Motor Vehicle Safety: NHTSA's Ability to Detect and Recall Defective Replacement Crash Parts Is Limited
Published: 2001-01-31T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: Although the National Highway Traffic Safety Administration (NHTSA) has the authority to regulate aftermarket crash parts, the agency has not developed safety standards for them because it has not determined that any aftermarket crash parts contain safety-related defects. NHTSA has more limited authority to regulate the use of recycled air bags. NHTSA could elect to develop safety standards for occupant restraint systems under the used vehicle provision of the Motor Vehicle Safety Act. NHTSA has not developed such standards because it has not identified significant problems with occupant restraint systems that could be addressed by state motor vehicle inspection programs. The limitations of NHTSA's complaint system may hamper NHTSA's ability to detect safety-related trends through broad key-word searches of its complaint database and make it unlikely that NHTSA can identify all unsafe parts. In addition, the ability to recall unsafe aftermarket crash parts is limited because some parts are not stamped with the manufacturer's name and there is no trail leading from the manufacturer to the ultimate user of the part. Two studies on the safety of recycled airbags concluded that they can be a potentially safe, economical alternative to new airbags as long as they are undamaged and properly handled and installed. However, the failure of some flood-damaged airbags to deploy correctly also demonstrates the potential for serious safety consequences.

section_title: Letter
paragraphs: The National Highway Traffic Safety Administration (NHTSA), the federal  agency responsible for reducing accidents, deaths, and injuries resulting  from motor vehicle crashes on the nation’s highways, estimates that over 6  million automobile accidents occurred in the United States in 1999. To  repair crash-damaged vehicles, consumers spent over $8 billion and bought  over 61 million sheet metal and plastic body parts (including exterior  fenders, bumpers, hoods, and doors). Consumers and body shops that  repair crash-damaged vehicles have a choice in many instances of buying  new replacement parts from either the original equipment manufacturer or  other sources, commonly called aftermarket manufacturers. These  aftermarket manufacturers produce their parts by copying the design of the  original vehicle parts.
Concerns have been raised for many years about the quality and safety of  aftermarket crash parts. A number of auto manufacturers and repair shop  owners argue that aftermarket crash parts are inferior to original parts and  pose a possible safety risk. Conversely, many aftermarket manufacturers  and auto insurers argue that aftermarket crash parts can be equal in quality  to original parts, are safe, and can cost up to 65 percent less than the  original equipment manufacturer’s parts. Public awareness was heightened  in October 1999 after judgments totaling over $1 billion were entered  against State Farm Mutual Automobile Insurance Company in response to a  class action complaint concerning the use of aftermarket crash parts. The  trial court concluded that State Farm breached its insurance policies by  requiring the use of aftermarket parts that did not return damaged vehicles  to their precrash condition. The court also found that State Farm’s conduct  violated the Illinois Consumer Fraud and Deceptive Business Practices Act.
State Farm has appealed this decision. In light of the decision, State Farm  has suspended its specification of aftermarket crash parts in repairs.
Concerns have also been raised about the safety of replacing deployed  airbags with nondeployed airbags taken from old or otherwise damaged  vehicles. Many maintain that the airbag is such an important safety item  that only new bags produced by the original manufacturer should be used  to replace deployed bags. Others contend that recycled airbags pose no  safety issues when properly handled and installed and that their use can  save the consumer hundreds of dollars in repair costs.
Because of potential concerns about the safety of aftermarket crash parts  and recycled airbags, you asked us to provide information on  studies on the safety of aftermarket crash parts and recycled airbags,  NHTSA’s authority over aftermarket crash parts and recycled airbags,   NHTSA’s ability to identify and remove unsafe aftermarket crash parts  and recycled airbags from the nation’s roadways.
To respond to these questions, we identified and reviewed existing safety  studies on aftermarket crash parts and recycled airbags; reviewed NHTSA’s  legal authority over aftermarket crash parts and recycled airbags; reviewed  NHTSA’s defect identification, investigation and recall processes; toured  two crash test facilities; and interviewed representatives of over 40  government and industry organizations. Appendix I provides a detailed  discussion of our scope and methodology.
subsections: section_title: Background
paragraphs: Crash parts are generally made of sheet metal or plastic and installed on  the exterior of a motor vehicle. These parts include hoods, doors, fenders,  and trunk lids. Crash parts exclude mechanical parts such as batteries,  filters, shock absorbers, and spark plugs. Body shops often use a mix of  parts in collision repairs, but we use the term “crash parts” in this report to  refer to parts used on the exterior of a vehicle. Aftermarket crash parts are  the replacement automotive crash parts that are not made by the original  equipment manufacturer (OEM). Many of these aftermarket crash parts  manufacturers are located overseas. Recycled airbags are salvaged  nondeployed airbags removed from damaged or old vehicles.
Crash parts are big business. In 1999, drivers had an estimated 6 million  automobile crashes in the United States costing over 40,000 lives and about  $8 billion in damage—of which $1.2 billion represents the costs of  aftermarket crash parts. Overall, about 60 cents out of every dollar of  automobile insurance claims is spent on repairing collision damage to  vehicles. Insurance companies estimate that using aftermarket instead of  OEM parts saves hundreds of millions of dollars each year. Until the mid- 1980s, consumers and auto body shops could purchase new replacement  crash parts only from the original automobile manufacturer. At that time,  independent parts manufacturers began offering aftermarket replacement  parts at substantially lower prices. Still, the crash parts industry remains  highly concentrated, and OEM parts account for about 80 percent of the  market. Figure 1 shows the replacement crash parts market by source.
