By Jamie LaReau, Crain News Service
DETROIT (Nov. 7, 2014) — Mounting recalls this year are a “black eye” for the auto industry, AutoNation Inc. CEO Mike Jackson said Nov. 6.
The poorly handled recalls have resulted in an impression “seeping into the American consciousness that the industry does not have a coherent plan” to properly handle safety recalls, the head of the nation's largest auto retailer told the Detroit Economic Club.
“It's painful to say, as an independent entrepreneur, but it would appear that we need a stronger NHTSA than what we have today,” Mr. Jackson said after his speech, referring to the National Highway Traffic Safety Administration (NHTSA).
“When you have a recall that goes across manufacturers, the idea that every manufacturer should be self-regulated and can come to its own conclusion, but those conclusions are very different from one another — I simply think it doesn't work.”
10 auto makers
Nearly 8 million 2000-04 model-year vehicles made by 10 auto makers containing faulty airbags made by Takata Corp. have been tagged by regulators as potentially at risk. The airbags can explode with too much force during a crash, spraying metal and plastic debris.
Although the 10 auto makers' recalls address the same issue on front, passenger-side airbags, their recall instructions have varied widely. Some have said the cars must be fixed immediately or have the passenger-side airbag disabled, while others have suggested a tag be put in the cars urging passengers not to sit in the front seat.
The Takata-related recalls follow actions earlier this year by General Motors Co., which recalled millions of vehicles for various safety defects including faulty ignition switches on older model cars.
Safe to drive?
Mr. Jackson said NHTSA should force those 10 car makers affected by the Takata recalls to meet and agree on a uniform protocol for dealers to follow in handling the repairs, particularly if parts are not immediately available.
“The first question [NHTSA and manufacturers] should be asked to answer: Are the cars safe to be driven until the parts are available to do the repairs?” Mr. Jackson said. “That's what people are asking us and I've gotten a range of answers that go from, ‘The occurrences are so rare, keep driving,' to ‘Disconnect the airbags,' to ‘Put a sticker on it.'”
Mr. Jackson said if he were grading NHTSA on its handling of this recall, “They get an F.”
As for the airbag manufacturer Takata, Mr. Jackson said the information on Takata's website has either been confusing or flat-out wrong.
“They sent a letter to every manufacturer telling them to move urgently and expediently, but nowhere did they answer the question: Is the car safe to drive while we wait for parts to make repairs? That's what every one wants to know. It's a common-sense question. And nobody is saying yes or no,” Mr. Jackson said.
“I don't think you should leave the American people whipping in the wind, if you will, trying to come to their own conclusions.”
Mr. Jackson called “manageable” whatever costs AutoNation has associated with the recall repairs.
“We've come to the conclusion that any one of these cars in our inventory for which we do not have the parts to repair, we will not sell the car. We have a sale-hold on the car,” Mr. Jackson said. “That doesn't mean we wholesale it back into the system like some other companies are doing and it disappears into the black hole of the market.”
Earlier, AutoNation had said it has about 400 of the older cars covered by the recalls on its lots.
If customers come in for a repair and AutoNation does not have the part to do it, they get a hang-sticker in the car warning not to allow any passenger to sit in the front seat.
Penske Automotive Group Inc., of suburban Detroit, previously said it also will halt retail sales of the impacted vehicles until they are repaired. But Tony Pordon, Penske's executive vice president of investor relations and corporate development, said the retailer gives its dealerships the chance to wholesale them “to get rid of the vehicle instead of sitting on it.”
This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.