Recalls

OEMs have chance for piece of $850 million Takata airbag restitution fund

BOSTON - 

Franchised dealerships have seen scores of customers arrive at their service departments to have defective Takata airbags replaced. Now, it’s the automakers’ turn to be compensated for the matter.

The special master in the criminal case involving Takata announced that he launched the $850 million restitution fund for OEMs that purchased airbags with PSAN inflators from Takata and its subsidiaries. 

The special master — defined as an official appointed by a judge who ensures court orders are followed — stated that he is sending notice to more than 50 manufacturers around the world that purchased the Takata airbags that are subject to widespread recall programs, and that may be eligible for compensation from the OEM Restitution Fund set up as part of Takata’s plea agreement in February.

Appointed by the United States District Court for the Eastern District of Michigan as special master is Eric Green, a Boston law professor and mediator.

According to the special master's notice sent to the manufacturers, Takata pled guilty on Feb. 27 to one count of wire fraud and the court entered the restitution order requiring Takata to, among other things, pay restitution in the amount of $481,848,850 to the OEMs who were defrauded in connection with their purchase of airbags with PSAN Inflators and additional restitution in the amount of $368,151,150 to all OEMs who purchased airbags with PSAN Inflators from Takata for a total amount of $850 million in restitution to OEMs.

On July 31, the court appointed Green as special master to oversee the OEM Restitution Fund. His responsibilities include developing a formula or formulas, subject to court approval, for distributing funds to eligible claimants, making determinations regarding allowed claims, and making a recommendation to the court regarding allocation of funds from the OEM Restitution Fund.

Officials explained that a significant majority of Takata’s OEM customers — which collectively purchased approximately 90 percent of the PSAN inflators sold by Takata as of Dec. 31, 2016 — agreed upon a proposed allocation and presented it to the special master for consideration.

Following a formal presentation on the proposal for allocation of the OEM Restitution Fund, several discussions with the consenting OEMs about the proposal, and an independent review by the special master of the proposal, the special master provisionally determined that the proposed allocation provides for an equitable distribution of the OEM Restitution Fund.

However, to ensure that all eligible OEMs have a chance to be heard, an opportunity is being provided for them to object to the proposed allocation or comment in writing to the special master prior to final determination by the special master and submission to the court for final approval.

Green is also in charge of a separate $125 million Individual Restitution fund designed for persons who suffer personal injury or wrongful death as the result of a Takata airbag inflator defect. Green stated that the proposed allocation of the Individual Restitution fund will be announced at a later date.

Under the proposed allocation, the restitution monies directed to the OEMs will be combined into a single global fund. All OEMs that purchased PSAN inflators, regardless of jurisdiction of sale, will be eligible to participate in the combined fund without the need for determining whether a particular OEM was defrauded by Takata.

Each OEM’s allocation will be determined by the percentage of all PSAN inflators sold by Takata globally that was purchased by that OEM as of Dec. 31, 2016. The court noted the special master has independently analyzed the verified third-party Takata PSAN inflator sales data utilized to determine the percentage for each OEM and determined it reliable.

The proposed allocation governing the distribution of the OEM Restitution Fund is set forth in the direct notice that was mailed electronically or otherwise to all identified OEMs that are eligible to participate in the OEM Restitution Fund. A copy of the direct notice and the proposed allocation schedule can be found and accessed on the special master's website, www.takataspecialmaster.com.

Officials indicated any remaining funds attributable to checks which are not cashed or to wire transfers that cannot be completed will be redistributed by the special master pro rata to all participating OEMs.

To receive an allocation from the OEM Restitution Fund, each eligible OEM will be required to provide a release in favor of the special master and his professionals, advisors and agents.

If an eligible OEM disagrees with the proposed allocation, it can comment on the plan or object. Officials said any comments and objections must be in writing and received by the special master on or before Dec. 20.

Objections can be emailed to OEMQuestions@TakataSpecialMaster.com. If a manufacturer does not submit a timely objection, officials insisted it will be deemed by the special master to have accepted and consented to the proposed allocation.

Following his review of any objections, Green anticipates that he will provide the final proposed allocation for the OEM Restitution Fund to the court for approval in January.

For any questions about the proposed allocation, visit www.takataspecialmaster.com, email OEMQuestions@TakataSpecialMaster.com, or call (800) 574-7035.

