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NHTSA to crack down on automakers' claims

Following a series of deadly scandals, and now Volkswagen's attempt to cheat on federal emissions standards, the U.S. government will be less accepting of auto industry claims, especially when it comes to self-certified testing, warns the top federal vehicle safety regulator.

"We're questioning everything now," said Mark Rosekind, director of the National Highway Traffic Safety Administration, during an appearance Tuesday at an industry conference in the Detroit suburb of Novi. "You have to question all assumptions."

On Friday, the Environmental Protection Agency ordered the recall of 482,000 Volkswagen diesel-powered vehicles after learning the automaker had installed a so-called "defeat device" designed to meet emissions standards when undergoing standard testing procedures. But once on the road, the vehicles were able to produce as much as 40 times the legal limit of harmful emissions.

Martin Winterkorn, chief executive officer of Volkswagen AG (VW).
Krisztian Bocsi | Bloomberg | Getty Images
Martin Winterkorn, chief executive officer of Volkswagen AG (VW).

The duplicity was only discovered after seven years when an industry group, intending to show how clean modern diesels have become, used a non-standard testing procedure that didn't trigger the software VW had installed. The automaker initially dismissed the outcome, though CEO Martin Winterkorn has since acknowledged VW's deception and pledged to resolve the problem.

VW is just the latest automaker taken to task for concealing actions that violate safety and emissions laws:

  • General Motors earlier this month agreed to a settlement with the U.S. Justice Department requiring it to pay a $900 million fine and serve three years' probation for concealing an ignition switch defect now linked to more than 100 deaths.

  • Fiat Chrysler in July paid a record $105 million fine to NHTSA for failing to live up to safety regulations on dozens of recalls.

  • And Toyota paid a $1.2 billion fine in March 2014 to settle another Justice Department criminal investigation.

  • "You don't have to say 'was that a lie?' You just have to challenge every assumption when information is provided," NHTSA's Rosekind said during an appearance at a conference sponsored by the trade organization, the Auto Industry Action Group.

NHTSA itself has come under intense fire for its failure to detect safety problems, including the GM ignition switch issue and a problem with Takata air bag inflators that has forced the recall of nearly 30 million vehicles in the U.S. alone. Since taking the helm at the federal safety agency in December, Rosekind has ordered a major shakeup at the agency to improve its regulatory oversight.

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He also has stressed on several occasions that he wants a more cooperative relationship with automakers, but one with zero tolerance for safety problems.

As that push continues, a number of officials in the automotive business contacted by TheDetroitBureau.com said they expect to see significant changes in the way industry and government work together.'

Among other things, federal regulators may be less willing to readily accept the results of self-certification programs in which automakers are allowed to run their own tests to meet safety, emissions and fuel economy standards.

Korean car maker Hyundai Kia, for one, paid a then-record $100 million fine—and hefty payouts to owners—in 2014 when it acknowledged the fuel economy numbers its tests generated were as much as 6 mpg higher than they should have been for a number of vehicles.

Ford was later faulted for also overstating mileage. And that pattern repeats itself, industry officials note. Major problems often are not limited to the first automaker that gets caught.

Already, several other automakers, including Mercedes-Benz, are being questioned about how clean their diesels operate in the real world.

"Every time we have an individual automaker or supplier where we find an issue, your first question has to be how extensive is it through the whole industry?" Rosekind said. "If they did it, anyone else can do it."

The challenge for the government agencies overseeing the auto industry will be to come up with the resources to either take over testing or find ways to validate industry numbers.

The Republican-controlled Congress, while sharply criticizing NHTSA earlier this year, refused to provide additional funds to expand the agency's Office of Defects Investigation, for example.

Nonetheless, expect to see NHTSA, the EPA and other government agencies be a lot more suspicious about the data they're given by automakers going forward.