GAO Uited States Geeral Accoutig Office Report to Cogressioal Requesters Jauary 2001 MOTOR VEHICLE SAFETY NHTSA s Ability to Detect ad Recall Defective Replacemet Crash Parts Is Limited GAO-01-225
Cotets Letter 3 Appedixes Appedix I: Scope ad Methodology 24 Appedix II: State Legislatio Goverig Aftermarket Crash Parts ad Recycled Airbags 27 Figures Figure 1: Replacemet Automobile Crash Parts by Source, December 2000 7 Figure 2: State Aftermarket Crash Parts Legislative Provisios as of November 2000 28 Abbreviatios ARA CAPA ICBC IIHS NHTSA ODI OEM Automotive Recyclers Associatio Certified Automotive Parts Associatio Isurace Corporatio of British Columbia Isurace Istitute for Highway Safety Natioal Highway Traffic Safety Admiistratio Office of Defects Ivestigatio origial equipmet maufacturer Page 1
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Uited States Geeral Accoutig Office Washigto, D.C. 20548 Leter Jauary 31, 2001 The Hoorable Byro L. Dorga Uited States Seate The Hoorable Joh F. Tierey House of Represetatives The Natioal Highway Traffic Safety Admiistratio (NHTSA), the federal agecy resposible for reducig accidets, deaths, ad ijuries resultig from motor vehicle crashes o the atio s highways, estimates that over 6 millio automobile accidets occurred i the Uited States i 1999. To repair crash-damaged vehicles, cosumers spet over $8 billio ad bought over 61 millio sheet metal ad plastic body parts (icludig exterior feders, bumpers, hoods, ad doors). Cosumers ad body shops that repair crash-damaged vehicles have a choice i may istaces of buyig ew replacemet parts from either the origial equipmet maufacturer or other sources, commoly called aftermarket maufacturers. These aftermarket maufacturers produce their parts by copyig the desig of the origial vehicle parts. Cocers have bee raised for may years about the quality ad safety of aftermarket crash parts. 1 A umber of auto maufacturers ad repair shop owers argue that aftermarket crash parts are iferior to origial parts ad pose a possible safety risk. Coversely, may aftermarket maufacturers ad auto isurers argue that aftermarket crash parts ca be equal i quality to origial parts, are safe, ad ca cost up to 65 percet less tha the origial equipmet maufacturer s parts. Public awareess was heighteed i October 1999 after judgmets totalig over $1 billio were etered agaist State Farm Mutual Automobile Isurace Compay i respose to a class actio complait cocerig the use of aftermarket crash parts. The trial court cocluded that State Farm breached its isurace policies by requirig the use of aftermarket parts that did ot retur damaged vehicles to their precrash coditio. The court also foud that State Farm s coduct violated the Illiois Cosumer Fraud ad Deceptive Busiess Practices Act. 1 Crash parts are geerally made of sheet metal or plastic ad istalled o the exterior of a motor vehicle. These parts iclude bumper compoets, hoods, doors, feders, ad truk lids. Crash parts exclude mechaical parts such as batteries, filters, shock absorbers, ad spark plugs. Page 3
State Farm has appealed this decisio. I light of the decisio, State Farm has suspeded its specificatio of aftermarket crash parts i repairs. Cocers have also bee raised about the safety of replacig deployed airbags with odeployed airbags take from old or otherwise damaged vehicles. May maitai that the airbag is such a importat safety item that oly ew bags produced by the origial maufacturer should be used to replace deployed bags. Others coted that recycled airbags pose o safety issues whe properly hadled ad istalled ad that their use ca save the cosumer hudreds of dollars i repair costs. Because of potetial cocers about the safety of aftermarket crash parts ad recycled airbags, you asked us to provide iformatio o studies o the safety of aftermarket crash parts ad recycled airbags, NHTSA s authority over aftermarket crash parts ad recycled airbags, ad NHTSA s ability to idetify ad remove usafe aftermarket crash parts ad recycled airbags from the atio s roadways. To respod to these questios, we idetified ad reviewed existig safety studies o aftermarket crash parts ad recycled airbags; reviewed NHTSA s legal authority over aftermarket crash parts ad recycled airbags; reviewed NHTSA s defect idetificatio, ivestigatio ad recall processes; toured two crash test facilities; ad iterviewed represetatives of over 40 govermet ad idustry orgaizatios. Appedix I provides a detailed discussio of our scope ad methodology. Results i Brief We idetified seve studies of aftermarket crash parts or recycled airbags. Five studies examied issues relatig to the safety of aftermarket crash parts, but their results do ot coclusively resolve the issue of safety. Oe of the studies, published by Cosumer Reports, cocluded that aftermarket crash parts are geerally of poorer quality, fit improperly, rust more quickly, ad may compromise safety. Aother study, coducted by Ford, stated that aftermarket crash parts are iferior to Ford geuie parts ad are ot of like kid ad quality. The three other studies, sposored by vehicle isurace compaies ad related associatios, cocluded that crash parts, whether origial or aftermarket, do ot ifluece motor vehicle safety. Two studies o the safety of recycled airbags cocluded that recycled airbags fuctio withi their origial specificatios whe udamaged ad properly hadled ad istalled. Although these studies are useful, they do ot Page 4
resolve the debate over the safety of aftermarket crash parts ad recycled airbags because they reach differet coclusios ad are limited i umber ad scope. NHTSA has broad authority to set safety stadards for aftermarket crash parts. 