Are recalls set to dominate the headlines?

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Since the first time a caveman picked up a flint and chiseled a message in stone to the community, writers have been guilty of producing alarmist headlines. The readers of those earliest rock alerts could be forgiven for unquestioningly accepting proclamations like ‘Dinosaur not extinct after all. Go hide’ or ‘Elders dismiss useless wheel invention’.

It has never been any different. Happily, in the 5th century BC, the dissemination of this sort of apocryphal data was curtailed by the development of a calibration tool. This was attributed to a philosopher called Antisthenes, who invented cynicism.

The car industry is not exempt from doom-laden headlines or healthy cynics. That is not to say that all the headlines are wrong, or indeed that there are no crises looming. So let’s pause to look at what’s new in our sector. Pretty much everything. There are emerging autonomous cars, new electric powertrains, new facilities, new testing hardware, and new software for everything from data acquisition to turbulence modeling. Even the fluids are new, so the testing industry has to consider new fluid dynamics. And of course there is new math, lots of it, performed on new high-speed supercomputers. If you need a new ensemble version of a governing equation to resolve some set of next-level unknowns, the chances are that someone has already written it.

Now, it may be that I am missing an attention-grabbing headline here. Perhaps it is about the legal consequences of all this newness happening in such a small arena all at once. Maybe that headline has to do with intellectual property rights – or IPRs as the legal world calls them. After all, wherever there is newness, there are technological advances, and wherever these arise there are inventors and hence IPRs. And wherever these elements reside, there is IPR theft. If three pointed stars and leaping Jaguars are knocked off, which they are, you can be sure that new technologies are equally at risk. Maybe that’s the next important headline. Maybe.

And yet, I can’t help thinking that the real crisis for the auto industry has already arisen and is lurking behind us in the cave like an unwelcome velociraptor. That headline has been written so often we almost don’t see it, so here is a recent reminder from Bloomberg: ‘Auto Recalls Top 60 Million’. Now that, folks, is a headline and that is just in the USA. Of course the number of recalls is sizable in any given year, but this is new territory. It equates to almost one car per family in the USA or one car per person in the UK.

A recall is a legal event in itself, and it has real legal consequences, not just potential ones. Class actions brought by owner groups have been springing up all over the USA as a lawyer-led consumer reaction to these recalls. And then there are the copy-cat litigants, who get a recall notice a year after an accident that was their fault, and suddenly they have a gripe, then a law suit. Or maybe I’m just a cynic.

Alexander M Geisler is a partner at Duane Morris. He has over 20 years’ experience in the automotive sector and is regularly retained by OEMs, Tier 1 and Tier 2 suppliers, test facilities and engineering companies. He is the resident legal columnist for Automotive Testing Technology International.

Alex can be reached at amgeisler@duanemorris.com, +44 20 7786 2111 (London) and +1 215 979 1000 (Philadelphia).

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