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Feds open probe into rental cars


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Feds open probe into rental cars

David Shepardson / Detroit News Washington Bureau

Washington — The National Highway Traffic Safety Administration has opened an investigation into how quickly rental car companies get recalled vehicles repaired.

NHTSA said in a statement posted on its website today that it is looking at nearly 3 million recalled vehicles, from General Motors Co., Ford Motor Co. and Chrysler Group LLC, that were sold to rental car companies. The review covers 29 separate models built between 2000 and 2010.

The investigation is to give NHTSA "an indication of how completely and how quickly rental car fleets, in general or individually, perform necessary recall-related repairs or other remedies on the vehicles owned and then leased for use on the roadways."

A consumer advocacy group has filed a petition with the Federal Trade Commission urging Enterprise Holdings Inc. to repair vehicles before they rent them to customers.

NHTSA "has been informed of incidents involving allegations of personal injury and death claimed to have been caused by safety defects and failures" that are "on rental car vehicles for which a safety recall to remedy the safety defect or noncompliance had allegedly not been performed prior to the rental car company's lease of the vehicle."

There is no law that requires rental car companies to fix vehicles before they return to service, said Sharon Faulkner, executive director of the American Car Rental Association. Most companies quickly repair vehicles once they get a notice, she said.

"You pull those cars and you park them," Faulkner said. "It's just foolish for anyone to risk a lawsuit, death or injury. It's just stupid. You don't do it."

It can be months before a recall notice actually gets to a rental company, she said, adding that automakers could work to better notify companies.

Faulkner did say some recalls are for very minor issues that don't pose a safety risk. She noted during the Toyota Motor Corp sudden acceleration scare, rental agencies parked thousands of cars waiting for repairs — losing money and turning away customers.

Sen. Charles Schumer, D-N.Y., also urged the FTC to act, writing that "if automotive dealers are not allowed to sell recalled vehicles without first fixing the safety issues, then rental car companies should be held to the same standard."

The FTC petition was filed by the Center for Auto Safety, a group founded by Ralph Nader and Carol S. Houck.

A suit Houck and her husband filed against Enterprise Rent-A-Car stems from the 2004 deaths of their two daughters, Raechel and Jacqueline, ages 24 and 20.

The sisters rented a PT Cruiser from Enterprise that, unknown to them, had been recalled for risk of under-hood fires. While traveling through Monterey County in California, the car caught fire, causing it to collide with a semi-trailer truck, instantly killing the women, the petition said.

After five years of fighting, Enterprise admitted liability in the deaths. Trial was held on the issue of damages only and a couple won a $15 million verdict in June.

The petition said Carol Houck "has dedicated herself to ensuring that others will not have the tragic fate of her daughters."

The petition said at least four people had rented the vehicle after Enterprise received a recall notice.

Privately held Enterprise has a third of all airport business in the United States and Canada through its three major brands: Enterprise, Alamo and National brands. Worldwide, it has 7,600 locations and operates a fleet of 1.1 million vehicles.

Enterprise spokeswoman Laura Bryant said the company would cooperate with NHTSA "in any inquiry they wish to make concerning our current practices."

She noted that NHTSA issues hundreds of recalls annually and automakers issue hundreds of service bulletins affecting millions of vehicles in North America, including thousands of our rental cars and trucks.

"If and when manufacturers recommend that vehicle owners park or ground their vehicles, Enterprise promptly does so," she said. "In most cases, we place a 'hold' on recalled vehicles so they are not rented until the recall work is completed. … We are confident those practices and procedures are fully consistent with our commitment to provide customers vehicles that are safe to drive."

NHTSA said today its investigation, called an "audit query," will "investigate recall remedy completion by rental car companies." The U.S. vehicles, which are a disproportionate share of rental car fleets "were chosen due to their inclusion of vehicles used in the rental market."

From The Detroit News: http://detnews.com/article/20101122/AUTO04/11220378/Feds-open-probe-into-rental-cars#ixzz163QXJE00

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Feds Launch Probe Into Rental Car Recall Delays

Investigation triggered by evidence some firms regularly delay repairs on defective vehicles.

by Paul A. Eisenstein on Nov.22, 2010

Rental firm accused of delaying repairs on recalled vehicles if they're in demand.

Federal regulators want to know whether daily rent-a-car companies may be risking the lives of their customers by delaying repairs for known safety problems in order to keep potentially defective vehicles in circulation.

The investigation comes as several rental car firms defend their actions in court. As TheDetroitBureau.com first reported, last July, officials with Enterprise, Alamo and National have acknowledged in court delaying safety-related repairs, in one manager’s words, “when demand called.”

But industry officials are denying such allegations and, if anything, are blaming automakers for failing to properly notify fleet managers of pending recalls.

The National Highway Traffic Safety Administration’s new investigation is specifically examining how major rental car companies have handled 29 individual recalls ordered by Detroit’s Big Three automakers. In all, those recalls involved 3 million vehicles sold to rental companies.

The federal agency, which oversees automotive safety issues, says it, “has been informed of incidents involving allegations of personal injury and death claimed to have been caused by safety defects and failures…on rental car vehicles for which a safety recall to remedy the safety defect or noncompliance had allegedly not been performed prior to the rental car company’s lease of the vehicle.”

