General Motors X-Car Brake Lock-up
On March 30, 1983, General Motors announced a recall of 240,000 1980 X-cars due to rear brake lock-up, a problem that causes spin-outs in sudden stops or on wet roads. Intended to end a four-year controversy over the front-wheel-drive cars' brakes, the recall instead merely signaled the end of General Motors' X-car cover-up. Four months later a U.S. Justice Department lawsuit charged all one million 1980 X-cars with having defective brakes, and GM with having lied repeatedly to government investigators.
Public criticism of the brakes in GM's first line of small front-wheel-drive cars (the Chevrolet Citation, Pontiac Phoenix, Oldsmobile Omega and Buick Skylark) began as soon as the cars were available for sale in April 1979. Magazines such as Car & Driver and Road & Track all commented in their reviews of X-cars about how grabby the rear brakes were, causing Car & Driver columnist Don Sherman to speculate that "every stop sign in the land would soon have an X wrapped around it."
This publicity led NHTSA's Office of Vehicle Safety Compliance to run tests in late 1979 on X-car stability in braking. On November 26, 1979, NHTSA's Office of Defects Investigation began a separate low-level investigation into the cars' brakes based on consumer complaints. The compliance testing produced uncontrollable skids despite the use of experienced test drivers and ideal braking conditions. But the investigation by NHTSA's Office of Defects Investigation proceeded at a snail's pace, often marked by periods of inactivity lasting several months.
Finally by mid-1981 the government had gathered enough information to lead it to request a voluntary recall by GM of those 1980 X-cars with aggressive rear brake linings, as well as some X-cars built before late August 1979 and with proportioning valves that apparently allowed too much brake pressure to the rear brakes during hard stops. GM had told the government that the switch in production from 41% to 27% proportioners was the only change made to correct a rear brake lock-up problem.
On July 2, 1981, NHTSA opened a formal defect investigation of 1980 X-car brakes. Four days later the agency wrote GM requesting a recall. GM's reply, dated July 8, 1981, advised that it would recall only those 1980 X-cars with both the 41% proportioners and aggressive rear brake linings, and that it would change only the proportioners. Not only did this recall of only 47,000 cars not affect some 300,000 1980 X-cars which NHTSA engineers believed were prone to rear brake lock-up, it also employed a fix which NHTSA knew would not work. Tests conducted July 8-9, 1981, by NHTSA showed that even with a switch in proportioners, X-cars with aggressive linings locked up nearly all the time on wet roads.
Over the objections of his engineers, NHTSA Office of Defects Investigation Director George Anikis ordered that details of the NHTSA test be given to General Motors. Yet NHTSA did not reveal the existence of these tests to the public, nor did it publicly challenge GM's recall, when the auto maker sent recall notices to owners the following August. In violation of its own procedures, NHTSA did not even issue a news release announcing that a formal investigation of 1980 X-car brakes was underway.
By Fall 1982, complaints to the Center for Auto Safety indicated that cars which were recalled by GM in 1981 for rear brake lock-up were still experiencing the problem, and that other 1980 and later models were reporting lock-up as well. On October 15, 1982, the Center for Auto Safety petitioned NHTSA to order a recall and to expand its investigation to include later model cars. NHTSA responded by adding 1981-83 X-cars to the investigation on December 8, 1982.
Then on January 5, 1983, a front-page New York Times article disclosed the existence of the secret 1981 tests showing GM's recall was both ineffective and not broad enough. At the same time the General Accounting Office, responding to a request from Rep. Timothy Wirth, chairman of the House subcommittee which oversees NHTSA, opened an investigation into charges that NHTSA had dragged its feet in the X-car case.
NHTSA was now besieged with reports of lock-up from X-car owners. On January 14, 1983, when the agency issued an initial defect determination on 1980 X-cars with aggressive rear brake linings (affecting only 240,000 out of over one million 1980 X-cars), it had received only 364 complaints in three years of investigation, including one death report. By February 18, 1983, NHTSA had gotten 900 more complaints including 13 death reports.
NHTSA was also catching heat from Congress and the media. Its outspoken director, Raymond Peck, tried to justify the agency's withholding of the X-car tests from the public by calling them "quick and dirty" tests. General Motors, in an apparent attempt to head off more trouble, announced on February 10, 1983 that it would recall the 240,000 X-cars with aggressive linings. The House held two days of hearings on the investigation. Hearings on NHTSA’s Defect and Recall Procedures: The GM C-Car Case, Before the Telecommunications, Consumer Protection and Finance Subcomm., House Energy & Commerce Comm., 98th Cong., 1st Sess., Serial No. 98-50 (Mar. 2, Aug. 5, 1983).
But it was too late, for intensifying public criticism had finally forced NHTSA into pursuing an aggressive investigation. In March 1983 NHTSA issued the first of three administrative subpoenas to General Motors that would ultimately result in the production of over 100,000 internal documents showing that the brake lock-up problem had been found in GM testing months before mass production began, that one month before the start of production GM's top executives were informed of the defect but did not order it corrected prior to production, that further tests after manufacture of the X-car began also showed that lock-up occurred, and that numerous changes were implemented during and after 1980 model production to try to fix the problem.