2 The Motor Vehicle Safety Act provides NHTSA with the authority to prescribe safety stadards for ew motor vehicles ad ew motor vehicle equipmet sold i iterstate commerce a category that icludes aftermarket crash parts. Although NHTSA has the authority to regulate aftermarket crash parts, it has ot determied that these parts pose a sigificat safety cocer ad therefore has ot developed safety stadards for them. The act also provides NHTSA with more limited authority to prescribe safety performace stadards for used motor vehicles i order to ecourage ad stregthe state motor vehicle ispectio programs. Because NHTSA may set motor vehicle safety stadards for vehicle systems (like brakes ad lights) as well as for a etire vehicle, the agecy could elect to develop safety stadards for occupat restrait systems, which could icorporate airbags, uder the used vehicle provisio. NHTSA has ot developed such stadards because it has ot idetified sigificat problems with occupat restrait systems that could be addressed by state motor vehicle ispectio programs. NHTSA s ability to idetify ad recall usafe aftermarket parts is limited. The agecy relies heavily o a database of complaits from vehicle owers ad other cocered people to idetify possibly usafe automotive products whether from the origial equipmet maufacturer or the aftermarket crash parts maufacturer. However, limitatios i the database may hamper NHTSA s ability to idetify treds i defects. For example, the database may cotai oly a small fractio of the complaits that customers make to maufacturers. I additio, aftermarket crash parts may ot be idetified as such i the database because cosumers who complai to NHTSA may ot kow they have aftermarket crash parts or their complaits may ot idicate that such parts are ivolved. Because existig studies of aftermarket crash parts do ot coclusively resolve the issue of safety, NHTSA eeds to have a effective oversight program that 2 NHTSA was established i 1970 as a separate operatig admiistratio withi the Departmet of Trasportatio to admiister the Departmet s motor vehicle ad highway safety programs. NHTSA carries out safety programs uder the Natioal Traffic ad Motor Vehicle Safety Act of 1966 ad the Highway Safety Act of 1966. The Motor Vehicle Safety Act was subsequetly recodified uder title 49 of the U.S. Code i chapter 301, Motor Vehicle Safety. Page 5
will detect safety-related defects, regardless of the type or source of the usafe parts. Furthermore, eve if NHTSA s database were to idetify usafe aftermarket crash parts, the agecy might ot be able to require maufacturers to recall them because some of these parts do ot idetify the product maufacturer ad documetatio o their purchasers is limited. Recet legislatio gives NHTSA a opportuity to look at ways to improve its systems so that it will be i a better positio to idetify defective automotive parts ad require maufacturers to recall them. This report cotais recommedatios to stregthe NHTSA s ability to detect ad order the recall of usafe vehicle parts from the atio s roadways. NHTSA geerally agreed with these recommedatios. However, i commetig o a draft of this report, NHTSA clarified its regulatory authority over recycled airbags. We modified the report to reflect NHTSA s commets. Backgroud Crash parts are geerally made of sheet metal or plastic ad istalled o the exterior of a motor vehicle. These parts iclude hoods, doors, feders, ad truk lids. Crash parts exclude mechaical parts such as batteries, filters, shock absorbers, ad spark plugs. Body shops ofte use a mix of parts i collisio repairs, but we use the term crash parts i this report to refer to parts used o the exterior of a vehicle. Aftermarket crash parts are the replacemet automotive crash parts that are ot made by the origial equipmet maufacturer (OEM). May of these aftermarket crash parts maufacturers are located overseas. Recycled airbags are salvaged odeployed airbags removed from damaged or old vehicles. Crash parts are big busiess. I 1999, drivers had a estimated 6 millio automobile crashes i the Uited States costig over 40,000 lives ad about $8 billio i damage of which $1.2 billio represets the costs of aftermarket crash parts. Overall, about 60 cets out of every dollar of automobile isurace claims is spet o repairig collisio damage to vehicles. Isurace compaies estimate that usig aftermarket istead of OEM parts saves hudreds of millios of dollars each year. Util the mid- 1980s, cosumers ad auto body shops could purchase ew replacemet crash parts oly from the origial automobile maufacturer. At that time, idepedet parts maufacturers bega offerig aftermarket replacemet parts at substatially lower prices. Still, the crash parts idustry remais highly cocetrated, ad OEM parts accout for about 80 percet of the market. Figure 1 shows the replacemet crash parts market by source. Page 6
Figure 1: Replacemet Automobile Crash Parts by Source, December 2000 Recycled Aftermarket 5% 15% 80% OEM Source: Ceter for Auto Safety. Some aftermarket crash parts are certified as to their quality. I 1987, the isurace idustry fuded the oprofit Certified Automotive Parts Associatio (CAPA), whose objective is to esure the quality of aftermarket crash parts. To determie the quality of these parts, the associatio examies a maufacturer s plat, equipmet, maufacturig processes, ad resultig products. If the associatio fids the aftermarket crash parts to be equivalet i appearace, fit, material compositio, ad mechaical properties to ew OEM parts, it certifies the parts as fuctioally equivalet to OEM parts. I additio, it periodically purchases parts i the ope market ad checks them to esure they meet the associatio s stadards. Accordig to the associatio, i 1999, about 35 percet of all aftermarket crash parts were certified. This represets about 5 percet of the total aftermarket crash parts market which would iclude OEM, aftermarket, ad recycled parts combied. More recetly, i 2000, Global Validators, a automotive quality cosultat, started a ew certificatio process directed at improvig the quality of aftermarket crash parts. The Maufacturers Qualificatio ad Validatio Program, similar to the CAPA program, is a set of guidelies that outlie policies ad quality maagemet practices desiged to esure that aftermarket crash parts are equal i form, fit, fuctio, performace, Page 7
