Before the Toyota recalls, the National Highway Traffic Safety Administration's threshold for a safety recall consisted of two criteria: When a motor vehicle or its equipment (including tires) does not comply with federal standards and when there is a safety-related defect in the vehicle or equipment. When two House committees hold hearings on the Toyota recalls next week, NHTSA critics say the groups should look into the administration's staffing and funding for its Office of Defects Investigation, which they say isn't enough to coax more than voluntary recalls out of carmakers, such as Toyota, Honda (HMC) and General Motors.
The NHTSA, prompted by consumer reports reviewed by its defects investigation office's roughly 20 employees, opened 100 defect and compliance investigations last year and has 40 still pending. During the last three years, the NHTSA says its investigations yielded 524 recalls of 23.5 million vehicles. Clarence Ditlow, executive director of the nonprofit Center for Auto Safety, says a lack of systematic policy on opening defect investigations and low funding are hindering the administration's ability to impose recalls. The NHTSA receives what amounts to two cents for each of the more than 135 million cars the Bureau of Transportation Statistics says are currently on road.
"Some recalls have been started by as few as one complaint, but some recalls never get started despite many complaints," Ditlow says. The NHTSA didn't respond to requests for comment.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV