NHTSA, blasted in audit, vows to reform early-warning system

WASHINGTON -- Automakers will be expected to provide greater detail -- and face tougher scrutiny -- with the quarterly reports they submit to federal regulators about crashes possibly linked to safety defects.

The National Highway Traffic Safety Administration said it will tighten its early-warning reporting requirements by next June as part of sweeping changes it has agreed to make following a blistering audit by the U.S. Transportation Department’s Office of Inspector General.

The audit, formally released today after copies were leaked Friday, found that NHTSA’s ability to monitor auto safety defects was severely undermined by poor staff training; haphazard collection and analysis of safety defect data; and inconsistent processes for deciding how and when to open defect investigations.

The findings are a stinging rebuke of the agency that NHTSA Deputy Administrator David Friedman steadfastly defended before multiple congressional panels last year in the wake of the General Motors ignition-switch crisis.

The yearlong probe was prompted by GM’s recall of 8.7 million vehicles for the faulty ignition switches, now linked to more than 117 deaths and 237 injuries, and it details several occasions as far back as 2003 when NHTSA overlooked or ignored opportunities to identify the safety defect in the switches.

The DOT’s inspector general also made 17 recommendations to overhaul NHTSA’s internal processes. In his official response to the audit, Administrator Mark Rosekind, who already has set major reforms in motion, pledged to complete work on the recommendations by next June.

Improved early warnings

Included in those recommendations: Automakers must create and follow new processes for the early-warning reports they submit to NHTSA quarterly on injuries or deaths related to possible safety defects, and those processes will be subject to periodic review by NHTSA. The agency, in turn, will revamp the format of the early-warning filings and the information collected in them. The current reports are “of little use” to NHTSA defect investigators, according to the audit.

The early-warning reporting system -- created by the 2000 TREAD Act that followed the Ford-Firestone tire recalls -- was intended to identify vehicle defects early, before they become broad threats to public safety and prompt massive, costly recalls for manufacturers.

But according to the inspector general’s audit, manufacturers have had wide latitude on what information they provide and how they categorize possible defects. Manufacturers routinely “mis-categorize” safety incidents in the reports, the audit says, skewing data collection and distorting decisions whether to refer the reports for further investigation.

Despite the thousands of components in modern cars, NHTSA has just 24 broad defect categories and provides manufacturers little guidance for how to use them. A failure of an airbag contained in a seat, for instance, could be categorized three different ways, the report says.

NHTSA also fails to periodically monitor how automakers handle their early-warning reports internally, according to the report. The director of NHTSA’s Office of Defects Investigation, Frank Borris, told auditors that the agency “relies on the ‘honor system.’”

Indeed, it wasn’t until American Honda self-reported in October that it had failed to include more than 1,700 death and injury claims in its early-warning reports since 2000 that NHTSA took action, even though it was aware of the issue as early as late 2011, according to the report.

The audit also found major shortcomings in training of NHTSA staffers. For example, three staffers assigned to analyze airbag defect incidents had no training in airbags.

The audit also blasted NHTSA’s defects investigation process, saying the agency fails to use sound methods to analyze defect data; that consumer complaints aren’t thoroughly screened; and that decisions about whether to open a formal defect investigation that could lead to a recall are haphazard and improperly documented.

Reform underway

Since taking over the agency in December, Rosekind has spearheaded several reform initiatives while turning up the pressure on automakers to police safety defects.

For example, NHTSA plans more detailed data requests and more frequent audits of suppliers and automakers as part of changes that it outlined earlier to prevent failings similar to what occurred in the decade before the GM ignition-switch recalls.

Rosekind also has made strong calls for automakers to adopt a more “proactive” approach to vehicle safety and invoked previously unused agency powers to compel compliance.

He also has made numerous calls for more resources and powers that he says the agency needs to do its job. A work-force assessment released earlier this month said NHTSA’s defect investigation operation ideally would have 380 full-time workers.

In his response to the report, Rosekind noted that the agency’s Office of Defects Investigation conducted 1,060 probes that resulted in 1,889 recalls in the last decade with a staff of eight defect screeners, four early-warning data analysts and 16 investigators.

Rosekind will testify before the Senate Commerce, Science and Transportation Committee at a hearing Tuesday to update the panel on the massive recall of defective airbags made by Takata Corp. DOT Inspector General Calvin Scovel III also will testify and likely will discuss the NHTSA audit’s findings before the panel.

Also scheduled to testify are Kevin Kennedy, executive vice president of Takata’s North American unit; Rick Schostek, executive vice president of Honda North America; and Scott Kunselman, head of vehicle safety and regulatory compliance at Fiat Chrysler Automobiles.