Tito F. Hermoso / | July 14, 2014 15:14
The business of recalls
Recalls: it's not all bad
With millions of vehicles constantly, over time, subject to recalls, it is a wonder why consumers aren't in revolt, courts clogged with product liability suits, people marching in the streets and legislators promising new laws to tame the fangs of greedy and irresponsible businessmen.
Hassle and motivation
Though a genuine hassle for the daily routine of dropping/fetching the kids to/from school and/or commuting to work, recalls are, at the most, an inconvenience pencilled in a calendar as a must do, but wished we didn't. Car companies usually trigger a recall when they discover a post-production or post-sale fault in a car that can be traced to several units - thousands and even millions, depending on how popular the model is and how common interchangeable parts are shared with other models – that pose a potential danger for malfunction and worse, fatalities. Car companies are motivated not only for the safety of their customers but also by laws, varying from country to country, that prescribe painful penalties to car companies who ignore potential danger and customer dissatisfaction, which could lead to loss of prospective and repeat sales, to say the least.
It's a bigger world out there
One might get the impression that cars nowadays, owing to their complexity, are not as reliable as cars of old. And that mass production car manufacturing has also multiplied the number of defects that quickly spread like a deadly virus. Well, yes and no. True cars of the 50s and 60s were not subject to recalls, at least, in the way we know it. But then there were none of the multitude of complex insurance and environmental statutes and consumer demands that have to be satisfied. And neither was car ownership as accessible to more income levels as it is today. Cars, like the consumer laws, are not only more nowadays, but are also more and more complex.
Penny wise, pound foolish
Nevertheless, being precautionary, we should welcome them. Announcements are usually made in popular media, usually with the guidance and approval of country road safety agencies. While this may sound alarming, car companies try to make the rectification process at their dealerships as pain-free as possible, with expenses all paid for by the parent manufacturing company.
More sold, greater recall coverage
In the mature car economies, the ubiquity of the automobile matches the frequency of recalls, so much so, a point may have been reached where most consumers, if not all, are actually jaded, take recalls as a matter of fact, as part of living in an imperfect world. Not so in younger motorizing economies. You can have the extreme of 'ignorance is bliss' like in the youngest and fastest growing car market in the world, China. There recalls are spotty, dealer response is elusive or in denial and customers usually don't care or don't understand the importance of a recall.
Owning aging cars
Countries where there is a high degree of car ownership awareness and without any mandatory end-of-term junking laws - Africa, Latin America and Asia, where car literacy is high but a majority keep older cars - it can be a sad and woeful experience to lose value for one's precious all purpose transporter, which, the owners hope to last a lifetime. Depending on the fault being recalled, and how successful the recall averts degradation of the subject model and of the brand's reliability image, the steep loss in resale value is also a reality as the used car market heavily discount models that had well known recalls.
Jaded or not, the antennae of motorists go on red alert once deaths ensue and are traceable to the recalled defect. The imagination can run wild with so-called 'freak' accidents just waiting to happen. For example; the unsecured slipping rubber mats on a Lexus or Toyota could lodge between the floor and brake pedal resulting in failure to apply full braking force, leading to a smash up - resulting in a massive drop in sales. Or in the case of the ignition keys of some GM cars, where the weight of all the other key and doodads on the key chain can cause the key to twist to OFF position just as when the car is crossing a railroad.
Everyone is involved
Most developed countries have consumer groups, road safety advocates, government safety agencies, insurance companies, the justice system and the lawyering professions heavily involved in these recalls. As accidents resulting in fatalities sometimes result from these defects, recalls are a high cost event to all concerned.
High speed production techniques
Believe the car companies when they say they avoid these defects, as a massive recall is a huge cost to them, even if they take on insurance. Yet it was in their their zeal to fulfill market orders and beat the competition, that their high speed production techniques does show up with flukes from time to time. When Toyota hit a high recall volume and rate in 2008, denting its much vaunted reputation for quality, management scaled back on the use of robots and increased double checking by trained humans. Even luxury car maker Mercedes Benz had to resort to an assembly line overhaul and production process overhaul when some E-class models were failing prematurely. Usually, recalls trigger the production team to 'back-to -the drawing board' in order to improve design and/or manufacturing process to avoid the defect.
Between the devil and the deep blue sea
Extensive recalls, though costly, are the cheaper and safer preventive that car companies resort to in order to avoid even costlier litigation; car companies that neglected customer complaints as “isolated” rue the day when they get sued when the anger of a good number of unhappy customers snowballs into a media campaign and class action suit.
Easing the pain
Locally, almost all car companies here do not neglect to inform customers through pervasive medial and perform the rectification required by the recall. Sometimes, dealers and distributors are informed by issuances from company Headquarters. Gone are the days when local dealers and distributors would play ignorant or deny claims of recalls that any consumer can easily research on the internet or bannered in the newspapers.
The passage of our own version of the Lemon law helps. Even if you are the only one who got the bad model out of a batch of a million, the car company does have an enforceable responsibility to you. Recalls simply reinforces an old rule where a seller, takes responsibility for the product he/she sold you. And that is not an unreasonable expectation, considering that recalls are so much more common nowadays.