Lessons from Automobile Recalls

In the United States of America (USA) automobile market, there are hundreds of automobile quality recalls every year. Manufacturers initiated many of the recalls, a majority of which had not become a major quality concerns. Many others are customer complaints which existence reaches the National Highway and Transportation Safety Administration (NHTSA). The NHTSA often initiates the later recalls depending on their severity. Typically, the NHTSA initiates recalls for occurrences of quality defects that negatively affect either the safety of the vehicle occupants, the safety of the public, or the regulatory mandates in the USA automobile market.

There some examples well known to the public. Some recalls have had significant impact on the sales volumes of automobiles of the brands being recalled. Often recalls with the highest negative impacts on sales volumes have included some of the highest numbers of vehicles recalled for a given quality concern. In the subsequent lines, I will present six of the automobile recalls from the year 1997 to present. 

I will review the mechanisms that led to the defects and the ones that led to the number of vehicles being recalled. Finally, I will present some lessons to be learned from the six major automobile recalls. I will review these recalls: The Ford Firestone recall, the Ford ignition switch recall, the Toyota accelerator pedal recall, the General Motors ignition switch recall, the Volkswagen emission recall, and the Takata’s airbag inflator recalls.

The Ford Firestone Recall

As earlier as 1994, there were incidents of threads separating from tires on Ford Explorer sport and utility vehicles (SUVs) on the field. In 1997 there were already fatalities upon rollovers of Ford Explorer many of them overseas and particularly in Malaysia, Saudi Arabia, Thailand, Columbia, Ecuador, and Venezuela. By early 1998, both Ford Motor Company’s and Firestone’s experts knew about the fatalities. The teams of both companies were also able to trace the defects back to tires manufactured at the Decatur, Illinois’s Firestone plant. Neither Firestone nor Ford immediately initiated a recall.

In July 1998, an insurance agent representing the victims of the rollover informed the NHTSA of 20 accidents caused by the P235/75/R15 ATX, ATX II, and Wilderness AT. Surprisingly the NHTSA did not initiate a recall. Ford issued a recall of tires in Malaysia and Thailand in February of 2000 and it recalled the tires in South America in May 2000. In August 2000 Ford recalled 6.5 million P235/75/R15 ATX, ATX II, and Wilderness AT tires.

After a review of different accounts of the symptoms and the causes of the defects, one can conclude that:

a)    Firestone finally corrected its Decatur plant’s process with respect to tread adhesion and rubber curing in 1998

b)    Many spare tires were among the defective tires.

c)    Firestone executive and Ford executives knew about the defects and related damages on the field but neither did immediately communicate the occurrences of the defects to the NHTSA nor initiate a recall.

d)    R16 tires were slightly more defective than R15 tires

e)    Ford established through studies that P225 tires were more resistant against thread separation than P235 tires but still choose P235 tires

f)     Ford redesigned the Explorer in 2002, lowering its center of gravity by half an inch to minimize propensity to rolling over

g)    Firestone cancelled further relationship with Ford and its CEO blamed the Ford Explorer design for the rollovers

h)    Ford replaced the Firestone tires with other manufacturer’s tires and the rate of accidents drastically diminished all the way down to zero occurrence

i)     Firestone’s market value decreased by half

j)     After a congress hearing, President Bill Clinton signed the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act into law on November 1, 2000. The TREAD Act mandates that automobile manufacturers report to the NHTSA any product recall or product safety campaign that they perform in foreign countries. Manufacturers must report to the NHTSA data on safety related defects, injuries, and deaths, and any other relevant safety data on products. The TREAD Act also requires criminal liability when a manufacturer has intentionally fail to report product safety related defects that have caused deaths or serious injuries

k)    The Firestone tire recall tarnished Ford Motor company reputation with respect to quality.

The Toyota Accelerator Pedal Recall

From 2007 to 2010, there were many Toyota vehicles that fitted one or many among three kinds of recall:

1) A floor mat trapping down the brake pedal and the accelerator pedal causing the vehicle to accelerate when the driver functions the brake pedal

2) A sticking accelerator pedal that would return to stand-by position excessively slowly making the vehicle accelerate while the driver is willing to slow the vehicle down by applying brakes

3) An error in the electronic accelerator control unit which might cause vehicles to accelerate

Toyota recalled overall about 14.5 million vehicles. As earlier as the year 2000, Toyota’s managers and executives had known about the accelerator pedal issues but the company ordered its dealership to repair vehicles without a formal recall. It has also been established that some of the NHTSA’s agents knew about the defects but did not issue a recall immediately, a clear violation of the TREAD Act.

