the data we analyzed, we
reviewed NHTSA's documentation of the Artemis system, interviewed
NHTSA officials familiar with the data, and conducted electronic tests
of the data, looking for missing values, outliers, or other anomalies.
We did find some recall campaign records that contained missing,
duplicative, or incomplete data. We had to delete 22 records from the
data before we performed our analysis because there were no reported
quarterly values for recall completion. Because three additional
records contained duplicate reporting quarters, we deleted those
duplicate quarters and were able to retain them for our analysis. We
deleted a fourth recall record that had anomalous data that could not
be explained. Because another recall record had an anomalous first
quarter value for affected vehicles that was clearly a data entry
error, we deleted that quarter's value. One final record showed a
completion record of slightly more than 100 percent. We capped that
record at 100 percent and retained it for our analysis. We determined
by the number of affected vehicles for these questionable records that
our changes and deletions have no material effect on our analysis and
that the data, as analyzed and corrected, were sufficiently reliable
for our purposes.
To determine vehicle owners' perspectives about safety defect recalls,
we conducted 10 focus group sessions with a total of 89 vehicle owners
at five locations. These sessions involved structured small-group
discussions designed to gain more in-depth information about specific
issues that cannot easily be obtained from another method, such as a
survey or individual interviews. Consistent with typical focus group
methodologies, our design included multiple groups with varying
characteristics but some similarity on one or two homogeneous
characteristics. Each group involved 7 to 10 participants. Our overall
objective in using a focus group approach was to obtain views,
insights, and feelings of vehicle owners regarding their awareness of
recalls, understanding of defect notification letters, and willingness
to comply with defect notices. By including vehicle owners with recent
recall experience and those without recent recall experience, we
intended to gather a range of perspectives regarding vehicle owners'
awareness of recalls, their understanding of defect notification
letters, and their willingness to comply with defect notices.
We conducted 10 separate focus group sessions--5 sessions with vehicle
owners that had experienced a recall in the past 3 years and 5
sessions with vehicle owners that had not experienced a recall within
the past 3 years. We selected five cities in which to conduct focus
groups to provide population and geographic dispersion--Chicago;
Dallas; Richmond, Virginia; Salina, Kansas; and Seattle. In addition,
we used the USDA's Economic Research Service Rural-Urban Continuum
Codes to select a city--Salina, Kansas--that represented a smaller,
more isolated community in order to ensure we included the
perspectives of vehicle owners in geographically distant or isolated
communities.[Footnote 41] Additionally, we used criteria in selecting
participants that ensured a mix of income, gender, and educational
level, and that accounted for the race and ethnicity of the area in
which the focus groups were located.
Discussions were structured, guided by a moderator who used a
standardized list of questions to encourage participants to share
their thoughts and experiences, as well as to react to various pieces
of communications. Specifically, question topics included perceived
responsibility for communicating the recall, expectations for how they
should be communicated with during a recall, factors that would affect
their decision to bring their recalled vehicle in for service, and
suggestions for improving communications of auto safety recalls.
During the sessions, we assured participants of the anonymity of their
responses, promising that their names would not be used. We also
conducted two pretest focus groups at GAO and made some revisions to
the focus group guide prior to beginning our travel for the sessions.
Each of the 10 focus groups was recorded and transcriptions were
created, which served as the record for each group. Those transcripts
were then evaluated using content analysis to develop our findings.
The analysis was conducted in two steps. In the first step, two
analysts independently developed a code book and then worked together
to resolve any discrepancies. In the second step, each transcript was
coded by an analyst and then those codes were verified by a second
analyst. Any coding discrepancies were resolved by both analysts
agreeing on what the codes should be. Because we found no differences
between the recall and nonrecall groups, a document was created that
compiled totals for each question, which was used for the findings
that were reported.
Methodologically, focus groups are not designed to (1) demonstrate the
extent of a problem or to generalize results to a larger population,
(2) develop a consensus to arrive at an agreed-upon plan or make
decisions about what actions to take, or (3) provide statistically
representative samples or reliable quantitative estimates. Instead,
they are intended to generate in-depth information about the reasons
for the focus group participants' attitudes on specific topics and to
offer insights into their concerns about and support for an issue. The
projectability of the information produced by our focus groups is
limited for several reasons. First, the information includes only the
responses from the vehicle owners from the 10 selected groups. Second,
while the composition of the groups was designed to ensure a range of
age and education levels, the groups were not randomly sampled. Third,
participants were asked questions about their experiences or
expectations, and other vehicle owners not in the focus groups may
have had other experiences or expectations. Because of these
limitations, we did not rely entirely on focus groups, but rather used
several different methods to corroborate and support our conclusions.
