National Automobile Dealers Association Chairman:
His claim only 6% of auto safety recalls are "hazardous"
Is "Dangerous, irresponsible, and dead wrong"
The parents include:
Cally Houck, mother of Raechel and Jacqueline Houck, who were only 20 and 24 when they were killed by a recalled PT Cruiser that caught on fire and lost steering. Read Cally's letter.
Alexander Brangman, father of Jewel Brangman, who was only 26 when she was killed by a recalled Honda Civic with an exploding Takata air bag. Read Alexander's letter.
Laura Gipe Christian, birth mother of Amber Marie Rose, who was only 16 when she was killed by the GM ignition switch defect that has killed over 124 people, and injured more than 274 others. Read Laura's letter.
In a letter to the NADA Chairman, Cally Houck and Alexander Brangman wrote:
Alexander's daughter Jewel Brangman was only 26 when she was killed by a recalled Takata air bag that severed an artery in her neck, after a low-impact collision, causing her to bleed to death. According to Carlson, a Colorado auto dealer, because Honda chose not to issue a voluntary, discretionary “stop drive” warning at the time, that defect was not “hazardous.”
In a report provided by the Alliance of Automobile Manufacturers to the National Highway Traffic Safety Administration, the AAMA found that auto manufacturers chose to issue a "do not drive" warning in only 6% of safety recalls. According to the National Highway Traffic Safety Administration, the agency lacks the authority to mandate that auto manufacturers issue such a warning.
Cally's daughters Raechel and Jacqueline were only 24 and 20 when they were killed by a recalled Chrysler PT Cruiser with a steering hose defect. According to NADA's Carlson, because Chrysler chose not to issue a voluntary “stop drive” warning at the time, their deaths do not count either, when it comes to how he and the National Automobile Dealers Association decide which safety defects are “hazardous.”
The parents also wrote that Carlson shows "a stunning disregard for the individuals and families across the nation who have suffered profound losses due to defects such as exploding Takata air bags, which remain in millions of vehicles across the nation. Those ticking time-bombs have already killed at least eleven people, most recently a 17-year-old teenager in Texas. They have also blinded a military officer and a young boy, and caused many other serious injuries."
Laura's daughter Amber's crash was attributed to a faulty ignition switch in her GM Chevrolet Cobalt, which apparently shut off the engine while the car was in motion – affecting the steering and braking, and cutting power to the air bags, which didn't inflate when the car hit a tree in Dentsville, Md.
Given your position, policymakers as well as consumers view you as an industry “expert” and they take your word seriously. But, your remarks down play the seriousness of a very scary situation here in our country. Frankly, you should be ashamed."
Administrator of the National Highway Traffic Safety Administration,
about NADA President Jeff Carlson's appalling statement:
Other lethal safety defects affecting millions of vehicles, where manufacturers chose not to issue a "do not drive" warning:
- GM ignition switches that turn to "off," causing a loss of braking and steering, and the air bags to fail to inflate when needed, in a crash
- brake failures
- sticking accelerator pedals
- steering loss
- catching on fire
- axles that break
- wheels that fall off
- safety belts that fail in a crash
- carbon monoxide poisoning
- hoods that fly up while you're driving, obscuring vision
Read more: Automotive News: National Automobile Dealers Association Chairman Jeff Carlson says "only 6% of recalls are 'hazardous.'".
Letter from Cally Houck and Alexander Brangman to NADA Chairman Jeff Carlson.
Letter from Laura Gipe Christian, Mother of Amber Marie Rose, to NADA President Carlson.
Alliance of Auto Manufacturers' report to NHTSA: how often do manufacturers issue a "do not drive" warning for a safety recall?.
NHTSA letter to Sen. McCaskill and Boxer regarding "do not drive" recalls.
New York Times: NHTSA lacks authority to mandate "do not drive" warnings for safety recalls.
Federal Trade Commission
To Halt Dealer Sales of Unsafe Recalled Used Cars
That's the core message consumer and auto safety groups are sending to the U.S. Federal Trade Commission, urging the agency to step up its game in protecting the American public from unsafe recalled used cars. The groups are responding to the FTC's proposal to settle cases brought against GM, Jim Koons Management, and Lithia Motors, Inc. over sales of "certified" used cars. Their advertising claimed all the cars had passed a rigorous inspection, before they could qualify to be sold as "certified". However, the dealers had failed to get the safety recall defects repaired.