durability ad appearace to OEM parts. This program is based o the QS- 9000 stadard, a productio quality stadard developed i the automotive idustry. Cosumers ca search a o-lie database to determie if a specific part has bee reviewed uder the program. At the federal level, NHTSA is resposible for reducig accidets, deaths, ad ijuries resultig from motor vehicle crashes. NHTSA accomplishes this, i part, by settig ad eforcig safety performace stadards that apply to ew motor vehicles ad motor vehicle equipmet. Uder these stadards, maufacturers of motor vehicles ad equipmet must assure that their products comply with all applicable safety stadards ad certify such compliace. The federal stadards are writte i terms of miimum safety performace requiremets for motor vehicles ad equipmet. Examples of stadards iclude hydraulic brake system requiremets to esure safe brakig performace, vehicle lamp requiremets to provide adequate illumiatio, ad hood latch requiremets to esure that hoods remai fasteed securely. The Motor Vehicle Safety Act requires maufacturers to iform NHTSA whe a vehicle or equipmet is defective or whe a vehicle or equipmet does ot comply with a applicable motor vehicle safety stadard. These requiremets also apply to persos who import motor vehicles ad equipmet ito the Uited States. NHTSA does ot approve vehicles or equipmet. Istead, federal law establishes a self-certificatio process uder which each maufacturer is resposible for certifyig that its products meet all applicable safety stadards. The law also gives NHTSA the authority to ivestigate possible safety-related defects, to decide whether a defect exists, ad to order a maufacturer to otify cosumers ad to remedy ay defect. NHTSA s process for idetifyig a possible defect i motor vehicles ad motor vehicle equipmet begis with screeig the complaits it receives i its Office of Defects Ivestigatio (ODI). Sources of complaits iclude a toll-free hotlie, a Web page, e-mail, telephoe calls, ad letters. I a average year, ODI receives betwee 40,000 ad 50,000 complaits. These complaits are etered ito a complait database, which ODI aalyzes to idetify potetial defect treds. Whe the screeig idetifies a potetial problem, ODI opes a ivestigatio called a prelimiary evaluatio. This evaluatio ivolves otifyig the maufacturer ad the public ad gatherig iformatio o the potetial defect. If this process cotiues to idicate that a defect tred Page 8
may exist, the ivestigatio moves to a secod stage called a egieerig aalysis. I this stage, ODI aalyzes the character ad scope of the potetial defect i more detail. This aalysis may iclude ispectios, surveys, tests, ad efforts to obtai additioal iformatio from the maufacturer. If ODI cotiues to believe that a defect tred may exist, a pael of experts from the agecy may be coveed to review the data. If the expert pael cocurs with ODI, a recall request letter is set to the maufacturer. If the maufacturer declies to coduct a recall i respose to the letter, NHTSA s Associate Admiistrator for Safety Assurace may issue a iitial decisio that a defect exists ad covee a public meetig o the issue. After the meetig, the NHTSA Admiistrator may issue a fial decisio ad order the maufacturer to coduct a recall. If ecessary, the agecy will the go to court to eforce such a order. I almost all cases, the maufacturer agrees to coduct the recall without NHTSA s forcig it to do so. Accordig to NHTSA officials, the agecy opes betwee 80 ad 100 defect ivestigatios each year, of which more tha half result i recalls. I additio, maufacturers coduct a average of 200 defect recalls each year that are ot iflueced by NHTSA s ivestigatios. I 2000, there were over 385 recalls for safety-related defects affectig over 18 millio vehicles. States are also ivolved i the regulatio of aftermarket crash parts ad recycled airbags. Accordig to the Natioal Associatio of Idepedet Isurers, 40 states have eacted some form of legislatio goverig the use of aftermarket crash parts i vehicle repairs. 3 Most of this legislatio is directed at esurig that vehicle owers are aware that aftermarket parts are beig used i repairs. For example, 33 states require that writte repair estimates cotai a disclosure statemet otifyig cosumers that aftermarket crash parts will be used i the repair, ad 8 states require the coset of the cosumer to use aftermarket crash parts. Furthermore, accordig to the Automotive Occupats Restraits Coucil, New York was the oly state that had eacted a law regulatig the sale ad istallatio of recycled airbags as of December 2000. Appedix II provides a summary of state law provisios coverig aftermarket crash parts ad recycled airbags. I additio, i early 2000, the Massachusetts Auto Damage Appraiser Licesig Board coducted two hearigs to discuss the safety of OEM, aftermarket, ad recycled parts used i collisio repair. I September 2000, the Board voted three to two that aftermarket cosmetic parts are ot exact 3 The Natioal Associatio of Idepedet Isurers represets about 675 isurace compaies. Page 9
duplicates of OEM parts ad may jeopardize the safety ad value of a vehicle. The Debate o Aftermarket Crash Parts The debate o the quality ad safety of aftermarket crash parts is highly polarized, reflectig a rage of opiios o the safety of aftermarket crash parts: Aftermarket crash parts are usafe. Accordig to this positio held geerally by may collisio-repair associatios ad repair shop owers aftermarket crash parts are iferior to OEM parts i fit ad fiish ad are dagerous. The evidece for this argumet is mostly aecdotal, although we saw aftermarket crash parts that were clearly differet from their OEM couterparts. Aftermarket crash parts may be usafe. Accordig to this positio held geerally by ew vehicle maufacturers the impact of aftermarket crash parts o occupats safety is ukow. Therefore, the maufacturers recommed that oly OEM parts be used to esure that repaired vehicles perform to their origial safety specificatios. Aftermarket crash parts are safe. Accordig to this positio held geerally by isurace compaies ad aftermarket maufacturers aftermarket crash parts are cosmetic oly ad do ot affect vehicle safety. The Debate o Recycled Airbags The debate o the use of recycled airbags is also divided. Geeral opiios iclude the followig: Recycled airbags may be usafe. Advocates of this positio geerally OEMs, some isurace compaies, ad body shop owers maitai that deployed airbags should be replaced oly with ew OEM airbags. Advocates of this positio maitai that airbags are a vital safety feature ad the potetial risks of recycled airbags should preclude replacig a deployed airbag with aythig other tha a ew airbag. Furthermore, they argue that recycled airbags do ot udergo the same itesive quality checks as ewly maufactured uits. They add that may udetectable variables, like water damage to the airbag, could prevet a recycled airbag from deployig properly. Fially, they coted that the existece of a recycled airbag market will further icrease airbag theft. Recycled airbags are safe. Advocates of this positio geerally recyclig orgaizatios ad some isurace compaies maitai that reusig odeployed OEM airbags is a viable, ecoomical, ad safe Page 10