We conducted this performance audit from June 2010 through June 2011
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Defect Notification Letters and Envelopes Used in Focus
Groups:
For the purposes of the focus groups, identifying information such as
manufacturer names, owner addresses, and vehicle identification
numbers were redacted. We distributed copies of three defect
notification letters and three envelopes, as shown in the following
pages:
Defect Notification Letter, Sample A (Original Included Three Pages):
(Page 1 of 3):
Manufacturer name and logo:
Manufacturer name and address:
October 2010:
Safety Recall: Recall ID#:
Owner name and address:
Your Vehicle Identification Number:
This notice is sent to you in accordance with the requirements of the
National Traffic and Motor Vehicle Safety Act.
[Manufacturer name] has decided that a defect which relates to motor
vehicle safety exists in your vehicle, with the Vehicle Identification
Number shown above.
We apologize for this situation and want to assure you that, with your
assistance, we will correct this condition. Our commitment, together
with your dealer, is to provide you with the highest level of service
and support.
What is the issue?
On your vehicle, the rear axle could potentially fracture when
operated in high corrosion areas (where salt is used on the roadways
during winter months) for an extended period of time. If the rear axle
should completely fracture, vehicle handling may be affected which
could increase the risk of a crash.
What will [Manufacturer name] and your dealer do?
[Manufacturer name] has authorized your dealer to inspect the rear
axle of your vehicle for cracks or perforations free of charge (parts
and labor).
If the axle passes inspection, additional corrosion protection will be
applied to the axle before returning the vehicle to you. You will be
notified by [redacted] via mail as soon as parts are available to
complete the final repair on your vehicle. Parts to reinforce axles
are expected to be available in the 4th quarter of 2010.
If the axle does not pass inspection, a rental vehicle will be
provided until a remedy is available. Additional axles are expected to
be available in the first quarter of 2011. At our discretion,
[Manufacturer name] may choose to extend an offer to repurchase
vehicles with cracked or perforated axles in lieu of replacing the
axle.
We apologize for any inconvenience these part shortages may cause you.
We are closely working with our suppliers to accelerate part
availability.
Copyright 2010 [Manufacturer name]
(Page 2 of 3):
How long will it take?
The time needed to inspect the rear axle is less than one-half day.
However, due to service scheduling requirements, your dealer may need
your vehicle for a longer period of time.
What should you do?
Please call your dealer without delay and request a service date for
Recall 10[redacted]. Provide the dealer with the Vehicle
Identification Number (VIN) of your vehicle. The VIN is printed near
your name at the beginning of this letter.
If you do not already have a servicing dealer, you can access
[Manufacturer name] for dealer addresses, maps, and driving
instructions. [Manufacturer name] wants you to have this safety recall
completed on your vehicle. The vehicle owner is responsible for making
arrangements to have the work completed. [Manufacturer name] can deny
coverage for any vehicle damage that may result from the failure to
have this recall performed on a timely basis. Therefore please have
this recall performed as soon as possible.
Please note: Federal law requires that any vehicle lessor receiving
this recall notice must forward a copy of this notice to the lessee
within ten days.
Do you need a rental vehicle?
If your vehicle does not pass inspection, your dealer is authorized to
provide a rental vehicle for your personal transportation at no charge
(except for fuel and tax) while your vehicle is at the dealership for
repairs. Please see your dealer for guidelines and limitations.
Have you previously paid for this repair?
If you have previously paid for a repair that addresses the issue
described in this letter, you still need to have this recall performed
to ensure the correct parts and procedures were used.
You may be eligible for a refund of previously paid repairs. Refunds
will only be provided for service related to a cracked or perforated
rear axle. To verify eligibility and expedite reimbursement give your
paid original receipt to your dealer.
Refund requests may also be sent directly to [redacted]. To request
your refund from [redacted], send the refund request with all required
documentation including your original repair receipt (no photocopies)
to [redacted]. Refund requests mailed to this address may take up to
60 days to process. Your original receipt will be returned to you.
Detailed information regarding eligibility for [redacted]
reimbursement program and documentation requirements may be obtained
by contacting the [redacted} Customer Relationship Center at
[redacted].
(Page 3 of 3):
What if you no longer own this vehicle?
If you no longer own this vehicle, and have an address for the current
owner, please forward this letter to the new owner.
