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Culture Matters: What a Good Auto Recall Looks Like

Are all global automakers alike? They all face recalls of various sorts now and then. In 2013 there were over 140 recalls among the top 10 auto manufacturers selling in the USA which impacted over 15 million vehicles. However, amidst all the news over the past few months of the cascading crises facing GM and their recalls, there was a story that may have been overlooked as to what happens when an automaker with a true culture of safety issues a recall.

While GM faces accusations of engineering managers knowing about ignition-switch problems on the 2005 Cobalt that could disable power steering, power brakes and air bags, but launching the car anyways because they believed the vehicles could be safely coasted off the road after a stall, Honda took a very different approach.

In March 2014 Honda filed documents with National Highway Traffic Safety Administration (NHTSA) announcing the recall of almost 900,000 Odyssey minivans because of a potential fire hazard. "Honda told the agency that part of the fuel pump in Odyssey models from 2005 to 2010 could 'deteriorate prematurely in a manner that can result in cracks' and allow gasoline to leak. The automaker said it was not aware of any fires or injuries resulting from the problem."

Just another recall? When you look at the documents filed with NHTSA a very different picture emerges. First of all, Honda determined on March 6, 2014 that there was a potential defect and had its recall notice filed with the NHTSA the very next week.

A look at the timeline of events in the recall notice reveals much about how a healthy culture focused on safety operates.

October 1, 2012 -- American Honda Motor Co., Inc. (AHM) recognized a high demand of Odyssey fuel pump replacement parts.

October 25, 2012 -- (Honda Manufacturing of Alabama) HMA started analyzing fuel pumps returned from the market.

February 19, 2013 -- The initial investigation done by the supplier showed that the cracks in the material were the result of acid.

July 30, 2013 -- Honda R&D North America Ohio (HRAO) and HMA investigated the potential for acid to come from chemicals found in car washes.

August 7, 2013 -- Honda R&D Tochigi in Japan (HGT) began to study the acid attack as well as the crack propagation as possible contributing factors based on preliminary failed part analysis.

September 23, 2013 -- HGT started a preliminary test of acid combined with crack propagation.

October 9, 2013 -- HGT found that low PH materials are used in fertilizer and dust control agents, a possible source of acidic compounds that gather on the fuel pump strainer cover.

October 16, 2013 -- HGT hypothesized that a combination of acid and crack propagation could be a cause for the cracks and started confirmation testing.

March 6, 2014 -- HMC determined that a safety defect exists and decided to conduct a recall.

First of all, who was it at the corporate office that identified the high demand for replacement parts? Probably not a very senior employee. But this employee certainly felt empowered and safe to raise the issue with more senior managers, even though at the time such an anomaly could have easily been put aside. But at Honda within 4 weeks the manufacturing facility was analyzing fuel pumps. Remember that there were no reported injuries or failures which prompted this investigation.

Over the next year Honda facilities world-wide worked with the part supplier and conducted a variety of tests to see if there was any significant risk to these failure that warranted intervention. Finally, on October 16, 2013 the R&D group in Japan hypothesized that under a certain set of circumstances, there could be a crack which could lead to a fire. Based on that possibility in March Honda recalled almost a million vehicles, even though they had received to that date only 187 warranty claims for this issue and no reported fires of injuries.

Recalls are expensive financially and costly to the reputation of the brand. They are not done lightly and one can only imagine the difficult conversations that must have ensued in order to get agreement to go ahead with the recall. And yet, from an insignificant piece of data uncovered in by a quality employee Honda's culture guided a number of employees from across the globe to take action that reflected the organization's commitment to its value of safety. Culture Matters.

David Gebler is the President of Skout Group, LLC and the author of The 3 Power Values: How Commitment, Integrity and Transparency Clear the Roadblocks to Performance (2012 Wiley)

www.skoutgroup.com

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