House Committee Approves Measure That Threatens Manufacturers’ Proprietary Business Information

Increased Disclosure of Early Warning Information May Harm Tire Makers in U.S

For more information contact:
Dan Zielinski
(202) 682-4846

WASHINGTON, D.C.May 28, 2010 – A House committee approved legislation this week that requires the National Highway Traffic Safety Administration (NHTSA) to make public more information that is reported to the agency by automobile, tire and automotive parts manufacturers.

The Rubber Manufacturers Association (RMA) voiced a number of concerns with the Motor Vehicle Safety Act of 2010, HR 5381. The group has voiced similar concerns with a companion measure in the Senate, S 3302.

“RMA strongly supports and our members fully comply with the current early warning reporting system to provide federal safety regulators with information to help enhance motorist safety,” said Charles Cannon, RMA president and CEO. “However, RMA and its members are very concerned that this bill may result in NHTSA disclosing critical business information that will cause competitive harm to manufacturers in the U.S.”

A 2000 federal law mandated NHTSA’s Early Warning Reporting System. Automotive industry manufacturers are required to report substantial amounts of production and performance data and consumer claims to the agency to assist federal safety officials with identifying potential safety issues. Consumer claims regarding fatalities, injuries and property damage claims are currently made public on NHTSA’s web site.

When NHTSA created the Early Warning Reporting System, it also created categories of information that would be protected from public disclosure as confidential business information. For tire manufacturers, this included production data, warranty claims and common green tires, which are tires that have not been cured.

“NHTSA conducted a rigorous process using strict Freedom of Information Act principles to develop a federal regulation that balanced public disclose of some early warning information with the need to protect some critical business data it receives each quarter from manufacturers,” Cannon said.

The Motor Vehicle Safety Act also includes a mandate requiring a brake override system in vehicles to help prevent the possibility of sudden unintended acceleration. Additionally, the measure gives NHTSA the authority to declare that a vehicle, tire or automotive part presents an “imminent hazard” to motorist safety. Such a declaration would allow the agency to impose a range of remedies to force manufacturers to address a potential safety issue.

The bill also boosts federal penalties on manufacturers for safety-related issues to a maximum of $200 million. The House version would allow individuals to sue the agency if they disagree with an agency determination in answering a petition to investigate a possible vehicle defect.

“Permitting lawsuits to overturn NHTSA’s thorough investigation of potential safety issues would force the agency to divert critical resources to redundant tasks and legal defenses to answer likely lawsuit challenges to defect petition decisions,” Cannon said.

The House bill is expected to go to the House floor in the coming weeks. A Senate committee is expected to consider its version of the bill in early June.

“We will continue to engage with legislators and work toward a reasonable solution that enhances motorist safety while addressing the risk to RMA members’ competitive business information posed by this bill,” Cannon said.

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The Rubber Manufacturers Association is the national trade association for the rubber products industry. Its members include companies that manufacture various rubber products, including tires, hoses, belts, seals, molded goods, and other finished rubber products.