Dawn of a New NHTSA Era?

Flexing its new tough-on-automakers muscle, the National Highway Traffic Safety Administration held a rare public hearing last week to highlight Fiat Chrysler’s dismal recall record. The hearing was short, statements were read into the record, and that a large fine will be levied against Fiat Chrysler (FCA) seems a foregone conclusion. It’s another signal that NHTSA wants to prove it’s going to ramp up enforcement activities after years of neglect and ongoing recall crises that have left the agency’s credibility in tatters.

The evidence NHTSA presented at the hearing, culled from its own investigation and FCA’s responses to its special order request, is damning: In 23 recalls issued between 2013 and May of this year, FCA failed to notify owners about a recall, took months or even years to supply the parts, provided defective replacement parts, lied to NHTSA about the extent of the recall – and sometimes all of the above.

In a series of recalls (13V527, 13V528, and 13V529), FCA recalled about one million Dodge Ram trucks for tie rod ends that could break unexpectedly, causing loss of steering. FCA filed its recall notices with NHTSA on November 6, 2013, and notified owners sometime in January (NHTSA pointed out that FCA gave differing dates in its communications). But after that, NHTSA began receiving complaints of unavailable parts. It turns out that the replacement parts were also defective, and FCA had quietly told the dealers to return them – without telling NHTSA. Although the defect has allegedly been resolved, with limited parts availability many owners are still waiting for a fix. In the meantime, FCA documents confirm that as of March 2015, it had received reports of 32 crashes, with 20 injuries and one death. At least one FCA customer service rep told worried owners there had been no crashes related to tie rod failures.

In one of the tie rod recalls, FCA instructed dealers to immediately replace the tie rod end if they saw a misaligned steering linkage, but if no misalignment was found, owners were told they could come in for a replacement when they received a follow-up letter (apparently as a way to manage parts shortages). That might have worked out okay if FCA had a system that could distinguish between vehicles that had been repaired and vehicles that had only been inspected. But it didn’t – any vehicle that was examined was marked as having received the recall repair; thus they had no way of knowing which trucks were fixed. So FCA was forced to send new letters in May 2015, telling all owners to bring their vehicles in to have the recall completed.

In another example, FCA initiated an October 2012 recall (12V474) of 48,000 Dodge Ram trucks for a pinion gear retaining nut that could come loose, allowing the driveshaft to fall off, causing axle lock up and loss of vehicle control. It subsequently expanded the recall in 2013 (13V038) and 2014 (14V796) after NHTSA found that other model years were experiencing the problem.

FCA didn’t have replacement parts when it initiated the recall, but it announced nine months later that parts were available. NHTSA says that during that time, internal FCA documents show the automaker learned of three crashes, including two with injuries. Two years after FCA launched the recall, the agency says it is still receiving complaints from owners who have been unable to obtain the part.

NHTSA noted FCA frequently failed to file defect notices within the required five-day timeframe. For instance, in October 2014, a supplier notified FCA of a production process issue that had been linked to transmission shift failures, but FCA did not initiate the recall (15V090) until February.  Similarly, in January 2015, FCA learned that some trucks with a maximum speed of 106 mph had tires that could safely be driven only up to 87 mph – it didn’t initiate a recall until May 12. FCA offered no explanation for the delays.

In another instance, FCA failed to properly identify the recall population. FCA missed 65,000 vehicles that should have been included in Recall (15V041), and only added them 14 weeks later after NHTSA realized they were missing.

The information FCA did send to the agency was frequently incomplete, sometimes omitting a schedule for when notices have been or will be sent or including an incomplete chronology.  The company also repeatedly failed to send NHTSA its communications with dealers – at least 32 dealer communications in 12 recalls – preventing the agency from making sure dealers are receiving complete information. The agency also rapped FCA for failing to send recall notices to consumers within the 60-day period after filing its Part 573 defect notices.

Ironically, NHTSA framed its actions in the Jeep Grand Cherokee/Jeep Liberty recall debacle as an example of its new enforcement rigor in the face of industry intransigence.  But, the moral of that story is actually something altogether different.

Readers may recall the looming showdown over the vehicles’ rear-mounted fuel tank that left them vulnerable to explosion in rear impact crashes.  The defect has been linked to more than 250 deaths, including that of 4-year-old Remington Walden, whose family was recently awarded $150 million by a Georgia jury.

The Center for Auto Safety had been pushing NHTSA to address the safety hazard since 2009, and after several years of investigation, NHTSA formally requested that Chrysler conduct a recall. The automaker denied there was a problem and publicly refused to launch one. Instead of a confrontation, then-NHTSA administrator David Strickland, DOT Secretary Ray LaHood and Fiat CEO Sergio Marcchione (see Crazy Ray’s Giveaway!) met in Chicago and cut a deal. FCA got off with a “voluntary campaign” to add a trailer hitch – rather than relocating or shielding the tank.  

In its presentations, NHTSA noted that it “took the unusual step” of performing its own crash tests after FCA refused to prove the hitch would be effective. NHTSA found the hitch provided safety benefits in low and moderate speed crashes despite FCA’s own description of the “fix” as “an opportunity to incrementally improve the performance of certain of the Subject Vehicles in certain types of low-speed impacts.” 

The agency touted its July 2014 Special Order request to FCA pressing the company for explanations on hitch availability. But NHTSA actually learned in January 2014 that FCA had only just started ordering the hitches. The agency didn’t get around to demanding an explanation until six months later.  

The campaign itself wasn’t actually launched until August 2014, four months before Kayla White, a 23-year-old who was eight months pregnant, died in a fiery crash weeks after trying to have the hitch installed only to be told the part wasn’t available. NHTSA revealed at the hearing that the completion rate for the recall is 6 percent for the Grand Cherokee and 32 percent for the Liberty. 

But, it’s a new era, with new players. Fiat asked NHTSA to cancel the hearing, citing its newfound cooperation. NHTSA said no. Instead of several days in 2013 of media fireworks over NHTSA’s demands and Chrysler’s refusals, this hearing lasted for a dry two hours. FCA provided no defenses.

NHTSA made great use of an opportunity to reinforce a new enforcement reality. Holding automakers accountable is step one and a strong signal that NHTSA may be dumping its old “regulatory partners” – industry – for the ones it was supposed to have had all along – the public.