Why Are So Many Cars Being Recalled?

Safety recalls for automobiles sold in the U.S. have soared in recent years, leaving many consumers wondering if the big numbers mean vehicle reliability and safety are declining.

It's a valid question.

The number of passenger vehicle recalls in 2016 set a record of 927 campaigns, exceeding the 2015 record by 7 percent. Perhaps more disturbing to consumers, the total number of cars and light trucks subjected to recalls has increased. More than 53.2 million passenger vehicles were recalled in 2016 compared to 51.1 million in 2015. That made three straight years of record-setting automotive safety recalls of more than 50 million individual vehicles.

Should You Worry?

That depends on the model of car you drive and its year of manufacture. Most of the vehicles recalled have been older models with newly discovered problems, not brand-new cars. The problem with cars on the road with unresolved recalls is acute, however. The National Highway Traffic Safety Administration urges owners to check their vehicle identification number at NHTSA's recalls page a couple times a year, just as they check the batteries in their home smoke detectors.

One example is the largest safety recall in automotive history: the highly publicized recall of millions of defective airbag inflators produced by the Takata Corp. The inflators, which include a metal cartridge that can shatter unexpectedly with explosive force, have been tied to at least 16 deaths worldwide. NHTSA estimates that the Takata recall affected 42 million 2002-2015 model-year vehicles in the U.S. containing between 65 million and 70 million airbags. In the wake of the scandal, Takata filed for bankruptcy and pleaded guilty to a felony charge. Repairs, penalties and litigation continue.

Another well-known example is the recall of 30 million GM cars and trucks with faulty ignition switches that can turn off the engine while the car is being driven, causing sudden power loss and preventing airbags from functioning in a collision. Crashes resulting from these defective switches, manufactured by Delphi Automotive, have caused 124 deaths. The recall came when GM acknowledged the problem after not doing so for a decade or more. Most of the vehicles come from the 2004-2010 model years.

The increasing use of common parts and suppliers across multiple model lines, and even by multiple automakers, has made it possible for a substantial number of vehicles to be affected when a faulty component or software problem forces a recall. Add to that stepped-up oversight of automakers by NHTSA and the Department of Justice, as well as media pressure and a greater degree of self-reporting than ever before, and it becomes easy to see why recalls have reached record highs.

But that doesn't mean car shoppers should put their buying plans on hold. Safety specialists, automakers and regulators alike insist that although the number and volume of recalls have reached record levels, there is no indication that cars are less safe than in the past. In fact, with required equipment such as antilock brakes, electronic stability control and multiple airbags, vehicles are safer than ever. And the growing availability of even more sophisticated features — such as automatic braking, adaptive cruise control and lane keeping assist — promises to make them even safer.

Federal Agency Pressure Is On

Why, then, are there so many recalls?

One key ingredient is stepped-up government pressure on automakers to order recalls. Congress and the media have been lambasting NHTSA for missing signs that could have resulted in a much earlier recall of, for instance, the GM vehicles with faulty ignition switches. As a result, the agency has become even more vigilant than in the past, acting much more quickly when defects are reported.

But NHTSA has only about 600 employees who, among other duties, are expected help ensure the safety of more than 260 individual car models and more than 260 million registered vehicles in the U.S. That compares to around 50,000 people employed by the Federal Aviation Administration who monitor about 8 million aircraft takeoffs and landings per year.

In addition to being understaffed, NHTSA has limited fining authority. The maximum fine now allowed is $35 million per incident, which is not a huge amount for major car companies. The agency has asked Congress to increase that to $300 million and give it additional enforcement power it now lacks, such as authority to order an immediate recall when it determines that public safety is at stake. Currently, that process can take months of negotiations with the affected automaker. If NHTSA gets that authority, expect it to be more aggressive in ordering recalls over the objections of carmakers, something that rarely happens now.

But even without increased regulatory authority for NHTSA, it appears that some positive change is taking place.

