What’s behind 2014’s record-breaking number of recalls?
It’s been an unprecedented year for auto recalls with more than 56 million cars and trucks—one in five vehicles—recalled this year in the United States alone.
The flurry of recalls have been for problems that run the gamut and have included high-profile cases such as General Motor’s faulty ignition switches, Takata’s exploding airbags and Chrysler’s failing alternators and power-mirror wiring.
Whether minor inconveniences or serious safety lapses, 2014’s recalls have cost automakers billions of dollars and dented the reputations of automakers and regulators.
The previous record was 30.8 million recalls in 2004.1 Considering that mechanical and electrical sophistication, quality and safety in today’s vehicles are at their highest levels ever,2 an obvious question: "Why all the recalls?" The answer isn’t simple.
Global supply chain
One reason for the rash of recalls, said David Whiston, an equity analyst at investment research firm Morningstar, is a movement to standardize parts across the globe. That’s helpful for carmakers, "but, when something goes wrong, it will now go wrong across a much wider number of vehicles than people are used to hearing about in the news for a recall," he said.
According to Kelley Blue Book senior analyst Karl Brauer, high-volume recalls are a downside of an increasingly global automotive supplier base. "We’ve moved from having hundreds of automotive suppliers that each served a small part of the industry to having a dozen or so suppliers doing almost everything," he said. "This means one problem with a supplier can impact a wide range of makes and models."3
Ron Berglund, a quality and performance improvement expert in Detroit, attributed the record-breaking year to automakers issuing recalls to quickly fix even the smallest problems. "There is heightened awareness of quality by automakers, regulators and the media, which creates the perception of a so-called ‘quality crisis,’" he said.
"I think the industry is a little bit jittery," said Rene Stephens, J.D. Power and Associates vice president.
Automakers seem to be erring on the side of caution and would rather issue a recall than have its corporate social responsibility questioned, Stephens said.4
This year, federal prosecutors fined Toyota $1.2 billion, the largest criminal penalty for an automaker in the United States, after Toyota admitted to concealing information and misleading the public about the safety issues behind recalls of 10 million cars.
GM also made headlines this year after it was revealed that GM waited 11 years to recall millions of cars with faulty ignition switches because it wanted to avoid costly replacements. That defect has been tied to 29 deaths and 27 injuries and potentially hundreds more.5
Regulators are also under more scrutiny in their handling of recalls. The spike in recalls could be linked to the National Highway Traffic Safety Association’s (NHTSA) crackdown on automakers in an effort to prove its effectiveness to Congress and the public.6
An investigation by the New York Times in September showed the NHTSA has been consistently slow to identify problems, take action and use its full legal authority against automakers. In many known vehicle safety issues of late—including the exploding airbags made by Takata—the NHTSA did not intervene until the problems had escalated to a crisis level and motorists were injured or killed.
"The problem is that in North America, safety is not job No. 1 for any of the car companies, and any of the regulatory agencies here in the U.S. or Canada are not up to the job of policing the auto industry," said Clarence Ditlow of the U.S. Center for Auto Safety.7
With a staff of 51 people and a budget of $10 million, the investigative arm of the NHTSA researches 40,000 consumer complaints a year in addition to recalls initiated by automakers. Concerned about safety lapses by the country’s top auto regulator, the Department of Transportation recently opened an investigation into the risk management and safety culture of the NHTSA for the Obama administration.8
Although this year’s recalls may be troubling, Berglund suggested the greater problem is that consumers often ignore automakers’ requests to fix problems. "Recalls are now considered ‘news’ rather than information between consumers and manufacturers," Berglund said.
Nearly one-third of recall notices mailed to vehicle owners are ignored, according to the NHTSA. Additionally, the media frenzy stirred up by each recall could be causing automotive recall fatigue.9
"We’re living in what we’re now referring to as the year of the automotive recall and unfortunately the population of drivers may become numb to that," said Mike Rozembajgier, a vice president of Stericycle, a medical waste management service in Indianapolis that provides recall readiness training and handles product recalls and retrievals for the healthcare industry.
"People begin to think, ‘I already checked,’ or ‘That’s not my car,’ or ‘That’s not that serious.’ But they’re all serious. They all have safety implications," he said.
The NHTSA has criticized automakers for downplaying the severity of problems.
"The letter that goes to the consumer is the most critical factor in getting a higher level of response," said Joan Claybrook, former NHTSA head and longtime traffic safety advocate. "A lot of times it’s pablum. The auto companies dumb it down so it doesn’t say, ‘Alert, alert, you could die.’"