By mid-1983 NHTSA had forwarded its files to the civil and criminal divisions of the Justice Department, which filed its civil suit August 3, 1983. The Justice complaint charged that GM documents showed four causes of rear brake lock-up in some or all 1980 X-cars: 1) use of 41% proportioners in cars built before late August 1979; 2) use of cheaper smooth-surface rear brake drums in cars built before mid-August 1979; 3) use of aggressive rear brake linings in all manual transmission and a small number of automatic transmission 1980 X-cars; and 4) failure to guard against corrosion of caliper pins in the front brakes of all 1980 X-cars. The government lawsuit charged GM with five instances of failure to recall the cars after making a good faith determination that a safety defect existed, and with 18 counts of lying or withholding information from the government. Thus the suit sought the recall of all 1980 X-cars including those recalled previously, as well as civil penalties totaling $4,027,000.
Two days after the government filed suit, the GAO disclosed another X-car cover-up, this time by the government. NHTSA's investigation "included long periods of time with no activity and was not conducted in accordance with [agency] guidelines," the GAO report concluded. "In addition, the existence of test data was not made known to the public." Agency engineers told the GAO that ODI Director Anikis had taken steps which had the effect of delaying the case and suppressing information from the public, including ordering copies of the final test report to be gathered up and stored "for security purposes."
Closing arguments in the case U.S. v. General Motors Corp., 656 F. Supp. 1555 (D.D.C. 1987), concluded on February 26, 1986, with the government emphasizing that even without the technical evidence of a defect, including the extensive train of GM internal documents showing the company's awareness of braking system problems, the nearly 5000 complaints filed by 1980 X-car owners were enough, of themselves, to establish a performance defect and justify a recall.
On April 14, 1987, nearly four years after suit was filed and over a year after trial ended, U.S. District Court Judge Thomas P. Jackson issued his decision, ruling for GM on all counts before the court. No recall would be ordered because the government had failed to define precisely what was wrong with X-car brakes. The thousands of complaints from X-car owners were dismissed as "anecdotal"; the internal memos in which GM's own experts attacked the car's brake performance were merely evidence "that brake engineers have yet to devise the infallible braking system." In his opinion Jackson chided the government for coming "into court with nothing more, essentially, than a reasonable suspicion, without the evidence to prove it."
Though the court acknowledged the high pre-publicity complaint rate on X-car brakes, it rejected the government's argument that these complaints and GM's own test driver reports and internal studies established a defect in performance despite the absence of proof of a specific cause of the problem. Furthermore, the court held that because GM's 1981 and 1983 X-car recalls were voluntary, the company did not have to comply with the requirements of NHTSA's regulations issued under the National Traffic and Motor Vehicle Safety Act regarding the contents of owner notification letters. The court also failed to find GM liable for civil penalties for failing to notify the Secretary of Transportation of GM's finding that a safety-related defect existed in certain of its X-cars prior to GM's actual recall announcements. Even though GM's recall notification stated to NHTSA that it had determined that a safety-related defect exists, the court relied on the government's failure to prove a safety-related defect existed in rejecting penalties for GM's earlier cover-up. Finally, the court's opinion introduced a much more extensive cost-benefit analysis into the decision as to whether a defect is safety-related than had been adhered to in prior court decisions.
On May 11, 1987, the U.S. Justice Department filed a notice of appeal of Judge Jackson's decision, arguing that the evidence at trial established a performance defect based on the complaints and GM internal documents alone, that GM--not the government--was responsible under the law for either fixing the cars if they were capable of being repaired or repurchasing them if they were not, and that manufacturers are not excused from obeying NHTSA recall notification requirements merely because a recall is voluntary.
In March 1988, the U.S. Court of Appeals upheld the lower court's decision against NHTSA and in favor of GM. United States v. General Motors, 268 App. D.C. 278, 841 F.2d 400 (1988). The Appeals Court stated that NHTSA did not prove that a defect existed in the X-cars because the agency did not identify a specific mechanical defect which caused rear brake lock-up. While acknowledging the agency's file of consumer complaints, the appellate court held that the complaints were "driving events for which there is no physical or engineering evidence of failure" and which thus did not constitute documentation of actual failures. The Court also held, in a particularly disturbing finding, that manufacturers conducting voluntary recalls have "no obligation to comply with the remedial provisions" of the National Traffic and Motor Vehicle Safety Act or other NHTSA regulations. Until this decision, manufacturers were required to pay for recall-related repairs, send notices to consumers via first class mail, and list the agency's toll-free telephone number to report any unsatisfactory resolution. Under the new ruling, NHTSA will have to issue final defect determinations and conduct public hearings in all investigations to insure compliance with the Act and other relevant regulations. Even manufacturers may ultimately wish to restore the law, from a products-liability standpoint, because NHTSA defect determinations are often more easily admissible into evidence than are voluntary recalls.