Recalls are an unfortunate byproduct of the manufacturing industry, but they are necessary to ensure public safety and maintain a high level of consumer trust for offending companies. This is especially true for automakers, as their product defects could potentially have lethal consequences if not addressed promptly. Considering the costs incurred from ensuing brand erosion and government fines, it will likely be more expensive for car manufacturers to ignore systemic issues than facing up to them publicly.
For example, The New York Times reported that South Korean automaker Hyundai recently announced two separate recalls of approximately 259,000 vehicles in total. In one instance, the company will recall 215,000 Sonatas and 24,000 Azeras due to the potential for rear cross members to rust from exposure to road salt, which could result in handling problems. Because the issue appears only under certain road conditions, the recall will only target states where salting streets is a common practice. Hyundai also announced a recall for roughly 20,000 2013 Santa Fe Sports. This action is only targeted at front-wheel-drive models with a 2.4-liter 4-cylinder engine. Defects in this particular model have raised concerns that the front axle shafts on the vehicles could break entirely without intervention. The company has thus far not been made aware of any accidents that have occurred as a result of these product flaws.
The decision to issue recalls in these instances was made entirely voluntarily by Hyundai executives. The news outlet noted, however, that the National Highway Traffic Safety Administration reserves the right to levy fines against any manufacturer that does not disclose recall information within five business days of discovering a potentially dangerous product defect.
Federal Recall Database to be Created
The federal agency recently took additional steps to bolster public safety by requiring automakers to provide more transparency regarding their recalled vehicles. The Associated Press reported that beginning next summer, the NHTSA will insist that car companies enter accurate and up-to-date information about all individual recalled cars into a federal database. According to the news outlet, approximately 30 percent of recalled vehicles never have their defects addressed by an accredited dealer, potentially putting drivers in danger. This is a concern particularly in the used car market, as shoppers could unwittingly purchase vehicles with significant safety issues. Automakers have until August 14, 2014 to supply the necessary information to the NHTSA.
Keeping track of data regarding individual product units can be extremely difficult for manufacturers, especially those that operate a nation-wide or international supply chain. Businesses can maintain more accurate oversight by deploying comprehensive barcode scanner software. By running a simple scan, employees ranging from warehouse managers to C-level officers can have access to a range of information regarding a single unit, including model number, shipment records and inventory status. With this improved supply chain monitoring capability, automakers and other manufacturers can keep accurate records on all products, including those that have been targeted for recall. This way, organizations will have the necessary information to fulfill federal requirements on recall transparency and avoid any costly fines for noncompliance.