GM Recalls 1.3 Million Cars: What's Behind All These Vehicle Recalls?

It's not just Toyota (TM): GM announced Tuesday that it's recalling 1.3 million compact cars. Already this year, according to Reuters, Honda (HMC), Nissan (NSANY), and Suzuki (SZKMY), and of course, Toyota, have also given the public word of recalls: For example, in January, Honda recalled 646,000 of its Fit/Jazz and City automobiles globally over a faulty window switch after a child died when a fire broke out in a car in 2009.

Why all the recalls all of a sudden? Have all the world's automobile manufacturers suddenly let their quality-control standards slip? And weren't the Toyota recalls just a government conspiracy to put all those Toyota automobile workers in Kentucky on the street so that U.S.-owned GM could take away their customers and give their jobs to automobile workers in Michigan?

No and no. There are two reasons for all the recalls: media attention and safety in numbers.

Which Cars is GM Recalling?

Before getting into these topics, let's examine the details of the GM recall. According to The Washington Post, GM will recall 1.3 million compact cars to replace a motor in the power steering system. When the motor fails, the car becomes harder to steer at lower speeds, according to GM. The affected models are:

  • The 2005-10 Chevrolet Cobalt;

  • The 2007-10 Pontiac G5, which has been discontinued;

  • The 2005-06 Pontiac Pursuit, which is the Canadian version of the G5; and

  • The 2004-05 Pontiac G4, which is the Mexican version of the G5.

The National Highway Traffic Safety Administration began its own probe of 905,000 Cobalts after getting more than 1,100 complaints about a loss of power steering -- including 14 crashes and one injury. Meanwhile, The New York Times has been doing some hard work -- poring through NHTSA records of safety-related complaints -- and has discovered that Toyota has not come clean about all of its problems.

Uncontrolled Acceleration: Not Just a Toyota Problem

Toyota has already recalled six million vehicles in the U.S. -- including Camrys built after 2007. But it turns out that Toyota should have recalled Toyotas built before 2007 as well. How so? After examining 12,700 complaint records from the last decade, The New York Times found that Camrys built before 2007, which were not subject to the recalls, were linked to a comparable number of speed-control problems as recalled Camrys.

And the acceleration-control problems are not limited to Toyotas. In fact, of the 12,700 NHTSA complaints that Times staffers analyzed, 3,500 came from Ford (F) cars and 3,000 from Toyotas. But the Toyotas were involved in more than twice the number of accidents as the Fords -- 1,000 vs. 450. These crashes represent incredibly tiny numbers as a percentage of the total number of vehicles these companies sold -- 0.0049% for Toyota, 0.0015% for Ford, 0.0014% for Honda, and 0.0006% for GM.

These tiny percentages may help explain why the manufacturers were so reluctant to come clean and recall the vehicles. But the error they made was to forget that human emotion does not care about statistics. Specifically, if enough people are afraid that they will soon suffer the terror of uncontrolled acceleration, politicians will tap into those fears to help them win re-election. And the winds of politics will further fan the flames of public panic, forcing companies to respond with recalls.

So what exactly is prompting the companies to respond to the public now? I think there are two forces at work:

  • Media attention. Since Toyota was forced to recall its faulty vehicles, the public and the media have started to pay much closer attention to the issue of customer complaints. Meanwhile, the media attention is leading more people to complain about quality because they now realize that they're not alone. All those new complaints draw more media attention, and the cycle continues.

  • Safety in numbers. PR consultants are likely advising their automobile industry clients that if they have any problems that have yet to hit the headlines, they are better off admitting them preemptively, and using all the bad news about Toyota as something of an umbrella for consumer anger. The more companies that recall their vehicles now, the more targets there will be to take the public's heat.

What is to be done about this? Last month, I suggested creating a government agency which would function like the Food and Drug Administration is intended to, monitoring the automobile industry's products before they actually get on our nation's highways and protecting consumers from unsafe vehicles.

I stand by that suggestion even more now.