Last month, ailing U.S. automakers and their workers accepted huge concessions in return for a $17.4 billion federal rescue package meant to buy them time to survive. As part of the package, GM received $9.4 billion and Chrysler $4 billion. In the interim, Ford opened the door to receiving additional aid. Upon receipt of the bailout, GM’s CEO, Rick Wagoner, admitted that the automobile maker has significant work to do and that federal loans were a blue print to the company’s continued success. However, looking back at the automobile manufacturer’s attitudes toward product safety it is hard to imagine how they can be saved from themselves.
During the hand ringing that led to the bailout, there was considerable discussion about Detroit’s failure to recognize and, in fact, participate in the green movement which led to the industry’s demise. The Big Three automakers have been fighting low emission and fuel economy standards for decades. Thankfully, the Obama Administration pushed the Big Three into the 21st Century by reversing the Bush Administration’s horrendous policies on these standards. Many people ascribe Detroit’s refusal to make more fuel efficient cars as the biggest reason that the automobile manufacturers are losing huge parts of their market share. One other issue that certainly has affected the marketability and profitability of the Big Three is their absolute reluctance to embrace safety and make their cars safer for the public.
Can anyone really say that they purchased an American car because it’s safer than other foreign cars? Until being acquired by Ford, Volvo has centered its marketing campaign around safety. Volvo had countless commercials and promotions extolling passenger safety in accidents. Before being acquired by Ford, Volvo did tremendously well with that campaign. Of course, Ford’s influence on Volvo squelched their focus on safety and their profitability suffered.
Every since the National Highway Traffic Safety Administration (NHTSA) was charged with regulating the safety of automobiles over 40 years ago, Detroit has been kicking and screaming at every turn. For the past decades, the automobile industry has been fighting seatbelts and then airbags which, now, are uniformly embraced by the automobile insurance industry and consumer groups alike.
In 1971, when Lee Iacocca was President of Ford Motor Company, he so strongly opposed automobile airbags that he personally appealed to then President Richard Nixon and persuaded the President to kill a pending federal regulation mandating airbags for U.S. cars. Of course, Iacocca did not know that Nixon was taping the conversation. At the time, automakers predicted that a single driver’s side airbag would add $1,000 to the cost of a new car. The industry predicted that benefits would be marginal and that the consumers would not want or pay for them. Now, airbags are standard in every vehicle and it’s hard to imagine buying a new car without this safety feature.
Not only did the Big Three oppose airbags, but if you go back even farther, their track records against safety have been consistently wrong. The automobile industry even opposed seatbelts years ago. The U.S. government started studying seatbelt use in the 1960’s, but the auto industry believed that safety would not sell and instead emphasized the cars comfort, style, and performance. In 1970, NHTSA proposed Federal Motor Vehicle Safety Standards that all vehicles have passive restraint, i.e. seatbelts, by January 1973. Over the next ten years, the standard was debated, delayed, altered and eventually rescinded by NHTSA in 1981. Finally, in 1984 NHTSA proposed that all vehicles have seatbelts by 1989.
It is undisputed that seatbelts and airbags have improved vehicles and enumerable studies have shown that these features save lives. Despite this fact, the automobile industry refuses to get ahead of the curve a make a safer car.
Despite these mandates, Detroit continues to refuse to prioritize designing and building a safer car. For example, the automobile industry is confronted with autos that are prone to rollover, roof crushes and tires that are defective due to tread separation. In addition, the rise of defective airbag cases has seen steady growth over the past ten years. One of the biggest reasons is because Detroit continues to scrimp and cut corners wherever and whenever it can and these decisions are affecting safety. For example, there are numerous cases being filed due to the airbags’ failure to deploy. Upon further review of these cases, it has become clear that the auto makers have cut corners by having inadequate sensors that detect the forces of an accident and make the airbag deploy. The Big Three’s attitude is that more sensors cost more money and are not needed. This is the exact same approach to business that got them in trouble in the first place.
The Bush administration’s lax rules and regulations over the automobile industry probably only rivals its abysmal regulation over the oil companies. However, since taxpayers are funding part of the bailout, not only should we insist on greener technology but we should also demand that NHTSA do its job and ensure that these vehicles are safer for consumers.
What’s next? It still remains to be seen if the Big Three can meet the challenges ahead and make the kind of cars that Americans want and deserve—because safer cars will sell better. Or, will the bailout just be a band aid so they can go back to their business as usual approach to technology and safety. Undoubtedly, if they go down that latter road – we can stop calling them Big Three because they won’t be so big and there sure won’t be three viable American automobile manufactures.