Tennessee Automotive Association chooses AutoAp to help dealers comply with new state recall law

PORTLAND, Ore. - 

A dealer organization and a service provider are joining forces to comply with a new mandate coming in Tennessee involving vehicle recalls.

Looking for ways to help Tennessee dealer members better identify safety recalls and streamline new recall compliance efforts requiring recall disclosure to consumers prior to sale, the Tennessee Automotive Association has entered into a strategic alliance with recall management service provider AutoAp.

The move is an attempt to help dealers comply with the Tennessee Motor Vehicle Recall and Disclosure Law that goes into effect in January.

“During our efforts to secure the passage of the Tennessee Motor Vehicle Recall and Disclosure Law, we became aware of the real-life difficulties dealers experience in seeking to identify recalls,” Tennessee Automotive Association president Bob Weaver said. “We set out in search of a strategic partner to help our members with an effective compliance solution, and AutoAp’s Dynamic Recall Management service does just that.

“Choosing AutoAp was the right thing to do,” Weaver continued.

AutoAp’s suite of safety recall management solutions can help dealers make informed decisions at vehicle acquisition, reduce recall liability and streamline recall compliance requirements for vehicles in inventory, and generate net-new service revenue from their sold customer vehicles.

“We are honored that the Tennessee Automotive Association has chosen AutoAp. With this strategic alliance, Tennessee motor vehicle dealers are assured of receiving the highest quality and comprehensive safety recall management solutions,” AutoAp chief executive officer Mark Paul said.

AutoAp releases survey to help dealers evaluate safety recall liability

PORTLAND, Ore. - 

AutoAp has developed a new assessment survey that provides dealers with a current safety recall liability score and specific recommendations regarding needed improvements to reduce safety recall liability at their dealerships.

With the report, dealers can gain an understanding of how they compare to the industry average and dealers with effective safety recall management processes.

“Dealers tell us how quickly they are able to lower their liability with the specific recommendations provided in our report. They’ve also said they had no idea they weren’t really covered,” AutoAp chief executive officer Mark Paul said in a news release.

“With all of the safety recall compliance requirements facing dealers today, it is extremely important for dealers to honestly assess how they are currently managing safety recalls. We are pleased to offer this industry-first recall management assessment tool, giving dealers an easy way to quantify their current recall liability and move towards best practices,” he continued.

The assessment includes six questions and is available to franchised dealers through the end of the year.

“Establishing a baseline for current recall management effectiveness, dealer principals can begin their critical process examination and learn where improvements need to be made. David Nathanson, managing partner at motormindz said in the release. “Ignoring ineffective recall management practices guarantees that a dealer will remain at high risk. I applaud AutoAp for making this available for all dealers. It is timely and extremely valuable.”

For access to the online assessment click here.

CarMD launches new educational online 'health report' tool

IRVINE, Calif. - 

CarMD recently launched CarMD Garage, its new turnkey online tool that provides car owners, used-car shoppers and auto industry partners with useful vehicle service and repair information.

Using any vehicle’s year, make, model and mileage, the new service generates a free CarMD Garage Vehicle Health Report with information on how to both reduce the cost of vehicle ownership and extend a vehicle’s life.

“CarMD Garage offers a way to find solutions for some of the most frequently searched for vehicle service and repair information as well as automated, accurate parts purchasing,” CarMD technical director David Rich said in a news release.

“Different CarMD Garage features will appeal to different markets, whether you are a consumer who just wants to stay on top of your vehicle’s performance, a DIYer who wants service your own vehicle or get details and estimates for repairs, or an aftermarket or telematics affiliate partner looking to enhance the overall value provided to customers by offering monthly vehicle health reports.”

Each free CarMD Garage Vehicle Health Report features the following information:

•        VIN decoding

•        Average miles per gallon

•        Recalls

•        Service Maintenance Due

•        Warranty Status

•        Predicted Failure count

•        Technical Service Bulletin count

Premium report information is available for purchase for most 1996 to current OBD-II cars, light trucks, minivans and SUVs.

The premium option offers vehicle title history reporting, such as DMV and accident history, as well as a list of detailed predicted failures with descriptions and parts and labor estimates for service issues.

CarMD Garage also can be integrated into partner websites, apps and telematics services.

CarMD said its new service offers business partners a low-cost way to enhance their offerings and increase customer retention.

“As online auto parts purchasing becomes more prevalent, automotive enthusiasts and DIYers find that it can be difficult and time consuming to search millions of parts online to find the right part for a specific vehicle,” the company said.

