AutoNation halts sales of used cars affected by air bag recalls

29 Oct 2014 | Author: | No comments yet »

AutoNation Halting Sales of Cars Subject to Takata Airbag Warnings.

WHEN regulators sleep and auto companies place profits over safety, safety defects pile up. DETROIT (AP) — The head of the nation’s biggest car dealership chain says it won’t sell used cars being recalled for exploding air bags due to conflicting advice from automakers and lack of direction from the government.DETROIT (Reuters) – AutoNation Inc (AN.N), the largest U.S. auto retail group, has stopped selling cars equipped with Takata Corp (7312.T) air bags involved in a massive global recall involving more than 16 million vehicles, Chief Executive Mike Jackson said on Tuesday. “We as a company have made the decision not to retail any vehicle that is involved in this recall until it is repaired and the vehicles that do come in for service, we are advising the customer not to put a passenger in front of that air bag until it’s repaired,” Jackson said in an interview with Reuters.US car safety regulators have expanded a recall of vehicles with potentially dangerous airbags made by Japanese auto parts supplier Takata to 7.8 million.

A record number of vehicles — more than 50 million — have been recalled this year, a result of congressional hearings and Justice Department prosecutions, which exposed a mass of deadly defects that the auto industry had concealed. The National Highway Traffic Safety Administration (NHTSA) warned that owners should take “immediate action” as when deployed, the airbags have the potential to eject deadly shrapnel at passengers. From the Ford Explorer rollovers in the 1990s and Toyotas’ issue with unintended acceleration in the 2000s to the recent fatal consequences of defective General Motors ignition switches and Takata airbags, the auto companies hid defects to avoid recalls and save money.

The move comes amid complaints of uneven recall and safety campaigns by auto makers to deal with the 7.8 million older cars containing air bags that can explode with too much force during a crash, spraying drivers and passengers with metal and plastic debris. “We have a very difficult situation on our hands,” AutoNation Inc. The agency has told those who might own affected vehicles to check the list at www.safercar.gov, and specifically warned those living in more humid climates such as Florida and Hawaii to get their vehicles inspected. “Responding to these recalls, whether old or new, is essential to personal safety and it will help aid our ongoing investigation into Takata airbags and what appears to be a problem related to extended exposure to consistently high humidity and temperatures,” said NHTSA deputy administrator David Friedman in a statement. These and other major defects were first exposed by safety advocates who petitioned the government and by reporters in the tradition of Bob Irvin of The Detroit News, who wrote over 35 articles on Chevrolet engine mounts until General Motors agreed to recall 6.7 million vehicles in 1971.

Earlier on Tuesday, Reuters reported that Takata is unlikely to be dumped by its automaker customers given the cost and disruption of such a move – for now. “There should be some entity that says to the industry: ‘Look, every individual manufacturer doesn’t get to make a decision here. The recall notices have been ongoing for the past 18 months, but regulators and car manufacturers have warned that only a small percentage of those cars potentially affected have been returned and inspected. The majority of the affected vehicles – more than five million – are Honda cars manufactured between 2001 and 2011, including the Accord, Civic, and Pilot models.

At the same time, some auto makers have advised drivers awaiting replacement parts to bar passengers from sitting in the front seats or disconnect the air bags to prevent them from inflating. Jackson said, some manufacturers are authorizing replacement of the air bag inflators, some are telling dealers to remove passenger side air bags, others are telling dealers just to inform customers of the potential problem or put a warning sticker in the cars. In May 2009 a student driving a 2001 Honda Accord bumped into a car in a parking lot outside Oklahoma City, causing the airbag to explode and shrapnel to slice the driver’s carotid artery leading to her death.

