How Fleets Can Manage Recalls

Recalls reached a new high in 2014 — a total of 803 in all, according to the National Highway Traffic Safety Administration (NHTSA) annual recall report. That total includes two of the largest recalls in history: Takata airbags and GM ignition switches. All together, just under 51 million vehicles were affected — averaging more than 139,000 vehicles every day — and marking the highest number in more than three decades. Perhaps more startling is the percentage of recalled vehicles left unrepaired, a staggering 25%, according to NHTSA.

“2014 was a record year for recalls in the automotive industry,” said Cindy Dixon, state fleet manager, State of Missouri, and president of the National Conference of State Fleet Administrators (NCSFA). “Increased NHTSA oversight and increased vehicle complexity are likely contributing factors to the growing number.”

Unfortunately, 2015 appears to have followed suit. During a speech at the Washington Auto Show in January, Mark Rosekind, administrator of NHTSA, said nearly 900 recalls were filed with the agency last year, affecting more than 51 million vehicles — slightly higher than the 2014 total.

With so many vehicles being recalled, it would be impossible for fleets to ignore the issue. But just what are the impacts of recalls on fleets? And what can fleets do to ensure safety while also keeping vehicles on the road?

Repercussions of Recalls

The two most obvious effects of recalls on fleets are vehicle downtime and driver safety. However, recalls can also lead to increased overhead costs and liability, especially if they go unchecked.

“Any unrepaired safety recall could lead to an accident with devastating results to the driver and the vehicle,” said Ross Macdonald, chief marketing officer, ­AutoAp, Inc., which offers a recall management service. “Accidents can lead to lawsuits and costs to administer the accident through courts and through the repair process.” 

Recalls can mean serious business. Macdonald explained that what may seem like a minor recall issue could result in major safety risks for fleets. “Some people cite safety recalls that involve replacing a sticker in the owner’s manual as a recall that is not important enough to ground a vehicle,” he said. “But if that sticker changes or corrects the recommended tire pressure at full cargo load, and that vehicle is involved in an accident due to having the incorrect tire pressure that could cause a blowout at freeway speeds with a full cargo load, then the sticker, while appearing benign, can be a life or death recall.”

In addition to safety risks, recalls can also lead to unplanned downtime, as vehicles are sent to dealerships for repair. And if a vehicle goes unrepaired, the result could be a breakdown requiring even more time spent in the shop than would be required of the initial repair. Total downtime may not be much for a single vehicle, but when spread across the entire fleet, the impact can be significant.

“If a fleet has a lot of the same year/make/model/style vehicles and those are all affected, then a single recall could have a ­significant effect or even cripple a fleet,” Macdonald said. “Or, if a recalled vehicle has no remedy yet available from the auto manufacturer, that can cause a long downtime for an affected vehicle or multiple vehicles.”

Another challenge can be the amount of time it takes for recalled vehicles to be serviced. For large recalls, those vehicle owners who discover the recall early on may get speedy service. But those who discover the recalls later may find long lines at the dealership or may wait for parts to arrive. In the meantime, vehicles waiting for repairs may continue to be operated. While often necessary — and not always unsafe — this both increases a fleet’s liability and could lead to public relations complications, as the public may feel fleets are putting drivers operating recalled vehicles at risk.

When parts don’t seem to be available, Scott Edwards, CAFM, State of Colorado fleet manager, recommends going straight to the source: OEMs. “Working with the OEM is your best place to start,” he said. “Sometimes the OEM can offer supplemental parts or timelines that will give you a point of reference when discussing the anticipated completion dates. In some cases, the OEM can coordinate a reimbursement plan with the fleet. This allows for quick and acceptable repairs to be made.” 

On top of safety and downtime, recalls can also increase fleet managers’ administrative time. Coordinating repairs can be time consuming, as can making a plan to keep drivers on the road while vehicles are being serviced. Simply checking for recalls can be time consuming, too.

Edwards has faced these very challenges. “Recalls always trigger additional work and taxes resources. The real challenge is in recalls that have been issued without parts and/or evaluation only. This requires the fleets to take their vehicles to the OEM multiple times,” he said. “In smaller, more localized fleets, this can be a more manageable process. With large fleets spread out over large distances, the task of process management is critical and can be difficult to track on similarly associated repairs. It can feel unsettled when trying to manage these processes.”

Dixon said establishing the appropriate process for tracking recalls is a common challenge among fleets. “Recently, the National Conference of State Fleet Administrators hosted a members-only recall management webinar, with several states and universities in attendance. Most fleets expressed concern on the webinar about their ability to track recall completion,” she said. “Factors making recall tracking difficult include decentralized fleet operations, paper-based processes, and a lack of integration between fleet systems and data from the OEMs.”