alterative to usig ew, more costly OEM airbags whe the recycled airbags are properly matched, hadled, ad istalled. The advocates add that lower-icome drivers may ot be able to afford to replace their airbags with ew, more expesive OEM airbags. Therefore, recyclers are creatig a market i which drivers ca purchase replacemet airbags that are 50 percet to 70 percet cheaper tha ew airbags. Studies of Aftermarket Crash Parts ad Recycled Airbags Do Not Coclusively Resolve Safety Issues We idetified seve studies of aftermarket crash parts or recycled airbags, but their results do ot coclusively resolve the issue of safety. Five studies oe by cosumer advocates, oe by a auto maufacturer, ad three by the isurace idustry examied the use of aftermarket crash parts. Two studies oe by the recyclig idustry ad the other by a isurace compay focused o the safety of recycled airbags. Although these studies are useful, they do ot resolve the debate over the safety of aftermarket crash parts ad recycled airbags because they reach differet coclusios ad are limited i umber ad scope. Cosumer Reports Test I February 1999, Cosumer Reports published the results of its study ad fueled the debate o the quality of aftermarket crash parts. 4 Cosumer Reports compared OEM ad aftermarket bumpers ad CAPA-certified feders for a 1993 Hoda Accord ad a 1993 Ford Taurus. It tested feder corrosio resistace, bumper protectio, ad the overall quality of the parts fit. Cosumer Reports foud that CAPA-certified aftermarket feders rusted more quickly ad did ot always fit properly. The report also stated that aftermarket bumpers did ot fit properly ad did ot provide sufficiet protectio i low-speed collisios. The aftermarket bumpers tested, which were ot CAPA-certified, shattered i a variety of tests at 5 miles per hour or less. Oe aftermarket bumper did ot prevet damage to the Ford headlight moutig pael, radiator support, ad air coditioer codeser. Aother bumper allowed damage to the Hoda radiator, air coditioer codeser, radiator support, ad other parts. The report cocluded that (1) aftermarket crash parts are iferior to OEM parts, (2) cosumers are ill served by the use of aftermarket crash parts, ad (3) aftermarket crash parts may ifluece vehicle safety. Cosumer Reports study also oted that comprehesively determiig the safety of aftermarket crash parts through testig is very difficult, if ot impossible. Accordig to Cosumer 4 Cheap Car Parts Ca Cost You a Budle, Cosumer Reports, Feb. 1999. Page 11
Reports, crash testig which would ultimately resolve questios about the safety of these parts is very complex ad expesive to coduct for all combiatios of replacemet crash parts ad origial vehicles. Ford Test I 1994, Ford compared its replacemet crash parts to certified ad ocertified aftermarket crash parts. Ford tested the parts for fit, fiish, structural itegrity, corrosio resistace, material compositio, ad det resistace. Accordig to the study, Ford replacemet parts outperformed the aftermarket replacemet parts for all quality factors. O the basis of this testig, Ford cocluded that aftermarket crash parts are iferior to Ford replacemet parts ad are ot of like kid ad quality. The Ford testig, like the Cosumer Reports testig, focused o the quality, ot the safety, of aftermarket crash parts. Isurace Idustry Tests The Isurace Istitute for Highway Safety (IIHS) coducted two studies of aftermarket crash parts. 5 IIHS sought to determie whether aftermarket crash parts pose a safety risk. I its 1987 study, IIHS crashed a 1987 Ford Escort without its frot feders, door skis, ad grill ad with a aftermarket hood istalled. The Escort complied with all frot-ito-barrier crash test performace requiremets specified i federal stadards. IIHS cocluded that aftermarket crash parts do ot affect occupats safety durig a collisio. I February 2000, IIHS released the results of a similar test with a 1997 Toyota Camry ad reached the same coclusio. I that test, IIHS compared the results of a crash test of two vehicles (1) a 1997 Toyota Camry with the frot feders, door skis, ad frot bumper removed ad a CAPA-certified aftermarket hood istalled ad (2) a factory origial 1997 Camry. The study foud o sigificat differece i the performace of the two vehicles, leadig IIHS to coclude that crash parts are irrelevat to safety with the possible exceptio of hoods. IIHS oted two possible safety-related cocers with hoods: (1) a hood latch could fail while drivig, allowig the hood to fly up suddely, obscurig the driver s view, ad (2) a hood may ot buckle properly durig a crash, allowig it to be drive back ear or ito the widshield i a collisio. 5 The Istitute is a oprofit scietific ad educatioal orgaizatio fuded by automobile isurers. Its missio is to reduce the losses deaths, ijuries, ad property damage from crashes o the atio s highways. Page 12
I 1995, Thatcham a isurace idustry research facility located i Eglad coducted a test similar to the 1987 IIHS study. 6 Thatcham crashtested a 1995 Vauxhall Astra with the frot feders, door skis, ad frot bumper removed ad a aftermarket hood istalled. It foud that the Astra complied with all frot-ito-barrier crash test performace requiremets specified i federal stadards cosistet with IIHS fidigs. The Thatcham study cocluded that aftermarket crash parts do ot affect the crashworthiess of a vehicle. Recycled Airbag Tests The Automotive Recyclers Associatio (ARA) fuded a study i 1998 at Garwood Laboratories i Califoria to test 196 recycled airbags ad 5 ew OEM airbags. 7 The study showed that 195 out of 196 recycled airbags deployed withi the maufacturer s specificatios. A associatio official stated that the laboratory pre-idetified oe flood-damaged airbag ad was ot surprised whe the airbag did ot deploy withi the maufacturer s specificatios. Thus, the associatio cocluded that recycled airbags are a viable, ecoomical, ad safe alterative to ew, more costly OEM airbags whe properly hadled, shipped, ad professioally istalled. I 2000, the Isurace Corporatio of British Columbia (ICBC) tested 136 recycled airbags from various automobiles. 8 This study sought to determie if there was ay appreciable differece i deploymet betwee factory-ew OEM airbags ad recycled airbags. 9 A official with ICBC stated that the study showed that there is o appreciable differece betwee OEM ad recycled airbags whe the airbags are properly replaced ad have ot bee exposed to flood damage. ICBC expects to begi specifyig that repairers use recycled airbags i early 2001. A official from ICBC stated that it expects to use oly certified recycled airbags i replacig deployed uits. 6 Thatcham was established i 1969 by the British Isurace Associatio ad udertakes a wide rage of automotive research. 7 The Automotive Recyclers Associatio represets approximately 2,000 automotive recyclers that provide replacemet parts. 8 The Isurace Corporatio of British Columbia is a govermet-operated corporatio ad the sole automobile isurace provider i British Columbia. 9 As of December 2000, ICBC had ot issued a paper o the results of its testig. Page 13