You received this notice because government regulations require that
notification be sent to the last known owner of record. Our records
are based primarily on state registration and title data, which
indicate that you are the current owner.
Can we assist you further?
If you have difficulties getting your vehicle repaired promptly and
without charge, please contact your dealership's Service Manager for
assistance.
Retail Owners: If you still have concerns, please contact the [redacted]
Customer Relationship Center at [redacted] and one of our
representatives will be happy to assist you. For the hearing impaired
call [redacted] (TDD). Representatives are available Monday through
Friday: 8:00AM - 5:00PM (Your Local Time).
If you wish to contact us through the Internet, our address is:
www.[redacted]
Fleet Owners: If you still have concerns, please contact the Fleet
Customer Information Center at [redacted], Option #3 and one of our
representatives will be happy to assist you. Representatives are
available Monday through Friday: 8:00AM - 5:00PM (Your Local Time).
Or you may contact us through the Internet at www.[redacted]
If you are still having difficulty getting your vehicle repaired in a
reasonable time or without charge, you may write the Administrator,
National Highway Traffic Safety Administration, 1200 New Jersey Ave.
S.E., Washington, D.C. 20590 or call the toll free Vehicle Safety
Hotline at 1-888-327-4236 (TTY: 1-800-424-9153) or go to
www.safercar.gov.
Thank you for your attention to this important matter.
Customer Service Division:
Source: Defect notification letter used in focus groups.
[End of letter]
Defect Notification Letter, Sample B (Original Included One Page):
[Manufacturer name]
Safety Recall -- Lower Ball Joints:
Dear Owner:
This notice is sent to you in accordance with the requirements of the
National Traffic and Motor Vehicle Safety Act.
[Redacted] has decided that a defect, which relates to motor vehicle
safety, exists in some 2002 and 2003 model year [redacted] vehicles.
The problem is:
Water may enter into the front suspension lower ball joints on your
[redacted]. This the can cause ball joints to corrode and separate.
Ball joint separation in can result a loss of steering control and
cause a crash without prior warning.
What [Manufacturer name] and your dealer will and do:
[Redacted] will repair your vehicle free of charge (parts and labor).
To do this, your dealer will replace the front suspension lower ball
joints on all 2002 and early 2003 model year vehicles. Later 2003
model year vehicles will have the ball joints inspected and replaced
if necessary. All vehicles will have ball joint boot shields
installed. Shield installation and ball joint replacement (if
necessary) will take about 1 1/2 hours. However, additional time may
be necessary depending on how dealer appointments are scheduled and
processed.
What you must do to ensure your safety:
* Simply contact your dealer right away to schedule a service
appointment. Ask the dealer to hold the parts for your vehicle
or to order them before your appointment.
* Bring the enclosed form with you to your dealer. It identifies
the required service to the dealer.
If you need help:
If you have questions or concerns which your dealer is unable to
resolve, please contact [Manufacturer name] at [Manufacturer phone
number].
If you have already experienced a ball joint failure and have paid to
have it repaired, you may send your original receipts and/or other
adequate proof of payment to the following address for reimbursement:
[redacted]
If your dealer fails or is unable to remedy this defect without charge
and within a reasonable time, you may submit a written complaint to
the Administrator, National Highway Traffic Safety Administration, 400
Seventh Street, S.W., Washington, DC 20590, or call the toll-free Auto
Safety Hotline at 1-888-327-4236.
We're sorry for any inconvenience, but we are sincerely concerned
about your safety. Thank you for your attention to this important
matter.
Customer Services Field Operations:
[Redacted]
Note to lessors receiving this recall: Federal regulation requires
that you forward this recall notice to the lessee within 10 days.
Source: Defect notification letter used in focus groups.
[End of letter]
Defect Notification Letter, Sample C (Original Included One Page
in Landscape Format)[Footnote 1]
SSC A0S — Certain 2010 Model Year [Redacted] Vehicles ABS Actuator ECU
Update Safety Recall Notice:
Dear Customer:
This notice is being sent to you in accordance with the requirements
of the National Traffic and Motor Vehicle Safety Act. [Redacted] has
decided that a defect, which relates to motor vehicle safety, exists in
certain 2010 model year [redacted] vehicles.
What is the condition?
[Redacted] has received complaints of inconsistent brake feel during
slow and steady application of brakes on rough or slick road surfaces
when the anti-took brake system (ASS) is activated in an effort to
maintain tire fraction. The system. in normal Operation, engages and
disengages rapidly (many times per second) as the control system
senses and reacts to tire slippage. If the same brake pedal force is
applied under these conditions, in the worst case, this may lead to an
increase of vehicle stopping distance and thus raise the likelihood of
a crash.