“When maintenance is due, CarMD Garage pinpoints the right part and provides a direct link to purchase the part online, which also reduces returns for the online retailer.”

Currently, the company is seeking select affiliate partners in the used-car, usage-based insurance, automotive retail and repair shop referral markets.

For more information about the CarMD Garage Vehicle Health Report, visit carmd.com/garage.

NADA & NIADA object again to bill aimed to stop retail of recalled units

CARY, N.C. - 

Seven Democratic lawmakers are trying again to push legislation that would prohibit the retailing of vehicles with an unfulfilled recall; a plan prompting the two largest dealership associations to reiterate their objections and explain the potential unintended consequences.

Amid all the hubbub over healthcare and the revolving door at the White House, late last week a proposal dubbed the Used Car Safety Recall Repair Act surfaced on Capitol Hill as lawmakers leveraged reports over another potential fatality involving faulty Takata airbags. While both the National Automobile Dealers Association and the National Independent Automotive Dealers Association want to retail safe vehicles, the groups fear this measure would hamstring dealers and impact owners significantly.

“NIADA shares the goal of 100 percent recall completion rates and supports public policies designed to achieve that goal.  However, overbroad legislation prohibiting dealers from selling any used motor vehicle with any open recall does not move us toward that goal,” NIADA senior vice president of legal and government affairs Shaun Petersen wrote in a message to Auto Remarketing.

“This legislation treats all recalls the same — whether safety related or not — and does nothing to manufacture the parts necessary to repair recalled vehicles or entice owners to take a recalled vehicle to a franchise dealership for repair,” Petersen continued. “But most important, it harms consumers by diminishing the trade-in value of their recalled vehicles by an average of $1,210 — and often upward of $5,000 — and would likely force dealerships to not take those vehicles in trade at all.

“Requiring dealers to ground vehicles for any recall does not justify that economic loss, particularly when the National Highway Traffic Safety Administration admits not every vehicle with an open recall needs to be grounded immediately,” he went on to say. “NIADA stands ready and willing to work with members of Congress to find common-sense solutions to improve recall completion rates.  However, this legislation — which was rejected numerous times by the previous Congress — is not the answer.”

Led by Sen. Richard Blumenthal of Connecticut and Sen. Edward Markey of Massachusetts along with Rep. Jan Schakowsky of Illinois, supporters of the Used Car Safety Recall Repair Act fear any owner of vehicle under recall will suffer the same tragic fate as the dozen individuals fatally wounded by faulty Takata airbags.

“This commonsense bill will protect used car buyers from driving a ticking time bomb off the lot and onto our roads,” Blumenthal said.

Schakowsky added, “It’s already illegal to sell a new car or offer for rent a car under recall. Our bill will give used car buyers the simple assurance that known defects have been fixed before you drive the car off the lot.”

NADA spokesman Jared Allen confirmed many of the points Petersen raised, including how much trade-in values can suffer.

“When recalled vehicles awaiting repair parts — including vehicles that the engineering experts at the NHTSA and the automakers have determined are acceptable for consumers to drive — can't be sold, the market instantly devalues those vehicles, resulting in a massive trade-in tax of, on average, $1,210 per vehicle, according to J.D. Power,” Allen said in a message to Auto Remarketing.

“We’re not in favor of anything that would create a trade-in tax because it’s unfair to ask consumers to pay for a manufacturer’s mistake,” Allen went on to say. “Additionally, imposing a $1,210 trade-in tax could lead to fewer, not more, recalled vehicles getting repaired, and we don’t believe a reduction in the recall completion rate is a good policy outcome for consumers or anyone else.”

The legislation introduced in the House is also co-sponsored by Rep. Frank Pallone Jr. of New Jersey, Rep. Bobby Rush of Illinois, Rep. G.K. Butterfield of North Carolina and Rep. Doris Matsui of California.

Recall Masters latest integration addresses new recall legislation

ALISO VIEJO, Calif. - 

Recall Masters has a new partnership to integrate its real-time vehicle recall lookup solution into Record360’s vehicle condition reporting app. And this collaboration aims to help dealers and rental agencies avoid claims disputes when putting drivers in vehicles during recalls.

The enhanced transparency and real-time recall updates are brought by the integration, following new legislation concerning vehicle safety recalls passed just last summer.

Lawmakers addressed rental car agencies need to fix any and all open safety defects before renting out vehicles to customers.

