Firestone, Ford, DOT and the Law
Dateline: 09/12/00
The CEO's of Firestone and Ford -- and U.S. Transportation Secretary Rodney Slater -- are scheduled to testify before the Senate Commerce Committee today on their actions in the Firestone tire recall.
As congressional hearings into the tire recall continue, this much we know; somebody failed American consumers -- fatally. But, exactly what laws might have been violated, and what could the penalties for those violations be?
Laws Involved
The Motor Vehicle Regulations
of Title 49, Chapter
301 of the United States Code, is intended to protect consumers against defects posing a "substantial
product hazard" in motor vehicles or motor vehicle equipment, including
tires.
The U.S. Department of Transportation (DOT) is in charge of administering the Motor Vehicle Regulations, while the U.S. Department of Justice is responsible for enforcement of the law and, when necessary, prosecution of violators.
This law requires that both consumers and the U.S. Department of Transportation (DOT) be made aware of hazardous defects as soon as they are detected. Specific requirements and specifications for proper legal notification are contained in Title 49, Chapter 301, Sec. 30119.
Under the law, manufacturers and the Secretary of Transportation are mutually responsible for notification of defects.
The Secretary of Transportation is required to notify the manufacturer of the defective vehicle or component as soon as the Department of Transportation determines that "the vehicle or equipment contains a defect related to motor vehicle safety or does not comply with an applicable motor vehicle safety standard," under the law. (Sec. 30118)
Unintentionally manufacturing defective tires is not a violation of the Motor Vehicle Regulations. Being aware that you have manufactured and distributed defective tires, and not immediately informing DOT and consumers of the fact, is.
| Discuss the Recall: What's your opinion on the Firestone/Ford Firestorm? |
Possible Crimes Involved
Manufacturers of motor vehicles or equipment are required to notify both the
Secretary of Transportation, as well as consumers as soon as the manufacturer:
- (1) learns the vehicle or equipment contains a defect and
decides in good faith that the defect is related to motor vehicle
safety; or
- (2) decides in good faith that the vehicle or equipment does
not comply with an applicable motor vehicle safety standard.
(Sec. 30118)
So far, congressional investigators have seen evidence suggesting that both Firestone and Ford were aware of defects in the 6.5 million tires recalled this August as early as 1997.
Damaging Documents
"Although ABCNEWS reported earlier this week that Firestone officials knew as early as 1997 about its defective tires, the new documents provide, in both language and tone, an even more extensive look at the struggle between Ford and Firestone to resolve the problems." -- ABC News, Sept. 8, 2000Early Signs Given Of Tire Problems
"A detailed Firestone report in mid-1998 showed a dramatic increase in customer claims on a particular model tire that was among those recalled two years later." -- Washington Post, Sept. 9, 2000
In addition, the National Highway Traffic Safety Administration (NHTSA), the watchdog sub-agency of the DOT responsible for administration of the Motor Vehicle Regulations, has taken harsh criticism from Congress for its slowness to act in the tire recall.
The Firestone Fiasco: Was the NHTSA "Asleep at the Wheel"?
"Congressional hearings reveal glaring oversights at the agency charged with protecting motorists' safety." -- Business Week Online, Sept. 8, 2000.Highway safety head undergoes baptism by Firestone
"Dr. Sue Bailey will be among federal safety officials fielding questions Tuesday from the Senate Commerce Committee about the recall of millions of certain Firestone tires." -- CNN, Sept. 11, 2000
| Opinion Polls: Do you still trust Firestone? -- Do you still trust Ford? |
Potential Penalties Involved
Attorney General Janet Reno has told that the Justice Department will review
the case and decide of legal action might be taken against those found to be
responsible. Reno is quoted in an LA
Times story of Sept. 8, 2000 as stating, ""We're reviewing
everything to see what would be appropriate, and that would include civil or
criminal processes."
Should investigators determine that Firestone or Ford failed to report product defects in accordance with the Motor Vehicle Regulations, the NHTSA could impose civil penalties in the form of fines up to $925,000 against each company.
Clearly, a $925,000 fine is pocket-change to companies like Firestone and Ford and Dr. Sue Bailey, head of NHTSA has proposed that the law be changed to increase the penalty to at least $4 million.
Of course, settlements in private law suits against the companies brought by injured consumers could result in much higher payments.
The Justice Department will also have to determine if any criminal laws might have been violated. So far, the Justice Department has not indicate that criminal prosecution is being considered.
Reference Links
Latest Advisory from NHTSA - Older Firestone Tires
The 9/1/00 advisory from NHTSA regarding problems with older Firestone tires not included in the August 9th recall.NHTSA Complaints Received on Firestone Tires
Download a complete list (Excel spreadsheet) of consumer complaints about the recalled Firestone tires as received by the NHTSA through Aug. 31, 2000.
Congress Fit to be 'Tired'
"What did Firestone and Ford know, and when did they know it?" With the budget, gun control, tax cuts and free trade with China still on their agenda, now Congress has to investigate the Firestone/Ford tire recalls. From your About Guide.
US News Guide Clare Saliba keeps you abreast of breaking coverage of the Firestone/Ford fiasco.
Find the latest information on the Bridgestone/Firestone ATX, ATX II, and Wilderness AT tire recall from About's Consumer Information Guide Nicolette Parisi.
Information on the original 6.5 million tires recalled by Firestone/Bridgestone on Aug. 9, 2000. From your About Guide.
The Firestone tire recall has already sliced profits and blemished the company's image. Despite those misfortunes, it may get even worse. There are legal battles ahead and a possible price war if rivals have their way. From Global Business Guide Paul Bishop.
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