Yahoo Finance Department of Transportation Slams NHTSA over Mishandled Takata Recalls and Institutional Problems
The federal government does not penalize automakers enough for violating recall requirements, and its poor record keeping may have put the American public at greater risk for many years before the Takata airbag defects surfaced. That’s according to a new report by the Office of Inspector General (OIG) of the U.S. Department of Transportation, which has concluded its audit of the National Highway Traffic Safety Administration’s handling of the Takata airbag recalls.
It is yet another dismaying analysis of the agency since the last OIG report, published in June 2015, which followed the General Motors ignition-switch defects that left 124 people dead and 274 injured. While not as scathing, the latest report tackles the deadly Takata airbag-inflator debacle-the largest safety recall ever-and describes a fickle NHTSA staff who often fail to document or explain their decisions and a data-gathering process run amok. There was sufficient evidence from a random sample of 94 recalls NHTSA issued for light passenger vehicles between 2012 and 2016 (out of 1384 issued during that period) for the OIG to suggest “NHTSA’s lack of internal accountability and risk-based oversight inhibits the Agency’s ability to meet its safety mission.”
How Defective Was the Handling of Takata Defects?
When Honda recalled just a few thousand cars in 2008 for defective Takata inflators that could explode shrapnel when deployed, there was little indication then that the units’ ammonium nitrate propellant was at fault or that the problem would soon spread to include tens of millions of cars from nearly every major automaker. Yet according to the report, when NHTSA opened an investigation in November 2009 and Takata disclosed that it had made 100 million inflators with the same propellant, the case was closed six months later because of Takata’s assurances it had limited the problem.
Even in August 2013, four months after multiple automakers first expanded the recall beyond Honda, the agency didn’t reopen the investigation despite receiving a complaint from a driver whose Takata airbag exploded, blinded him in one eye, and butchered his nose so badly he needed 100 stitches. Since the inflator was outside the original recall’s range of affected vehicles, NHTSA did nothing. When the investigation resumed in June 2014 after “media interest,” the agency downplayed these injuries as they “appeared to be minor.” As such, the report points out that “NHTSA’s minimal action to address low Takata recall completion rates and its poor oversight of manufacturers’ reporting on recall risk may have contributed to the slow implementation of these recalls between 2008 and 2015.”
Between May 2015, when the agency delivered its consent order that led to Takata pleading guilty to criminal charges and agreeing to a $1 billion settlement, and February 2017, no one at NHTSA oversaw recalls involving supplier equipment, such as those involving Takata. This, despite 252 such recalls issued in 2016. The report reviewed all 36 Takata recalls issued before the consent order and found 43 percent of the initial recall notices were missing required information. NHTSA did not make efforts to recover the information, nor does it to this day have a way to verify any of the Takata recall repair rates listed on its website-despite ordering automakers to reach a 100 percent completion rate.
Bad Judgment, No Paper Trails
As was previously pointed out in the 2015 OIG report, NHTSA struggles with poor employee training, supervisor oversight, documentation, and procedure. None of that seems to have improved since. There still is no common justification for why the agency does or does not open an investigation into potential defects or expansions of current recalls. Few of NHTSA’s engineers across its multiple divisions communicate with one another despite department policy. Of the 1384 recalls in the report’s scope, all but three had no formal documentation from engineers whose job it is to review an automaker’s suggested repairs for effectiveness. In most cases, staff used “informal” notes or telephone calls. Even managers don’t always review the letters automakers send to owners, which is something of an issue given how lower-level “staff is authorized to electronically sign letters the manager has not reviewed” and allow automakers to send them forth.
Until 2016, NHTSA had never audited information it received from automakers to check for missing documentation, according to the report. Of 869 reviewed recalls, the OIG found 180 were missing required files such as dealer notices and technical bulletins. For that alone, the OIG estimates NHTSA could have fined automakers $1.26 million per day. But the agency says it prefers not to leverage civil penalties against automakers in its everyday course of business. In its response to the report, NHTSA deputy administrator Heidi King said that “NHTSA does not agree that it should divert resources to verify manufacturer-submitted information as a matter of course, absent a reason to question its accuracy.” As with nearly everything submitted to NHTSA-similar to submissions automakers make to the EPA-self-certification is the rule.
But imposing heavy fines, including those that can now total up to $21,000 per day for delayed recall implementation, is only part of the agency’s daily problems. A big one? NHTSA can’t evaluate the severity of recalls and complaints pouring into its office with any consistency. The OIG report bluntly states in a subhead that NHTSA “Does Not Use Its Risk-Based Oversight Tools to Mitigate Risk.” Personal judgment, not a systemic and monitored approach, is how automotive defects get tossed aside or passed on for investigation. When automakers file a recall, they must meet timed thresholds for repair rates over the course of 18 months. Yet while the OIG report found 205 recalls that fell below that 18-month requirement, NHTSA only investigated two of them. The staff responsible for monitoring this information had no idea the agency already had a special “tool,” called a Quarterly Report Performance Notification, to compel automakers to work harder. There was no evidence automakers were ever contacted using such a tool, and only one staff member recalled the agency holding meetings “twice a year” to discuss such recall progress. In 97 percent of the recalls that the agency was supposed to monitor during the OIG report’s timeline, the agency could not prove it had told automakers to resubmit missing information. Such details are often key to identifying more cars with defects.
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To its credit, NHTSA has overseen a record number of industry recalls, as well as the largest ever product recall in the country, on only a fledgling budget. It also has agreed with most of the OIG’s recommendations. But in its deputy administrator’s words, it shouldn’t need to document everything. “NHTSA does not believe it is reasonable to establish specific, one-size-fits-all timelines for submitting documents that vary widely across recalls, and which may not be required for every recall,” she wrote. “Additionally, as some of these actions may not be appropriate to document in NHTSA’s [internal] database system, documentation will reside outside of that system unless appropriate.” Clearly, however, things need to change within NHTSA. The agency plans to implement some solutions in 2019, although as this OIG report makes plain, far too little has changed inside one of the most critical, lifesaving agencies in our country since its last public wrist slap.
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