Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Auto-Safety Plan Lacks Power to Order U.S. Recalls

May 19 (Bloomberg) -- U.S. auto regulators lack needed power to order immediate recalls under proposed Senate legislation, the federal car-safety chief said today.

The measure, a response to Toyota Motor Corp. vehicle defects, would let regulators require consumer notification of safety hazards and remedies to correct flaws. That “does not constitute a recall,” said David Strickland, director of the National Highway Traffic Safety Administration.

“If the threat to human life is truly imminent, the agency needs to act quickly, and not be slowed down by a lengthy procedural process,” Strickland said in testimony at a Senate Commerce, Science and Transportation Committee hearing in Washington.

Strickland is trying to shape legislation as the Senate and House advance plans to toughen safety oversight in response to Toyota vehicle flaws. The Toyota City, Japan-based company recalled more than 8 million vehicles worldwide in the past year for accelerator-pedal defects.

The legislation was proposed this month by Senator Jay Rockefeller, a West Virginia Democrat and chairman of the panel that held today’s hearing. The House is considering a separate plan.

Rockefeller’s legislation lacks legal protections for manufacturers or standards that would define when the government could take immediate action on defects, according to groups including the Alliance of Automobile Manufacturers.

‘Significantly Expand’

The measure would “significantly expand” federal power over manufacturers, “without offering any additional safety benefits,” said Dave McCurdy, chief executive officer of the Washington-based alliance whose members include Toyota, General Motors Co. and Ford Motor Co.

Toyota, the world’s largest automaker, paid the maximum $16.4 million U.S. fine yesterday for failing to alert regulators about a defect tied to unintended acceleration. Regulators said Toyota waited at least four months, violating the law that requires notification within five days.

Toyota hasn’t found any electronics flaws to explain sudden, unintended acceleration after examining more than 2,000 vehicles, James Lentz, president of Toyota Motor Sales USA Inc., said in remarks prepared for tomorrow’s House Energy and Commerce Committee hearing and released today.

Rockefeller’s legislation proposes steps such as requiring standards for vehicle “black boxes” that will record data, brake overrides and floor-pedal placements. The plan increases per-vehicle penalties to $25,000 from $5,000, and removes a fee cap for intentionally failing to report defects.

House, Senate Differences

The House version sponsored by Representative Henry Waxman, a California Democrat, differs from the Senate plan by giving Strickland the power to order immediate recalls. Other provisions in the House version also are in the Senate bill.

The Senate’s pedal-placement rule wouldn’t benefit safety, and penalties should be capped “at some reasonable level,” McCurdy said in prepared remarks. Proposed black-box requirements “will add significantly” to costs of the devices, McCurdy said.

To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.