1-800-554-1026 February 15, 2016
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Recalls Create Problems on Several Fronts
GONE BUT NOT FORGOTTEN: Workers gather around the last Ford Ranger produced on Dec. 16, 2011, at Ford’s historic Twin Cities Assembly Plant in St. Paul, Minn. Ford is recalling more than 300,000 of these small trucks as part of the latest Takata airbag issue.
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Recalls continue to create logistical and regulatory headaches for the used-car industry. A pair of large airbag recalls was announced earlier this month. Continental Automotive Systems is recalling potentially defective airbag control units in up to 5 million vehicles and Takata Corp. is recalling 1.2 million SDI driver-side air bag inflators. These recalls affect a wide range of vehicle types and age. For example, the Takata recall includes 361,692 model year 2004-06 Ford Rangers. Ford hasn’t produced this vehicle for nearly five years.
The massive amount of recalls in the past few years continues to draw negative attention to used-car sales from the federal government. The latest development is a Federal Trade Commission action against General Motors Co. and two dealer groups. The FTC settled a complaint with GM, Jim Koons Management and Lithia Motors Inc. concerning how the companies promoted the inspections of certified pre-owned vehicles. The FTC alleges that GM’s CPO advertising failed to disclose that some vehicles were subject to previously announced open recalls for
safety issues and that these recalls were unrepaired. According to the FTC’s complaint, those cars subject to recalls included those affected by GM’s ignitionswitch issue. Koons and Lithia offer their own certification product and the FTC found the same ad problems with these programs. “Safety is one of the biggest considerations for consumers shopping for a car,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “So companies touting the comprehensiveness of their vehicle inspections need to be straight with
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consumers about safety-related recalls, which can raise major safety concerns.” Under the proposed consent orders, which would remain in effect for 20 years, the companies are prohibited from claiming that their used vehicles are safe or have been subject to a rigorous inspection unless they are free of unrepaired safety recalls, or unless the companies clearly disclose the existence of the recalls in close proximity to the inspection claims. These proposed orders will also require the companies to inform recent customers, by mail, that their vehicles may have an open recall.
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