Recall risks for Automobile suppliers in the USA
Hanover, 06. October 2015 | More than 60 million vehicles were recalled in 2014 in the United States due to possible defects. That is more recalls than during the preceding four years combined. In the first half of 2015, the recalls have already amounted to 30 million. In the second half of the year, Volkswagen will significantly influence the number of recalls expected. "In general, there is a trend towards more recalls in the US," said Neil Steinkamp, consultant from New York during an automotive conference hosted by Herfurth & Partner and the Automotive Cluster in Hannover which was attended by representatives from the automobile supply and insurance industry. Mr. Steinkamp’s firm advises suppliers about risk management and product liability in the US and he posesses extensive data and analysis on product recalls. He notes that the documentation and reporting obligations due to the US traffic supervisory authority, the National Highway Traffic Administration (NHTSA) and towards the vehicle manufacturers will increase. The original equipment manufacturer (OEM) frequently shows a tough stance to the suppliers, as the specific manufacturers have recently demonstrated by clearly holding their suppliers fully responsible. Quality management does play a prominent role for its suppliers, in order to limit the risks from US product liability, said Ulrich Herfurth, "Suppliers need to be aware that the OEM will consistently enforce their quality management standards. Product liability insurance is also used to hedge the risk of liability. However, insurance companies offer recall insurance only hesitantly, contractual liability recoveries are often not covered by the insurance policies. Therefore, Ray Vandenberg, US attorney from New York recommends that the corporate structure should be such that, in case of doubt, only the US importer or a subsidiary is held liable but the liability does not penetrate to the parent company".
The law firm of Vandenberg & Feliu LLP is a Partner Firm of Herfurth & Partner, in the international Alliuris Group. Alliuris covers 31 locations and 450 specialized business lawyers all over Europe and in the major world markets. „The connection with the USA has in the last few years once again grown in importance, explained Ulrich Herfurth, Chairman of the Alliuris Group.
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