TCI Tries to Throw Old Safety Recalls under the Bus; NHTSA Recall Enforcement Stalled
Reprinted from The Safety Record, Volume 6, Issue 5, October 2009
WASHINGTON, D.C. – In May 2005, the National Highway Traffic Safety Administration tested the ironically named Sturdibus HD model, built by the U.S. Bus Corporation. The compliance check at the MGA Research Center revealed that the school bus failed three critical elements of crashworthiness: a restraining barrier located in front of the forward-most seat had improper or missing welds on the barrier support; the adhesive applied to the roof seams was inadequate; the glazing in the rear emergency window was not properly anchored in the frame.
The manufacturer, located in Suffern New York, duly filed three separate notices of defect and non-compliance; identified the recall population, proposed remedies and filed quarterly reports. But the information contained in some of those reports was odd. Take Recall 05V-255, for instance. In August 2007, U.S. Bus Corp filed its last quarterly report to the agency detailing its progress in fixing the barrier support problem, which was to install additional reinforcements in the barrier frame. The company indicated that it had inspected 154 vehicles suspected to have the missing or improper welds, but two years later, had remedied none of them. Three months later, U.S. Bus Corp transferred its assets to the Transportation Collaborative Inc., another Rockland County entity, located just 15 miles away in Warwick, New York. And the fate of the 154 school buses with compromised barrier support welds remained a mystery.
Later this month, NHTSA expects to begin publicly untangling the snarled past of U.S. Bus Corp., and the future liability of TCI, when it holds a rare hearing on recall non-compliance in 15 campaigns going back to 2001. The defects ranged from more minor infractions, such as a misplaced mirror use label to very serious violations, such as seat anchorages that don’t meet the minimum standards. (U.S. Bus Corp buses subsequently failed compliance testing in 2006 and 2007.) The public hearing’s intent is to determine if TCI has met its obligations to complete the recalls.
The agency was tight-lipped about the case. Spokesman Rae Tyson would only say: “We are holding the hearing because we do not believe that the company or its predecessor met its obligations to complete these recalls.”
Under the Safety Act, manufacturers are “obligated to notify and to perform the remedy in a reasonable amount of time,” he added. “There are penalties for failing to disclose and failing to notify.”
The agency has concluded that in some cases, neither owners, nor dealers were notified of the recall. The paucity of remedied vehicles appears suspect, given that many of the defects were significant safety deficits on hundreds of vehicles transporting school children from Saipan to Los Angeles – some of which were purchased by large and well-known school transportation companies like Laidlaw. In total, from 2001 to 2007, U.S. Bus Corp filed 21 defect and non-compliance reports to the agency. By mid 2007, according to the Federal Register Notice, “U.S. Bus had committed to completing a number of recall and remedy campaigns that would require substantial repairs.” But the information filed by the company was confusing, at best, and often indicated a very low rate of repair.
NHTSA Recall No. 06V–443 involved 96 MY 2000–2006 Sturdibus vehicles built with seat back barriers that did not match the contour of the seats on which they were installed, a violation of FMVSS No. 222, School Bus Passenger Seating and Crash protection. According to one of U.S. Bus Corp’s quarterly reports, it had notified all the owners and had shipped repair kits to them. In a Nov. 19, 2007 response, “U.S. Bus reported that 96 remedy parts kits were shipped and 5 vehicles were repaired. However, in the same document, U.S. Bus reported that the parts are available for shipping,” the Federal Register notice said.
A Bus Company by any Other Name
According to the Federal Register notice, the agency believes that the case against TCI is strengthened by the fact that the “sale” of U.S. Bus Corp to TCI (also doing business as Trans Tech Bus) in November 2007 appeared to be a paper transfer between common owners – possibly to avoid dealing with the costly repairs indicated in the recall remedies. U.S. Bus and TCI “have continuity of ownership, management, personnel, assets, and general business operations. Based on available information, the shareholders of both U.S. Bus and TCI—Debra Bess Deutsch-Corr, Steven Marksohn, Jerome B. Marksohn, Bart Marksohn, and Helena Marksohn—are the same,” the agency said in its Federal Register notice.
