The recent apology of CEO Shigehisa Takada to those killed or injured by Takata Corp.'s faulty airbag inflators signals the end of an era.
A half century ago, Detroit was the world's auto capital, home of U.S. automakers, suppliers and industry-related companies. Those manufacturing titans transformed America's economy, changed how people lived and created millions of jobs. But they also used big congressional influence to starve regulators of resources needed to oversee a booming industry.
Back then, the prevailing message was that anything that hurt the industry hurt America. Safety and environmental advocates were often called "safety nazis" or "tree huggers." In the late 1990s, Bill Ford Jr. acknowledged the automobile's environmental impact and pledged that Ford Motor would work to cut emissions and boost fuel economy. The industry response was not kind.
Over time, industry responses to defect investigations became predictable. First, a manufacturer would deny any problem existed while withholding information and urging congressional allies to quash further investigation. If a problem was proved, the manufacturer would assert that it was rare and insignificant. If a problem was clearly more widespread, the manufacturer tried to limit any recall to certain geographic areas or a small number of vehicles. If all else failed, automaker lawyers often argued that the vehicle had met federally mandated safety standards and was not required to do more.
Times have changed. Today, consumers hold the key to the economy. The Detroit 3 control less than half the U.S. market. Consumers expect greater corporate responsibility and accountability, particularly on health and safety.
When its airbag problems arose, Takata tried to use the old playbook. It simply doesn't work anymore. Takata failed to show a proper sense of concern, urgency or accountability. Government authority and resources have changed, too. There are stronger reporting requirements for manufacturers and higher fines for misconduct. The Department of Justice is more likely to intervene.
Americans don't want an overbearing government, but they want one that works. Regulatory agencies must objectively enforce rules, ensure fair market competition and protect the public. As in sports, quality competition depends on honest referees.
Yet recent government audits and reports show that the agency charged with overseeing auto safety, the National Highway Traffic Safety Administration, has been chronically underfunded, understaffed and undertrained. To work effectively, NHTSA needs resources and expert personnel.
With so many brands available, market share determines an automaker's fate. Value and quality are still important, but increasingly market share relies on trust and meaningful relationships. That means automakers putting consumer safety and well-being ahead of corporate profits -- a hallmark of corporate responsibility. Vehicles often share parts across multiple platforms to reduce costs. But if a part is defective, it's in more cars. The longer a manufacturer waits to fix bad parts, the more it costs and the greater the risk to the public.
Early intervention is more effective, cheaper in the long run and demonstrates corporate responsibility, which fosters trust and deepens relationships with consumers. Trust is the real key to building market share and long-term profits. It may not be the traditional approach, but it is certainly a sustainable one. More important, it saves lives.
Ricardo Martinez is chief medical officer of North Highland Worldwide and a former NHTSA administrator.