Entire Auto Industry Is Under the Microscope
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Entire Auto Industry Is Under the Microscope


With General Motors announcing another string of six recalls this week, the Detroit automaker has now recalled more than 11 million vehicles in the U.S. this year - half as many as recalled by the entire industry in 2013.

But GM isn't alone. When you add in the safety-related actions announced by its competitors, the industry has recalled about 20 million vehicles domestically so far this year, and is on track to break the all-time recall record of nearly 31 million set a decade ago, according to NHTSA data.

Related: GM Fined $35 Million for Ignition Failures

Automotive analysts suggest that GM's well-publicized problems with a defective ignition switch linked to at least 13 fatalities, and the $1.2 billion fine Toyota agreed to pay in March to settle charges related to its own safety problems, mark a dramatic shift in the way the auto industry handles safety problems.

"The math has changed," said Clarence Ditlow, head of the Washington, D.C.-based Center for Automotive Safety. In the past, automakers such as GM and Toyota might have found it cheaper to avoid dealing with modest safety problems. But where the mantra was once, "When in doubt, stonewall," Ditlow said the industry now goes by the guideline, "When in doubt, recall."

A number of industry officials have suggested that they are, indeed, being much more cautious about the handling of safety problems that might, in years past, have been handled with a less aggressive Technical Service Bulletin, like the one GM originally issued in 2008 when it learned that some of its midsize models, like the Chevrolet Malibu and Saturn Aura, were experiencing issues that could lead to brake lights failure.

These types of bulletins are sent out to dealer service departments as an advisory about known problems that don't rise to the recall level. Typically, owners aren't told about such issues but will find themselves getting repairs at no charge if they complain.

Related: Igniting a Battle That Could Bring Down GM

But things have changed.

"The entire industry is under the microscope," said David Sullivan, senior auto analyst with consulting firm AutoPacific. Carmakers "aren't going to sit on anything anymore," he said.

In GM's case, industry observers suggest that the maker is doing a rapid clear-out of safety-related problems that it had hadn't yet decided to act upon. That's in line with what happened with Toyota after its problems with so-called unintended acceleration were first reported in 2009. The Japanese automaker also became far more aggressive about safety issues—a major reason why it has had the most vehicles of any manufacturer covered by recalls in the U.S. for five of the last six years.

After hitting the previous record of about 31 million vehicles in 2004, the numbers declined for several years, according to NHTSA data. But they've been on the rise since the Toyota scandal erupted. Last year, the number of U.S. recalls reached about 22 million, according to NHTSA, a figure that the industry could top before mid-year if it stays on its current course.

"There's a good chance of a new record" for recalls this year, Ditlow said.

This article originally appeared in CNBC.

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