The NHTSA and the National Aeronautics and Space Administration (NASA) investigated on the accelerator pedal defects but found neither flaw nor variation on the Toyota’s electronic accelerator software. Thus they concluded that the floor mat design, the sticking of the accelerator pedals, or the mistakes of drivers triggered the occurrence of the defects. Toyota repaired the floor mats and accelerator pedals of all vehicles that were objects of the recalls.

Toyota executives and employees knew about the issue as earlier as in 2000. The executives and the employees did not report the defects and related damages to the NHTSA on time. Thus they did not comply with the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act of 2000.

Toyota’s CEO Akio Toyoda accepted responsibility for the recall on behalf of Toyota and apologized to the victims. He explained that Toyota may have focused more on sales volumes rather than on quality within the last few years that preceded the accelerator pedal recall. 

Toyota paid more than 1.2 billion dollars in fine for failing to report the defect on time as required by the TREAD Act. Besides recalling million of vehicle, Toyota compensated victims for about 40 deaths and more than 3000 injuries.

Toyota created a global committee for investigating on further defects and further recalls and a swift Market Analysis Response Team ("SMART") to complete on site vehicle reviews, record data, use independent consultants, an enhance education on product safety.

The media reported heavily on Toyota incidents in 2009 and 2010. In spring 2010, the accelerator pedal recall had up to 11 percent of media coverage. However in 2010 Rasmussen polls showed that a large majority of USA customers still had a favorable or very favorable image of Toyota.

The Ford Ignition Switch Recall

In November of 1995, Ford Motor Company (Ford) recalled about 248,000 vehicles in Canada for fires created by ignition switches. In April of 1996, Ford recalled about 8.7 million vehicles among them many cars, SUVs, and pick-up trucks.  Most vehicles were built between 1984 and 1988 but Ford Motor Company and the NHTSA agreed that some vehicles of model year 1989 to 1993 be included. There were about 1100 incidents in which vehicles that the owners had parked for a while and started again caught fires damaging the vehicles and other properties including homes.

There were some personal injuries. There were earlier signs of the defect when drivers would struggle while cycling the key to ignite the engine. There were different most probable causes of the defects. Corrosion of ignition switch wires would create a build-up of metal corroded overtime that finally created a short circuit causing fire upon ignition. Ignition switch being worn out could also cause shot circuit leading to fire.

Damages of a plastic barrier of the area covering all among the grounding wire connection, the battery cable connections, and the ignition switch were other most probable causes of short circuits causing fires. Air gaps being smaller than the specification limits and excessive grease around the battery cables were catalysts of the later mechanism of the defect. Variations upon replacement of electrical wire, crushed or pinched fuel valve wires could also lead to ignition switch failures and fires.

The Ford engineering team knew about the issue by 1990. The team changed the design of ignition switches to a more robust design in order to eliminate worn-out. However when questioned on their knowledge of any potential causes of the defects by NHTSA agents twice between 1990 and 1995, engineers denied having previous knowledge of the issues. The Ford team finally acknowledged that the design of the ignition switch system or variations in manufacturing may cause the defect which led to the first recall in Canada in November 1995 and the larger recall of 8.7 million vehicles in July 1996.

The recalls tarnished Ford’s image with respect to quality. Ford spent hundred millions of dollars on the recalls. Ford also paid a fine of 485,000 dollars for denying knowing about the defects.

The General Motors Ignition Switch Recall

In February 2014 General Motors Company (General Motors or GM) recalled 800,000 small cars for ignition switch failures that would stop the vehicle while driving and shut off the airbag which would then not deploy. Within the next two years GM would end up recalling at least 29.9 million vehicles of which 29 million vehicle incidents occurred in the USA and at least 900,000 vehicles had incidents that occurred worldwide out of the USA. GM ended up settling in 2016 with 124 representatives of 124 fatalities. Off the 124 fatalities, GM settled about 13 cases individually and the settled rest of the fatalities either through a trust fund payment plan managed by Kenneth Feinberg, an insurance claim expert that GM appointed, or progressively in a case by case basis. GM also paid 900,000 dollars of fines for not disclosing knowledge of the ignition switch defects and repairs to the NHTSA on time. In other words, GM did not comply with the TREAD Act.

In 2001, GM engineers detected an ignition switch defect on a Saturn Ion pre-launch vehicle. The product development team redesigned the ignition switch system. Between 2001 and 2014 there were more occurrences of ignition switch defects with vehicles stalling on the street. For unknown reasons neither GM nor the NHTSA initiated a recall until GM initiated the recall in Canada in November 2015. Noticeably, the GM engineering team had defined a new ignition switch design ten years earlier that the team did not approve because it concluded that the cost was excessively high.

