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Auto Regulator Has 51 People Tracing 250 Million Cars

The U.S. office responsible for monitoring safety defects in cars has had its budget stagnate and its staff cut by one-fifth from highs more than a decade ago, when Congress tried to strengthen it.

While no one has connected cuts to the failure to order a recall earlier of 1.6 million General Motors Co. (GM) cars linked to 12 deaths, safety advocates say U.S. investigators don’t have enough resources to keep up with data and detect patterns.

“They’re getting information, and they’re not following up,” Sally Greenberg, president of the Washington-based National Consumers League said in a phone interview. “They’re not capturing the information in a way that’s useful. They’re not responding quickly to a litany of similar complaints.”

Legislation passed in 2000 amid a Ford Explorer SUV tire recall was supposed to boost the National Highway Traffic Safety Administration’s defects-investigation team, adding people and giving it direct access to manufacturer data. Since then, defects that weren’t pinned down for years have occurred in Toyota Motor Corp. models and now, at Detroit-based GM.

Related: GM Down 14% Shows Barra Challenges From Recalls to China

As the number of registered cars in the U.S. rose to 248 million, NHTSA’s Office of Defect Investigations shrunk to 51 employees, from 64 in 2002. Its budget has been about $10 million annually since 2005, according to NHTSA.

Photographer: Jeff Kowalsky/Bloomberg

Vehicles are welded while moving along the body shop production line at the General Motors assembly plant in Lake Orion, Michigan. Close

Vehicles are welded while moving along the body shop production line at the General... Read More

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Photographer: Jeff Kowalsky/Bloomberg

Vehicles are welded while moving along the body shop production line at the General Motors assembly plant in Lake Orion, Michigan.

“The idea of $10 million for an office that’s in charge of the safety of all these vehicles, undertaking investigations and doing the recalls, it’s just ridiculous,” said Jackie Gillan, president of Advocates for Highway and Auto Safety, a Washington-based group that works with the insurance industry.

“You look at the number of people working on this, you look at their inadequate funding, and you think to yourself, no wonder this is happening over and over again.”

Senate Legislation

Nathan Naylor, a spokesman for NHTSA, defended the agency’s track record, saying its investigations have led to 929 recalls involving more than 55 million vehicles in the past seven years. Vehicle-related fatalities are at historic lows, and automakers have paid more than $85 million in fines since 2009 for delays in reporting defects, Naylor said in an e-mail.

The agency “pursues investigations and recalls wherever our data justifies doing so,” Naylor said in response to questions about the agency’s staffing. “NHTSA is constantly looking for ways to improve our process so we can better identify serious safety defects.”

Photographer: Luke Sharrett/Bloomberg

A General Motors Co. Cobalt vehicle moves along the assembly line at the company's Sao Caetano do Sul manufacturing facility in Sao Caetano, Brazil,As the number of registered cars in the U.S. rose to 248 million, National Highway Traffic Safety Administration’s Office of Defect Investigations shrunk to 51 employees, from 64 in 2002. Close

A General Motors Co. Cobalt vehicle moves along the assembly line at the company's Sao... Read More

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Photographer: Luke Sharrett/Bloomberg

A General Motors Co. Cobalt vehicle moves along the assembly line at the company's Sao Caetano do Sul manufacturing facility in Sao Caetano, Brazil,As the number of registered cars in the U.S. rose to 248 million, National Highway Traffic Safety Administration’s Office of Defect Investigations shrunk to 51 employees, from 64 in 2002.

Tread Act

While Naylor didn’t discuss GM, NHTSA has said it didn’t force a recall sooner because the automaker hadn’t provided timely information that connected defective ignition switches with failing air bags.

An automobile-safety watchdog is questioning that explanation, saying NHTSA has opened investigations on air bags with much less evidence than it had about the GM defect. An analysis of 39 such probes shows at least 26 of them were opened with fewer than 10 consumer complaints, Clarence Ditlow executive director of the Washington-based Center for Auto Safety, said in a letter to the agency today.