Recycled Airbag Certificatio Compay Tests We idetified two U.S. compaies that are developig testig procedures to certify the safety ad reliability of recycled airbags. Both orgaizatios use electrical egieerig ad other methods to detect flood damage, foreig matter, ad electroic problems. Oe of the compaies said that it had tested 58 recycled airbags ad foud that the recycled airbags it tested deployed withi the maufacturer s specificatios. These compaies said that their approaches could esure that a recycled airbag performs withi the maufacturer s specificatios. Both orgaizatios stated that the key to the safety of recycled airbags is the proper matchig, hadlig ad istallatio of the recycled airbags. Oe compay has begu certifyig recycled airbags, ad the other plas to start certifyig airbags i early 2001. Studies Do Not Defiitively Aswer the Questio of Safety While the studies ad tests coducted o aftermarket crash parts ad recycled airbags provide useful iformatio, they do ot appear sufficiet to resolve the questio of whether aftermarket crash parts ad recycled airbags are safe. The limited umber ad scope of the studies make it difficult to draw coclusios about all parts. I the studies of aftermarket crash parts, oly three vehicles were crash-tested a 1987 Ford Escort, a 1997 Toyota Camry, ad a 1995 Vauxhall Astra. These vehicle models represet oly a small percetage of the hudreds of makes, models, ad years of vehicles o the roads today. The primary focus of the Cosumer Reports study was o the quality of aftermarket crash parts, although it raised questios about their safety. The study also stated that the large umber of vehicles ad parts available may make it impossible to aswer the safety questio through testig. Although the two recycled airbag studies coducted by ARA ad ICBC showed that udamaged ad properly istalled airbags will deploy withi the maufacturer s specificatios, they did ot develop measures to esure that recycled airbags are udamaged. They highlighted the eed to develop testig procedures to esure that recycled airbags are udamaged ad ot take from flood-damaged vehicles. Page 14
NHTSA s Authority Over Aftermarket Crash Parts ad Recycled Airbags The Motor Vehicle Safety Act gives the Secretary of Trasportatio broad authority to prescribe safety stadards to reduce traffic accidets, deaths, ad ijuries o the atio s roads. The act authorizes the Secretary to prescribe safety stadards for ew motor vehicles ad motor vehicle equipmet. 10 The Motor Vehicle Safety Act prohibits, i part, the maufacturig, sellig, ad importig of ew vehicles ad ew vehicle equipmet that do ot comply with NHTSA s safety stadards. These provisios could apply to both ew OEM ad ew aftermarket crash parts sice ew parts are classified as ew motor vehicle equipmet. Although NHTSA has the authority to regulate aftermarket crash parts, the agecy has ot determied that these parts pose a sigificat safety cocer ad therefore has ot developed safety stadards for them. Accordig to agecy officials, the agecy has ot developed safety stadards for aftermarket crash parts because testig by IIHS cocluded that the use of aftermarket crash parts does ot affect vehicle safety; problems with aftermarket crash parts ted to focus o the fit ad fiish of the parts, rather tha o safety; the agecy has ot idetified ay treds i the complaits it receives about the safety of aftermarket crash parts ad recycled airbags; ad those who voiced cocers about the use of aftermarket crash parts, icludig maufacturers of origial replacemet parts, have ot provided coclusive evidece that aftermarket crash parts pose a sigificat safety cocer. The act s provisios that apply to aftermarket parts do ot apply to recycled airbags because they are used rather tha ew equipmet. For used vehicles, the Motor Vehicle Safety Act directs the Secretary to prescribe safety performace stadards for used motor vehicles, i order to ecourage ad stregthe state motor vehicle ispectio programs. Uder this provisio, the agecy could elect to develop safety stadards for occupat restrait systems, which might icorporate airbags. NHTSA has ot developed such stadards because it has ot idetified sigificat problems with occupat restrait systems that could be addressed by state motor vehicle ispectio programs. The agecy has, however, determied that water damage ca udermie the performace of airbag systems. Through its defect ivestigatio process, NHTSA has idetified several 10 The Secretary has delegated the authority over these matters to NHTSA. Page 15
safety defects i motor vehicles that were related to the failure of the airbags to operate properly after beig exposed to flood damage or the itrusio of other liquids. The resultig recalls affected over 725,000 vehicles. Several other maufacturers have recalled vehicles to address similar problems without beig iflueced by NHTSA s ivestigatios. Accordig to NHTSA officials, the agecy could coduct a study of recycled airbags ad, if appropriate, issue cosumer warigs or issue a report to the Cogress o its fidigs. NHTSA s Ability to Detect ad Order the Recall of Usafe Aftermarket Crash Parts Is Limited NHTSA has the authority to order maufacturers of replacemet parts that cotai a safety-related defect to recall the defective items. Maufacturers must otify owers, purchasers, ad dealers of the defect ad remedy the defect (either through repair or replacemet) free of charge. However, NHTSA s ability to detect parts with safety-related defects is limited because the agecy s database of complaits from vehicle owers ad others cotais oly a fractio of the complaits that maufacturers receive. Moreover, eve if NHTSA were to idetify usafe aftermarket crash parts, it