A GM appointed investigator concluded that the non disclosure of defects for most of the 2000s years was not a cover-up but a misunderstanding of the design and manufacturing of automobile system components. A delay in the initiation of a recall caused the repairs of at least 20 million vehicles that would have not been repaired had a new design been applied before the year 2007. GM fired at least 17 of its employees to stress accountability for the delay in initiating the recall.

The Volkswagen Emission Recall

In 1998, Volkswagen emerged from a competitive downturn with a global strategy that included several acquisitions, coverage of most market segments in Europe and North America, a growth plan in China, the rest of Asia, Africa, and South America. The message for the world was that Volkswagen would rely on the strength of German engineering, on innovation, and on diesel power technology to drive fuel efficiency while not excluding hybrid and green power technologies.

By 2014, the execution of the Volkswagen strategy had been almost flawless. Worldwide sales volumes of Volkswagen Group vehicles grew significantly from the second half of the 1990s to 2007 and from 2009 to 2014 for Volkswagen to be become either number one or number two automobile manufacturers based on global sales volumes. Volkswagen’s growth was remarkable.

Volkswagen was able to pass the very strict European regulations and USA regulations for carbon and nitrogen emissions. By relying on the development of diesel engines to offer customers low fuel consumption, Volkswagen became the largest manufacturer of diesel powered vehicles. The public and automobile professional admired the achievement of Volkswagen in developing diesel that passed emission standards, an achievement that few manufacturers could realize.

It was with astonishment that the public learned in 2014 that Volkswagen vehicles had not passed the regulations on carbon and nitrogen emissions. It was the beginning of emission gate or diesel gate. In 2014 the California Air Resources Board requested a study comparing emissions of different USA vehicles and European vehicles. The International Council on Clean Transportation (ICCT) ran the initial study. Of the 15 vehicles initially studied, there were three Volkswagen that showed emissions excessively higher than the ones that the manufacturers presented during regulatory qualification studies. Further field studies confirmed the discrepancies in Volkswagen’s vehicles’ emissions. 

It was confirmed that Volkswagen had voluntary programmed its vehicles to emit less nitrogen oxide (NOx) during environmental qualification studies while real emissions of NOx in service were up to 40 times greater than emissions of the qualification. The company paid a 2.8 billion dollars fine for cheating and at least 18.32 billion dollars to fix the emission of NOx in affected vehicles. The company also fired few executives and non executive employees. As of 2018, Volkswagen was still buying back and repairing vehicles of concern.

The Takata Airbag Inflator Rupture Recall

In March and April of 2013, Takata (TK or Takata Holding Inc.), a supplier of airbags and airbag inflators recalled over three million vehicles because the front air bags deployed emitting debris from breakages of the airbag inflators. Honda led the first recall. From the rest of the year 2013 through the first quarter of 2018, there would be many recalls involving many manufacturers including GM, Toyota, BMW, Honda, Daimler, Chrysler, Nissan, Mitsubishi, and Ford. At least 17 manufacturers and at least 25 makes had been involved.

As late as on March 5, 2018 there was a recall for the defect. The mechanism of the defect appeared complex in that it might depend on time, temperature, chemical consistency, manufacturing capability, and design quality. For that reason when the team thought it had defined the set of defective airbags. Further discoveries drove Takata to expand the set of defects. Thus as of March 2018 Manufacturers and Taka had recalled over 60 million vehicles.

Takata started using ammonium nitrate as the propellant in 2001 discarding tetrazole it had used since 1998. From 1988 to 1998 Takata used sodium azide, a propellant that did not cause a recall. Seemingly tetrazole did not cause a recall.

Takata decided to use ammonium nitrate in a form called phase stabilized ammonium nitrate (PSAN). A PSAN composite is used as a propellant for rockets. PSAN is ammonium nitrate that does not vary in volumes when temperatures change. Takata decided to use PSAN as an airbag inflator because it was arguably the least expensive of the airbag propellants available at the time. Another reason was that PSAN was less toxic than other propellant.

In May 2000 during process validation testing, three inflators ruptured. During the development phase of PSAN airbags in 2001, Takata performed several manufacturing validation tests prescribed by automobile manufacturers. Takata’s engineers concluded that the PSAN airbags passed the tests because the outcome was a normal airbag behavior but there were a few points out of specifications which should have triggered test failures for safety characteristics. There were also ruptures of inflators in process validation testing in 2001 and in 2002. There were two occurrences of such abnormalities. Takata attributed one rupture to an operator mistake claiming that the operator loaded twice the required amount of volume stabilizer of propellant and the other one to over-packing of propellant in which an operator failed to perform a height check.