Some aftermarket crash parts are certified as to their quality. In 1987, the  insurance industry funded the nonprofit Certified Automotive Parts  Association (CAPA), whose objective is to ensure the quality of aftermarket  crash parts. To determine the quality of these parts, the association  examines a manufacturer’s plant, equipment, manufacturing processes, and  resulting products. If the association finds the aftermarket crash parts to be  equivalent in appearance, fit, material composition, and mechanical  properties to new OEM parts, it certifies the parts as functionally  equivalent to OEM parts. In addition, it periodically purchases parts in the  open market and checks them to ensure they meet the association’s  standards. According to the association, in 1999, about 35 percent of all  aftermarket crash parts were certified. This represents about 5 percent of  the total aftermarket crash parts market—which would include OEM,  aftermarket, and recycled parts combined.
More recently, in 2000, Global Validators, an automotive quality consultant,  started a new certification process directed at improving the quality of  aftermarket crash parts. The Manufacturers’ Qualification and Validation  Program, similar to the CAPA program, is a set of guidelines that outline  policies and quality management practices designed to ensure that  aftermarket crash parts are equal in form, fit, function, performance,  durability and appearance to OEM parts. This program is based on the QS- 9000 standard, a production quality standard developed in the automotive  industry. Consumers can search an on-line database to determine if a  specific part has been reviewed under the program.
At the federal level, NHTSA is responsible for reducing accidents, deaths,  and injuries resulting from motor vehicle crashes. NHTSA accomplishes  this, in part, by setting and enforcing safety performance standards that  apply to new motor vehicles and motor vehicle equipment. Under these  standards, manufacturers of motor vehicles and equipment must assure  that their products comply with all applicable safety standards and certify  such compliance. The federal standards are written in terms of minimum  safety performance requirements for motor vehicles and equipment.  Examples of standards include hydraulic brake system requirements to  ensure safe braking performance, vehicle lamp requirements to provide  adequate illumination, and hood latch requirements to ensure that hoods  remain fastened securely.
The Motor Vehicle Safety Act requires manufacturers to inform NHTSA  when a vehicle or equipment is defective or when a vehicle or equipment  does not comply with an applicable motor vehicle safety standard. These  requirements also apply to persons who import motor vehicles and  equipment into the United States. NHTSA does not approve vehicles or  equipment. Instead, federal law establishes a “self-certification” process  under which each manufacturer is responsible for certifying that its  products meet all applicable safety standards. The law also gives NHTSA  the authority to investigate possible safety-related defects, to decide  whether a defect exists, and to order a manufacturer to notify consumers  and to remedy any defect.
NHTSA’s process for identifying a possible defect in motor vehicles and  motor vehicle equipment begins with screening the complaints it receives  in its Office of Defects Investigation (ODI). Sources of complaints include a  toll-free hotline, a Web page, e-mail, telephone calls, and letters. In an  average year, ODI receives between 40,000 and 50,000 complaints. These  complaints are entered into a complaint database, which ODI analyzes to  identify potential defect trends.
When the screening identifies a potential problem, ODI opens an  investigation called a preliminary evaluation. This evaluation involves  notifying the manufacturer and the public and gathering information on the  potential defect. If this process continues to indicate that a defect trend  may exist, the investigation moves to a second stage called an engineering  analysis. In this stage, ODI analyzes the character and scope of the  potential defect in more detail. This analysis may include inspections,  surveys, tests, and efforts to obtain additional information from the  manufacturer. If ODI continues to believe that a defect trend may exist, a  panel of experts from the agency may be convened to review the data.
If the expert panel concurs with ODI, a recall request letter is sent to the  manufacturer. If the manufacturer declines to conduct a recall in response  to the letter, NHTSA’s Associate Administrator for Safety Assurance may  issue an initial decision that a defect exists and convene a public meeting  on the issue. After the meeting, the NHTSA Administrator may issue a final  decision and order the manufacturer to conduct a recall. If necessary, the  agency will then go to court to enforce such an order. In almost all cases,  the manufacturer agrees to conduct the recall without NHTSA’s forcing it to  do so. According to NHTSA officials, the agency opens between 80 and 100  defect investigations each year, of which more than half result in recalls. In  addition, manufacturers conduct an average of 200 defect recalls each year  that are not influenced by NHTSA’s investigations. In 2000, there were over  385 recalls for safety-related defects affecting over 18 million vehicles.