According to the FTC's announcement of the settlements, “Under the proposed consent orders, which would remain in effect for 20 years, the companies are prohibited from claiming that their used vehicles are safe or have been subject to a rigorous inspection unless they are free of unrepaired safety recalls, or unless the companies clearly disclose the existence of the recalls in close proximity to the inspection claims. The proposed orders also would prohibit the companies from misrepresenting material facts about the safety of used cars they advertise.” [Emphasis added.]
The groups pointed out that "The proposed settlements would allow car dealers to sell 'certified' vehicles, advertised as having passed rigorous inspections, if the dealers merely “disclose” to prospective car buyers the existence (or potential existence) of unrepaired safety recalls. Such settlements could unfortunately do more harm than good. They could perversely encourage even more unethical and unscrupulous car dealers to engage in reckless practices and play “used car roulette” with the public's safety."
Instead, the groups urged the agency to "prohibit dealers from selling any 'certified' vehicle to a consumer if it has unperformed safety recalls. The consent orders should not rely on mere disclosure of a safety defect at all, but it would be particularly harmful to rely on disclosures of open safety recalls when a vehicle is advertised as having passed an inspection, or being “certified,” or safe.
Cally Houck's message continued:
"If the FTC's proposed settlements had been in effect when my daughters were buying a car, they would not have saved my daughters. Had they even noticed and read a “disclosure” about the recall, my girls, in their early 20's, with no engineering or mechanical experience, and no awareness of other fatalities associated with that defect, would not have been equipped to accurately assess the risk involved. If they had been told verbally that the defect did not pose a serious hazard, in all likelihood they would have believed it. And after their deaths, there would have been no way to prove what they were told."
Read more: Consumer Groups to FTC: Stop Dealers from Selling Unsafe Recalled Used Cars
Read more: Letter from Cally Houck to the FTC
recalled used cars fails in Virginia
Richmond VA. Update: In another major win for consumers and public safety, Virginia legislators rejected car dealers' attempt to legalize selling unsafe, defective recalled used cars to consumers, without getting them repaired first.
The biggest loser was CarMax, which has made it a practice to deliberately sell consumers vehicles that the company knows are unsafe. This victory was all the more remarkable because CarMax has its headquarters in Richmond, and has a lot of political sway. CarMax is the largest retailer of used cars in the country. CarMax advertises that all its vehicles must pass a "rigorous 125+ point inspection," in order to qualify to be sold as "CarMax Quality Certified" cars. But the company doesn't bother getting the safety recall repairs performed prior to sale.
Link to the video: https://www.youtube.com/watch?v=n1YQkysD15g
Brazen Attempt to Legalize Sales of Unrepaired, Unsafe Recalled Cars with Lethal Safety Defects
Virginia auto dealers are mounting a sneak attack aimed at making it legal, for the first time, for car dealers in VA to get away with selling unsafe recalled used cars without fixing the potentially lethal safety defects first. The car dealers are backing two bills, SB 709 (authored by Republican Senator Ryan McDougle) and HB 1232 (carried by Republican Delegate Greg Habeeb).
The bills were introduced without fanfare, at a time when car dealers nationwide are facing increased scrutiny by federal regulators over their deceptive sales of unsafe recalled used cars and mounting pressure by the U.S. National Highway Safety Administration. In addition, CarMax, the nation's largest used car dealership chain, with headquarters in Richmond, VA, is also under fire over its deceptive and misleading sales practices, which have been the target of numerous media investigations and reports issued by the CARS Foundation and PIRG Education Funds in California, Massachusetts and Connecticut. Over 97,000 people have signed a petition calling on CarMax to stop selling unsafe recalled cars. https://www.change.org/p/carmax-stop-selling-unsafe-recalled-cars-to-consumers-2
It is already illegal, in all 50 states, for dealers to sell unsafe new or used vehicles to consumers. Dealers who sell unsafe recalled used cars face severe penalties and sanctions, including loss of their license to conduct business, punitive damages that may cost them millions of dollars, major fines, and other penalties for violations of state laws. For example, a jury unanimously awarded the Houck family $15 million after Raechel and Jacqueline Houck were killed by an unrepaired recalled car. Their parents sued under state laws that prohibit negligence or wrongful death. Dealers also face legal sanctions for violating laws against engaging in unfair or deceptive acts and practices, violating express or implied warranties, or engaging in fraud. Any dealer who fails to disclose a "material" fact -- concealing information that is important -- may be guilty of criminal fraud. Findings of fraud have sometimes led to hefty jury verdicts against dealers, helping deter other dealers from engaging in such practices.
