It’s another exciting year in the automotive industry for recalled automobiles! In 2014, we all watched the news as multiple automotive manufacturers were involved in using faulty parts effecting safety concerns. From Honda’s cover up over fatalities due to overpowered airbags to GM’s ignitions unexpectedly cutting out even in drive, we are quickly becoming familiar with (and tolerant of) frequent recalls hitting the news. The recent revelation regarding Volkswagen’s optimized emissions testing software, shocking consumers and no doubt infuriating EPA officials, has added again to our collective familiarity with the automobile recall.

Yet there are those companies who have never needed to take advantage of a recall for there vehicle. For them, recalls (despite their name) are not actually taking or buying their vehicle back from the consumers. Instead, it is a service provided by the manufacturer to repair or replace a fault in their vehicles, free of charge to the owners. While these recalls are usually mandated by the National Highway Traffic Safety Administration, they may also choose to voluntarily recall their vehicles in order to mitigate damage to their public image. In more unusual cases such as Volkswagen’s recent scandal, other agencies such as the EPA can be involved in the recall decision.

Yet despite their apparent frequency, automotive recalls can be an extremely difficult and expensive process, with costs ranging from millions to even billions of dollars, to all except the consumer. When it comes to blame, there are multiple parties who can end up scrambling to demonstrate their faultlessness. Recalls, along with other engineering faults which are fixed behind the scenes, inevitably becomes a game of ‘Hot Potato’; shifting responsibility for the problem. All responsibility for recalls begins with the large automotive company which last sold the vehicle to consumers. The game begins when that company begins to look at whether their suppliers or other business partners are responsible for the fault. Unless these OEMs, suppliers, and other third parties can demonstrate their faultlessness, they might end up shouldering costs capable of ending most smaller companies.

The nature of recalls seems to be following some dramatic trends as of recent years. Typically, the situation of a recall would be a careless mistake or omission having unexpectedly serious implications on the market. As big business is serious business, we, though outraged, are not altogether surprised when a large company seeks backhanded way to deal with the resulting consequences. I speak, of course, of the Ford-Firestone scandal of 2000 where Ford negotiated for Firestone to take responsibility for faulty tires while awarding the business to Bridgestone, a related company. More recently, we are exposed to more suspicious circumstances around recalls, such as Honda’s cover-up of deaths related to their airbags. This year, we witness one of the first recalls caused by deliberate action: Volkswagen’s software designed to trick tests establishing compliance to EPA standards.

In the current culture of the automotive market, it takes more aggressive strategies to earn a profit each year. Between consumers demanding competitive prices to ramping EPA regulations which hamper vehicle performance, automotive manufacturers need an edge. To some, this means lean manufacturing and eliminating wasted time and money. To others, increasingly back-handed techniques corrected only when caught by government agencies and public watchdogs. Will the automotive market become less competitive, making such techniques unnecessary? Or are the expectations of today’s vehicle’s emissions, efficiency, and luxury to be considered the unstoppable force against the immovable object of our current manufacturing techniques?About the Author:

David Rabideau is the Supply Chain Manager for Geiger Automotive, an international parts manufacturer with prominent customers in the U.S. such as BMW and Continental Automotive. He has experience in new production processes, international shipment coordination, as well as in maintaining his own vehicles. Currently living in the Charlotte, N.C. area, he continues to seek to share his experience to help others better understand the automotive market. Check out another one of David’s articles at The Automotive Aftermarket