States are also involved in the regulation of aftermarket crash parts and  recycled airbags. According to the National Association of Independent  Insurers, 40 states have enacted some form of legislation governing the use  of aftermarket crash parts in vehicle repairs. Most of this legislation is  directed at ensuring that vehicle owners are aware that aftermarket parts  are being used in repairs. For example, 33 states require that written repair  estimates contain a disclosure statement notifying consumers that  aftermarket crash parts will be used in the repair, and 8 states require the  consent of the consumer to use aftermarket crash parts. Furthermore,  according to the Automotive Occupants Restraints Council, New York was  the only state that had enacted a law regulating the sale and installation of  recycled airbags as of December 2000. Appendix II provides a summary of  state law provisions covering aftermarket crash parts and recycled airbags.  In addition, in early 2000, the Massachusetts Auto Damage Appraiser  Licensing Board conducted two hearings to discuss the safety of OEM,  aftermarket, and recycled parts used in collision repair. In September 2000,  the Board voted three to two that aftermarket cosmetic parts are not exact  duplicates of OEM parts and may jeopardize the safety and value of a  vehicle.
subsections: section_title: The Debate on Aftermarket Crash Parts
paragraphs: The debate on the quality and safety of aftermarket crash parts is highly  polarized, reflecting a range of opinions on the safety of aftermarket crash  parts:  Aftermarket crash parts are unsafe. According to this position—held  generally by many collision-repair associations and repair shop  owners—aftermarket crash parts are inferior to OEM parts in fit and  finish and are dangerous. The evidence for this argument is mostly  anecdotal, although we saw aftermarket crash parts that were clearly  different from their OEM counterparts.
Aftermarket crash parts may be unsafe. According to this position—held  generally by new vehicle manufacturers—the impact of aftermarket  crash parts on occupants’ safety is unknown. Therefore, the  manufacturers recommend that only OEM parts be used to ensure that  repaired vehicles perform to their original safety specifications.
Aftermarket crash parts are safe. According to this position—held  generally by insurance companies and aftermarket manufacturers— aftermarket crash parts are cosmetic only and do not affect vehicle  safety.
section_title: The Debate on Recycled Airbags
paragraphs: The debate on the use of recycled airbags is also divided. General opinions  include the following:   Recycled airbags may be unsafe. Advocates of this position—generally  OEMs, some insurance companies, and body shop owners—maintain  that deployed airbags should be replaced only with new OEM airbags.  Advocates of this position maintain that airbags are a vital safety feature  and the potential risks of recycled airbags should preclude replacing a  deployed airbag with anything other than a new airbag. Furthermore,  they argue that recycled airbags do not undergo the same intensive  quality checks as newly manufactured units. They add that many  undetectable variables, like water damage to the airbag, could prevent a  recycled airbag from deploying properly. Finally, they contend that the  existence of a recycled airbag market will further increase airbag theft.
Recycled airbags are safe. Advocates of this position—generally  recycling organizations and some insurance companies—maintain that  reusing nondeployed OEM airbags is a viable, economical, and safe  alternative to using new, more costly OEM airbags when the recycled  airbags are properly matched, handled, and installed. The advocates add  that lower-income drivers may not be able to afford to replace their  airbags with new, more expensive OEM airbags. Therefore, recyclers are  creating a market in which drivers can purchase replacement airbags  that are 50 percent to 70 percent cheaper than new airbags.
section_title: Studies of Aftermarket Crash Parts and Recycled Airbags Do Not Conclusively Resolve Safety Issues
paragraphs: We identified seven studies of aftermarket crash parts or recycled airbags,  but their results do not conclusively resolve the issue of safety. Five  studies—one by consumer advocates, one by an auto manufacturer, and  three by the insurance industry—examined the use of aftermarket crash  parts. Two studies—one by the recycling industry and the other by an  insurance company—focused on the safety of recycled airbags. Although  these studies are useful, they do not resolve the debate over the safety of  aftermarket crash parts and recycled airbags because they reach different  conclusions and are limited in number and scope.
subsections: section_title: Consumer Reports Test
paragraphs: In February 1999, Consumer Reports published the results of its study and  fueled the debate on the quality of aftermarket crash parts. Consumer  Reports compared OEM and aftermarket bumpers and CAPA-certified  fenders for a 1993 Honda Accord and a 1993 Ford Taurus. It tested fender  corrosion resistance, bumper protection, and the overall quality of the  parts’ fit. Consumer Reports found that CAPA-certified aftermarket fenders  rusted more quickly and did not always fit properly. The report also stated  that aftermarket bumpers did not fit properly and did not provide sufficient  protection in low-speed collisions. The aftermarket bumpers tested, which  were not CAPA-certified, shattered in a variety of tests at 5 miles per hour  or less. One aftermarket bumper did not prevent damage to the Ford  headlight mounting panel, radiator support, and air conditioner condenser.  Another bumper allowed damage to the Honda radiator, air conditioner  condenser, radiator support, and other parts. The report concluded that (1)  aftermarket crash parts are inferior to OEM parts, (2) consumers are ill  served by the use of aftermarket crash parts, and (3) aftermarket crash  parts may influence vehicle safety. Consumer Reports’ study also noted  that comprehensively determining the safety of aftermarket crash parts  through testing is very difficult, if not impossible. According to Consumer  Reports, crash testing—which would ultimately resolve questions about  the safety of these parts—is very complex and expensive to conduct for all  combinations of replacement crash parts and original vehicles.
