The U.S. Needs an FDA for Auto Safety

If you thought free markets would protect you from cars that can accelerate out of control and slam you into a ditch, think again. Look no further than the latest news on Toyota's (TM) recalls. In recent weeks, the Japanese carmaker has recalled 8.1 million vehicles, and today it added 437,000 Prius and other hybrid models whose brakes don't work all that well (when traveling on a wet or potholed road, they can go about 50 feet without working).

Given the number of people who trust the lives of their families to vehicles every day, you'd think that cars would be subject to some kind of consumer protection agency to keep faulty vehicles off the roads until they had been thoroughly tested.Unfortunately, that's not the case. While the National Highway Transportation Safety Administration (NHTSA) does crash tests on vehicles, no single government group has responsibility for assuring the public that cars and trucks are safe.

I'm not sure how the auto industry has gotten away with this. The Food and Drug Administration (FDA) makes pharmaceutical companies test their drugs extensively before introducing them to the public. And the Federal Aviation Administration (FAA) won't certify a new aircraft until after it has passed rigorous flight tests. Yet even hundreds of millions of cars and trucks carry precious human cargo on our roads and highways, the U.S. allows vehicle makers to sell their wares without rigorous independent safety testing and inspection.

We Told Them So

Toyota's recalls are just the latest in a long series of problems resulting from the U.S.'s laissez faire attitude toward the auto industry. And the slim regulation the industry does get is pathetically passive. Consider this report in the Washington Post that State Farm, a leading auto insurer, says it told the NHTSA back in 2007 that it was seeing a rise in the number of unexpected acceleration cases in Toyotas. But safety regulators ignored the warnings for over a year.

This isn't the first time that the NHTSA has snoozed through a vehicle safety crisis. The Post story also reports that in 2000, State Farm warned the NHTSA of problems with accidents involving Firestone tires and Ford's (F) Explorer SUV. When congressional investigators at the time discovered that the agency had ignored the State Farm warnings, the furor in part led to legislation that created a so-called "early warning" system for auto safety.

But that system -- which would have "worked" only after vehicle problems led to the death and dismemberment of many Americans -- never even got off the ground.

Needed: A New Regulatory Scheme

Are enough Americans now driving faulty Toyotas to generate sufficient political support for true safety regulation of the auto industry? If so, I think a new regulatory scheme like the FDA's would work. It would:
  • Tightly examine new vehicles during their design to assure that they'll be safe to operate;
  • Require the auto industry to pass rigorous safety tests before new vehicles were allowed to be sold;
  • Inspect auto manufacturing facilities and regularly test what they produce to make sure that American vehicles are safe.
Americans wouldn't quietly tolerate the recall of more than 8 million bottles of defective medicine or more than 8 million defective airplanes. So why is it OK for Toyota to recall more than 8 million vehicles for a problem as basic as faulty brakes without a fundamental change in the process that lets those vehicles operate for years despite reported problems?

It's time for a change.
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