Each circumstance may vary, and drivers must use their best judgment,
but until the remedy is completed on your vehicle, [redacted] advises
drivers to depress the brake pedal using firm pressure. Also, please
allow additional distance between your vehicle and the vehicle in
front of you so as to provide additional stopping distance.
What will [redacted] do?
[Redacted] has developed a software update for this condition. Any
authorized [Manufacturer name] dealer will update the ABS Electronic
Control Unit ("ECU") with the newly designed software at no charge to
the vehicle owner.
Whet should you do?
This is art important Safety Recall:
Please contact your authorized [redacted] dealer to install the newly
designed ABS ECU software as soon as possible. The installation will
take approximately 30 minutes. However, depending upon the dealers
work schedule, it may be necessary for you to make your vehicle
available for a longer period of time.
We request that you present this notice to the dealer at the time of
your service appointment.
If you would like 10 update your vehicle ownership or contact
information, please go www.[redacted]. You will need your full 17-
digit Vehicle Identification Number (VIN) to input the new
information.
What if you have other questions?
Your local dealer will be more than happy to answer any of your
questions and set up an appointment to perform this important Safety
Recall. If you require further assistance, you may contact the
[redacted] Customer Experience Center at [redacted] Monday through
Friday, 5:00 am to 5.00 pm, Saturday 7:00 am through 4:00 pm Pacific
Time. It you believe that the dealer or [redacted] has failed or is
unable to remedy the defect within a reasonable time, you may submit a
complaint to the Administrator, National Highway Traffic Safety
Administration, 1200 New Jersey venue S.E., Washington, DC 20590 or
call the toll free Vehicle Safety Hot Line at 1-888-327-4236 (TTY: 1-
800-424-9153), or go to http://wwwsafercar.gov].
If you are a vehicle lessor, Federal law requires that any vehicle
lessor receiving this recall notice must forward a copy of this notice
to the lessee within ten days.
We have sent this notice in the interest of your continued
satisfaction with our products and we sincerely regret any
inconvenience this condition may have caused you.
Thank you tor driving a [redacted].
Sincerely,
[Redacted]
Spanish translation on back side:
Source: Defect notification letter used in focus groups.
Footnote:
[1] This defect notification letter was two-sided, with one side in
English and the other in Spanish. The Spanish letter (not shown) was
not discussed in our focus groups.
[End of letter]
Defect Notification Letter Envelope, Sample D:
Presorted:
First Class Mail:
U.S. Postage:
Paid:
NDS:
[Manufacturer name]
SSC/LSC Notification Processing Center:
No General Correspondence:
P.O. Box [redacted]
SSC AOB — Certain 2010 Model Year [redacted] Vehicles ABS Actuator ECU
Update:
Safety Recall Notice:
Owner name and address
Source: Defect notification envelope used in focus groups.
[End of sample D]
Defect Notification Letter Envelope, Sample E:
First-Class Mail:
U.S. Postage Paid:
Manufacturer name and address:
Red bar: Urgent Airbag Safety Recall Notice:
Please Deliver To Registered Owner:
Vehicle Identification number:
Source: Defect notification envelope used in focus groups.
[End of sample E]
Defect Notification Letter Envelope, Sample F:
[Manufacturer name and address]
[Manufacturer name and logo]
Presort:
First-Class:
U.S. Postage:
Paid:
[Manufacturer name]
Important Recall Information:
Red bar.
Source: Defect notification letter used in focus groups.
[End of sample F]
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Susan A Fleming, (202) 512-2834 or flemings@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Ray Sendejas (Assistant
Director), Jennifer Clayborne, H. Brandon Haller, Terence Lam, James
Leonard, Grant Mallie, Josh Ormond, Steve Rabinowitz, Amy Rosewarne,
Kelly Rubin, Tina Won Sherman, Susan Michal-Smith, Andrew Stavisky,
Crystal Wesco, Chad Williams, and Susan Zimmerman made key
contributions to this report.
[End of section]
Footnotes:
[1] Pub. L. No.110-314, 122 Stat. 3016 (Aug. 14, 2008).
[2] Pub. L. No.111-353, 124 Stat. 3885 (Jan. 4, 2011).
[3] For the purposes of this report, a recall includes the repair,
removal, replacement, or refund for a defective or unsafe product.