would likely have difficulty havig them recalled. Recet legislatio creates opportuities for NHTSA to gather additioal iformatio eeded for idetifyig possible defects ad improve its maagemet ad aalysis of vehicle safety data. NHTSA s Complait Database Has Limitatios A essetial compoet of NHTSA s overall process is the agecy s ability to detect safety-related defects. To decide whether to ivestigate a possible safety-related defect, icludig ay relatig to OEM ad aftermarket crash parts, NHTSA relies heavily o its complait database. However, this database cotais oly a fractio of the complaits that customers report to maufacturers. I additio, aftermarket crash parts may ot be idetified as such i the database because cosumers who complai to NHTSA may ot kow they have aftermarket crash parts or their complaits may ot idicate that such parts are ivolved. NHTSA s ODI receives cosumer complaits about possible defects i motor vehicles ad motor vehicle equipmet from a toll-free cosumer hotlie, a o-lie computer Web page, e-mail, telephoe calls, surveys, ad letters. As of August 2000, the database cotaied about 400,000 complaits gathered over the last 10 years. I a average year, ODI receives betwee 40,000 ad 50,000 complaits. Page 16
The umber of complaits i the database may represet oly a small percetage of all complaits beig made about possible defects. For example, i September 2000, the Admiistrator of NHTSA testified o the ivestigatio ad recall of Firestoe tires. The Admiistrator said that by the ed of 1999, NHTSA had received 46 reports of icidets ivolvig these tires. NHTSA did ot ope a defect ivestigatio at that time because of the large umber of tires i use ad the variety of possible causes of tire failure. However, after press reports i February 2000 highlighted two fatalities ad alluded to a umber of other crashes ad fatalities, NHTSA opeed a ivestigatio. After obtaiig additioal iformatio from the maufacturers ivolved ad the attedat publicity, the Admiistrator reported that as of August 31, 2000, NHTSA had received over 1,400 complaits. I additio, accordig to the former Chief of ODI s Treds ad Aalysis Divisio, the complaits NHTSA receives about safety-related defects may represet oly 10 percet of all the complaits that maufacturers receive. This estimate was based o the results of past requests for iformatio made to maufacturers after ODI had opeed ivestigatios. For example, i February 2000, ODI bega a ivestigatio of plastic door garish moldigs o 1998 ad 1999 Sebrig Coupe vehicles. This ivestigatio respods to 21 cosumer complaits of partial ad complete detachmet, some of which occurred while the cosumer was drivig. 11 Durig the prelimiary evaluatio phase of the ivestigatio, ODI requested iformatio from DaimlerChrysler Corporatio ad obtaied 276 additioal complaits that the maufacturer had received. Accordig to NHTSA officials, the agecy has made efforts over the past few years to ecourage repair shops ad others to report safety-related problems with either OEM or aftermarket crash parts; however, the agecy has received relatively few complaits about these parts. Aftermarket crash parts may ot be idetified as such i NHTSA s database because cosumers who complai to NHTSA may ot kow they have aftermarket crash parts or their complaits may ot idicate that such parts are ivolved. Accordig to data supplied by the Natioal Associatio of Idepedet Isurers, 10 states do ot have ay form of legislatio addressig the use of aftermarket crash parts. I these states, it is ot ecessary to tell a ower specifically about the use of a aftermarket part i a vehicle repair or to receive the ower s coset to use the parts. Furthermore, there are o requiremets for iformig the purchaser of a 11 The door garish moldig is the trim pael that attaches to the lower portio of the vehicle. It is composed of a molded thermoplastic ad is 50 iches log ad 14 iches high. Page 17
used vehicle that aftermarket crash parts have bee used i a earlier repair. I these istaces, the complaiat would be ulikely to idetify the defective part as a aftermarket part. I additio, i submittig a complait to NHTSA, a complaiat is free to describe the problem i ay way he or she chooses. The choice of words i a complait is importat because the process NHTSA follows i idetifyig potetial defect treds begis with a search of key words i the database. For example, we asked NHTSA to search for aftermarket ad foud six complaits that cotaied that term. However, complaiats could have used a variety of other words to describe their complait or might ot have thought to metio the term. Recallig Usafe Aftermarket Crash Parts May Be Difficult Eve if NHTSA were to coclude that certai aftermarket crash parts cotaied a safety-related defect, its ability to recall them would be hampered because the parts do ot always idicate the maufacturer ad it may be difficult to idetify the vehicles o which the parts were used. Accordig to Cosumer Reports, may aftermarket crash parts are essetially ivisible to NHTSA s complait ad recall system, maily because the parts have o maufacturer s ame stamped o them. Durig our review, we also saw several aftermarket crash parts that did ot carry the maufacturer s idetificatio. However, the extet to which parts are ulabeled is ukow. Taiwa Auto Body Parts Associatio officials stated that, sice 1994, early all of the aftermarket crash parts its members maufacture are stamped with the maufacturer s ame ad a productio lot umber. 12 Furthermore, accordig to a CAPA official, the aftermarket parts certificatio process requires maufacturers to mark each part with the maufacturer s ame ad productio lot umber to facilitate idetificatio ad recall if ecessary. However, CAPA recogizes that its certified parts represet oly a third of all aftermarket crash parts ad some ocertified parts do ot idicate the maufacturer. Eve if the maufacturers of aftermarket parts were clearly idetified, little iformatio exists o the purchasers of those parts, makig the recall process difficult. Whe automotive maufacturers recall vehicles, they rely o iformatio they obtaied whe the vehicles were purchased ad o registratio records maitaied by state departmets of motor vehicles to idetify ad locate vehicle owers. With aftermarket crash parts, however, 12 The Taiwa Auto Body Parts Associatio represets early 40 Taiwa-based aftermarket crash parts maufacturers. Page 18