In May and June of 2003, Takata received notification of field ruptures on airbag inflators on the field in Switzerland. There were two other notifications of ruptures in the field in May 2004 and in May 2005.Takata attributed the cause of the first rupture to an operator mistake claiming the operator loaded the required amount of volume stabilizer of propellant. Takata did not initiate and did not contact NHTSA. This was a violation of the TREAD Act.

There was a recall in 20007 and other occurrences of the defects on the field. with communication between and Takata and NHTSA. Because the use of PSAN on airbags was new many problem solving exercises that Takata undertook were as effective as they should have been because Takata engineers were still on a learning curve. Many experts reviewed Takata’s analyses of the problem and approved it. The potential causes of the rupture were: exposure of PSAN to humid environment which might lead to high pressure, latent degradation of the inflator making it brittle overtime, variations in manufacturing processes, mistakes in the reporting of design verification tests and process validation tests, absence of rigor when making decision based on test data and a still non optimal knowledge of the behaviors of airbag systems using PSAN as a propellant.

Takata and at least 12 automobile manufacturers recalled at least 60 million vehicles. Takata also agreed to pay one billion dollars to compensate manufacturers and individual victims, and cover fines due to the USA government. Because many manufacturers had decided not to use ammonium nitrate as an airbag propellant, it was challenging for Takata to close on new contracts. It was also too late for Takata to switch back to tetrazole or to other safer propellants because Takata ran out of cash. Takata filed for Chapter 11 bankruptcy in the USA and filed for bankruptcy protection in Japan. Takata sold the remaining of its assets to Chinese automobile supplier and Michigan based Key Safety Systems. It was an unfortunate end for a company started in 1933 ago that had managed to b a leader in a technology driven industry.

Detailed Discussion on Lessons Learned

Lesson 1

Fear to Report Defects, Frequent Cover-up, and Non Compliance to the TREAD Act

All the six cases that I reviewed in this paper have in common the failure of employees including executives to either disclose violation of regulations, to admit that they had known about defects, to report safety related defects on products per the TREAD Act, or to report fatalities that had occurred out of the USA. The Ford ignition switch and Ford Firestone tire recalls occurred before the enactment of the TREAD Act therefore one can understand that Ford’ employees failed to report defects and incidents to NHTSA on time.

The GM ignition switch recall, the Toyota accelerator pedal recalls, and the Takata airbag inflator recall all occurred after the introduction of the TREAD act. Thus, had the manufacturers and suppliers trained their personnel on the TREAD Act, there would have been a high probability that employees would have reported the occurrences of the defects to the NHTSA. That no employee reported the occurrences of defects to NHTSA means that a manager or managers decided or directed employees not to report it or the employees feared eventual retaliation for reporting occurrences of the defect as early warning of a potentially large recall.

In the case of Volkswagen, it is straightforward that some senior managers decided to cheat and either informed trustable employees about it or hid their cheating scheme from the majority of employees. Here are solutions that may help:

1.1) The NHTSA must mandate that automobile manufacturers, suppliers, and the public have hot lines that they can call to report safety defects and related incidents.

1.2) The NHTSA and similar organization should also communicate the TREAD Act to insurance agent organizations in foreign countries.

1.3) Chairmen of the board of directors of suppliers and manufacturers must include the recommendation here listed as priorities for the senior managers of automobile suppliers and manufacturers

1.4) Automobile manufacturers and suppliers must train their employees on the ethical behaviors needed to assure superior quality and enforce compliance to such behaviors

Lesson 2

Need for Systematic Training on the TREAD Act

2.1) NHTSA, governments of countries hosting automobile suppliers or automobile manufacturers, or the International Automobile Task Force (IATF) must make training on compliance to the TREAD Act mandatory.

2.2) Because there may sometimes be pressure from mangers to not disclose required information to NHTSA, there should be a clause in the quality manuals or the manual of codes of conduct of suppliers and manufacturers that orders manufacturers and suppliers not to retaliate aginst or punish employees who report required information to the NHTSA per the TREAD Act.

2.3) Insurance organizations must train insurance agents on the TREAD Act. Thus when an automobile accident which may be driven by a vehicle defect occurs, the insurance agent defending the victim shall communicate the defect and related accident to the NHTSA.

