Toyota

Auto recalls a matter of negotiation

Alisa Roth Feb 22, 2010
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Toyota

Auto recalls a matter of negotiation

Alisa Roth Feb 22, 2010
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TEXT OF STORY

Kai Ryssdal: Toyota acknowledged today that it’s been subpoenaed by a federal grand jury and by the Securities and Exchange Commission. Documents released over the weekend show Toyota bragging about the money it saved when the floor mat problem was classified as an equipment recall. It sure looks like Toyota might’ve been trying to downplay this whole mess.

But Marketplace’s Alisa Roth explains that to a lot of people, just sounds like business as usual.


ALISA ROTH: When a vehicle has a problem, it’s up to the National Highway Traffic Safety Administration — or NHTSA — to decide how serious it is.

NHTSA classifies some defects as annoying but not life threatening. And some as real safety issues that warrant a recall.

Kenneth Ragsdell is an engineering professor at the Missouri University of Science and Technology. He says NHTSA’s decisions are the result of negotiations.

The agency takes its concerns to the manufacturer and gives it a chance to respond.

KENNETH RAGSDELL: The companies will try to negotiate with data with NHTSA to say this is the level that’s appropriate. They want it to be confined at the lower levels, a mechanical issue that doesn’t have a serious safety implication.

He says sometimes there’s no obvious conclusion. And the agency just has to use the data it has to make a decision.

No company wants to issue a safety recall because it’s expensive, and it looks bad. So companies work hard to show that their vehicles’ problems don’t merit a recall.

Joan Claybrook ran NHTSA under the Carter administration. She says that doesn’t mean these companies are covering up something.

JOAN CLAYBROOK: If a company comes in and says you’re really off the mark here, this only affects XYZ vehicles, for example, or these model years, or this is not the real problem, that can be very legitimate.

But she says it’s up to the agency to figure out whether the company’s telling the truth.

NHTSA’s been widely criticized for its role in the Toyota mess. David Strickland, the agency’s head, is scheduled to testify at tomorrow’s hearing on Capitol Hill.

I’m Alisa Roth for Marketplace.

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