United States legislators are hustling to get bills passed that would strengthen the National Highway Traffic Safety Administration's (NHTSA) ability to monitor automakers as well as increase the penalties on automakers who violate portions of the new law. Additionally, Ford Motor Co. and Bridgestone/Firestone have come together to ask a federal judge to consolidate more than 200 lawsuits that have been filed against both companies in the wake of the recall.
Starts and stalls
While both houses of Congress are working to get versions of the new bill passed, they are doing it with differing results. Senator John McCain, R-Ariz., blasted special interest groups on Oct. 6, in particular the auto industry, for working to impede the progress of the bill.
"I want to express my deep disappointment that the fix is in by the special interests," he said speaking from the floor of the Senate. "The automotive industry is now blocking this legislation—(that is) the word on the street."
A series of holds have been placed on the Senate bill, which Michigan Senator Carl Levin denies is motivated by the auto industry. McCain reiterated his concerns that a House version of the bill would get passed, but his bill would not make it to the floor for a vote due to the delays.
McCain allegedly suggested he would hinder the passing of a $58 billion transportation- spending bill, which included some provisions of his bill such as disclosing foreign defects and allowing NHTSA to institute a rollover rating system, but he later recanted. He did take one last shot at motivating his Senate colleagues. "I don't think many American citizens would approve of the Senate blocking legislation that is designed to save lives," he said. The House version of the bill made it through the House Commerce Committee Oct. 5 in a unanimous 42-0 vote. A vote before the full House is expected Oct. 10. However, the House version is not without its controversy.
The bill calls for prison sentences of up to 15 years for executives who knowingly withhold information on products that cause injury or death. The bill would also raise the maximum penalty from $925,000 to $15 million. However, the bill also has a provision that allows criminal penalties to be waived if withheld information is reported or corrected in a "reasonable time."
Critics claim the clause takes all the teeth out of the bill, however, Billy Tauzin, R-La., who heads up the House Commerce Committee, said the clause protects whistle blowers rather than protecting executives.
Bridgestone and Firestone executives knew about problems
A former Bridgestone employee testified in Nashville, Tennessee, that the company's executives knew there was a problem with possible tire defects in its ATX, ATX II and Wilderness AT tires as early as 1997. Bob Martin said he discussed the problems with both Masatoshi Ono, Bridgestone/Firestone chairman and CEO, and John Lampe, executive vice president, during quarterly sales meetings. Ono, who is rumored to face a demotion soon, and Lampe testified before Congress in August they had no knowledge of the defects until late July.
Firestone said the company used the claims data, which Martin referenced in his Nashville testimony, for profit analysis rather than for possible safety issues. The claims data didn't suggest an unusually high percentage of tire failures.
Additionally, Ford executives received a plethora of correspondence from customers, dealers and lawyers since 1998 telling them that there was a problem with the tires. However, Ford didn't pursue its own tests on the tires until a NHTSA inquiry began. Jason Vines, Ford vice president of communications, said the company reacted when it found a problem. He added that the company repeatedly asked for further analysis from Bridgestone and was told repeatedly the tires were not defective.
Working together again
Ford and Firestone have asked a panel of federal judges to consolidate the 210 lawsuits that have been filed against them. The judges will hear arguments on the motion Oct. 17. This type of move is often approved because it reduces the workload on the system and eliminates many conflicting rulings.
Some critics say the maneuver is done to prevent lawyers representing plaintiffs from doing complete and effective discovery. They view it as a stalling tactic on the parts of both companies. There have been 60 consumer class-action cases and approximately 150 personal injury cases filed in relation to the tire defects.
Additionally, the first suit on behalf of plaintiffs outside the U.S. was filed last week. The suit was filed on behalf of 400 Venezuelan Explorer owners. It will be part of the consolidation hearing.