section_title: Ford Test
paragraphs: In 1994, Ford compared its replacement crash parts to certified and  noncertified aftermarket crash parts. Ford tested the parts for fit, finish,  structural integrity, corrosion resistance, material composition, and dent  resistance. According to the study, Ford replacement parts outperformed  the aftermarket replacement parts for all quality factors. On the basis of  this testing, Ford concluded that aftermarket crash parts are inferior to  Ford replacement parts and are not of “like kind and quality.” The Ford  testing, like the Consumer Reports testing, focused on the quality, not the  safety, of aftermarket crash parts.
section_title: Insurance Industry Tests
paragraphs: The Insurance Institute for Highway Safety (IIHS) conducted two studies of  aftermarket crash parts. IIHS sought to determine whether aftermarket  crash parts pose a safety risk. In its 1987 study, IIHS crashed a 1987 Ford  Escort without its front fenders, door skins, and grill and with an  aftermarket hood installed. The Escort complied with all front-into-barrier  crash test performance requirements specified in federal standards. IIHS  concluded that aftermarket crash parts do not affect occupants’ safety  during a collision. In February 2000, IIHS released the results of a similar  test with a 1997 Toyota Camry and reached the same conclusion. In that  test, IIHS compared the results of a crash test of two vehicles—(1) a 1997  Toyota Camry with the front fenders, door skins, and front bumper  removed and a CAPA-certified aftermarket hood installed and (2) a factory  original 1997 Camry. The study found no significant difference in the  performance of the two vehicles, leading IIHS to conclude that crash parts  are irrelevant to safety with the possible exception of hoods. IIHS noted  two possible safety-related concerns with hoods: (1) a hood latch could fail  while driving, allowing the hood to fly up suddenly, obscuring the driver’s  view, and (2) a hood may not buckle properly during a crash, allowing it to  be driven back near or into the windshield in a collision.
In 1995, Thatcham—an insurance industry research facility located in  England—conducted a test similar to the 1987 IIHS study. Thatcham crash- tested a 1995 Vauxhall Astra with the front fenders, door skins, and front  bumper removed and an aftermarket hood installed. It found that the Astra  complied with all front-into-barrier crash test performance requirements  specified in federal standards—consistent with IIHS’ findings. The  Thatcham study concluded that aftermarket crash parts do not affect the  crashworthiness of a vehicle.
section_title: Recycled Airbag Tests
paragraphs: The Automotive Recyclers Association (ARA) funded a study in 1998 at  Garwood Laboratories in California to test 196 recycled airbags and 5 new  OEM airbags. The study showed that 195 out of 196 recycled airbags  deployed within the manufacturer’s specifications. An association official  stated that the laboratory pre-identified one flood-damaged airbag and was  not surprised when the airbag did not deploy within the manufacturer’s  specifications. Thus, the association concluded that recycled airbags are a  viable, economical, and safe alternative to new, more costly OEM airbags  when properly handled, shipped, and professionally installed.
In 2000, the Insurance Corporation of British Columbia (ICBC) tested 136  recycled airbags from various automobiles. This study sought to determine  if there was any appreciable difference in deployment between factory-new  OEM airbags and recycled airbags. An official with ICBC stated that the  study showed that there is no appreciable difference between OEM and  recycled airbags when the airbags are properly replaced and have not been  exposed to flood damage. ICBC expects to begin specifying that repairers  use recycled airbags in early 2001. An official from ICBC stated that it  expects to use only certified recycled airbags in replacing deployed units.
section_title: Recycled Airbag Certification Company Tests
paragraphs: We identified two U.S. companies that are developing testing procedures to  certify the safety and reliability of recycled airbags. Both organizations use  electrical engineering and other methods to detect flood damage, foreign  matter, and electronic problems. One of the companies said that it had  tested 58 recycled airbags and found that the recycled airbags it tested  deployed within the manufacturer’s specifications. These companies said  that their approaches could ensure that a recycled airbag performs within  the manufacturer’s specifications. Both organizations stated that the key to  the safety of recycled airbags is the proper matching, handling and  installation of the recycled airbags. One company has begun certifying  recycled airbags, and the other plans to start certifying airbags in early  2001.
section_title: Studies Do Not Definitively Answer the Question of Safety
paragraphs: While the studies and tests conducted on aftermarket crash parts and  recycled airbags provide useful information, they do not appear sufficient  to resolve the question of whether aftermarket crash parts and recycled  airbags are safe. The limited number and scope of the studies make it  difficult to draw conclusions about all parts. In the studies of aftermarket  crash parts, only three vehicles were crash-tested—a 1987 Ford Escort, a  1997 Toyota Camry, and a 1995 Vauxhall Astra. These vehicle models  represent only a small percentage of the hundreds of makes, models, and  years of vehicles on the roads today. The primary focus of the Consumer  Reports study was on the quality of aftermarket crash parts, although it  raised questions about their safety. The study also stated that the large  number of vehicles and parts available may make it impossible to answer  the safety question through testing. Although the two recycled airbag  studies conducted by ARA and ICBC showed that undamaged and properly  installed airbags will deploy within the manufacturer’s specifications, they  did not develop measures to ensure that recycled airbags are undamaged.  They highlighted the need to develop testing procedures to ensure that  recycled airbags are undamaged and not taken from flood-damaged  vehicles.
