Part IV Navigating NHTSA: What Automotive Leaders Need to Know

Special Considerations for Suppliers

Alert

In Part I of this series Before the Recall: Defect Determinations and NHTSA Investigations we provided an overview of the legal requirements for when manufacturers are required to file recalls, how manufacturers make defect and noncompliance determinations and how NHTSA investigates safety issues.

Part II of this Client Alert series examined the requirements for recall filings and owner notification letters. Part III addressed the requirement that manufacturers provide owners a remedy for defects and noncompliances at no cost. 

Suppliers of original equipment often have less interaction with NHTSA because the vehicle manufacturer is responsible for conducting recalls for defects and noncompliances in original equipment. Aside from the limited circumstances in which the same component was installed in vehicles made by multiple manufacturers, or in the case of a defect or noncompliance in replacement equipment, suppliers  generally are not required to file recalls. However, there may be circumstances in which it makes sense for a supplier to voluntarily assume the responsibility of filing a Part 573 Report from the vehicle manufacturer and conducting the notification and remedy campaign. 

Are suppliers allowed file a Part 573 Report and conduct a notification and remedy campaign on behalf of the vehicle manufacturer?   

Yes, in the case of original equipment included in vehicles made by only one manufacturer, NHTSA permits either the vehicle or the original equipment manufacturer to file the Part 573 report and conduct the notification and remedy campaign. In the case of original equipment that was installed on vehicles made by multiple manufacturers, both the vehicle manufacturer and original equipment manufacturer are required to file Part 573 Reports with NHTSA. However, NHTSA permits either the vehicle or the original equipment manufacturer to conduct the notification and remedy campaign. 

A supplier considering whether to voluntarily assume responsibility for conducting a notification and remedy campaign should only do so after close consultation with their vehicle manufacturer customer and review of their supply agreements. Because the Safety Act places responsibility for conducting recalls involving original equipment on the vehicle manufacturer, both parties should be clear regarding the responsibility that the supplier is assuming.

When would it make sense for a supplier of original equipment to conduct a notification and remedy campaign?

Supplier initiated recalls make the most sense in situations in which the supplier has its own business relationship with the vehicle owner or the vehicle owner is at least aware that the supplier’s equipment is incorporated into the vehicle. A supplier initiated recall also may make sense where the supplier is collecting information from vehicle owners that is relevant for a defect or noncompliance determination, such as warranty claims and consumer complaints. For highly specialized equipment, the supplier may be in the best position to develop a remedy. Suppliers of such equipment also may have their own service or dealer networks that would allow for recall repairs to be conducted more quickly and at a lower cost than if the recall was conducted by the vehicle manufacturer. 

Supplier initiated recalls are most likely to involve commercial vehicles or specialty equipment such as mobility equipment installed by upfitters. 

For light vehicles, a supplier led notification and remedy campaign typically would not be practical because of the relationship that the manufacturer’s dealer network has with consumers and the likelihood that the consumers will not be aware of the equipment installed in their vehicle, making it less likely that they would respond to a supplier issued notification by having their vehicle repaired. Because of these factors the vehicle manufacturer is usually in the best position to conduct the notification and remedy campaign. 

If you have questions about the recall process or how it applies to your business, please contact Tom Healy or another member of Honigman’s Regulatory Practice Group. Learn more about Honigman's Automotive Regulatory & Compliance Services here.