[4] Pub. L. No. 89-563, 80 Stat. 718 (Sept. 9, 1966).
[5] Pub. L. No. 91-605, 84 Stat 1713 (Dec. 31, 1970).
[6] Pub. L. No. 106-414, 114 Stat. 1800 (Nov. 1, 2000).
[7] NHTSA also engages in activities targeted at behavioral aspects of
traffic safety--for example, through public information campaigns
supporting seat belt use and against drunken driving or distracted
driving.
[8] According to NHTSA, these federal safety standards are written in
terms of minimum safety performance requirements for motor vehicles or
items of motor vehicle equipment. These requirements are specified,
according to the agency, in such a manner "that the public is
protected against unreasonable risk of crashes occurring as a result
of the design, construction, or performance of motor vehicles and is
also protected against unreasonable risk of death or injury in the
event crashes do occur."
[9] The Department of Transportation's Office of Inspector General
plans to issue this report in the summer of 2011. For more information
on the Office of Inspector General, see [hyperlink,
http://www.oig.dot.gov].
[10] Lessor means a person or entity that is the owner, as reflected
on the vehicle's title, of any five or more leased vehicles, as of the
date of the safety defect notification. Unless a manufacturer notifies
lessees--the persons who lease motor vehicles--directly through
agreement with a lessor, then the lessor is required to forward the
initial follow-up notifications of a recall to lessees within 10 days
of receiving them.
[11] 49 U.S.C. § 30118(b)(2).
[12] Pub. L. No. 111-353, § 206.
[13] Manufacturers are required to submit draft recall notification
letters to the agency at least 5 business days prior to the date that
the manufacturer plans to mail them to vehicle owners. 49 C.F.R. §
577.5(a).
[14] Manufacturers are required to provide the remedy free of cost to
vehicle owners who purchased the vehicle within 10 years of the
identification of the defect. 49 U.S.C. § 30120(g). However, NHTSA
officials told us auto manufacturers generally provide the defect
remedy work free of cost to all vehicle owners in all cases.
[15] The first quarter of reporting is required to begin with the date
on which a manufacturer first sends recall notices to vehicle owners.
[16] In certain cases, where NHTSA does not have authority to impose
civil penalties, it can refer the matter to the U.S. Department of
Justice for civil proceedings where civil penalties can be imposed.
[17] NHTSA is authorized to impose a fine of not more than $5,000 for
each violation and a maximum of $15 million for a related series of
violations. 49 U.S.C. § 30165(a). At least every 4 years NHTSA reviews
the amount of the fines and, if appropriate, is authorized to adjust
the fines. Currently, NHTSA has adjusted the fines to not more than
$6,000 for each violation and to a maximum of $17.350 million for a
related series of violations.
[18] CPSC can impose a fine of not more than $100,000 for each
individual violation and a maximum of $15 million for a related series
of violations. 15 U.S.C. § 2069(a)(1). For food products under FDA's
authority, any person who introduces into interstate commerce or
delivers for introduction into interstate commerce an article of food
that is adulterated or any person who does not comply with a recall
order shall be subject to a civil money penalty of not more than
$50,000 in the case of an individual and $250,000 in the case of any
other person for such introduction or delivery, not to exceed $500,000
for all such violations adjudicated in a single proceeding. 21 U.S.C.
§ 333(f)(2)(A). For medical devices under FDA's authority, fines are
$15,000 for each violation and a maximum of $1 million for all
violations adjudicated in a single proceeding. 21 U.S.C. §
333(f)(1)(A).
[19] 21 U.S.C. § 1041.
[20] 49 U.S.C. § 30118(b)(2); 15 U.S.C. § 2064(d)(1).
[21] 15 U.S.C. §. 2055(b)(5)(d).
[22] The auto safety recall authorities of Germany and the UK are
based, in part, on European Union (EU) directives. Officials from
Germany and the UK told us that their national laws pertaining to the
recall process are based on laws that apply to safety standards for
all consumer products, which, in turn, are based on the EU's law
pertaining to general product safety. EU officials told us that the EU
requires that all of its member states conduct risk assessments of
potential safety defects in products, such as motor vehicles, and
ensure that manufacturers take actions to remedy these risks.
According to the officials, member states must also report safety
defects to the EU so that they can be posted to a Web-based system
accessible to the public.
[23] In November 2009, a survey by the Original Equipment Suppliers
Association--a leading auto supply industry group--reported that at
least 43 U.S.-based auto suppliers had filed for Chapter 11 bankruptcy
protection in 2009. Also in 2009, a consultant group estimated that as
many as 30 percent of North American suppliers were at high risk of
failure.
