Weekly Recap: NHTSA searches for answers after Congressional grilling

Sat, 20 Sep 2014

By the end of the lengthy session, senators had painted the unflattering portrait of a toothless agency in disarray.

The National Highway Traffic Safety Administration received a brutal one-two punch from Congress this week for its response to the General Motors ignition-switch scandal.

NHTSA was hammered in a 45-page House report, and then grilled by senators during a hearing on Capitol Hill. Both on paper and in person, legislators picked apart the agency's plodding, seemingly inept responses to GM, and questioned NHTSA's ability to serve as a watchdog for the auto industry, which has faced extensive recalls, fines and controversy in recent years.

Deputy administrator David Friedman, who's only been with NHTSA since 2013, had few answers when questioned on the hill, and by the end of the lengthy session, senators had painted the unflattering portrait of a toothless agency in disarray.

Yes, there was some grandstanding. But legislators, and Friedman's responses to their often-testy questions, illustrated a valuable point – NHTSA needs help. It needs more power, more people and more money to effectively regulate on of the most complex industries in the nation.

NHTSA's authority, or seeming lack thereof, came under repeated fire from senators. It can only fine automakers $35 million for safety violations, something a proposed bill seeks to change. Even Toyota's record $1.2-billion settlement with the US attorney's office in its unintended acceleration cases was technically for wire fraud. The bill, introduced in August by Sen. Claire McCaskill (D-Mo.), would also double NHTSA's funding for vehicle safety. If the legislation passes, auto executives could face prison sentences for delaying a recall, which would force companies to take NHTSA more seriously.

"We could use additional resources. More people, more money for better technology so that we can better sift through the information that's out here." – David Friedman

"We need more authority to fine the car companies so that they understand the heavy price that they are going to pay if they fail to report these things," Friedman said.

He also told senators he needs more resources, noting NHTSA doesn't have enough boots on the ground to handle the massive recalls it's faced in recent years.

NHTSA wants to increase its full-time workers to 637 for the 2015 fiscal year, (plus four employees whose salaries are reimbursed for their work on intelligent transportation). That's up 27 from this year, which would provide more muscle to sort through the extensive data that's sent to the agency by carmakers and the public.

To do this, NHTSA wants more money, and has asked the federal government to increase its budget to $851 million, up $32 million from the 2014 fiscal year.

"We could use additional resources," Friedman said. "More people, more money for better technology so that we can better sift through the information that's out here."

Speaking of resources, NHTSA needs an official boss. Technically, Friedman is the deputy administrator, even though he's in charge of the department. The former top administrator, David Strickland, left in January to work for a law firm that lobbies for the auto industry. He had been in charge since 2010. Friedman was named the acting head, then that title expired.

Other News and Views

Mercedes-Benz CLA off to fast start

Mercedes-Benz's new entry-level sedan has been an instant hit, and reports say supplies are tight. Mercedes has already sold 15,676 copies of the CLA this year, including 2,722 in August.

In addition to being a sales success, the CLA has attracted fresh buyers to the brand. About 75 percent of the CLA buyers are new to M-B, and 50 percent are the sought-after Millennial generation, a spokesman said. While some industry observers questioned Mercedes' decision to offer a sub-$30,000 car, the move appears to be paying off in sales volume. Additionally, Mercedes has a loyal customer base, and when they trade in their CLAs, they're more likely to consider another Mercedes.

This bodes well for the GLA, a small SUV based on the same platform as the CLA. Its mission is the same as that of the CLA: attract new customers to Mercedes and keep them inside the fold of the Three-Pointed Star. Product manager Bart Herring says this vehicle offers even more potential than the lauded CLA, as the popularity of crossovers continues to surge.

"The compact SUV segment is the fastest growing segment in the United States," he said.

Mercedes launches two GLA models this month, the GLA250 4MATIC ($33,300) and the GLA45 AMG ($48,300). The base version, the GLA250, joins in early 2015, starting at $31,300.

GM ramps up Colorado, Canyon production

General Motors' bet on midsize pickups has paid off – at least early on – as dealer orders of the Chevrolet Colorado and GMC Canyon have been unexpectedly strong. Dealers have ordered nearly 43,052 units through August, comprised of 28,287 copies of the Colorado and 14,765 versions of the Canyon, GM spokesmen said. The trucks began shipping to dealerships on Thursday.

GM will add another shift in early 2015 at its Wenztville, MO, factory to build the pickups. The move will create about 750 new jobs, the company said.

The high demand for the trucks has defied skeptics who questioned the need for modern midsize pickups, a segment Detroit's automakers have stayed away from in recent years. GM is the only one to re-enter the market, while Ford has focused on remaking the 2015 F-150 with an aluminum body, and Chrysler has added a diesel model to the Ram 1500 lineup.

Lincoln lands in China with ambitious plans

The first shipment of Lincolns arrived in China this week, and dealerships will open in October in Shanghai, Beijing and Hangzhou. Two more shipments of Lincolns will arrive next month to support the openings, and there will be eight dealerships in China by the end of the year.

This is the start of Ford Motor Co.'s ambitious plans for Lincoln in China. The market is a crucial part of the brand's strategy for growth, and success overseas could help compensate for its small sales volume in the United States. The MKC and MKZ will be the first vehicles sold there, and three more products, including the Navigator, will join by 2016.

By Greg Migliore