Lessons That Manufacturers Can Learn From Automotive Recall Issues
By now, anyone not living under a rock for the last 18 months is no doubt aware of the high-profile recalls that have been roiling the automotive industry. Although the long-running GM ignition switch recall may be the most well-known example, the automotive industry in general is recalling vehicles at rates much higher than in the past and other automakers also are facing scrutiny for perceived slow responses. Many manufacturers outside of the automotive industry may breathe a sigh of relief that they are not the ones under the gun. However, recalls are not limited to the automotive industry and manufacturers in other sectors would do well to heed the lessons that can be learned from watching current events.
Although manufacturers outside of the automotive sector may not be subject to regulation by the National Highway Traffic Safety Administration (“NHTSA”), most manufacturers (particularly those manufacturing goods for the consumer market) are subject to some form of regulation. Not all regulatory authorities have the power to force a recall of goods, but those that do are no doubt aware of the criticism directed at NHTSA for its perceived inaction or delay. Such agencies likely will step up their own enforcement actions in the future. Even those manufacturers who are not subject to involuntary recalls can find themselves facing a “voluntary” recall where they might otherwise be faced with product liability claims.
With all of this in mind, manufacturers should consider carefully what lessons can be learned from the ongoing automotive recalls, including:
- Do not wait for a molehill to turn into a mountain – It should go without saying but, early detection and correction can greatly reduce the cost of a problem. All too often, companies do not realize/admit they have a problem until after they have received so many returns or complaints that the issue no longer can be dismissed as coincidence. Companies should look to implement procedures that are designed to identify potentially problematic trends as early as possible.
- Do not allow even the appearance of a cover up – It often is said that the cover up is worse than the original offense. The same holds true when addressing product issues. Recalls are by no means uncommon in the automotive industry. However, much of what set the GM ignition switch recall apart stems from the widespread perception that GM employees tried to sweep the problem under the rug. GM’s reputation certainly was not helped by revelations such as a GM presentation training engineers to avoid using certain words or phrases when describing a problem.
- Learn from your own mistakes – In large companies, it is an unfortunate reality that, the lessons learned from a problem often are not disseminated beyond those immediately involved in the issue. No company is perfect. The manufacturing industry today, and the goods that it produces, are more complex than ever. It is impossible to anticipate and prevent every potential issue. However, companies should ensure that they have policies and procedures in place to make sure that potential issues, and the solutions, become part of the wider company knowledge base.