Final Thoughts

By Michael E. Wilson, ARA Chief Executive Officer michael@a-r-a.org

ARA Urges NHTSA to Hold Automakers Accountable for All Their Parts

ot surprisingly, the automakers’ recall campaigns create multiple chal- lenges for professional automotive recy- clers whose business model is defined by providing safe and quality OEM recycled automotive parts daily to a wide range of consumers in the marketplace. These challenges could be made less onerous if the automakers provided access to spe- cific parts data so that only safe, quality, recycled OEM parts are utilized to main- tain and repair their motor vehicles - the very same parts designed by automakers to meet their fit, finish and durability standards.

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Indeed, automakers have a statutory responsibility under federal law to address recalled “motor vehicle equip- ment,” a term which includes “any sys- tem, part or component of a motor vehicle as originally manufactured.” Automakers need to fully acknowledge that there exists a $32 billion dollar recycled OEM parts industry that is due the same consideration for remedy under this statute as is given to franchise automotive dealerships with new vehicles and owners of used motor vehicles. ARA has and continues to meet with automakers and the National Highway Traffic Safety Administration (NHTSA) to discuss the need for automotive man- ufacturers to systematically provide for remedy of the recalled parts that end up in the inventories of professional automotive recyclers. The Association believes that unless NHTSA uses its enforcement authority under this pro- gram, the automakers will continue to ignore their statutory responsibilities to address those recalled parts found in the inventories of professional automo- tive recyclers’ businesses.

ARA also has emphasized to NHTSA that the only way in which the Administration could reach its stated goal for the automakers to attain a 100

74 Automotive Recycling | September-October 2015

Your Association is working hard to protect and promote your inventories.

percent recall completion rate is to include those parts recovered by profes- sional automotive recyclers – who each day sell over 500,000 recycled OEM parts directly to consumers as well as to mechanical/collision repair shops and automobile dealers.

ARA strongly believes that the auto- makers will continue to exclude recy- cled/salvage vehicles and OEM recycled parts in their recall remedy activities unless NHTSA holds them accountable to the law. Many examples of this exclu- sionary behavior have been noted in the past, and most recently is reflected by the fact that out of the 803 recall cam- paigns issued by auto manufacturers last year, ARA is aware of only one recall remedy program initiated within the automotive recycling industry. We are all aware that automakers are pursuing buy-back, replacement or repair programs with new motor vehicle franchised dealerships as well as owners of used motor vehicles. In response, ARA continues to urge NHTSA to enforce the requirement that automak- ers also include in these programs those vehicles which are part of the profes- sional automotive recyclers’ inventories. We remind NHTSA that to exclude this vehicle population is to ignore – at the nation’s peril – the fact that this popula- tion includes parts that have been recalled. We further note to NHTSA that to ignore this segment of the auto- motive parts supply chain leaves the robust consumer market that relies on recycled OEM parts for their vehicle repairs exposed to the very automakers’ defective parts that the Administration

is now so aggressively working to have remedied or removed from the market. In our discussions with NHTSA and policymakers, on the need for parts data, we make specific reference to a General Motors “buy-back” program to illustrate the fact that automakers are fully aware that the life-cycle of their parts can go beyond the initial utilization in a motor vehicle from the factory and that parts data is necessary to identify specific parts in the marketplace. This recognition was underscored in August 2014, when General Motors contracted with a third-party supplier to “coordinate the purchase and return of certain used parts, which are subject to a product safety ignition switch recall, from salvage yards.” In a notice from this third-party supplier, on behalf of GM, to automotive recycling facilities, the correspondence not only included the make, model and year of the vehicles subject to the recall but also detailed the specific part num- bers, which the notice stated, “are pro- vided so the manager can identify the parts being recalled.”

As you can see, your Association is working hard to protect and promote your inventories. To that end, ARA will continue to urge part suppliers, manu- facturers, government regulators, con- sumers groups and others to all work together to develop a system under which recalled parts are correctly identi- fied, tracked and remedied or retired from service. Also, ARA will continue to call on all stakeholders to pool collective resources to promote consumer safety while supporting a vibrant and quality parts market.