Faulty Early Warning System Could Hide Exploding Air Bag

 An early-warning system set up by the U.S. government is designed to protect drivers from auto defects. Narrow industry reporting requirements mean regulators could miss the next exploding air bag.

Under a 2000 law, automakers are legally obligated to file reports of deaths and injuries from the public so safety officials can spot the kind of defects that require recalls. Data compiled by Bloomberg show some companies are more forthcoming than others.

General Motors Co., eager to demonstrate proactivity in the wake of the biggest recall in its history, has disclosed 102 death and injury reports per 100,000 vehicles sold so far this year. By contrast, Honda Motor Co. has disclosed 2.4 reports per 100,000 vehicles sold this year. Last week, Honda said it failed to disclose 1,729 death and injury reports over 11 years, including eight linked to air bag deaths or injuries.

Yesterday at a hearing before the House Energy and Commerce Committee, the top auto safety regulator asked all carmakers to audit their compliance with the law. Meanwhile, Congressional leaders are pushing the industry to comply not just with the letter of the law but the spirit too.

“Our intent was clear: manufacturers should provide as much helpful information as they can so we can help save lives,” said Representative Fred Upton, a Michigan Republican who co-authored the law. “Reporting the bare minimum doesn’t cut it.”

Safety Strategy

When asked about the difference in frequency of the early-warning data numbers, spokespeople for General Motors and Toyota Motor Corp. said they report more data than required as part of their safety strategy. Last week, Honda disclosed it has been underreporting those claims and is modifying its practice to capture more data. Ford Motor Co., Chrysler Group, Nissan Motor Co., Hyundai Motor Co. and Kia Motors Corp. said in statements their reporting meets current legal requirements.

In 2000, Congress passed the Transportation Recall Enhancement Accountability and Documentation Act, or TREAD, after reports that Bridgestone Corp.’s Firestone tires were disintegrating in hot-weather states, causing Ford Motor Co. Explorer SUVs to roll over.

At the heart of the act was the early warning system, which for the first time gave the public access to industry safety data. When plaintiffs’ lawyers are contacted by accident victims, they search the data to see if there’s a pattern or if the accident is a rare occurrence that can’t be linked to other incidents or a possible defect.

Lawyers may reject cases or plaintiffs might accept small settlements because they have no knowledge of other similar incidents, said attorney Hank Didier, who represents the family of a Florida woman who looked as though she’d been knifed after being killed by shrapnel from an exploding airbag.

Missed Incidents

Lawyers handling claims related to air bag and other defects identified 10 incidents in recent cases that they say never showed up in the early warning system.

The law only requires an incident be counted if it is a written claim, such as a lawsuit, or a written notice other than a lawsuit that has been delivered to the automaker or one of its representatives. Automakers aren’t required to include media articles or claims received by telephone, for example.

In March, Democratic senators Edward Markey of Massachusetts and Richard Blumenthal of Connecticut introduced the Early Warning Reporting System Improvement Act.

Markey and Blumenthal said the legislation would require automakers to automatically submit accident reports and documentation showing how they connected fatalities to alleged safety defects. It would make more information publicly accessible and force the National Highway Traffic Safety Administration to make its website searchable.

‘Safety First’

In recent months, NHTSA’s acting chief, David Friedman, called representatives of a dozen automakers to Washington to make clear they need to cooperate with regulators and respond more quickly to evidence of defects, including in early-warning reports. In a phone interview, he said that the industry must stop “fighting with us” and “put safety first.”

The data compiled by Bloomberg covered 56,000 deaths and injury complaints filed by the eight largest U.S. automakers from 2003 through the first half of this year (see attached chart).

GM and Toyota, which both vowed to reform safety procedures after defects linked to deaths and injuries, lead the industry. Since 2010, when Toyota was criticized for under-reporting its own defects, the automaker has reported more claims than most other automakers, trailing only GM this year with 76 reports per 100,000 sales.

‘Over-Report’

In a statement, GM said it was committed to “both the spirit and the letter of the law.” Toyota prefers to “over-report claims,” said Cindy Knight, a spokeswoman.

Of the eight companies analyzed, Honda, Chrysler and Nissan posted the lowest number of early-warning reports versus their sales, the data show.

Honda’s admission that it failed to report more than 1,700 claims from 2003 through this year may prompt NHTSA to impose a $35 million fine on the Japanese automaker. Honda blamed the underreporting on “inadvertent data entry or computer programming errors.”

“Honda’s failure to report as required by law deprives NHTSA of the ability to protect the public,” said attorney Didier, who represents the family of Hien Tran, the 51-year-old Florida woman whose air bag death was originally investigated as a murder because of the severity of the cuts to her throat. “That is why this is so harmful. You’re also depriving safety advocates like us to see if there’s a pattern.”

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