But while there is no law that specifically requires a fleet to pull recalled cars out of use until repairs are made, delaying a recall could put a rental firm at risk of a lawsuit, as Enterprise – which also owns daily rent-a-car companies Alamo and National – has learned.

Last July, the company was in the midst of a case involving the deaths of two sisters who were killed, in 2004, when the Chrysler PT Cruiser they had rented from Enterprise collided with a tractor trailer and caught fire. The vehicle had been rented out three times despite the fact that the firm had been notified of a safety-related recall. (For the full story, Click Here.)

During the trial, Mark Matias, a former San Francisco-area manager for Enterprise admitted on the stand that, “When demand called, we rented out recalled vehicles. It happened, I won’t lie.” Enterprise earlier had accused one of the sisters for having caused the wreck, claiming she had either been “suicidal or on drugs.”

Eventually, the parents of Rachel and Jacquie Houck won a $15 million judgment against Enterprise.

Despite the admissions in court, Sharon Faulkner, a spokeswoman for the American Car Rental Association, said renting out cars that need safety repairs is not a normal industry practice.

“You pull those cars and you park them,” Faulkner told The Detroit News. “It’s just foolish for anyone to risk a lawsuit, death or injury. It’s just stupid. You don’t do it.”

The industry notes that it grounded tens of thousands of Toyota vehicles that were involved in a sudden acceleration recall, earlier this year, until repairs were made. The Japanese maker was extremely aggressive with that recall, critics counter, going so far as to tell its dealers not to sell the affected vehicles until repairs could be made.

Meanwhile, New York Senator Charles Schumer has joined with the Center for Auto Safety in asking the Federal Trade Commission to take steps to require immediate repairs of recalled vehicles in rent-a-car fleets.

Iif automotive dealers are not allowed to sell recalled vehicles without first fixing the safety issues,” he wrote the FTC, “then rental car companies should be held to the same standard.”

link:

http://www.thedetroitbureau.com/2010/11/feds-launch-probe-into-rental-car-recall-delays/

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NHTSA probes rental car recall repairs

Agency seeks data on how quickly 3 million vehicles were fixed

David Shepardson / Detroit News Washington Bureau

Washington — The National Highway Traffic Safety Administration has opened an investigation into how quickly rental car companies fix recalled vehicles.

NHTSA said on its website Monday that it is looking at nearly 3 million recalled vehicles from General Motors Co., Ford Motor Co. and Chrysler Group LLC that were sold to rental car companies. The review covers 29 models — from sedans to minivans to sport utility vehicles — built from 2000 to this year.

The agency said its probe is to give "an indication of how completely and how quickly rental car fleets, in general or individually, perform necessary recall-related repairs or other remedies on the vehicles owned and then leased for use on the roadways."

The Center for Auto Safety, a group founded by Ralph Nader and Carol S. Houck, has filed a petition with the Federal Trade Commission urging Enterprise Holdings Inc. to repair vehicles before they rent them.

NHTSA said it "has been informed of incidents involving allegations of personal injury and death claimed to have been caused by safety defects and failures" that are "on rental car vehicles for which a safety recall to remedy the safety defect or noncompliance had allegedly not been performed prior to the rental car company's lease of the vehicle."

No law requires rental car companies to fix vehicles before they return to service, said Sharon Faulkner, executive director of the American Car Rental Association. Most companies quickly repair vehicles once they get a notice, she said.

"You pull those cars and you park them," Faulkner said. "It's just foolish for anyone to risk a lawsuit, death or injury.

"It can be months before a recall notice gets to a rental company, she said, adding that automakers could work to better notify companies.

Faulkner noted during Toyota Motor Corp.'s sudden acceleration scare, rental agencies parked thousands of cars waiting for repairs — losing money and turning away customers.

The FTC petition follows a suit the center's Houck and her husband filed against Enterprise Rent-A-Car that stems from the 2004 deaths of their two daughters, Raechel and Jacqueline, ages 24 and 20.

The sisters rented a PT Cruiser from Enterprise that, unknown to them, had been recalled for risk of under-hood fires. While traveling through California, the car caught fire, causing it to collide with a semi-trailer truck, instantly killing the women, the petition said.

After five years of fighting, Enterprise admitted liability in the deaths. The couple won a $15 million damages-only verdict in June.

The petition said at least four people had rented the vehicle after Enterprise received a recall notice. Privately held Enterprise has a third of airport business in the United States and Canada through its Enterprise, Alamo and National firms.

Enterprise spokeswoman Laura Bryant said the company would cooperate with NHTSA in any inquiry involving current practices.

NHTSA issues hundreds of recalls annually and automakers issue hundreds of service bulletins affecting millions of vehicles in North America, including thousands of our rental cars and trucks, Bryant said.

"If and when manufacturers recommend that vehicle owners park or ground their vehicles, Enterprise promptly does so," she said. "In most cases, we place a 'hold' on recalled vehicles so they are not rented until the recall work is completed."

From The Detroit News: http://detnews.com/article/20101123/BIZ/11230328/NHTSA-probes-rental-car-recall-repairs#ixzz167cVUtsR

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