Legislation introduced in the Senate yesterday would require NHTSA to publish information it collects now and do so in a searchable, user-friendly format. That would open the door for analysis of an automaker’s safety data by watchdog groups, competing car companies and lawyers for accident victims.

NHTSA has been down this road before. The Transportation Recall Enhancement, Accountability and Documentation Act that emerged in 2000, amid media reports that Ford Motor Co. (F)’s Explorer SUVs were rolling over and killing people after their Bridgestone Corp. Firestone tires fell apart, led to a doubling of the spending on defects investigations.

Massive Breakdown

The law, known as the Tread Act, also gave the regulators more information about emerging defects through quarterly reports compiling warranty claims, death and injury data from every automaker.

That was supposed to give NHTSA the raw data that companies compile and scan for anomalies that would indicate a defect. The system didn’t catch the reports of faulty floor mats and sticky pedals in Toyota vehicles that became a focus of congressional hearings in 2010. It also didn’t catch the GM ignition-switch defect.

“A massive information breakdown at NHTSA has led to deadly vehicle breakdowns on our roads,” said Senator Edward Markey of Massachusetts, who along with fellow Democrat Richard Blumenthal of Connecticut introduced the legislation yesterday to make more defect data available to the public.

GM declined to comment on the legislation.

Wade Newton, a spokesman for the Alliance of Automobile Manufacturers trade group in Washington, said the current warning system has led to more than 5,500 recalls.

House Hearing

“It seems premature to assume there are systemic problems, much less to identify specific legislative fixes, before investigations are complete and the data necessary for thoughtful decision-making are gathered,” Newton said.

Acting NHTSA Administrator David Friedman and GM CEO Mary Barra are scheduled to testify before the House Energy and Commerce Committee on April 1.

NHTSA is under review by the Transportation Department’s inspector general over how it handled events in the decade leading up to Feb. 7. That’s when GM notified the agency it was recalling some models of the Chevrolet Cobalt and Pontiac G5 because of reports that jostling key rings could cause the engines to stall and air bags to fail to deploy.

GM has since said it got its first internal report on ignition-switch problems in small cars in 2001, while developing the Saturn Ion. NHTSA officials asked GM as far back as 2007 about those switches after discovering a fatal crash linked to engine-power loss and air-bag failure.

40,000 Complaints

Inspector General Calvin Scovel’s review will be the fourth into the effectiveness of NHTSA’s defects-screening process since 2002. In 2011, a report found the office didn’t meet its own timeliness goals in more than half the cases and didn’t document meetings with manufacturers.

The report found no evidence that the office’s handling of the Toyota investigation was influenced by former employees who had gone to work for automakers.

The NHTSA office reviews consumer complaints for the continuously changing makes and models, which includes 15.4 million newly registered cars and light trucks last year alone, according to IHS Automotive.

The agency reviews more than 40,000 consumer complaints a year, which it codes by automotive part, make and model year. It’s using more sophisticated data analysis tools, including software provided by International Business Machines Corp. (IBM), to find critical content and search for patterns, Naylor said.

It’s also rolling out new tools for consumers to be able to notify the agency about potential safety defects, he said.

Dwindling Staff

The Office of Defects Investigation has 51 employees, with more than half being investigators, according to agency data. The number of people working in four divisions that investigate defects was 28 last year, including seven who specialize in trucks. That’s down from 31 in 2002.

Gillan and other safety advocates who have pushed for more NHTSA staff and funding said they’re frustrated that presidents haven’t asked for more resources.

Of NHTSA’s $851 million budget request for fiscal 2015, $19.9 million is for enforcement. Only about half of that -- $10.6 million -- is for investigating defects, according to government budget documents. That’s the same amount the agency is spending in fiscal 2014, up from $10.1 million in 2013.

“It’s patently obvious that NHTSA isn’t doing its job in protecting the American consumer,” Greenberg said. “There seems to be a disconnect at the agency.”

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net Romaine Bostick

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