Auto industry acts globally--except on recalls

DETROIT - When it comes to making and selling cars, the auto industry thinks and acts globally: There is near-seamless coordination between parts suppliers, factories and dealerships. But when an unsafe car needs to be recalled, that global coordination breaks down -- in part because governments do not demand it.

There are no international standards for determining what's unsafe and should be recalled, or how car owners should be notified. The consequences can sometimes be deadly.

Six years ago, Honda began recalling driver's side air bags in the U.S. The air bags, made by Japanese supplier Takata Corp. at a now-shuttered plant in Georgia, can inflate with too much force, spewing shrapnel into the vehicle.

But it wasn't until November of this year -- after the death of a driver in Malaysia -- that Honda recalled driver's side air bags in small cars sold in Europe and Asia, even though the air bags were made at the same time in the same Georgia factory.

Governments are the safety watchdogs, but regulations vary widely and there's little cooperation between nations. Automakers, for the most part, get to decide when and where their cars will be fixed.

CARS ARE GLOBAL

Cars and car parts are now made to be sold and used almost anywhere in the world. The compact Ford Focus is designed to be sold globally, with only minor tweaks to satisfy local tastes and regulations. It's made in nine different factories.

Almost all the major automakers use air bags from Takata, which has 56 plants in 20 countries. The Japanese company makes around 22 percent of the world's air bags, according to Valient Automotive Market Research. Sharing common parts saves money, but some experts question whether the rush to go global compromised safety.

Auto analyst and engineer Tadashi Tateuchi says he believes that's what happened with Takata and Honda, which is Takata's biggest customer. Honda responds that the air bags sold in the U.S. were different, and more advanced, than those involved in the Malaysia crash. Even though they both ruptured, determining the underlying cause took time.

THE SAFETY GAMUT

Despite decades of talk, at the United Nations and elsewhere, little progress has been made getting governments to harmonize safety standards. In Europe and Japan, cars are rigorously tested before they go on sale. In the U.S., automakers self-certify and cars are tested only after they go on sale. In Mexico and India, cars don't have to meet any government safety standards at all.

Likewise, countries differ on how to treat a problem. The U.S. requires automakers to report a safety defect within five days of its discovery, even if the cause hasn't been determined. Other countries, like Colombia, want automakers to have a fix in place before they report a recall.

John Krafcik, the president of auto buying site TrueCar.com and Hyundai's former U.S. chief, says there's also discrepancy in what's considered a safety defect. The lack of a cohesive system contributes to huge disparities. In 2013, there were 714 vehicle recalls issued in the U.S., where 28 million cars, trucks and motorcycles were called back due to safety issues. That outpaced the rest of the world. In Europe, which has around the same number of cars on the road as the U.S., there were 110 recalls. In Japan there were 303. China had 130.

WHAT AUTOMAKERS WANT

Some auto executives say global standards would allow them to work from one playbook when designing cars. But low or nonexistent standards also save them money. Nissan didn't even include air bags in the $5,000 Datsun Go it now sells in India and South Africa.

"We are starting with a world that is uneven in the distribution of safety," says Adrian Lund, the president of the Insurance Institute for Highway Safety, an insurance-funded group that crash tests U.S. cars. Nissan says the Go meets local safety standards and has other features like better brakes to help drivers avoid accidents.

Automakers can also save money by limiting or delaying recalls. Ten years ago, the U.S. government fined Toyota $16 million for delaying a recall of 4Runner SUVs with defective steering rods in the U.S. The defect was linked to three fatal crashes here. This summer, two years after a recall in Europe, General Motors recalled the Aveo in the U.S. because corrosion was wearing down the brakes.

Meanwhile, Ford recalled SUVs with 1.6-liter EcoBoost engines in the U.S. two years ago because of a fire risk. No recall yet in Europe and Brazil.

WHAT MIGHT WORK

Krafcik says the job of alerting owners to recalls will get easier once connected cars let automakers send recall notifications directly to the dashboard. But global implementation of such technology could take decades.

In the meantime, Lund thinks getting local people involved in their own safety -- instead of imposing global standards -- might be the safest approach. He is a trustee with the Global New Car Assessment Program, a nonprofit that sets up independent crash-test facilities and publicizes the results. The group has established vehicle testing programs in Southeast Asia and Latin America over the past four years, and it's working on a program for India.

"What you want it for everyone to be educated about safety, and learn that people are being injured and killed and don't need to be," he says.