The legislation established a fine of $5,000 if a consumer is put into a rental or loaner vehicle with an outstanding recall, Recall Masters explained in a news release announcing the partnership.

“Countless damage disputes impact relationships, customer satisfaction, and cause negative reviews,” said Recall Masters president Chris Miller. “Vehicle condition and claims management processes is dependent on paper or low-fidelity digital reporting and Record360 fills the gap with a modern solution.”

Dealerships and car rental agencies can automate their asset management by digitizing vehicle conditions reviews via Record360’s condition reporting software.

The software is designed to help prevent customers being put into a rental or loaner vehicle with an existing recall, as well as end customers’ ability to claim they did not cause damage to a loaner or rental.

“Our integration with Record360 ensures that the user is informed of any open recall in real-time while the initial inspection is done. This helps build trusting relationships between automotive dealers or car rental agencies and their customers,” added Miller.

Top 5 cities most & least impacted by recalls

SAN FRANCISCO - 

RepairPal.com released analysis on Tuesday that blends together the site’s data with information from the National Highway Traffic Safety Administration to find the cities most impacted by vehicle recalls.

The site organized user data relating to owner inquiries website user activity by ZIP code seeking repair information during the past five years along with recall data collected from NHTSA to compare against the top researched vehicles in each specified metropolitan area.

The area most impacted by recalls turned out to be Pittsburgh, with data suggesting 60.85 percent of vehicle researchers in the Steel City area seeing a recall.

“Pittsburgh's affinity for Chevys may be partially to blame for their high recall score,” site officials said. “In particular, two of the vehicles RepairPal users in this city researched most frequently include the 2008 Chevrolet Cobalt and the 2006 Chevrolet Aveo — both of which were hit with relatively large recalls in the past five years.”

Pittsburgh was followed by the New York City metropolitan area with a rate of 60.13 percent. In New York, RepairPal users more frequently research commonly recalled vehicles like the Honda Accord and CR-V, as well as the Toyota Corolla and Camry.

"In addition, the BMW 325i seems to have a surprising following in this region. The fact that it was part of a recall twice — in 2013 and in 2016 — didn’t help New York's score here,” site officials said.

The third metro area most affected by recalls was Edison, N.J., with 59.90 percent, followed by Newark, N.J., with 59.12 percent and Boston with 59.06 percent.

Some of our lowest recall scores came from out West, as RepairPal.com found that Seattle residents saw the lowest recall rates at 42.62 percent, followed by Portland, Ore., at 42.68 percent and Las Vegas at 46.27 percent.

Some other notably low recall rates were found in the Virginia area, with Richmond and Virginia Beach showing scores of 46.47 percent and 46.70 percent, respectively.

To view more of the report along with the methodology of compiling the data used, go to this website.

Daimler recall includes 3 million diesel units mainly in Germany

STUTTGART, Germany - 

Millions of vehicles in the U.S. and Canada have been recalled because of the Takata airbag saga, plus a wide array of other issues.

Now Daimler made the move to recall more than 3 million vehicles in Europe to fix emission issues stemming from the diesel engine in certain Mercedes-Benz models.

The Daimler board of management on Tuesday approved a comprehensive plan for diesel engines with the objective of investing about 220 million euros. The plan comprises a substantial expansion of the current service action for vehicles in customers’ hands as well as a rapid market launch of a completely new diesel engine family.

Since March, Mercedes-Benz has offered its customers of compact-class cars an improvement in NOx emissions for one engine version. The automaker indicated approximately 45 percent of those vehicle have been updated. A voluntary service action is also being carried out for V-Class customers — with approximately 75 percent of the vehicles in Germany.

In order to effectively improve the emissions of additional model series, Daimler decided to extend the service action to include more than three million Mercedes-Benz vehicles. For this purpose, the company’s engineers are making use of latest knowledge gained during the development of the new family of diesel engines.

The measures to be taken for nearly all EU5 and EU6 vehicles in Europe will be carried out in close cooperation with the German regulatory authorities, according to a news release from Daimler.

The company emphasized that the service actions involve no costs for the customers. The implementation of the measures will be starting in the next weeks. Due to the large number of vehicles, this will continue over a longer period of time.

“The public debate about diesel engines is creating uncertainty — especially for our customers. We have therefore decided on additional measures to reassure drivers of diesel cars and to strengthen confidence in diesel technology,” said Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars.