How Fleets Are Handling Recalls

So what should fleets do to best manage recalls? Dixon suggested these steps: Assess the risk, communicate recall information to those impacted, monitor the status, and record recall completion in your fleet management information system. 

The State of Missouri has a decentralized fleet structure, so recall notices from manufacturers are sent to each agency that owns the vehicles. These agencies are then responsible for taking vehicles to the dealership for repairs.

However, fleet staff members also monitor weekly NHTSA e-mails that list recalls issued during the prior week. “When recalls on common fleet vehicles are announced, state fleet management staff export vehicle data from our fleet system on vehicles that are possibly affected and send the NHTSA recall announcement and impacted vehicle data to those agencies to bring additional attention to the recall,” Dixon explained. “We take appropriate safeguards as recommend by the vehicle manufacturer and, depending on the nature and length [of time] to execute the recall, we may communicate information to drivers to keep them informed.” 

The State of Colorado follows a similar process, in that the team evaluates the risk, then tracks the process from reporting to repair. “First, we must rely on the OEMs to evaluate the level of risk. The OEM has the resources to provide a threat level,” Edwards said. “It is understood that some level of action must be taken on all recalls, or they would not be issued if they were not needed. The information OEMs provide on how a recall should be addressed guides the urgency.”

From there, the state relies on its Motor Vehicle Advisory Council to create awareness about incoming recalls. This group of internal employees both disseminates an action plan to end users and serves as their main point of contact.

“The more high-profile and the safety-oriented recalls are discussed, allowing us to review each step, including workload, parts availability, urgency, and repair processing,” Edwards said. “If there becomes concern with the process of getting vehicles repaired, we ensure our efforts with the OEM have been exhaustively investigated.”
To track recalls, the State of Colorado relies on in-house software. Once a recall notification comes in, it’s logged in the database, allowing the fleet to generate a recall list and monitor progress toward completion. The list is then e-mailed to vehicle coordinators so they’re aware of the recall and can schedule the assessment with the OEM.

“We have a fairly large and very diverse fleet of around 6,300 vehicles, so the opportunity is very real to have hundreds of recalls in any one time frame,” Edwards said. “Our in-house software, Colorado Automotive Reporting System, helps us track the vehicle repair process. Recalls are processed as preventive maintenance events that can be scheduled for repair. Once completed, the recalls are logged as repair events and tied to the vehicle repair history.”

When it comes down to it, Macdonald of AutoAp said fleets really have four options for dealing with recalls:

1. Ignore the problem or assume it doesn’t affect them — a high-risk, high-liability approach.
2. Manually check vehicle identification numbers daily through the website ­SaferCar.gov, NHTSA’s recall look-up system. “This is the time-intensive approach and can yield false negatives — reporting that a vehicle is not affected when it really is,” Macdonald said.
3. Wait for official notification from OEMs. “We’ve found that it can sometimes take two months before receiving an OEM notification after NHTSA issues the recall, putting drivers at risk,” he said.
4. Get daily status updates through an automated service like AutoAp’s Dynamic Recall Management service. Macdonald said this can significantly reduce administrative time spent identifying recalls, while also providing timely information.

“Our automated software service uploads a current fleet inventory file and processes it against a proprietary multi-source safety recall database to find matches at the year/make/model/style level. Matches are then automatically checked to determine whether the particular VIN is actually affected by the safety recall and then to verify whether the recall on the affected vehicle is open or has been repaired,” he said. “Analysis is reported to clients every day in an e-mail report.”

Once recalls have been identified, Macdonald suggested following these steps:

• Contact the dealer to verify the recall is still open and the dealer is able to remedy it.
• Determine the earliest opening to schedule the repair.
• Ensure the authorized repair facility reports to the auto manufacturer that the repairs have been completed.

Regardless of your process, Edwards suggested keeping an open mind for revising it. “Be open to process review; be your own toughest critic,” he suggested. “I recommend reviewing your process regularly — at least once per year at a minimum. Invite a diverse set of members to assist with the evaluation. Even a basic review will provide support for a functioning process or one that can use improvement.”

With record numbers of recalls behind us and more on the horizon, Macdonald reminded fleets of the importance of staying on top of them. “Unrepaired safety recalls put drivers at risk and increase fleet liability,” he said. “The additional operating cost of grounding vehicles with open safety recalls is now a fact of life.”