—Megan Schmidt, contributing editor
- Brent Snavely, "Automakers Set Recall Record and Mostly for Basic Issues," Detroit Free Press, Oct. 20, 2014, www.freep.com/story/money/cars/general-motors/2014/10/19/gm-chrysler-ford-toyota-nhtsa-recalls-record-year/17473167.
- Manmeet Malhi, "Life in the Times of Automotive Recalls," Automotive World, Nov. 3, 2014, www.automotiveworld.com/megatrends-articles/life-times-automotive-recalls.
- Snavely, "Automakers Set Recall Record and Mostly for Basic Issues," see reference 1.
- Drew Harwell, "It’s the Worst Year Ever for Auto Recalls. Why Are So Many Dangerous Cars Still on the Road?" Washington Post, Oct. 22, 2014, www.washingtonpost.com/blogs/wonkblog/wp/2014/10/22/its-the-worst-year-ever-for-auto-recalls-why-are-so-many-dangerous-cars-still-on-the-road.
- Snavely, "Automakers Set Recall Record and Mostly for Basic Issues," see reference 1.
- Rebecca R. Ruiz and Julie Hirschfeld Davis, "Administration Will Review Auto Safety Regulator," New York Times, Oct. 24, 2014, www.nytimes.com/2014/10/25/business/white-house-will-review-auto-safety-regulator.html.
- Chris Bruce, "Obama Administration Eyeing New NHTSA Boss After Safety Lapses," Auto Blog, Oct. 30, 2014, www.autoblog.com/2014/10/30/nhtsa-investigation-overhaul-new-director-report.
- Harwell, "It’s the Worst Year Ever for Auto Recalls. Why Are So Many Dangerous Cars Still on the Road?" see reference 5.
KATHARINE E. MORGAN was chosen to succeed James A. Thomas as president of ASTM International, formerly known as the American Society for Testing and Materials. Morgan currently serves as vice president of technical committee operations and will transition to ASTM executive vice president next year before she assumes the top spot when Thomas retires in early 2017. For more information about Morgan’s background, visit www.astmnewsroom.org/default.aspx?pageid=3595.
THE AMERICAN NATIONAL Standards Institute unveiled its new website. The look of the website has been modernized, and site processes operate more quickly. Visit www.ansi.org to see the enhancements.
HOWARD HARARY WAS appointed director of the National Institute of Standards and Technology’s engineering lab, which develops the measurement tools and standards needed to support technology-intensive manufacturing, construction and cyber-physical systems. The lab also conducts research to reduce the risks of fire, earthquakes and other hazards. For more on Harary’s appointment, visit www.nist.gov/el/harary-110514.cfm.
THE LEAPFROG GROUP, a national hospital safety watchdog group, updated its patient safety ratings for more than 2,500 general hospitals in the United States. The group’s healthcare safety scores assign A, B, C, D and F grades to hospitals based on their ability to prevent errors, injuries and infections. To check out the ratings, visit www.hospitalsafetyscore.org where you can search hospitals by name, city, state or zip code.
ASQ Journal Spotlight
QP occasionally highlights an open-access article from one of ASQ’s seven other journals.
This month, read "Parametric Yield Modeling Using Hidden Variable Logistic Regression," which appeared in the October edition of the Journal of Quality Technology (JQT).
In it, authors Jung Yoon Hwang of Samsung Electronics and Hyun Cheol Lee of the Korea Aerospace University demonstrate that hidden variable logistic regression outperforms logistic regression in terms of integrated mean-squared error through Monte Carlo simulation-based investigations.
To access the 17-page article in PDF format, click on the "Current Issue" link on JQT’s website: http://asq.org/pub/jqt.
From there, you also can find a link to information about subscribing to the quarterly publication.
NEW CASE STUDY A new case study on quality and forensic techniques was released by ASQ’s Knowledge Center. The study describes how quality helped assess the effectiveness of a quality management system used in a pipeline project in West Africa. To access this members-only content, visit http://asq.org/knowledge-center/case-studies-forensic-techniques-reveal-conclusive-evidence.html.
CULTURE TOOL A new assessment tool to help you gauge your organization’s culture of quality was launched. The tool grew from the ASQ/Forbes Insights culture of quality research earlier this year, which resulted in the white paper, "Culture of Quality: Accelerating Growth and Performance in the Enterprise." Access the tool and the 40-page white paper at www.cultureofquality.org.
