Who Put Consumer Reports In Charge Of Car Testing?

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By Douglas A. McIntyre Published
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Consumer Reports’ monopoly on auto testing remains largely unquestioned. Recently, the magazine found that the Lexus 460 rolls over. In years past, it has found problems with Jeeps and Firestone tires.  The question is whether this huge amount of power is deserved.

The Consumers Union, the non-profit publisher of the magazine, has 600 employees. Presumably only a small number of people among that group test cars. They test dozens of cars and light trucks each year. That means only a moderate time can be given to each set of tests. Tests are prone to error, even those done by government and universities. But, Consumer Reports is, is in the eyes of the public, incapable of error. Perhaps that is because it is a non-profit beholden to none of the companies whose products it tests. Perhaps it is because of its decades old reputation for picking the best products in a number of categories, and the worst.

Some might argue that the NHSTA does a laudable job of tracking car defects, but the Toyota recalls undermine that perception. The Insurance Institute for Highway Safety does a great deal of crash testing, but its results do not grab the headlines the Consumer Union tests do. JD Power offers opinions on cars and trucks, but they are based on surveys and not tests done on a track.

The Consumer Reports test of the Lexus SUV found that it had a tendency to roll over. Based on press reports, the organization did not test 100 of the vehicles, or probably even 20.  But, Toyota felt compelled to stop selling the truck. It could not cope with more bad PR after recalling 8.8 million cars worldwide. Even if the big SUV was a sound as a bank vault, the No.1 car company in the world was in no position to debate with the magazine.

It is odd that no organizations monitor the monitor. Consumers Union does not have another group that audits its results. Perhaps every report that the CU has ever issued on every product is test was perfect. But, batting 1,000 is impossible when the tests involve the perception of the tester no matter how skilled they may be.

It is hard to question that the CU performs a valuable service, unless in those cases when it is wrong.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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