section_title: NHTSA’s Authority Over Aftermarket Crash Parts and Recycled Airbags
paragraphs: The Motor Vehicle Safety Act gives the Secretary of Transportation broad  authority to prescribe safety standards to reduce traffic accidents, deaths,  and injuries on the nation’s roads. The act authorizes the Secretary to  prescribe safety standards for new motor vehicles and motor vehicle  equipment. The Motor Vehicle Safety Act prohibits, in part, the  manufacturing, selling, and importing of new vehicles and new vehicle  equipment that do not comply with NHTSA’s safety standards. These  provisions could apply to both new OEM and new aftermarket crash parts  since new parts are classified as new motor vehicle equipment. Although  NHTSA has the authority to regulate aftermarket crash parts, the agency  has not determined that these parts pose a significant safety concern and  therefore has not developed safety standards for them. According to  agency officials, the agency has not developed safety standards for  aftermarket crash parts because  testing by IIHS concluded that the use of aftermarket crash parts does  not affect vehicle safety;  problems with aftermarket crash parts tend to focus on the fit and finish  of the parts, rather than on safety;  the agency has not identified any trends in the complaints it receives  about the safety of aftermarket crash parts and recycled airbags; and  those who voiced concerns about the use of aftermarket crash parts,  including manufacturers of original replacement parts, have not  provided conclusive evidence that aftermarket crash parts pose a  significant safety concern.
The act’s provisions that apply to aftermarket parts do not apply to  recycled airbags because they are used rather than new equipment. For  used vehicles, the Motor Vehicle Safety Act directs the Secretary to  prescribe safety performance standards for used motor vehicles, in order  to encourage and strengthen state motor vehicle inspection programs.  Under this provision, the agency could elect to develop safety standards for  occupant restraint systems, which might incorporate airbags. NHTSA has  not developed such standards because it has not identified significant  problems with occupant restraint systems that could be addressed by state  motor vehicle inspection programs. The agency has, however, determined  that water damage can undermine the performance of airbag systems.  Through its defect investigation process, NHTSA has identified several  safety defects in motor vehicles that were related to the failure of the  airbags to operate properly after being exposed to flood damage or the  intrusion of other liquids. The resulting recalls affected over 725,000  vehicles. Several other manufacturers have recalled vehicles to address  similar problems without being influenced by NHTSA’s investigations.  According to NHTSA officials, the agency could conduct a study of  recycled airbags and, if appropriate, issue consumer warnings or issue a  report to the Congress on its findings.
section_title: NHTSA’s Ability to Detect and Order the Recall of Unsafe Aftermarket Crash Parts Is Limited
paragraphs: NHTSA has the authority to order manufacturers of replacement parts that  contain a safety-related defect to recall the defective items. Manufacturers  must notify owners, purchasers, and dealers of the defect and remedy the  defect (either through repair or replacement) free of charge. However,  NHTSA’s ability to detect parts with safety-related defects is limited  because the agency’s database of complaints from vehicle owners and  others contains only a fraction of the complaints that manufacturers  receive. Moreover, even if NHTSA were to identify unsafe aftermarket  crash parts, it would likely have difficulty having them recalled. Recent  legislation creates opportunities for NHTSA to gather additional  information needed for identifying possible defects and improve its  management and analysis of vehicle safety data.
subsections: section_title: NHTSA’s Complaint Database Has Limitations
paragraphs: An essential component of NHTSA’s overall process is the agency’s ability  to detect safety-related defects. To decide whether to investigate a possible  safety-related defect, including any relating to OEM and aftermarket crash  parts, NHTSA relies heavily on its complaint database. However, this  database contains only a fraction of the complaints that customers report  to manufacturers. In addition, aftermarket crash parts may not be  identified as such in the database because consumers who complain to  NHTSA may not know they have aftermarket crash parts or their  complaints may not indicate that such parts are involved.
NHTSA’s ODI receives consumer complaints about possible defects in  motor vehicles and motor vehicle equipment from a toll-free consumer  hotline, an on-line computer Web page, e-mail, telephone calls, surveys, and  letters. As of August 2000, the database contained about 400,000  complaints gathered over the last 10 years. In an average year, ODI receives  between 40,000 and 50,000 complaints.
The number of complaints in the database may represent only a small  percentage of all complaints being made about possible defects. For  example, in September 2000, the Administrator of NHTSA testified on the  investigation and recall of Firestone tires. The Administrator said that by  the end of 1999, NHTSA had received 46 reports of incidents involving  these tires. NHTSA did not open a defect investigation at that time because  of the large number of tires in use and the variety of possible causes of tire  failure. However, after press reports in February 2000 highlighted two  fatalities and alluded to a number of other crashes and fatalities, NHTSA  opened an investigation. After obtaining additional information from the  manufacturers involved and the attendant publicity, the Administrator  reported that as of August 31, 2000, NHTSA had received over 1,400  complaints. In addition, according to the former Chief of ODI’s Trends and  Analysis Division, the complaints NHTSA receives about safety-related  defects may represent only 10 percent of all the complaints that  manufacturers receive. This estimate was based on the results of past  requests for information made to manufacturers after ODI had opened  investigations. For example, in February 2000, ODI began an investigation  of plastic door garnish moldings on 1998 and 1999 Sebring Coupe vehicles.  This investigation responds to 21 consumer complaints of partial and  complete detachment, some of which occurred while the consumer was  driving. During the preliminary evaluation phase of the investigation, ODI  requested information from DaimlerChrysler Corporation and obtained 276  additional complaints that the manufacturer had received. According to  NHTSA officials, the agency has made efforts over the past few years to  encourage repair shops and others to report safety-related problems with  either OEM or aftermarket crash parts; however, the agency has received  relatively few complaints about these parts.
