Vehicle Recall on Consumer Perception Term Paper

  • Length: 30 pages
  • Sources: 15
  • Subject: Transportation
  • Type: Term Paper
  • Paper: #81772051

Excerpt from Term Paper :

They may be forced to follow the technical procedures that are related to the recall that may seem time consuming on their part.

In cases where the defect has caused the life of someone then monetary compensation may not suffice as life is deemed precious than the monetary compensation that may be awarded. Recall usually causes a lot of disruption to consumers hence creating a major confusion to the personnel using the product. Disruption will lead to consumers change their plans so as to meet the demands and meet the deadlines set by the manufacturers. States have laws known as lemon laws which are meant to curb and protect consumers who buy new autos against ones that are defective. The defective vehicles are usually referred to as lemons. These laws entitle the aggrieved consumers to a replacements vehicle, or refund as long as the motor vehicle meets certain standards that are set by the law. The National Highway Traffic Safety Administration ( NHTSA) gives the power that require manufacturers to recall all the motor vehicles with safety-related problems that may cause loss of motor vehicle control such as fire, braking, repeated stalling or steering. The NHTSA regulates motor vehicles and motor vehicle equipment.

A report is to be taken to NHTSA within five working days where a manufacturer determines that a safety-related defect or noncompliance with a NHTSA regulation exists in its product. The manufacturer's proposed remedial program is to be included with the report. This remedy will always include a recall of the affected products from the customers' control if the product has made it into the market. Because on-road motor vehicles must be registered with some governmental entity, it is generally easier to find the current owner s and communicate with them than is the case with most consumer products. A manufacturer must also report to NHTSA when a foreign government requires a recall of an identical or substantially similar vehicle or equipment. There is a standard required by manufacturers to maintain known as Federal Motor Vehicle Safety Standard to regulate vehicles in order to sell their vehicles in the market. Even if they comply with the standard, if serious accidents occur or are expected because of potential defects, then a recall is required. The recent massive recalls by Toyota, which have included full product lines and over 6 million vehicles (in the U.S. alone), have brought the issue to the front pages around the globe, and have prompted some to suggest the need for the government to better regulate the vehicles that manufacturers put on the road.

Types of recalls

There are 2 types of recalls

i. Mandatory and ii. Voluntary The manufacturers are given the opportunity by the state to announce recall on a voluntary basis. If manufacturers disagrees with the State's decision to recall its products the dispute can be resolved in courts.

When the owners think that their vehicles have any safety-related problem, then the NHTSA releases information on how to complain. When they are injured in accidents, and think that their injuries are due to those problems, they are asked to file a defect report directly to the NHTSA. Alternatively, they may report the problems to the manufacturers.

The legal process is usually long, For example, a Firestone tire recall that affected some

Ford vehicles took more than 7 years from the first report until they reached a decision that is final. There are several steps that may be followed before a final decision is made to recall the defective vehicles. The manufacturer can start the process of recalling once the defects are found to be unsafe even where no complaints have been reported and recorded by their consumers. The first step is taken by the regulatory agency, is known as "screening." Once all the information from the reports is entered into a database, technical staff at the Office of Defects Investigation (ODI) of the NHTSA looks at the complaints and check if there is any trend in accidents. If the trend shows an increasing risk of accidents, then the NHTSA starts an investigation. The next step is called "petition analysis." However, this does not always follow screening because any person can submit a petition to the NHTSA. For example, an owner who had a serious injury from an accident can write a petition to the NHTSA, when he or she believes that there may have been some defects in the vehicle that may have played a role in causing the accident. The role of the NHTSA is then to decide whether the petition is accepted or denied. Once it is accepted, more detailed investigation is conducted. In the final stage before recall issuance, the ODI sends a notice to manufacturers to give them an opportunity to argue against it or provide new evidence. Manufacturers can issue a recall at any of the stages, which makes the recall voluntary. If the manufacturers do not recall, then the NHTSA investigates further. If the government experts find the safety standard has been violated, the government agency contacts the manufacturer who starts the recall process. In rare occasions the manufacturers fight the decision of the government and bring the issue to court. Once recalls are announced, notice letters are sent to their customers by the manufacturers and also the recall is announced through the media so that the vehicles can be brought in and the defects fixed.

Any manufacturer selling goods needs to assume a minimum post-sale duty to warn. More than half of the states have adopted some version of this duty, either through the courts or the legislatures.If the manufacturer's product was defective at the time of sale, the common law provides generally that a highly effective recall will not cut off liability for the manufacturer. A post-sale duty to warn is based on negligence. So, while a manufacturer may successfully defend this cause of action, the existence of the recall or other remedial program may be considered an admission that the product is defective. The manufacturer could still be held liable for selling a defective product where that product injured someone.

The common law basis for post-sale duty to warn is negligence. Judge Learned Hand's formula for negligence is used for determining whether this duty has been met is the reasonableness of the manufacturer's conduct after balancing the risk of harm against the burden on the manufacturer to reduce the harm. The question becomes, "What action would a reasonable manufacturer undertake if faced with these circumstances?" And the answer is that the greater the risk to consumers and other product users, the more the manufacturer must do to minimize that risk. Or in other words, the higher the risk, the more the manufacturer needs to do to minimize the risk to consumers and other product users. An effective recall is based on many considerations. The general factors that affect the outcome include the perceived risk to consumers and the difficulty for the manufacturer of reducing or eliminating risk. Considerations that affect the latter factor include product cost, the product's distribution in the marketplace and difficulty in conveying notice to those at risk. The level of risk is reduced if people discontinue use of the product. Actually retrieving the product may not be necessary. Given notice, a consumer may destroy the product or stop using it or change her behavior when using it.

At some point, most manufacturers will have to undertake a post-sale remedial program in connection with one of its product. The programs could include consumer warning, retrofit, recall or safety upgrade. These programs may be instituted as a result of a series of accidents, law suits, consumer complaints, and a change in standards, a safety improvement, a governmental order or even a request. Manufacturers need to be prepared to recall their product even if they have not done so before. Once a product has issues with regard to its safety then the manufacturer may find it hard to develop plans as soon as possible before a lot of damage is caused. Earlier preparation for a recall before it happens can significantly increase its effectiveness and more so lessen disruption and cost.

Manufacturers also need to develop and employ a pro-active and before sale product liability prevention techniques so that a recall will not be necessary in the first place. Manufacturers should also not assume that their effectiveness rates are static and cannot be changed or improved. With the technological advancement today this therefore means that they could increase their ability to communicate with the distribution chain and even the consumers about the recall. They should also look for other ways to improve the success of their recall procedures and other post-sale remedial programs as the will help minimize risks and potential accidents which would in turn reduce the consequences and effects that may be caused to the consumers as a…

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