The recall of millions of Toyota products, plus evidence the maker concealed problems from federal regulators, is likely to result in the expansion of NHTSA's power to order recalls.
The recent rash of recalls at Toyota has federal regulators and lawmakers racing to find ways to improve safety oversight, and a new proposal could stick buyers, rather than consumers, in general, with the costs of the expanded effort.
A new draft bill, sponsored by Congressmen Henry Waxman and Bobby Rush, would reform existing safety measures among other things requiring that automakers begin equipping their vehicles with event data recorders, or EDRs, similar to the so-called black boxes used on commercial aircraft. Along with a similar measure introduced in the Senate, the draft legislation would increase the size and powers of the National Highway Traffic Safety Administration.
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NHTSA has come under fire, in recent months, for getting too cozy with carmakers, Toyota in particular. A document leaked from a Congressional committee, last February, showed Toyota officials celebrating a successful effort to convince the Washington-based safety agency to downsize a recall related to the maker’s products – saving Toyota hundreds of millions of dollars.
The proposal by Waxman, the Democratic chairman of the House Energy and Commerce Committee, and Rush, head of a subcommittee overseeing NHTSA, would also raise the funds for the additional manpower and resources required – by charging new car buyers a fee that would start at $3 and climb to $9 by the third year of the new law. At that figure, that would amount to about .03% of the price for the typical vehicle sold in the U.S.
This year, most analysts expect to see the American auto market rebound slightly from last year’s low to about 11 million new cars, trucks and crossovers. Most expect that figure to grow only slightly in the coming years, but would still generate at least $100 million in new fees. Under the proposals, NHTSA would see its budget doubled to $100 million, next year, and increased to $280 million by 2013.
Senator Jay Rockefeller, an outspoken Democrat from West Virginia, is sponsoring a Senate measure that would step up NHTSA oversight – and give the agency more power to order a recall where it perceives “an imminent hazard of death or injury.”
Currently, the recall process can stretch out – sometimes for a year or more — as regulators and automakers debate the merits of a potential safety problem. NHTSA chief David Strickland said the process “needs to be much faster” than the current system.
It’s clear that the Toyota safety scandal is a significant factor in the debate over expanded auto safety regulations. Though most makers now equip their vehicles with some form of black box, the Japanese maker has repeatedly denied it can use its own system to help investigators understand the surge in complaints about “runaway” vehicles.
(Toyota empowers independent panel to study its safety problems. Click Here.)
Future EDRs would provide extensive information about what was happening in a vehicle before, during and immediately after a crash.
Earlier this month, Toyota agreed to pay a $16.4 million fine for failing to notify NHTSA of a problem with sticky accelerators in the timely manner required by law. That is a record penalty, but it was also the maximum fine under current law – and Congress may lift that cap, which would mean a similar infraction could cost a maker $13.8 billion.
Executives would also face stiff penalties for giving false or misleading statements on safety-related matters.
Such steps as the removal of the penalty cap could trigger some significant lobbying by the auto industry, though even many Republicans appear willing to make a bipartisan effort to enhance auto safety at a time when it has wide public support. Meanwhile, the black box proposal is expected to make it into any final bill, what with GM, among key automakers, lending the idea its backing.