Aftermarket crash parts may not be identified as such in NHTSA’s database  because consumers who complain to NHTSA may not know they have  aftermarket crash parts or their complaints may not indicate that such  parts are involved. According to data supplied by the National Association  of Independent Insurers, 10 states do not have any form of legislation  addressing the use of aftermarket crash parts. In these states, it is not  necessary to tell an owner specifically about the use of an aftermarket part  in a vehicle repair or to receive the owner’s consent to use the parts.  Furthermore, there are no requirements for informing the purchaser of a  used vehicle that aftermarket crash parts have been used in an earlier  repair. In these instances, the complainant would be unlikely to identify the  defective part as an aftermarket part. In addition, in submitting a complaint  to NHTSA, a complainant is free to describe the problem in any way he or  she chooses. The choice of words in a complaint is important because the  process NHTSA follows in identifying potential defect trends begins with a  search of key words in the database. For example, we asked NHTSA to  search for “aftermarket” and found six complaints that contained that term.  However, complainants could have used a variety of other words to  describe their complaint or might not have thought to mention the term.
section_title: Recalling Unsafe Aftermarket Crash Parts May Be Difficult
paragraphs: Even if NHTSA were to conclude that certain aftermarket crash parts  contained a safety-related defect, its ability to recall them would be  hampered because the parts do not always indicate the manufacturer and it  may be difficult to identify the vehicles on which the parts were used.
According to Consumer Reports, many aftermarket crash parts are  essentially invisible to NHTSA’s complaint and recall system, mainly  because the parts have no manufacturer’s name stamped on them. During  our review, we also saw several aftermarket crash parts that did not carry  the manufacturer’s identification. However, the extent to which parts are  unlabeled is unknown. Taiwan Auto Body Parts Association officials stated  that, since 1994, nearly all of the aftermarket crash parts its members  manufacture are stamped with the manufacturer’s name and a production  lot number. Furthermore, according to a CAPA official, the aftermarket  parts certification process requires manufacturers to mark each part with  the manufacturer’s name and production lot number to facilitate  identification and recall if necessary. However, CAPA recognizes that its  certified parts represent only a third of all aftermarket crash parts and  some noncertified parts do not indicate the manufacturer.
Even if the manufacturers of aftermarket parts were clearly identified, little  information exists on the purchasers of those parts, making the recall  process difficult. When automotive manufacturers recall vehicles, they rely  on information they obtained when the vehicles were purchased and on  registration records maintained by state departments of motor vehicles to  identify and locate vehicle owners. With aftermarket crash parts, however,  this information is typically not available. Vehicle owners may purchase  aftermarket crash parts at automotive retail stores and install the parts  themselves, or body shops may install aftermarket parts that they obtained  through parts distributors. In either instance, it is unlikely that the owners  of vehicles with unsafe aftermarket crash parts could be specifically  identified because it is unlikely that shops or distributors would maintain  the information needed to locate the owners of the unsafe parts.  Consequently, it would be necessary to recall unsafe aftermarket crash  parts using a broad-based approach similar to a consumer product safety  recall. Under this approach, public announcements are made to alert  consumers to the product’s safety-related defect. NHTSA officials  recognize that it would be very difficult to identify and recall aftermarket  crash parts using this approach.
section_title: Recent Legislation Identifies Weaknesses in NHTSA’s Ability to Identify Safety- Related Defects
paragraphs: The Firestone tire recall, together with the subsequent congressional  investigations and legislative initiatives, focused attention on weaknesses  in NHTSA’s regulatory and enforcement program. Likewise, congressional  oversight reports expressed concerns about the effectiveness and  efficiency of NHTSA’s process of gathering and analyzing data on vehicle  defects and initiating investigations and recalls. The Transportation Recall  Enhancement, Accountability, and Documentation Act was signed into law  in November 2000. In addition to requirements specifically addressing tires,  the act sought to increase NHTSA’s legal authority, improve its regulatory  programs and access to safety information, and increase its funding levels  by $9.1 million. For example, the act requires manufacturers to report to  NHTSA safety recalls of their products (which would include OEM and  aftermarket crash parts) in other countries, increases civil penalties, and  establishes criminal penalties for persons who knowingly violate the act.  The act also requires NHTSA to conduct a comprehensive review of all  standards, criteria, procedures, and methods, including the data  management and analysis systems it uses to open a defect or  noncompliance investigation.
section_title: Conclusions
paragraphs: The validity of concerns about the use of aftermarket crash parts and  recycled air bags has been debated for many years. As a result, a number of  states have enacted legislation to ensure that vehicle owners are aware that  aftermarket crash parts are being used in repairs. Existing studies on the  safety of aftermarket crash parts and recycled airbags show mixed results,  are limited in number and scope, and fail to resolve the debate. Although  NHTSA has the authority to regulate aftermarket crash parts, the agency  has not developed safety standards for them because it has not determined  that any aftermarket crash parts contain safety-related defects. NHTSA has  more limited authority to regulate the use of recycled airbags. NHTSA  could elect to develop safety standards for occupant restraint systems  under the used vehicle provisions of the Motor Vehicle Safety Act. These  standards could apply to systems containing recycled airbags, but the  standards would apply to the restraint system as a whole and not to its  individual components. NHTSA has not developed such standards because  it has not identified significant problems with occupant restraint systems  that could be addressed by state motor vehicle inspection programs.
