April 11, 2019
In November 2016, trade publication Automotive News published a rosy headline on the eve of National Highway Traffic Safety Administration chief Mark Rosekind’s departure: NHTSA positioned to continue Rosekind's work after inauguration.
The article went on to repeat Rosekind’s predictions that the agency’s aggressive enforcement stance would continue because “the agency has taken steps to keep its momentum on issues such as autonomous vehicles and cementing a “proactive” safety culture in the new presidential administration.”
[Transportation] Secretary Foxx supported us by allowing us to take an associate administrator and make her the acting deputy administrator. So, when we leave, instead of two-thirds of the leadership leaving, two-thirds will stay,” Rosekind said. “That’s another way we’ll have senior career people making sure that things go on.”An examination of NHTSA rulemaking, investigations, and civil penalties in the last two years shows that the momentum has died; the agency appears to be doing less than ever before. It’s so pronounced that even Rosekind could see it from his new perch on the industry side, as chief safety innovation officer by Zoox, a driverless car startup. There could be a variety of reasons for this, so we’ll keep the speculation to a minimum, but the trendlines point to a decline in agency enforcement and rulemaking activities.
Civil Penalties
One of Rosekind’s signature enforcement moves was the use of civil settlements and Special Orders to focus automakers’ attention on timely reporting and ramp up enthusiasm for offering recall remedies. From 2014 to 2015, the agency levied more than $530 million against major automakers, such as Honda, Fiat Chrysler, Hyundai-Kia, BMW and GM, for failure to submit Early Warning Reports, failure to make timely defect reports to the agency, and failure to remedy recalled vehicles and components. These were big fines levied against big players—indeed, the entire industry earned a nuclear response for decades of treating the regulator with open disdain. By the end of 2016, the Golden Age of Enforcement was over. From imposing 10 civil penalties in 2015, totaling more than $404 million, NHTSA fined four entities in 2016 – three of which were auto dealers who sold unremedied, recalled vehicles.
That year, Ride the Ducks International, then-owned by Herschend Family Entertainment, earned the largest fine – $1 million for a slew of violations stemming from a September 2015 crash, in which a stretch duck boat vehicle crashed with a motor coach in Seattle, killing five and injuring 69 others. The vehicle had an unrepaired axle defect covered by a Technical Service Bulletin. The immediate civil penalty was $500,000, with a second $500,000 payment held in abeyance unless the company committed new violation. A couple of years later, a Ride the Ducks boat sank in Table Rock Lake, in the Missouri Ozarks, and killed 17. The victims’ families have sued the new owner, Ripley Entertainment Inc. Did NHTSA investigate to determine if it was time to collect the other $500,000?
In 2017, the civil penalty tally dropped to $130,000, with fines against Michelin Tires, and C&M Trailers of Ennis, Texas. The latter was penalized $110,000 for basically flouting the regulations in any way that it could: skipping EWR reports, manufacturing and certifying vehicles that did not comply with federal motor vehicle safety standards, failing to submit identifying information, failing to comply with VIN requirements, failing to maintain information on first retail purchasers, failing to maintain records of tire purchasers, and launching untimely recalls. This penalty covered four recalls for jet ski, boat and utility trailers.
In 2018, NHTSA only fined Champion Ford, of Edinboro, Indiana $20,000 for selling unremedied recalled vehicles.
One theory is that Rosekind’s shock and awe campaign permanently cowed the industry into following all the rules, promptly reporting defects and submitting all EWR claims, so no need for the further dispensation of civil penalties. Civil settlements going back to 1999 show that for most of the years prior to 2014, the agency was regularly nabbing auto dealers or small manufacturers and zapping at least one or two major automakers each year. Enforcement seems more closely correlated to the party in power, with Republicans rarely finding many violations worth pursuing, and Democrats exercising the regulator’s authority. For example, during the Bush Administration, in 2007, no fines were imposed or collected. With a Republican president at the helm, NHTSA enforcement has apparently re-entered a hibernation phase.
Investigations
The number of investigations the agency has opened in the last two years has similarly dropped like a stone. In 1988, the agency opened as many 186 Defect Petitions, Equipment, Recall and Audit Queries, Preliminary Evaluations and Engineering Analyses. As our regular readers know, an EA is not a new, separate investigation; it represents an upgrade of an existing investigation – most typically a PE. In the time period examined, there are about four times more PEs than EAs, because either the manufacturer is persuaded to conduct a recall, or the agency decides it doesn’t have enough to pursue the matter further. The figures below represent any investigation opened in a particular calendar year.
In 2008, NHTSA’s Office of Defects Investigations decreased to 123, and in 2018, the number is down to 34. In the first three months of 2019, the agency has opened a grand total of one investigation.
| Year | Number of Investigations |
| 2008 | 123 |
| 2009 | 94 |
| 2010 | 78 |
| 2011 | 63 |
| 2012 | 66 |
| 2013 | 56 |
| 2014 | 68 |
| 2015 | 65 |
| 2016 | 28 |
| 2017 | 33 |
| 2018 | 34 |
| 2019 | 1 |
We suspect this could be due to NHTSA turning to a more informal screening process that doesn’t rise to the PE level. These pre-investigation investigations don’t make it into the public record. The Safety Record has long noted NHTSA’s aversion to transparency.