PARTNER ADDED The International Academy for Quality (IAQ) has joined ASQ’s World Partners program. The World Partners are a group of 21 organizations across the Americas, Asia, Europe and the Middle East that share similar visions and goals to those of ASQ in promoting quality and continuous improvement fundamentals. "IAQ—whose members include a select group of quality thought leaders from around the world—offers their important voice to the global quality chorus," said ASQ Chair Stephen Hacker. For more on the partnership program, visit http://asq.org/global/world-partner-program.html.
Word to the Wise
To educate newcomers and refresh practitioners and professionals, QP occasionally features a quality term and definition.
A graph to determine the probability of accepting lots as a function of the lots’ or processes’ quality level when using various sampling plans. There are three types: type A curves, which give the probability of acceptance for an individual lot coming from finite production (will not continue in the future); type B curves, which give the probability of acceptance for lots coming from a continuous process; and type C curves, which (for a continuous sampling plan) give the long-run percentage of product accepted during the sampling phase.
- "Quality Glossary," Quality Progress, June 2007, p. 52.
Date in Quality History
QP occasionally looks back on an event or person that made a difference in the history of quality.
Dec. 10, 1976
Harold F. Dodge, one of the principal architects of the science of statistical quality control, died on this date.
Dodge was born in Lowell, MA, in 1893. He earned a degree in electrical engineering from the Massachusetts Institute of Technology in 1916 and a master’s degree in physics and math from Columbia University in 1922.
Dodge was a statistician at Bell Laboratories from 1917 to 1958. At Bell in the 1930s, Walter Shewhart introduced the theory of using statistical methods to solve quality control problems. Dodge and a colleague, Harry G. Romig, are credited with building on Shewhart’s statistical process control concepts by introducing acceptance sampling methods.
The Dodge-Romig Sampling Inspection Tables have been called Dodge’s most important work. During his tenure at Bell, he developed the basic concepts of acceptance sampling, such as consumer risk, producer risk, double sampling, lot tolerance percentage defective and average outgoing quality limit. He originated several types of acceptance sampling schemes, CSP-type continuous sampling plans, chain sampling plans and skip-lot sampling plans.
He chaired the ASQ Standards Committee for many years and was chairman of the American Society for Testing and Materials Committee E-11 on statistical methods. He is one of ASQ’s most often-honored members: Dodge was the second recipient of the Shewhart Medal (1949), sixth recipient of the Grant Award (1972) and fifth honorary member (1965). He was also a fellow and founding member of the society.
Who’s Who in Q
NAME: Edwin Garro.
RESIDENCE: San José, Costa Rica.
EDUCATION: Master’s degree in manufacturing engineering from the University of Massachusetts (UMass) in Lowell.
INTRODUCTION TO QUALITY: Quality was part of Garro’s undergraduate curriculum when he studied industrial engineering at the Costa Rica Institute of Technology in Cartago. He was familiar with the subject, but two of his mentors at UMass, Paul Kales and Sammy Shina, helped him fall in love with quality. Attending a lecture presented by W. Edwards Deming at UMass also greatly influenced Garro.
CURRENT JOB: President of PXS Performance Excellence Solutions, a training and consulting company in Costa Rica. Partner at Ludovico, an offset print shop in San José. Also involved with a software company and an online training start-up.
OTHER NOTEWORTHY JOBS: Quality engineer and quality manager at Panduit in Grecia, Costa Rica.
ASQ ACTIVITIES: Founder and past president of Section 6000, a local member community in Costa Rica. Country counselor for ASQ in Costa Rica.
OTHER ACTIVITIES: Garro’s company is active in feeding the homeless and others in need in San José. The company also offers scholarships to students.
PUBLISHED WORKS: Garro regularly contributes articles about continuous improvement to the business section of El Financiero, the main management journal in Central America. He also has contributed to Quality Council of Indiana books and writes the blog "Punto de Vista PXS." Garro was named a blogger for ASQ’s Influential Voices of Quality.
RECENT HONORS: Garro was part of the 2013 class of ASQ fellows.
PERSONAL: Married to Carmen Carranza for 24 years. Three college-aged children.
FAVORITE WAYS TO RELAX: Reading, listening to music, traveling and physical fitness activities.
QUALITY QUOTE: Quality professionals are like the movie character Nanny McPhee (a 2005 fantasy film). Paraphrasing one of her quotes: "When we are needed, but not wanted—then we must stay. When we are wanted, but no longer needed—then we must go." This is the life of quality trainers and consultants, mostly when dealing with top management. Paraphrasing a quote from St. Francis of Assisi: "Spread excellence at all times, and when necessary, use words." This can apply to quality professionals, who must lead by example.