Auto
Safety Lapses Evoke the Bad Old Days
By Phil Mattera in the Dirt Diggers Digest
The
Big Three carmakers, once considered the epitome of corporate irresponsibility,
have been viewed in a more favorable light in recent years.
After
their near-death experience of a few years back—during which two of them,
General Motors and Chrysler, went bankrupt and had to be rescued by the federal
government—the consensus seems to be that they have cleaned up their act. They
are also being rewarded in the marketplace, where Detroit’s sales have been
booming.
Recently,
the National Highway Traffic Safety Administration finedFord
Motor $17.35 million for taking too long to recall more than 400,000 SUVs that
were susceptible to sudden acceleration, a problem that was linked to at least
one death and nine injuries in crashes.
If
you hadn’t heard about this case, it may have been because NHTSA decided not to
issue a press release about the penalty. Word got out and the matter received
modest coverage in a few newspapers. It was only the Corporate Crime
Reporter that gave the story the prominence it deserved:
front-page treatment.
The
Ford penalty came a couple of months after Chrysler took the unusual step
of refusing to
acquiesce to NHTSA’s request that it recall 2.7 million Jeeps the agency
contends are defective and prone to fires in the event of rear-impact
collisions.
Chrysler, now controlled by Italy’s Fiat, later relented but
applied the recall to only 1.6 million vehicles. Moreover, its fix for the
problem—installing trailer hitches on the vehicles—was dismissed as
inadequate by the watchdog Center for Auto Safety, had been responsible for
bringing the defect to light.
One
would think that Ford, in particular, would be more diligent on safety issues,
given the hard lessons of its past. This was the company, after all, that
produced those ill-fated Pintos, whose unshielded fuel tanks near the back of
the fragile compacts caused horrific explosions in rear-end collisions.
Evidence later emerged that Ford was aware of the vulnerability of the gas
tank, but went ahead with production of the car. In one civil case a jury
awarded $125 million in damages (reduced by the judge to $3.5 million).
Ford
was also embarrassed by reports that many of its cars with automatic
transmissions produced during the 1970s had a tendency to slip from park into
reverse. In 1981 federal regulators forced the company to send warning notices
to purchasers of some 23 million vehicles about the problem. Ford may not have
been happy about this, but it was a lot less onerous than the massive recall of
the cars that had been urged by public interest groups.
In
1996 Ford gave in to
public pressure and agreed to pay for replacing ignition
switches on more than 8 million cars and trucks that were prone to short
circuits that could cause fires. In 1998 State Farm, the largest auto insurer
in the United States, suedFord,
charging that the company withheld information about the potential fire hazard
from federal regulators and the public.
In
1999 NHTSA hit Ford with a $425,000 fine in
the matter. An investigation later revealed
evidence that Ford knew about ignition defects, which also sometimes
caused vehicles to stall out while making turns, but remained silent. A
California judge then orderedthe
recall of an additional two million vehicles—the first time a U.S. court had
ever taken such an action against automaker.
In
2000 Bridgestone/Firestone announced a massive recall of tires, most of which
had been installed on Ford sport-utility vehicles and light trucks. Ford alleged that
the tire company had known of the defects for several years. Information
later came out suggesting
that Ford, as well as Bridgestone/Firestone, had known of the tire defects long
before the recalls were announced.
An
investigation by
the New York Times found that in the 1980s Ford had taken a
number of design shortcuts that raised the risk of rollover accidents in what
would become its wildly popular Explorer SUV.
What
a track record. Let’s hope we are not returning to those bad old days of
automaker recklessness.
Note:
The latest addition to my CORPORATE RAP SHEETS is a dossier on Monsanto,
the bully of agricultural biotechnology. Read it here.