According to New York State Secretary of State business records, U.S. Bus Corp. was the fourth iteration of a company that started its existence as Northeast Truck and Bus Repairs, Inc. It was first registered with the state in 1985; from 1992 to 2001, it was U.S. Bus Manufacturing, based in Suffern, N.Y. under the direction of CEO Irwin Kushner. Although TCI says that U.S. Bus Corp has ceased doing business, it is still registered with New York State as an active business entity. (The information on the Secretary of State website is provided by the companies themselves and the state does not guarantee their accuracy.)
Beginning in 1998, according to New York State records, the company has been the subject of liens from the Internal Revenue Service, Financial Federal Credit Inc, The CIT Group/Financing Equipment Inc. and HSBC Bank USA. Other creditors, including GMAC and JP Morgan Chase Bank have filed liens on TCI in recent years.
After U.S. Bus Corp passed into the hands of TCI, NHTSA served the company with a special order to investigate “the outstanding recalls, the asset sale and the ownership, activities, and management of both companies from TCI, U.S. Bus, and their management. After reviewing this information, NHTSA has tentatively concluded that TCI, as the successor of U.S. Bus, is legally responsible for completing the notification or remedy campaigns for the outstanding U.S. Bus recalls.
How Recall Enforcement Works
Public hearings involving recall non-compliance issues are relatively rare. The last one was scheduled in December 2008 over BMW’s refusal to conduct a recall of Mini-Cooper S Vehicles, which were cited for burn hazards from the exhaust pipe tips which protruded at the center rear of the vehicle. Despite “numerous complaints” from consumers who had suffered leg burns while doing mundane tasks, such as unloading groceries from the trunk, BMW was only willing to conduct a “service campaign,” according to a Federal Register notice announcing the hearing. Two weeks before the hearing, BMW capitulated and announced a recall to replace the protruding exhaust pipes with a shorter version.
But getting to this point is more art than science. The agency has no set procedures for determining if a manufacturer has adequately met its recall obligations. Tyson says that the agency does monitor notification and recall completion rates, but there is no threshold for the percentage of defects remedied.
“It’s a case by case situation,” Tyson said. “If we see a fairly poor completion rate, we will ask and do ask for another round of notifications. The companies need to be responsive to requests for further notification.”
Ignoring NHTSA’s requests for re-notifications can trigger a public hearing, such as the one TCI is facing. A search of the recall records in that case however, only show the agency occasionally reminded U.S. Bus Corp to file a missing quarterly report.
The agency, in general, has been hampered in its quest to track defect information in a way that could lead to recalls and higher recall rates. In 2004, the Inspector General’s Office audited the agency’s progress in implementing the provisions of the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act. It found that NHTSA had made substantial progress, but still lacked the ability to predict trends. The Advanced Retrieval (Tire, Equipment, Motor Vehicle) Information System (ARTEMIS), which became operational in 2004, was supposed to help the agency crunch the numbers.
The OIG found that ARTEMIS “does not have the advanced analytical capabilities originally envisioned to help point analysts to potential safety defects. For example, the system cannot automatically notify analysts if consumer-reported complaints and manufacturer-reported warranty claims are both increasing due to vehicle steering problems. According to NHTSA officials, delays in acquiring these capabilities will prevent NHTSA from obtaining full value from the EWR information manufacturers report. While ARTEMIS will automatically point analysts to deaths that manufacturers report so that trends in small numbers of fatalities can be detected, ARTEMIS will not, as currently developed, link deaths to an alleged defect or identify relationships between the categories of EWR information. In short, ARTEMIS cannot perform more advanced trend and predictive analyses that were originally envisioned as being needed to identify defects warranting investigation.”