[24] We convened 10 focus groups of vehicle owners in five cities--
Chicago; Dallas; Richmond, Virginia; Salina, Kansas; and Seattle--to
determine vehicle owners' awareness of auto safety recalls, their
willingness to comply with defect notification letters, and potential
options for improving safety defect notification letters. For more
information, see appendix I.
[25] See appendix II for copies of the three defect notification
letters and three envelopes reviewed by the focus group participants.
[26] CPSC sponsors [hyperlink, http://www.recalls.gov], which provides
information on, among other things, consumer product recalls and auto
safety recalls. Six federal regulatory agencies, including NHTSA,
participate in recalls.gov. In addition to searching for safety
recalls, consumers may access a list of recent recalls issued by each
of the six agencies. Consumers may also subscribe to e-mail alerts
from four of the six agencies, including NHTSA.
[27] Each new recall will remain available on the RSS feed for 7 days.
[28] NHTSA's 5-Star Safety Ratings measure the crash worthiness and
rollover safety of vehicles. Five stars indicate the highest rating,
one star indicates the lowest.
[29] NHTSA does not have a separate category in their data for
"passenger vehicles." For our analysis we excluded motorcycles,
commercial vehicles, trailers, recreational vehicles, and car seats.
Furthermore, we included only safety defect recalls for vehicles from
the top 21 manufacturers in terms of U.S. market share according to
Ward's Automotive Group from 2000 through 2008. All data for 2009 or
2010 was excluded because recall completion data for recalls initiated
during late 2009 or 2010 would not have matured a full 18 months (6
quarters) at the time of our analysis. After these exclusions, our
analysis included 1,028 safety defect recall campaigns representing
about 88 percent of all affected vehicles recalled by manufacturers
from 2000 through 2008.
[30] 49 U.S.C. § 30118(b)(2). While NHTSA can order the manufacturer
to remedy the defect, according to NHTSA officials, the process of
remedying vehicles is overseen by the manufacturer with minimal
involvement from NHTSA. The process of remedying defects primarily
involves the manufacturer and franchised dealers.
[31] Franchised dealers that sell new motor vehicles may sell or lease
the motor vehicle only if the defect has been remedied before delivery
of the motor vehicle under the sale or lease. 49 U.S.C. § 30120.
[32] CarFax reports are available on all used cars and light trucks
model year 1981 or later using the unique 17-character VIN. These
reports check for information on a vehicle's history such as title
information; accident indicators, including air bag deployment; and
recall information.
[33] National Independent Automobile Dealers Association, Used Car
Industry Report (2010).
[34] Motor Vehicle Safety Act of 2010, S. 3302, 111th Cong. (2010).
This bill was not enacted in the 111th Congress.
[35] NHTSA requires defect notification letters to have (1) a notation
on the envelope that include the words "SAFETY," "RECALL," and
"NOTICE" in all capital letters and in a font different from the
address information; (2) a clear description of the defect; (3) an
evaluation of the risk to vehicle safety related to the defect; and
(4) a statement of measures to be taken to remedy the defect. 49
C.F.R. § 577.5.
[36] S. 3302; Motor Vehicle Safety Act of 2010, H.R.5381, 111th Cong.
(2010).
[37] GAO, Food Safety: USDA and FDA Need to Better Ensure Prompt and
Complete Recalls of Potentially Unsafe Food, [hyperlink,
http://www.gao.gov/products/GAO-05-51] (Washington, D.C.: Oct. 6,
2004); and Consumer Safety: Better Information and Planning Would
Strengthen CPSC's Oversight of Imported Products, [hyperlink,
http://www.gao.gov/products/GAO-09-803] (Washington, D.C.: Aug. 14,
2009).
[38] Congressional Research Service, "The U.S. Motor Vehicle Industry:
Confronting a New Dynamic in the Global Economy," R41154 (Mar. 26,
2010).
[39] NHTSA officials told us that they do not have a definition of
passenger vehicles. Therefore, we defined passenger vehicles as
noncommercial cars, sport utility vehicles, large vans, minivans, and
pickup trucks.
[40] We also excluded motorcycles from our analyses.
[41] See USDA Economic Research Service at [hyperlink,
http://www.ers.usda.gov/Briefing/Rurality/RuralUrbCon/].
[42] This defect notification letter was two-sided, with one side in
English and the other in Spanish. The Spanish letter (not shown) was
not discussed in our focus groups.
[End of section]
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