Recalls
In 2016, a record 53 million vehicles were recalled – mostly due to the expansion of the Takata airbag recall for over-pressurized bags that could deploy inadvertently, spewing metal shards into occupants. According to the agency’s latest annual recall report, in 2017, there were 822 recalls involving 30.7 million vehicles, just above 2013 levels. In 2018, there were a total of 722 recalls affecting over 29 million vehicles in the United States. The number of NHTSA-influenced recalls specifically for vehicle defects has dropped more dramatically. In 2008, there were 191 NHTSA-influenced recalls, and over the last nine years, that number has fluctuated, but declined, with just 41 NHTSA-influenced recalls for vehicle defects in 2017. That was the lowest number in two decades.
But, perhaps the quantity of vehicles recalled is less important than the quality of NHTSA’s oversight. In July 2018, the Office of the Inspector General (OIG) released NHTSA’s Management of Light Passenger Vehicle Recalls Lacks Adequate Processes and Oversight, an audit mandated by the 2015 Fixing America’s Surface Transportation (FAST) Act, in the wake of the Takata recalls. This report concluded:
NHTSA’s process for monitoring for light passenger vehicle recalls lacks documentation and management controls, and does not ensure that remedies are reported completely and in a timely manner. The Agency also does not verify recall completion rates, although it has the authority to do so, and it lacks sufficient management controls to ensure staff assess risk when deciding whether to use oversight tools to improve recall completion rates. Finally, while NHTSA expanded its oversight of the Takata recalls in 2015, by increasing the reporting requirements for manufacturers, it did not follow its own procedures to address low recall completion rates for earlier Takata recalls. Overall, inadequate controls and processes for verifying and collecting manufacturer-reported information have hindered NHTSA’s ability to oversee safety recall implementation.
A chart entitled Monitoring of Recall Scope Reporting was fairly damning – showing that despite significant percentages of initial Part 573 Notices of Defect and Noncompliance with mandated information missing, the Recall Management Division noticed these gaps zero percent of the time – or the sample was too small to say. For example, the RMD did not notice that 46 percent of defect notices contained no description of the manufacturer's basis for its determination of the recall population.
In 2011, GAO auditors also found NHTSA’s recall oversight wanting. This report called out the agency for having no set procedures to determine the adequacy of a recall, being slow to analyze recall data to determine if defects are being repaired, and failing to analyze its data to identify recall completion trend data. Since there are no set targets for recall completion rates, there was little incentive for manufacturers to try to remedy defects for most of the population still in the fleet and in a timely manner. In the short term, NHTSA did not track repair rates to ensure recall effectiveness, the report noted. And, while manufacturers file quarterly reports showing the number of vehicles remedied, and NHTSA occasionally opens Recall Queries (RQ) – investigations to assess recall effectiveness – there was evidence that NHTSA did not appear to employ a systematic process to quickly catch low repair rates.
Rulemaking
Save the agency’s early years, NHTSA has never been a torrent of rulemaking. NHTSA largely likes to wait until Congress mandates a new rule, or the entire industry complies, allowing the codification of a widespread practice. But over the last four years, NHTSA’s number of proposed and final rules has wound down to little.
From 2014 through 2016, the agency moved forward with a number of significant regulatory initiatives, mostly buoyed by 10 Congressionally mandated rulemakings on issues ranging from motorcoach safety to side impact tests for children’s car seats. In those years it published:
In 2017, the agency published a Notice of Proposed Rulemaking to establish a new standard, FMVSS 150, to mandate the standardization of vehicle-to-vehicle (V2V) communications for new light vehicles. In 2018, NHTSA’s most significant rulemaking was to withdraw a 2010 Notice of Proposed Rulemaking to test the impact of brake fluids on the type of rubber the industry now uses. The agency kicked off 2019 by withdrawing two 2012 NPRMs – one that mandates installation of an Event Data Recorder (EDR) that meets NHTSA's current EDR standard in most light vehicles and a second that revises FMVSS 205, Glazing materials, to harmonize it with the corresponding Global Technical Regulation used internationally.
NHTSA’s failure to execute rulemaking has earned it two lawsuits in the last three years. In November 2016, Consumer Watchdog, the Center for Auto Safety and former NHTSA Administrator Joan Claybrook, sued the agency for failing to respond to their petition to establish an automatic braking regulation. The group had petitioned the agency in January to require the feature. And then in March, without responding to the petition in the required 120 day-period, NHTSA announced it had reached an historic agreement with 22 automakers to voluntarily make automatic emergency braking standard by 2022.
In August 2017, the Center for Auto Safety and KidsAndCars.org sued the DOT for missing a deadline to require automakers to install rear-seat warning technology in all future vehicles. The plaintiffs have argued that the 2012 Moving Ahead for Progress in the 21st Century Act (MAP-21), signed into law by President Obama on July 6, 2012, required NHTSA to issue a final rule by October 2015 mandating the rear-seat reminder system. The agency has argued that the Department initiated a rulemaking in 2013, when it asked for public comments on a proposed study on the effectiveness of existing rear seat belt reminder systems. That study began in 2014. The agency further argued that MAP-21 specifically authorized the DOT to extend the initial three-year deadline for issuing a final rule, and the agency has repeatedly announced these extensions. Currently NHTSA estimates it will publish an NPRM in May.
The DOT has often been a Cabinet-level backwater, and NHTSA the ugly step-child of the federal family – even though it regulates a consumer commodity found in virtually every American home. The Trump Administration, in concert with a Republican majority in both houses from 2016 to 2018, generally disdained governance unless it was focused on re-distributing wealth to the top, taking healthcare away from the public, or suppressing brown people. So, we didn’t expect too much from NHTSA during these years. But we’ve never seen NHTSA minimize itself so thoroughly. And the contrast with the activity under Rosekind’s two-year reign is stark.