Lesson 3

Absence of Rigor in Decision Making on Tests and Analyses Needs to Be Addressed

While developing their PSAN based inflator, Takata product development engineers had to assess test results of concept phase prototypes and pre-production prototypes. Twice the engineers qualitatively approved airbag behaviors but surprisingly approved quantitative data with a few points out of specification limits. The quantitative data were communicating to Takata’s engineers that they should have not moved inflator technology from tetrazole to PSAN. At this stage, any flaw in the design of the inflator could lead to injuries including death just like any flaws in the design of an aircraft engine might lead to an accident in service including fatalities.

3.1) The rigor in engineering changes for airbags should be equivalent to the rigor in engineering changes for aircraft engines. In this context taking the time to do it right is better than doing it fast, quality and safety are better than cost savings, and process capability greater than 1.5 is better than any process out of control and definitely better than any process out of specifications.

3.2) In general, managers must use all of capability data, statistical process control data, and individual data to accept or reject a test.

Lesson 4

Need for a Federal Motor Vehicle Safety Standard (FMVSS) Regulation or a Prescribed Process on the Introduction of New Safety Related Technologies 

The development of the PSAN inflator by Takata had revealed a situation where although the personnel involved was experienced it became bounded in the current state of the technology that had to be replaced. The mistake was to consider the same assumptions as the ones for the current. The current state was known. The new state should be made of assumptions that are known and new assumptions. For the PSAN inflator the new state would lead to the following tests: Test of behavior overtime, sensitivity analyses for all previous tests, and new tests based on experts in chemistry and explosives. Had the Takata team had this mindset, the team would have found that it was not ready by 2003 to launch the PSAN inflator. The team would have used tetrazole instead.

4.1) The introduction in an automobile of new technologies that affects occupant safety needs to follow a rigorous process that is the same for all automobile manufacturers and automobile suppliers in the USA.

4.2) The design verification process should be quantitative and exploratory. The product development team needs to take the time to do it right, which is better than pushing to meet due dates or to meet low cot objectives.

Lesson 5

Back to the Basics: Traceability, Robust Product Design, and Robust Manufacturing Process.

For the Ford Firestone recall, a comparative analysis of tire failures showed that most tire failures were from tires manufactured in the Decatur, Illinois plant. The tire failures triggered the rollovers of the Ford Explorers. Firestone should have solved its manufacturing capability variations at the Decatur Illinois, Plant. One of the arguments of Firestone was that, the explorer was more likely to roll over compared to other trucks. The arguments could not be valid because very few Ford Explorer roll over when their tire did not fail.

5.1) Traceability of process characteristics, process capability data, and product test data is required. With good traces of data the manufacturers or suppliers may recall fewer vehicles than they may recall in case data were not traceable. Good traceability of data may lower the number of vehicles being recalled

5.2) Excellence in problem solving for manufacturing helps prevent defects and safety recalls.

5.3) Manufacturing processes that include safety (critical) process characteristics need to be mistake proof so an operator cannot be blamed

5.4) The design of the product has to be robust: Robust design failure modes and effects analyses (DFMEA), robust design reviews, robust tests, robust, control plans, and robust design verification

Lesson 6

Need of NHTSA to Be Independent

For three of the defects that I cover in this paper the automobile manufacturers or suppliers and the NHTSA spent up to four years exchanging data and supporting arguments without initiating any recall. Up to ten years were wasted until the NHTSA initiated a recall. NHTSA is not a problem solver at the service of manufacturers or suppliers.

 6.1) NHTSA is a compliance and control agency which main roles are to protect the public and to ensure compliance to federal regulations. In cases of a defects on a vehicle manufactured after the cleaning point, either the manufacturers or the suppliers have failed to resolve the defect. In that case NHTSA must initiate a recall, quarantine inventory, and halt production until the critical quality defect is resolved. The process here described should be transparent, unbiased, and without emotion.

 6.2) NHTSA should avoid the existence of conflict of interest between its personnel and either an automobile manufacturer or an automobile supplier. Having a manufacturer hire or promise to hire a NHTSA employee should be a red flag for potential conflicts of interest.

Lesson 7

Need Third Party Audit of the Effectiveness of Problem Solving and Compliance with Regulation

7.1) A third party entity or a governmental agency such as NHTSA must audit compliance to the training requirement. Training on the meaning of the TREAD Act, on data-driven decision making upon testing or during engineering reviews.

7.2) The NHTSA must verify that all emission of gas tested by an automobile manufacturer prevent cheating and high emission of carbon or nitrogen.