Absent a comprehensive study that resolves the issue of safety, NHTSA is  left to rely on its complaint system to identify possible safety-related  defects in aftermarket crash parts and recycled airbag systems. However,  NHTSA’s defect identification and recall system has limitations. The key  database used to identify unsafe parts contains only a small fraction of the  complaints received by manufacturers. Apparently, many vehicle owners  are either unaware of NHTSA’s complaint program or choose not to  participate in it. In addition, aftermarket crash parts may not be identified  as such in the database because consumers who complain to NHTSA may  not know they have aftermarket crash parts or their complaints may not  indicate that aftermarket parts are involved. These limitations may hamper  NHTSA’s ability to detect safety-related trends through broad key-word  searches of its complaint database and make it unlikely that NHTSA can  identify all unsafe parts. In addition, the ability to recall unsafe aftermarket  crash parts is limited because some parts are not stamped with the  manufacturer’s name and there is no trail leading from the manufacturer to  the ultimate user of the part. Therefore, even if an aftermarket part were  found to contain a safety-related defect, the product might have to be  recalled using a broad-based announcement similar to a consumer product  safety recall.
The two studies on the safety of recycled airbags that we identified  concluded that they can be a potentially safe, economical alternative to  new airbags as long as they are undamaged and properly handled and  installed. However, the failure of some flood-damaged air bags to deploy  correctly also demonstrates the potential for serious safety consequences.  Resolving the safety issues associated with using recycled airbags is  important because it appears likely that their use will grow, especially if the  Insurance Corporation of British Columbia begins specifying their use in  early 2001.
The recently enacted Transportation Recall Enhancement, Accountability,  and Documentation Act gives NHTSA an opportunity to improve its  systems for detecting and recalling defective products. It provides NHTSA  with the authority to require additional data from manufacturers and others  that it can consider in determining the need to initiate an investigation. In  addition, the act’s provisions requiring a comprehensive review of all  standards, criteria, procedures, and methods used to open a defect or  noncompliance investigation give NHTSA an opportunity to improve its  processes for identifying potentially unsafe parts.
section_title: Recommendations for Executive Action
paragraphs: The Secretary of Transportation should direct the Administrator of the  National Highway Traffic Safety Administration, as part of the legislatively  required review, to consider taking the following actions:  Identify additional sources of information to include in the agency’s  complaint database. This might include obtaining additional data from  manufacturers and insurance companies.
Heighten consumers’ awareness of NHTSA’s complaint reporting system  with the goal of increasing consumers’ participation.
Investigate the safety of using recycled airbag systems, particularly  those taken from flood-damaged vehicles, and determine if any action is  appropriate concerning their use.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided copies of a draft of this report to the Department of  Transportation for its review and comment. We discussed the report with  NHTSA officials, including the Associate Administrator for Safety  Assurance, the acting Chief Counsel, and the Director of the Office of  Defects Investigation. They emphasized that NHTSA has statutory  authority to issue standards only if they would meet the need for motor  vehicle safety and to seek recalls only if there is evidence that particular  products made by a specific manufacturer contain a safety-related defect.  They added that NHTSA has not taken action to regulate aftermarket crash  parts because studies conducted to date and other data and analyses do not  demonstrate that there are safety-related problems with the parts. They  also maintained that NHTSA does not have statutory authority to regulate  recycled airbags. They indicated that their authority over used vehicles is  limited to prescribing standards applicable to used motor vehicles for the  purpose of encouraging and strengthening state inspections of those  vehicles. As a result, NHTSA can issue performance-based standards for  used vehicle inspections, but cannot differentiate between new or used  individual parts or the history of those parts. We revised this report to  reflect NHTSA’s comments on its authority over recycled airbags. NHTSA  also provided other technical clarifications and information, which we  incorporated in the report as appropriate.
As arranged with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after the  date of this letter. At that time, we will send copies of this report to the  Honorable Norman Y. Mineta, Secretary of Transportation and the  Honorable Robert Shelton, Acting Administrator of the National Highway  Traffic Safety Administration. We will also make copies available to others  on request.
