Could GM's Recall Problem Have Been Avoided With More Funding For NHTSA?

April 4, 2014

Along the road to the massive recall known as "Switchgate", many, many things went wrong at General Motors. Perhaps most importantly, we now know that GM was aware of ignition-switch flaws on certain Chevrolet, Pontiac, and Saturn vehicles as early as 2001 -- long before the first of the recalled models reached showrooms, and a staggering 13 years before the automaker issued a formal recall. 

This week on Capitol Hill, CEO Mary Barra acknowledged GM's mistakes and said that the company was conducting an internal investigation to determine how the ignition switch problem could've lingered so long. It's commendable that Barra took responsibility for the goof-up (which, by strange/sad coincidence hit the headlines during her first few weeks on the job). But could the National Highway Traffic Safety Administration also be to blame?

According to Detroit News, representatives from the Department of Transportation also attended this week's hearings in Washington, D.C. And among the things unearthed during their testimony was the fact that NHTSA's defect investigation division has just 51 employees, who are tasked with tracking and evaluating every complaint lodged by U.S. car owners.

Of NHTSA's $800 million annual budget, it spends around $10.1 million -- just 1.25 percent -- on defect investigation. And most interestingly of all, that $10.1 million figure has remained flat for about a decade.

If you can't help noticing that NHTSA's period of flat-funding for defect investigations overlaps a bit too neatly with GM's ignition switch problem, you're not alone. Senator Claire McCaskill (D-MO), who chaired this week's hearings, noticed it too and subsequently lobbed NHTSA Administrator David Friedman a softball question about whether $10 million is enough to handle the huge number of vehicle probes in the U.S. 

Though he didn't attempt to avoid blame entirely, Friedman told McCaskill that the agency needs more funds to secure better analytic equipment and the human resources to use it. Perhaps in response to those statements, Representative Henry Waxman (D-CA) proposed upping the recall penalties levied against automakers from $35 million to $200 million.

Would more money have helped in the case of GM's recall? Maybe.

In 2007, an investigator at NHTSA proposed a formal investigation of GM's ignition switches. A few months later, in 2008, a NHTSA report indicated that there was a direct link between those switches and air bag failures. On both occasions, NHTSA declined to conduct further investigations. It's entirely possible that the agency did so due to a lack of resources.

Friedman said that he didn't know why NHTSA failed to carry out probes of GM vehicles, but an internal investigation is being conducted by the DOT Inspector General to find out. 


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