“We are convinced that diesel engines will continue to be a fixed element of the drive-system mix, not least due to their low CO2 emissions,” Zetsche added.

Another 2.7M units from 3 OEMs added to Takata airbag recall campaign

CARY, N.C. - 

Another development in the ongoing Takata airbag recall saga might mean some vehicles at the auction you frequent — or perhaps even units already in your dealership inventory — could be equipped with airbags that need replacing.

The National Highway Traffic Safety Administration on Tuesday said 2.7 million vehicles from Ford, Nissan and Mazda have an additional inflator type that will pose a safety risk if not replaced. Officials explained new Takata test data identified this expansion of the ongoing recalls, which have led to the repairs of more than 8.1 million units so far.

The agency noted this development is the first recalled inflator type that uses a desiccated phase-stabilized ammonium nitrate (PSAN), but this is not a recall for all desiccated PSAN inflators.  

“Currently, there are no reports of injuries or fatalities resulting from the rupture of a desiccated PSAN inflator,” NHTSA said in a document sent to Auto Remarketing. “In fact, currently there are no known ruptures of this inflator with this desiccant, though the testing data clearly shows that the propellant is degrading and is on the path towards ruptures in the future.

Most of the units included in the latest development are from Ford — about 2.2 million units — according to federal officials.

“We’re aware of Takata’s submission, and we have been in regular contact with the agency on the issue. Importantly, we aren’t aware of any incidents, and test data doesn’t suggest any issues,” Ford said in a statement sent to Auto Remarketing without disclosing the specific models that are included. Blue Oval officials have five days to reply to NHTSA’s announcement.

Meanwhile, Nissan was more specific in its statement to Auto Remarketing.

The automaker said approximately 626,805 Nissan Versa hatchbacks and sedans from the 2007 through 2012 model years in the U.S. and Canada are affected with approximately 515,394 units being sold in the U.S.

“Although there have been no known incidents associated with this specific inflator type, Nissan Group is implementing this recall out of an abundance of caution,” the OEM said.

“Nissan Group is committed to the safety and security of our customers and their passengers,” the company continued while adding that owners of affected vehicles will be notified within the next 60 days with additional instructions.

The remaining units — about 6,000 — are from Mazda.

And federal officials acknowledged their work involving Takata appears to be far from being completed.

“NHTSA’s investigation remains active.  Additional desiccated inflators are still being investigated to determine whether or not they are defective,” officials said. “Bottom line: If there are inflators out there that are unsafe, NHTSA expects their recall.

“It’s important that the public check for recalls and get the free air bag replacement if their vehicle is affected,” they went on to say while noting that Takata is required to prove the safety of these inflators by the end of 2019.

ProMax adds open recall monitoring tool

DAVENPORT, Iowa - 

Dealer Marketing Services, the makers of ProMax Unlimited, recently released Recall Check, a new feature for the platform that tracks open recalls.

Recall Check was designed to monitor a dealer’s entire inventory for open recalls.

“Recall Check gives our dealer customers a foolproof way to track all pertinent recall information and use it to generate service business and protect their dealership from liability,” ProMax chief executive officer John Palmer said in a news release.

Recall Check is powered by the provider of automotive recall news and data Recall Masters, which draws on a comprehensive OEM database.

“As the automotive market evolves, Recall Masters is continually evolving our systems and database to provide the most valuable information possible to promote sound dealership business initiatives and consumer safety,” Recall Masters chief executive officer Christopher Miller said.

“The integration with ProMax’s Recall Check feature allows their customers to easily access unique recall data and information through the existing ProMax workflow. ProMax dealers can focus on efficiently managing recalls and attending to the needs of consumers through a familiar, proven platform. The partnership with ProMax is one more step in the right direction to ensure consumer safety and to mitigate the risk of automotive-related injuries.”

The new solution uses an automatic nightly process and checks for recalls anytime a trade is booked in or a vehicle is delivered.

“Recall Check is a tool that can be leveraged in a number of ways,” added ProMax chief operations officer Shane Born. “The automatic monitoring ensures that all recall information is available; dealers can craft different strategies based on their local laws and individual prerogatives. Savvy dealers can use Recall Check to better evaluate trades, book in inventory, or funnel customers to their service lane in some instances. There are also options to print recall disclosure forms on sold vehicles. It has everything a dealer needs. There are a lot of possibilities.”

Additionally, all recall information obtained by Recall Check is tracked across several reports dealerships can access at their leisure.