Final Inspection

GM and NHTSA Need to Dig Deeper

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I’m not convinced throwing more money at a government agency will fix anything.

General Motors’ ignition-switch defect is a first-class fiasco. It now is painfully obvious GM should have ordered a redesign and recall years ago.

But GM isn’t the only one taking heat. The National Highway Traffic Safety Administration also is being blasted for not ordering a recall on its own. After all, it turns out NHTSA had the data all along.

But by zeroing in on this one case, we’re missing the bigger picture. And that could lead to wrong-headed solutions.

Remember, GM initiated hundreds of recalls in the 2000-2008 timeframe. Hundreds. NHTSA initiated thousands. So it’s not as if either one was sitting on its hands. Yet this one ignition- switch defect managed to slip through.

GM, for its part, is blaming its problem on a cost-cutting culture at the “old GM.” I find that a curious excuse. Name one major car company in the world that does not have a laser-like focus on cutting costs. You can’t, because they all do.

“One Ford,” Nissan’s “Power 88” and Volkswagen’s MQB program, to name three, are all about cutting costs in massive chunks.

Besides, if a cost-cutting culture was to blame, how come GM initiated so many other recalls during this timeframe? Or are there other non-recalls that we haven’t learned about yet?

Over at NHTSA, the lack of action prompted Joan Claybrook, the former administrator during the Carter Administration, to run around saying NHTSA needs a bigger budget and more staff. She says that will solve all the problems. But I’m not convinced throwing more money at a government agency will fix anything. Here’s why:

NHTSA already has a huge budget, over $800 million a year. The agency admits its biggest problem is its various databases are not linked together, so it cannot do Big Data-type analysis.

It says that’s why it didn’t catch these GM problems. But even NHTSA admits it only needs $3 million to link up those databases.

Three million bucks is chump change. I think the agency can find that money within its existing budget. For example, last year NHTSA awarded its employees $3 million worth of raises, or about $4,000 for each of its 715 employees.

I’m not against these people getting raises if they are deserved, but NHTSA’s administrative expenses are nearly 16% of its budget. At auto makers such as GM or Ford, administrative expenses are more like 9%. Seems to me there are efficiencies to be found.

And why stop there? For example, why not outsource all of NHTSA’s crash testing to the Insurance Institute for Highway Safety? It’s going to crash all those cars anyway, so they both don’t have to do it. (Hey, I’m just trying to think outside the box.)

Another problem: NHTSA is engaged in a lot of low-reward efforts. The agency still is devoting resources to help the Obama Administration reach its goal of getting 1 million electric cars on the road by next year. That’s never going to happen, not even if EVs are given away for free.

That’s one of the problems with this agency. It’s trying to be all things to all people. It needs to pick its most important issues and target its resources at them.

My fear is GM and NHTSA now will layer on more reviews, reports and studies as they go forward. That will only bog down the process of building and regulating cars and trucks. Instead, they need to reduce complexity and drive decision-making deeper down into their organizations.

Empower your people, GM and NHTSA. Then stand back and watch the magic happen. You will get far better results much faster.

John McElroy is editorial director of Blue Sky Productions and producer of the “Autoline” PBS television show and “Autoline Daily,” the online video newscast.

Discuss this Blog Entry 1

on May 14, 2014

For GM, the argument could be made that empowerment went too far down the chain of command. If you believe the statement, that the ignition switch engineer approved the part change all by himself?

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