Depending on how dealers advertise their cars, their sales of unrepaired recalled used cars may also be a violation of federal law. Recently, the Federal Trade Commission announced a crackdown against GM and its dealers, Lithia Motors, and Jim Koons Management Company, which is based in Virginia, over their advertising and sales of unrepaired recalled used vehicles as so-called "certified" cars. Typically, manufacturers and dealers advertise "certified" vehicles as being superior to other vehicles, using terms like "nearly new" and telling consumers to "expect perfection." They also charge extra for "certified" cars and claim they must pass a "rigorous" inspection of many specific components, claiming they inspect 125+ or 170 or more different points / components.
Recently, the Federal Trade Commission issued this press release, announcing the proposed legal settlements. Note: the FTC is also seeking public comments regarding the proposed settlements, and consumer / safety non-profits will push hard for the FTC to outlaw these dangerous, inherently deceptive practices. FTC News Release: https://www.ftc.gov/news-events/press-releases/2016/01/gm-jim-koons-management-lithia-motors-inc-settle-ftc-actions
According to the Daily Press in Richmond, the car dealers deny that their bills are anti-consumer. Don Hall, president and CEO of the Virginia Automobile Dealers Association, downplayed alarms raised about the bills, and even claimed that "the vast majority of recalls are for minor things."
However, that is false. In fact, that is exactly the type of misleading, irresponsible statement that could trick car buyers into the mistaken notion that a recall may not be serious, when it may actually pose a serious risk of death or devastating injuries. It may also lead car buyers into believing there is no urgency need to getting their car's safety recall repaired.
GM similarly downplayed the threat posed by faulty ignition switch defects for over a decade, while hundreds of its customers were injured or killed. One of GM's victims was Lara Gass, a beautiful, talented, young woman and beloved daughter. Ms. Gass, an honors student and law review editor at the Washington and Lee University School of Law in Lexington, Va., was driving on Interstate 81 in Virginia one Tuesday morning. According to a report in the New York Times, "On March 15, three days before the accident, Ms. Gass’s parents received the recall notice from G.M. with its warning not to drive with any objects on the key chain. Mr. Gass scanned it into his computer and forwarded it in an email to Lara, who was in Washington with friends running a half-marathon...Ms. Gass, 27, was killed after crashing into a tractor-trailer on her way to work as an intern for a federal judge."
NY Times report: After a G.M. recall, a fiery crash and a payout.
Typical types of safety defects that lead to safety recalls:
- Seat belts that fail in a crash
- Air bags that explode with excessive force and spew shrapnel into faces and necks, causing blindness and bleeding to death
- Axles that break
- Wheels that fall off
- Child safety seat anchors that fail to latch
- Components that burst into flames
- Fuel leaks that cause carbon monoxide poisoning
- Ignition switches that cause a loss of steering and braking, and also disengage the air bags
- Sticking accelerator pedals
- Brake failure
- Stalling in traffic
Daily News Report: Sudden Disagreement: Is car bill good for consumers, or bad?
The car dealers' legislation in VA is even worse than similar legislation that was defeated by consumer and labor organizations in California and New Jersey. That's because it also would impose a new, unprecedented burden on consumers to get the safety recalls on their vehicles repaired. For most people, that means having to time from work, losing income due to lost hours of work, and hassling over getting an appointment to have the repairs performed. Most dealers only perform repairs during regular business hours and on weekdays, making the logistics difficult for many working families. Plus if there are no repair parts available, there could be lengthy delays -- months, or even years -- before it is possible to get the defects repaired. Meanwhile, the consumer would have little choice other than to keep driving an unsafe vehicle.
Here are links to letters of opposition to the bill in CA. The same arguments also apply to the bills in VA:
Consumers for Auto Reliability and Safety
National Association of Consumer Advocates
Consumer Federation of California
James Sturdevant and Former NHTSA Administrator Joan Claybrook
Consumer Attorneys of California
International Association of Machinists and Aerospace Workers
Consumer Action, CALPIRG, Housing and Economic Rights Advocates, Courage Campaign, California Rural Legal Assistance Foundation, Consumer Watchdog
Other opponents include: Trauma Foundation, Center for Auto Safety, and Advocates for Highway and Auto Safety.