In order to prevent the risk of death or serious injury, Congress empowered the agency to oblige auto companies to use alternate suppliers and independent repair shops to manufacture parts and make repairs to expedite a recall fix. Certain car makers such as Ford Motor Co. and Mazda Motor Corp. are providing replacements only for vehicles registered in a few high-humidity southern states, Puerto Rico and the U.S. Department of Transportation Secretary Anthony Foxx said at a workshop in New York that he has asked the DOT inspector general’s office to review NHTSA’s handling of the Takata issue. “I’ve also asked our team to do a due diligence review,” Foxx said. “I make no apologies for taking a look at our safety posture as an agency. In August 2014, an inflator ruptured in a 2005 Honda Civic in the United States, sending a “one-inch piece of shrapnel into the driver’s right eye”, according to a complaint filed with NHTSA.

Yet the N.H.T.S.A. has never used this authority — even though it took General Motors from February to October to get enough parts to dealers to repair all the recalled ignition switches. It’s like a check up, and I think it’s a good practice for us to do.” He said one automaker advised dealers to tell consumers to continue to drive the car because the chance of an incident was rare. Only after a lengthy delay was the agency prodded, in 2009, into opening an investigation into whether the first two Honda recalls of Takata airbags were adequate. Although the agency asked tough questions, it quickly closed the investigation after Takata hired a former senior N.H.T.S.A. official to represent the company.

On Monday, consumers filed a proposed class action suit in Florida against Takata and several automakers including Honda Motor Co (7267.T) and Toyota Motor Corp (7203.T), claiming the companies defrauded them by concealing crucial information. A couple of months ago, Michael Johnson received a notice from BMW AG saying the passenger-side air bag in his 2003 325i sedan was at risk of rupturing in a crash but saying parts weren’t then available. The Los Angeles resident is waiting to have the repair performed. “You get this notice that says, ‘hey, there is a problem and it can send pieces of metal flying into you, but we’ll let you know when we get parts,’” he said. “I wouldn’t feel good about having someone else, or a child, in the passenger seat knowing I’m putting them at risk,” he said.

So far NHTSA says it hasn’t found problems outside of the following areas: Florida, Puerto Rico, limited areas near the Gulf of Mexico in Texas, Alabama, Mississippi, Georgia, and Louisiana, as well as Guam, Saipan, American Samoa, Virgin Islands and Hawaii. Ammonium nitrate is the compound responsible for a number of fertiliser and explosive plant blasts over the years, most recently at the fertiliser storage facility at West in Texas in 2013 which killed 15 and injured more than 160. Takata has identified several manufacturing problems with its inflators, including some at a plant in Moses Lake, Washington, and at Monclova, where the ammonium nitrate was exposed to too much moisture inside the air-conditioned plant. The recalls have been enormously expensive for the company – Takata shares have lost more than 50% of their value this year – and also for the auto manufacturers that use its airbags. NHTSA said long-term exposure to these conditions could result in the defect, but snowbirds who travel to these regions during the winter aren’t “at the same level of risk.” “If a national recall were issued, despite evidence indicating the problem is not happening nationally, it would divert supply of air bags from those areas at demonstrated risk,” the agency said.

Glassman and Paul Jackson Rice, who all served as chief counsel to the agency — have gone on to become consultants, lawyers or expert witnesses for auto companies. Under an agreement with NHTSA officials earlier this year, Takata said it “would not be expected to admit that its products contain such a defect” and the same applies for its auto maker customers, according to documents filed with the agency.

Karl Brauer, a senior analyst with Kelley Blue Book’s KBB.com, owns a Ford GT but lives in California—outside the region where Ford has said it would to conduct repairs on the car. Although Congress has given the N.H.T.S.A. regulatory tools that the agency failed to use, Congress has not given it the two things it needs most: sufficient funding, and the power to bring criminal penalties against auto companies. Since the National Traffic and Motor Vehicle Safety Act was enacted in 1966, the industry has blocked any meaningful provision for criminal penalties that would make company executives who concealed defects or decided not to recall dangerous vehicles subject to prison sentences. All auto companies should have an independent, government-certified safety ombudsman to investigate complaints from whistle-blowers and to report defects directly to the chief executive and the agency. They must demonstrate that they see auto companies as an industry to be regulated, rather than partners whose profits and sales must be protected at the public’s expense.

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