Field actions – otherwise known as customer service campaigns, secret warranties, silent recalls and other terms – are sometimes issued by vehicle manufacturers instead of recalls, to the detriment of customers, according to a new report in Automotive News.
The National Highway Traffic Safety Administration (NHTSA) has the authority to issue vehicle safety standards and recall vehicles that don’t meet these standards or have other safety-related defects. Manufacturers often issue recalls in response to NHTSA investigations, although some recalls are voluntary.
Non-recall actions, such as a customer-satisfaction campaign used by GM to remedy a carpeted floor mat shortage for Chevrolet Volt models, are supposed to be issued only for non-safety defects – but Automotive News reports that manufacturers may issue them because they draw less publicity, are largely unregulated and cost less than recalls.
Under the Radar
GM, for example, has issued only one recall for the Volt (over a faulty brake valve) since the vehicle was introduced in 2010. Other problems on thousands of Volts, however, including reinforcing the battery to reduce the likelihood of a fire after a crash, have been addressed through no less than eight customer-satisfaction campaigns.
GM didn’t consider the battery repairs a recall because it said there was no clear evidence that it was a safety defect. Other automakers have used customer-service campaigns for defects related to steering systems, airbags and headlights.
“There’s a ton of stuff that goes under the radar screen in the form of technical service bulletins and goodwill campaigns and hidden warranties,” Gabriel Shenhar of Consumer Reports told Automotive News. “It’s to the benefit of the customer to have it done as a recall, so it doesn’t go under the radar screen.”
An obvious reason why companies might want to fly under the radar is cost. While more than 70 percent of recalled vehicles get repaired, just 40 to 50 percent of vehicles covered by non-recalls do.
The result is less money reimbursed to dealers for repairs. And customers of less-informed garages or dealers are more apt to miss out on non-recalls compared to recalls, an omission that could force them to pay for repairs out-of-pocket.
“Everybody has recalls,” Shenhar said. “Recalls are better than the alternative. It’s better that the manufacturer is above-board and says, ‘We should have done it a little better in the first place, and we’re inviting you to get it fixed.’”
Strong Action by Regulators Could Prompt More Recalls
Vehicle manufacturers may rethink their stance on non-recalls after a year that’s seen multiple investigations of GM’s ignition recalls and the $1.2 billion penalty paid by Toyota over vehicles that accelerated uncontrollably.
The Toyota problem was handled as a criminal matter and prosecuted by the Justice Department. A report in the Wall Street Journal says that NHTSA was limited to a $66 million fine for the issue.
“If you’re looking at a billion-dollar fine, it changes your calculus,” said Clarence Ditlow of the Center for Auto Safety.
According to the NHTSA website, more than 390 million cars, trucks, buses and other vehicles have been recalled since 1966.
Through the first half of 2014, U.S. automakers had recalled around 40 million vehicles – an all-time record. General Motors alone has issued more than 40 separate recalls affecting 26 million vehicles.
Field actions – otherwise known as customer service campaigns, secret warranties, silent recalls and other terms – are sometimes issued by vehicle manufacturers instead of recalls, to the detriment of customers, according to a new report in Automotive News.
The National Highway Traffic Safety Administration (NHTSA) has the authority to issue vehicle safety standards and recall vehicles that don’t meet these standards or have other safety-related defects. Manufacturers often issue recalls in response to NHTSA investigations, although some recalls are voluntary.
Non-recall actions, such as a customer-satisfaction campaign used by GM to remedy a carpeted floor mat shortage for Chevrolet Volt models, are supposed to be issued only for non-safety defects – but Automotive News reports that manufacturers may issue them because they draw less publicity, are largely unregulated and cost less than recalls.
Under the Radar
GM, for example, has issued only one recall for the Volt (over a faulty brake valve) since the vehicle was introduced in 2010. Other problems on thousands of Volts, however, including reinforcing the battery to reduce the likelihood of a fire after a crash, have been addressed through no less than eight customer-satisfaction campaigns.
GM didn’t consider the battery repairs a recall because it said there was no clear evidence that it was a safety defect. Other automakers have used customer-service campaigns for defects related to steering systems, airbags and headlights.
“There’s a ton of stuff that goes under the radar screen in the form of technical service bulletins and goodwill campaigns and hidden warranties,” Gabriel Shenhar of Consumer Reports told Automotive News. “It’s to the benefit of the customer to have it done as a recall, so it doesn’t go under the radar screen.”
An obvious reason why companies might want to fly under the radar is cost. While more than 70 percent of recalled vehicles get repaired, just 40 to 50 percent of vehicles covered by non-recalls do.
The result is less money reimbursed to dealers for repairs. And customers of less-informed garages or dealers are more apt to miss out on non-recalls compared to recalls, an omission that could force them to pay for repairs out-of-pocket.
“Everybody has recalls,” Shenhar said. “Recalls are better than the alternative. It’s better that the manufacturer is above-board and says, ‘We should have done it a little better in the first place, and we’re inviting you to get it fixed.’”
Strong Action by Regulators Could Prompt More Recalls
Vehicle manufacturers may rethink their stance on non-recalls after a year that’s seen multiple investigations of GM’s ignition recalls and the $1.2 billion penalty paid by Toyota over vehicles that accelerated uncontrollably.
The Toyota problem was handled as a criminal matter and prosecuted by the Justice Department. A report in the Wall Street Journal says that NHTSA was limited to a $66 million fine for the issue.
“If you’re looking at a billion-dollar fine, it changes your calculus,” said Clarence Ditlow of the Center for Auto Safety.
According to the NHTSA website, more than 390 million cars, trucks, buses and other vehicles have been recalled since 1966.
Through the first half of 2014, U.S. automakers had recalled around 40 million vehicles – an all-time record. General Motors alone has issued more than 40 separate recalls affecting 26 million vehicles.