For automakers, this is the year of the recall

Washington Post

It's becoming the year of the recall: Automakers have recalled more than 28 million vehicles in the United States this year - more than one in 10 vehicles on the road - putting the industry on track to trample the 2004 record of 30.8 million.

On Monday, Japanese automakers Honda and Nissan recalled close to 3 million vehicles worldwide to repair an air bag problem. Coupled with a recent Toyota recall to fix a similar problem, it means that in just the past month Japan's three largest automakers have called back more than 5 million vehicles worldwide to fix faulty air bags. It's unclear how many of those vehicles are in the United States.

Industry analysts see two big factors behind the flood of recalls: Automakers everywhere are being extra careful after seeing Toyota get slapped by a $1.2 billion fine earlier this year to settle charges that it hid safety problems from customers and regulators. And, of course, there's the debacle confronting General Motors, which is facing multiple investigations for taking more than a decade to recall cars equipped with a defective ignition switch linked to at least 13 deaths. As the chart below shows, this year has been the worst since government began tracking auto recalls in 1966, and summer has just started.

In February, GM started recalling 2.6 million Chevrolet Cobalts and other small cars equipped with defective ignition switches. But that was just the beginning. So far this year, GM has ordered 44 recalls covering 17.7 million vehicles in the United States and more than 20 million in North America, the automaker said. The U.S. recalls account for nearly two-thirds of all recalls in the country this year.

"Almost all automakers are doing a large number of recalls," said Arthur Wheaton, an automobile industry specialist at The Worker Institute at Cornell University.

Many of the defects have been serious: faulty ignition switches, overheating exhaust parts, power steering problems.

But others, not so much: Earlier this month, GM recalled 184 Chevrolet and GMC trucks that were equipped with floor mats prone to move under the driver's feet because the vinyl floors have no attachments to secure them in place. GM also recalled more than 57,000 trucks whose chimes did not work if a key was in the ignition while a driver's door is open, or a front seat belt is not buckled.

The cost of recalls can put a financial strain automakers. GM estimates that its recalls will take $2 billion off its bottom line this year.

But for automakers and dealers, there is also an upside. Analysts say that at least two in three recall notices is fulfilled, meaning that dealers get to have their old customers back in the showroom. There, they can show off the new models, and, at minimum, be in a position to sell drivers on some repairs they previously were not considering.

"The recalls, per se, are not bad," Wheaton said. "The thing is how you handle them, and are you, as an automaker, seen as trying to hide something. If done right, they can help dealers and automakers. Dealers get traffic in the showrooms, and automakers get to show they are being aggressive and concerned about fixing problems."

While the huge number of recalls this year is an anomaly, people who follow the industry say car owners should expect to see a healthy number of recall notices in their mailboxes going forward. As cars become equipped with more computer and other electronic components, the chances of defects increase. Also, Wheaton noted, more autos than ever share parts, meaning that if one part is bad, more vehicles will have to be recalled to fix the problem.