this iformatio is typically ot available. Vehicle owers may purchase aftermarket crash parts at automotive retail stores ad istall the parts themselves, or body shops may istall aftermarket parts that they obtaied through parts distributors. I either istace, it is ulikely that the owers of vehicles with usafe aftermarket crash parts could be specifically idetified because it is ulikely that shops or distributors would maitai the iformatio eeded to locate the owers of the usafe parts. Cosequetly, it would be ecessary to recall usafe aftermarket crash parts usig a broad-based approach similar to a cosumer product safety recall. Uder this approach, public aoucemets are made to alert cosumers to the product s safety-related defect. NHTSA officials recogize that it would be very difficult to idetify ad recall aftermarket crash parts usig this approach. Recet Legislatio Idetifies Weakesses i NHTSA s Ability to Idetify Safety- Related Defects The Firestoe tire recall, together with the subsequet cogressioal ivestigatios ad legislative iitiatives, focused attetio o weakesses i NHTSA s regulatory ad eforcemet program. Likewise, cogressioal oversight reports expressed cocers about the effectiveess ad efficiecy of NHTSA s process of gatherig ad aalyzig data o vehicle defects ad iitiatig ivestigatios ad recalls. The Trasportatio Recall Ehacemet, Accoutability, ad Documetatio Act was siged ito law i November 2000. I additio to requiremets specifically addressig tires, the act sought to icrease NHTSA s legal authority, improve its regulatory programs ad access to safety iformatio, ad icrease its fudig levels by $9.1 millio. For example, the act requires maufacturers to report to NHTSA safety recalls of their products (which would iclude OEM ad aftermarket crash parts) i other coutries, icreases civil pealties, ad establishes crimial pealties for persos who kowigly violate the act. The act also requires NHTSA to coduct a comprehesive review of all stadards, criteria, procedures, ad methods, icludig the data maagemet ad aalysis systems it uses to ope a defect or ocompliace ivestigatio. Coclusios The validity of cocers about the use of aftermarket crash parts ad recycled air bags has bee debated for may years. As a result, a umber of states have eacted legislatio to esure that vehicle owers are aware that aftermarket crash parts are beig used i repairs. Existig studies o the safety of aftermarket crash parts ad recycled airbags show mixed results, are limited i umber ad scope, ad fail to resolve the debate. Although NHTSA has the authority to regulate aftermarket crash parts, the agecy Page 19
has ot developed safety stadards for them because it has ot determied that ay aftermarket crash parts cotai safety-related defects. NHTSA has more limited authority to regulate the use of recycled airbags. NHTSA could elect to develop safety stadards for occupat restrait systems uder the used vehicle provisios of the Motor Vehicle Safety Act. These stadards could apply to systems cotaiig recycled airbags, but the stadards would apply to the restrait system as a whole ad ot to its idividual compoets. NHTSA has ot developed such stadards because it has ot idetified sigificat problems with occupat restrait systems that could be addressed by state motor vehicle ispectio programs. Abset a comprehesive study that resolves the issue of safety, NHTSA is left to rely o its complait system to idetify possible safety-related defects i aftermarket crash parts ad recycled airbag systems. However, NHTSA s defect idetificatio ad recall system has limitatios. The key database used to idetify usafe parts cotais oly a small fractio of the complaits received by maufacturers. Apparetly, may vehicle owers are either uaware of NHTSA s complait program or choose ot to participate i it. I additio, aftermarket crash parts may ot be idetified as such i the database because cosumers who complai to NHTSA may ot kow they have aftermarket crash parts or their complaits may ot idicate that aftermarket parts are ivolved. These limitatios may hamper NHTSA s ability to detect safety-related treds through broad key-word searches of its complait database ad make it ulikely that NHTSA ca idetify all usafe parts. I additio, the ability to recall usafe aftermarket crash parts is limited because some parts are ot stamped with the maufacturer s ame ad there is o trail leadig from the maufacturer to the ultimate user of the part. Therefore, eve if a aftermarket part were foud to cotai a safety-related defect, the product might have to be recalled usig a broad-based aoucemet similar to a cosumer product safety recall. The two studies o the safety of recycled airbags that we idetified cocluded that they ca be a potetially safe, ecoomical alterative to ew airbags as log as they are udamaged ad properly hadled ad istalled. However, the failure of some flood-damaged air bags to deploy correctly also demostrates the potetial for serious safety cosequeces. Resolvig the safety issues associated with usig recycled airbags is importat because it appears likely that their use will grow, especially if the Isurace Corporatio of British Columbia begis specifyig their use i early 2001. Page 20
The recetly eacted Trasportatio Recall Ehacemet, Accoutability, ad Documetatio Act gives NHTSA a opportuity to improve its systems for detectig ad recallig defective products. It provides NHTSA with the authority to require additioal data from maufacturers ad others that it ca cosider i determiig the eed to iitiate a ivestigatio. I additio, the act s provisios requirig a comprehesive review of all stadards, criteria, procedures, ad methods used to ope a defect or ocompliace ivestigatio give NHTSA a opportuity to improve its processes for idetifyig potetially usafe parts. Recommedatios for Executive Actio The Secretary of Trasportatio should direct the Admiistrator of the Natioal Highway Traffic Safety Admiistratio, as part of the legislatively required review, to cosider takig the followig actios: Idetify additioal sources of iformatio to iclude i the agecy s complait database. This might iclude obtaiig additioal data from maufacturers ad isurace compaies. Heighte cosumers awareess of NHTSA s complait reportig system with the goal of icreasig cosumers participatio. Ivestigate the safety of usig recycled airbag systems, particularly those take from flood-damaged