The new law is a major new expansion of the National Highway Traffic Safety Administration's authority over safety recalls. For the first time, the agency will be able to police used vehicles provided by rental car companies, including car dealers, as rentals or loaners. Nearly all vehicles rented or sold by rental car companies will be required to be safe. Rental car companies are the largest purchasers of new cars in North America. They are also among the largest sellers of used cars. So this means that millions of used cars will also be safer, when they re-enter the used car market. However, thanks to a last-minute loophole added at the behest of auto dealers, the Act would apply only if the company rents or loans a fleet of 35 or more vehicles, on average – exempting many auto dealers. If a dealer rents, loans, or sells an unsafe recalled car, it would still be a violation of various state laws, but NHTSA is not able to enforce those laws.
The Senate and House both rejected attempts by the auto manufacturers and car dealers to kill the bill, or to allow rentals and loaners of recalled vehicles with “disclosure,” which would merely shift liability onto the victims of unsafe vehicles. The rental car industry, including Enterprise, Hertz, Avis, Dollar-thrifty, Alamo, National, and the American Car Rental Association, as well as many smaller rental car companies, helped persuade lawmakers to vote for the Act, and worked alongside Cally Houck and CARS for passage of the new law. The lone exception was the owner of Rent-a-Wreck, Jack Fitzgerald, a car dealer, who actively opposed the bill and lobbied against its passage.
US Rep. Roger Williams (R-Texas), a car dealer, introduced a special-interest amendment to exempt car dealers from the bill, and to allow them to rent or loan unrepaired recalled vehicles regardless how unsafe they are, or how many people they have maimed or killed, without having to worry about NHTSA enforcement. U.S. Rep. Lois Capps (D-CA), and Rep. Jan Schakowsky (D-IL) argued against the dealer loophole on the House Floor, pointing out that the amendment would mean that consumers who take a recalled car to a dealer for repairs could be loaned another recalled car with the exact same defect. Despite polling showing that the public overwhelmingly opposes this loophole, the Williams amendment passed near midnight, with few Representatives left on the House floor to cast votes, by a voice vote, with some voting “No.”
Rep. Williams also claimed that no dealer would loan or sell an unsafe vehicle. However, many news reports have exposed cases where dealers have handed customers the keys to vehicles with potentially lethal safety defects, causing crashes and even catching a home on fire. In one tragic crash, four family members were killed by an unsafe Lexus loaner car. In Texas, Carlos Solis was killed by a recalled used car with an exploding Takata air bag when a dealer failed to get the car repaired prior to sale. CarMax, the largest retailer of used cars in the nation, openly admits that it sells large numbers of unsafe recalled vehicles without bothering to get the free safety recall repairs done first.
According to the National Highway Traffic Safety Administration, “All safety recalls resulting from defects present an unreasonable risk to safety and we believe it is inappropriate to suggest that some defects are not risky enough to require repair. For the safety of the motoring public, all recalled vehicles should be fixed promptly.”1
The Act will improve both rental car and used car safety, by reducing the numbers of recalled rental and used cars that re-enter the used car market. However, Congress failed to close the used car safety gap, due to heavy opposition from the National Automobile Dealers Association.
To its credit, AutoNation has publicly announced that they guarantee a recall-free vehicle, including used cars. They have also announced that they will not penalize consumers who trade in a vehicle with an open recall by dinging them over the price.
Read more: LA Times: One mother spent over a decade after her daughters' deaths changing car rental laws
recalled rental and loaner cars
Leads to call for ethics investigations
The Center stated in a news release: “Members creating carve-outs that directly benefit their own business interests severely undermines the public’s belief that Members of Congress are acting in the public interest,” said Meredith McGehee, Campaign Legal Center Policy Director. “The specific actions of Rep. Williams must be reviewed for compliance with current rules, but even if he did clear his amendment with the Ethics Committee, his actions are a prime example of why the current rules are both too weak and in need of further clarification.”
The Center issued a letter to Ethics Committee Chair Charles Dent (R-PA) and Ranking Member Linda Sanchez (D-CA) and OCE Co-Chairs David Skaggs and Judy Biggert, urging a review of Rep. Williams’ conduct. The Center also asked the Committee to recommend changes to clarify House rules concerning recusal [removing oneself from participating in the debate and / or vote] and conflicts of interest by Members.
Read more: Legal Center calls for review of loaner car loophole amendment by U.S. Rep. Williams
Read more: Campaign Legal Center letter seeks ethics review