If you have any questions about the report, please contact me at (202) 512- 2834. Key contributors to this report were Samer Abbas, Bert Japikse,  David Lehrer, John Rose, and Glen Trochelman.
section_title: Scope and Methodology
paragraphs: To determine whether any studies have been conducted on the safety of  aftermarket crash parts and recycled airbags, we conducted a literature  search using the Internet, periodicals, trade journals, and Lexis/Nexis. To  identify additional studies, we interviewed federal, state, and industry  experts. At the federal level, we interviewed officials from the National  Highway Traffic Safety Administration's (NHTSA) Office of Defects  Investigation, Office of Regulatory Analysis and Evaluation, Office of  Vehicle Safety Compliance, and Office of Vehicle Safety Research. At the  state level, we interviewed officials from New York and Ohio. To gain an  industry perspective, we interviewed representatives from organizations  representing manufacturers and distributors of aftermarket and original  equipment manufacturers' parts, collision repair shops and collision repair  specialists, consumer advocacy groups, insurance providers, and vehicle  safety experts. (A complete listing of the organizations we contacted  appears at the end of this appendix.) In addition, we met with  representatives of eight collision repair shops located in Illinois and  Massachusetts to obtain their views on the safety and quality of  aftermarket crash parts and recycled airbags. Illinois was selected because  it was the site of the State Farm case and Massachusetts because the  Massachusetts Auto Damage Appraisers Licensing Board recently  conducted two hearings to discuss the safety of original, aftermarket, and  recycled parts used in collision repair.
To determine the extent of NHTSA's authority over aftermarket crash parts  and recycled airbags, we reviewed applicable legislation, regulations,  program guidance, and other documentation on NHTSA's vehicle safety  process and procedures. We also interviewed officials in NHTSA's Office of  Defects Investigation, Office of Regulatory Analysis and Evaluation, Office  of Vehicle Safety Compliance, Office of Vehicle Safety Research, and Office  of General Counsel to gain an understanding of NHTSA's rules, regulations,  policies, and procedures.
To determine NHTSA's ability to identify and remove unsafe aftermarket  crash parts and recycled airbags from the nation's roadways, we reviewed  NHTSA's policies and procedures for identifying safety-related defects. We  reviewed consumer complaints on aftermarket crash parts contained in  NHTSA's complaint database and reviewed the data and reports on the  complaints. We also gathered information on the actions NHTSA has taken  with respect to the safety of aftermarket crash parts. To identify potential  ways to improve the effectiveness of NHTSA's safety program, we  interviewed NHTSA officials, industry associations, and consumer  advocacy groups.
We did not analyze the accuracy or quality of the over 400,000 complaints  contained in NHTSA's database because such an analysis was beyond the  scope of our review. We performed our review from June 2000 through  January 2001 in accordance with generally accepted government auditing  standards.
subsections: section_title: Organizations Interviewed by GAO
paragraphs: Aeromotive Automotive Electrical Engineering Field Services Airbag Testing Technology, Inc. Alliance of American Insurers Alliance of Automotive Manufacturers American Insurance Association Auto Body Parts Association Automotive Aftermarket Industry Association Automotive Occupant Restraints Council Automotive Engine Rebuilders Association Automotive Parts Rebuilders Association Automotive Recyclers Association Automotive Service Association California Autobody Association Center for Auto Safety Certified Automotive Parts Association Coalition for Auto Repair Equality Consumer's Union (Consumer Reports) DaimlerChrysler Corporation Detroit Testing Laboratories Eagle Automotive, Inc. Entela Laboratories Ford Motor Company General Motors Corporation Insurance Corporation of British Columbia Insurance Institute for Highway Safety Keystone Automotive Industries, Inc. Massachusetts Auto Body Association Massachusetts Auto Damage Appraisers Licensing Board Mitsubishi Motors America, Inc. National Association of Independent Insurers National Association of Mutual Insurance Companies Nationwide Insurance companies New York State Department of Motor Vehicles Nissan North America, Inc. North Star Automotive Group Ohio Board of Motor Vehicle Collision Repair Registration Specialty Equipment Manufacturers Association Society of Collision Repair Specialists Taiwan Auto Body Parts Association Tech-Cor, Inc. Toyota Motor Sales, U.S.A., Inc. USAA Property and Casualty Insurance Volkswagen of America, Inc.
section_title: State Legislation Governing Aftermarket Crash Parts and Recycled Airbags
paragraphs: Forty states have enacted some form of legislation governing the use of  aftermarket crash parts in vehicle repairs, according to data supplied by  National Association of Independent Insurers. According to the  association’s data, of the 40 states with existing legislation, 90 percent (36  states) require that repair estimates identify each aftermarket crash part  used in the repair, and about 83 percent (33 states) require that the repair  estimate disclose that aftermarket crash parts are being used in the repair.  A manufacturer’s warranty is required by 68 percent (27 states), and about  58 percent (23 states) require a manufacturer’s identification on any  aftermarket crash parts used. The provisions that the states have enacted  vary but can be grouped in nine categories. Figure 1 summarizes the states’  aftermarket crash parts legislative provisions.
According to an Automotive Occupant Restraints Council official, only  New York had laws governing the sale and installation of recycled airbags.  New York requires that each recycled airbag be certified according to  standards established by an approved, nationally recognized testing,  engineering, and research body.  On May 2, 2000, the New York Supreme  Court for Albany County granted a preliminary injunction concerning the  requirement that all recycled airbags be certified before installation. The  judge determined that, since there was no existing way to certify recycled  airbags, it was impossible to abide by the law. The New York State  Department of Motor Vehicles has since begun reviewing one company’s  recycled airbag certification procedures to determine whether the  procedures address the concerns of the court.
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subsections: section_title: United States General Accounting Office Washington, D.C. 20548-0001