Ever since the Justice Department fined Toyota $1.2 billion in 2014 for misleading the public about vehicles suspected of unintended acceleration, and the adverse effects of the Takata airbag inflator and GM ignition switch recalls, there's been a sea change in how the industry looks at defects. Automakers have taken note of these cases and begun to do a better job of self-policing in order to avoid fines and bad publicity. As a result, manufacturer-initiated recalls have risen considerably in recent years.

In addition, a number of consumer advocacy groups around the world have increased their efforts to both monitor patterns of automotive defects and put pressure on automakers and government regulatory agencies to take action when problems are uncovered. These groups have also often been critical of agreements and settlements between manufacturers and regulators and weighed in on penalties that have been assessed to increase public awareness of how recall issues are being resolved.

Sell More Cars, Recall More Cars

Another factor that adds to recall numbers is success in the marketplace. Following disastrous sales in the economic downturn that began in 2008, major automakers experienced a steady comeback, eventually setting all-time U.S. sales records in 2015 and 2016, years in which recalls also reached record numbers.

The Takata recall alone affected some of the best-selling automotive brands in the country. For example, Honda has recalled more than 11 million vehicles, Toyota 6 million, Dodge/Ram more than 5 million, Nissan more than 4 million, Ford 3 million and Chevrolet almost 2 million.

As part of their recovery efforts in the wake of the recession, manufacturers looked to common suppliers as a means of reducing costs and increasing profitability. So at the same time sales were going up, the use of shared parts also increased, compounding the likelihood of a defective item affecting more automakers and more vehicles.

What Automakers Say

Carmakers are generally more sensitive to public opinion these days and more willing to order a recall without being required by NHTSA to do so. They acknowledge, though, that NHTSA has gotten a bit tougher on them recently. Car companies also have seen that prompt recalls can save money, because assembly line errors can be corrected or faulty parts fixed before being installed in vehicles and affecting an even larger number of customers.

Automakers also seem to be ordering recalls lately for issues that in the past would have been handled in a more low-key manner, such as through technical service bulletins. These bulletins are notices to dealership service departments to check for and fix a particular problem when a customer brings a vehicle in for a regular service or repair.

Automakers also point out that general improvements in vehicle reliability have extended the life of most cars and added to the numbers when recalls are ordered, especially since the majority of recalls involve older models. The average age of passenger vehicles on U.S. roads has reached a record-setting 11.6 years, greatly increasing the potential number of cars that could be subject to a recall.

Lesson Learned?

The big question is: What have automakers learned from all this, and what are they doing about it?

Perhaps the biggest takeaway from the highly publicized recall scandals is that manufacturers need to take responsibility and get in front of issues as soon as they come to light. Trying to deny that a problem exists or sweeping it under the rug never works. Pursuing this course of action invariably not only risks additional injuries and possible fatalities, it also means the worst kind of publicity and more fodder for lawsuits and more damaging court-ordered settlements.

A good example of how to deal with a defective product is the 1982 incident in which seven people died from cyanide-laced Extra Strength Tylenol. At the time, the pain reliever was Johnson & Johnson's best-selling product, and many analysts predicted the publicity from the malicious tampering would be the end of the company. In an unprecedented move, Johnson & Johnson immediately recalled 31 million bottles of the Tylenol capsules and replaced them with safer tablets at no charge. Rather than being ruined, the company emerged as a shining example of corporate responsibility.

Another lesson that automakers should have learned is that increased reliance on a supply chain leaves the manufacturer at the mercy of its weakest link. For example, while Takata, its employees and its reputation suffered greatly from the inflator recall, the individual automakers that installed those products in their vehicles were left taking most of the heat, both in terms of expense and public opinion. So the car companies will need to find new ways to handle quality control while continuing to make use of outsourcing to streamline production processes and cut costs.

Finally, while manufacturers strive constantly for growth, greater sales increase the possibility of larger-scale problems. Component defects can make their way through more vehicle models as a result of shared suppliers, but defects can also spread like wildfire as sales increase. The major challenge for automakers is how to sell more vehicles and hold down costs while keeping an eye out for potential issues that can cost lives and imperil companies.