vehicles, ad determie if ay actio is appropriate cocerig their use. Agecy Commets ad Our Evaluatio We provided copies of a draft of this report to the Departmet of Trasportatio for its review ad commet. We discussed the report with NHTSA officials, icludig the Associate Admiistrator for Safety Assurace, the actig Chief Cousel, ad the Director of the Office of Defects Ivestigatio. They emphasized that NHTSA has statutory authority to issue stadards oly if they would meet the eed for motor vehicle safety ad to seek recalls oly if there is evidece that particular products made by a specific maufacturer cotai a safety-related defect. They added that NHTSA has ot take actio to regulate aftermarket crash parts because studies coducted to date ad other data ad aalyses do ot demostrate that there are safety-related problems with the parts. They also maitaied that NHTSA does ot have statutory authority to regulate recycled airbags. They idicated that their authority over used vehicles is limited to prescribig stadards applicable to used motor vehicles for the purpose of ecouragig ad stregtheig state ispectios of those vehicles. As a result, NHTSA ca issue performace-based stadards for Page 21
used vehicle ispectios, but caot differetiate betwee ew or used idividual parts or the history of those parts. We revised this report to reflect NHTSA s commets o its authority over recycled airbags. NHTSA also provided other techical clarificatios ad iformatio, which we icorporated i the report as appropriate. As arraged with your offices, uless you publicly aouce its cotets earlier, we pla o further distributio of this report util 30 days after the date of this letter. At that time, we will sed copies of this report to the Hoorable Norma Y. Mieta, Secretary of Trasportatio ad the Hoorable Robert Shelto, Actig Admiistrator of the Natioal Highway Traffic Safety Admiistratio. We will also make copies available to others o request. If you have ay questios about the report, please cotact me at (202) 512-2834. Key cotributors to this report were Samer Abbas, Bert Japikse, David Lehrer, Joh Rose, ad Gle Trochelma. Sicerely yours, Phyllis F. Scheiberg Director, Physical Ifrastructure Issues Page 22
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Appedix I Scope ad Methodology Apedixes ApedixI To determie whether ay studies have bee coducted o the safety of aftermarket crash parts ad recycled airbags, we coducted a literature search usig the Iteret, periodicals, trade jourals, ad Lexis/Nexis. To idetify additioal studies, we iterviewed federal, state, ad idustry experts. At the federal level, we iterviewed officials from the Natioal Highway Traffic Safety Admiistratio's (NHTSA) Office of Defects Ivestigatio, Office of Regulatory Aalysis ad Evaluatio, Office of Vehicle Safety Compliace, ad Office of Vehicle Safety Research. At the state level, we iterviewed officials from New York ad Ohio. To gai a idustry perspective, we iterviewed represetatives from orgaizatios represetig maufacturers ad distributors of aftermarket ad origial equipmet maufacturers' parts, collisio repair shops ad collisio repair specialists, cosumer advocacy groups, isurace providers, ad vehicle safety experts. (A complete listig of the orgaizatios we cotacted appears at the ed of this appedix.) I additio, we met with represetatives of eight collisio repair shops located i Illiois ad Massachusetts to obtai their views o the safety ad quality of aftermarket crash parts ad recycled airbags. Illiois was selected because it was the site of the State Farm case ad Massachusetts because the Massachusetts Auto Damage Appraisers Licesig Board recetly coducted two hearigs to discuss the safety of origial, aftermarket, ad recycled parts used i collisio repair. To determie the extet of NHTSA's authority over aftermarket crash parts ad recycled airbags, we reviewed applicable legislatio, regulatios, program guidace, ad other documetatio o NHTSA's vehicle safety process ad procedures. We also iterviewed officials i NHTSA's Office of Defects Ivestigatio, Office of Regulatory Aalysis ad Evaluatio, Office of Vehicle Safety Compliace, Office of Vehicle Safety Research, ad Office of Geeral Cousel to gai a uderstadig of NHTSA's rules, regulatios, policies, ad procedures. To determie NHTSA's ability to idetify ad remove usafe aftermarket crash parts ad recycled airbags from the atio's roadways, we reviewed NHTSA's policies ad procedures for idetifyig safety-related defects. We reviewed cosumer complaits o aftermarket crash parts cotaied i NHTSA's complait database ad reviewed the data ad reports o the complaits. We also gathered iformatio o the actios NHTSA has take with respect to the safety of aftermarket crash parts. To idetify potetial ways to improve the effectiveess of NHTSA's safety program, we iterviewed NHTSA officials, idustry associatios, ad cosumer advocacy groups. Page 24
Appedix I Scope ad Methodology We did ot aalyze the accuracy or quality of the over 400,000 complaits cotaied i NHTSA's database because such a aalysis was beyod the scope of our review. We performed our review from Jue 2000 through Jauary 2001 i accordace with geerally accepted govermet auditig stadards. Orgaizatios Iterviewed by GAO Aeromotive Automotive Electrical Egieerig Field Services Airbag Testig Techology, Ic. Alliace of America Isurers Alliace of Automotive Maufacturers America Isurace Associatio Auto Body Parts Associatio Automotive Aftermarket Idustry Associatio Automotive Occupat Restraits Coucil Automotive Egie Rebuilders Associatio Automotive Parts Rebuilders Associatio Automotive Recyclers Associatio Automotive Service Associatio Califoria Autobody Associatio Ceter for Auto Safety Certified Automotive Parts Associatio Coalitio for Auto Repair Equality Cosumer's Uio (Cosumer Reports) DaimlerChrysler Corporatio Detroit Testig Laboratories Eagle Automotive, Ic. Etela Laboratories Ford Motor Compay Geeral Motors Corporatio Isurace Corporatio of British Columbia Isurace Istitute for Highway Safety Keystoe Automotive Idustries, Ic. Massachusetts Auto Body Associatio Massachusetts Auto Damage Appraisers Licesig Board Mitsubishi Motors America, Ic. Natioal Associatio of Idepedet Isurers Natioal Associatio of Mutual Isurace Compaies Natiowide Isurace compaies New York State Departmet of Motor Vehicles Nissa North America, Ic. North Star Automotive Group Page 25