A car has thousands of parts in it. Earlier, it all used to be mechanical with a few electrical parts but the past two decades have seen automobiles with more electronics inside them than a computer has! This has raised the complexity so much that any number of trials and tests is not enough to identify the possible defects. Before 2000, most of the auto manufacturers preferred not to recall vehicles owing to high costs involved unless the issue was large and they were forced.
But Recall rates have risen sharply in the last decade or so as companies do not want to risk even the smallest issue. The following list shows the major recalls throughout the history of the industry.
1. Ford Recalls - Ford Pinto, 1978
With 27 deaths and numerous accidents recorded, Ford Pinto had a dubious record. It had hit the road early in the 1970’s but with complaints rolling in from as early as 1972, the recalls came quite late in 1978. At that time, this was one of the largest recalls, counting 1.5mn cars. What made the event worse was that, the company infamously ran a cost analysis for the compensations it would have to pay against the cost that it would incur by changing the defect, without considering the labour and logistics it would involve. The proposed alterations would have cost about $200mn while compensations would cost only $50mn. The fuel tank was placed in the rear end leading to spillage and fire at the smallest accident, even a collision at 30kmph could potentially initiate a fire, a fact the company knew just months after it had started production.
This is a classic case of companies not being worried about the safety of the customers, and level of sway they had over the regulators, as no action was taken against Ford. The mistake in the end cost much more than the $200mn estimated for the changes in the end but one could say Ford escaped with only financial costs as opposed to legal action for hiding design faults.
2. Takata Airbags -2013 onwards
While other recalls are restricted to particular models of an automaker, this is one plagues the entire industry. What else can one expect when 19 automakers in all have a common supplier across the world? Estimates suggest that nearly 100mn vehicles are affected by this Airbag issue with recalls being on for 7 years and running! Some vehicles might even end up being scraped before they are recalled. 23 deaths are directly associated with this issue worldwide while there are numerous others which have not been confirmed.
The core of the issue lies in the fact that there is no drying agent, causing an explosion when the airbag opens, releasing metal shards with it, a potentially fatal issue. While recalls are more predominant in the Western countries, the issue is more serious in South Asia and Middle East, where hot and humid conditions prevail, the odds of Airbag explosions happening are higher. Yet, the recalls are least in these regions.
Most of the cars manufactured in the period between 2002 and 2014 are affected and no one can come up with a clear estimate of the financial impact of this Massive recall. The Logistics and planning activities involving dozens of models has been a nightmare for all the automakers involved. However, Takata had already filed for Bankruptcy protection in the US and in Japan and has now been acquired for just $1.5bn!
3. Cummins Recall – Medium and Heavy-Duty trucks
Cummins is the leading Truck engine manufacturer in the US. The Environmental Protection Agency (EPA) had found an emission issue with the Cummins engine due to a faulty Control system leading to increasing NOx emissions in older vehicles caused by a degrading catalyst, in the engines manufactured between 2010-15. This led to Cummins issuing a voluntary recall at the direction of the EPA for 5,00,000 trucks. The numbers are deceptively low but considering that trucks are much less prominent than cars, this is a huge number!
The recall is set to cost around $200mn for the engine maker. This is a record number of recalls for trucks and is a result of emission issues- something automakers are sweating over throughout the past decade. The smooth process indicates increasing responsibility on the part of Automakers as well as better scrutiny by the Agencies, at least in the West.