THE RECENT FIRESTONE TIRE RECALL ACTION,

FOCUSING ON THE ACTION AS IT PERTAINS

TO RELEVANT FORD VEHICLES

HEARINGS

BEFORE THE

SUBCOMMITTEE ON TELECOMMUNICATIONS,

TRADE, AND CONSUMER PROTECTION

AND THE

SUBCOMMITTEE ON OVERSIGHT AND

INVESTIGATIONS

OF THE

COMMITTEE ON COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

SEPTEMBER 6 AND 21, 2000

Serial No. 106–165

Printed for the use of the Committee on Commerce

(

THE RECENT FIRESTONE TIRE RECALL ACTION, FOCUSING ON THE

ACTION AS IT PERTAINS TO RELEVANT FORD VEHICLES

U.S. GOVERNMENT PRINTING OFFICE

67–111CC WASHINGTON : 2001

THE RECENT FIRESTONE TIRE RECALL ACTION,

FOCUSING ON THE ACTION AS IT PERTAINS

TO RELEVANT FORD VEHICLES

HEARINGS

BEFORE THE

SUBCOMMITTEE ON TELECOMMUNICATIONS,

TRADE, AND CONSUMER PROTECTION

AND THE

SUBCOMMITTEE ON OVERSIGHT AND

INVESTIGATIONS

OF THE

COMMITTEE ON COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

SEPTEMBER 6 AND 21, 2000

Serial No. 106–165

Printed for the use of the Committee on Commerce

(

COMMITTEE ON COMMERCE

TOM BLILEY, Virginia, Chairman

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

MICHAEL G. OXLEY, Ohio

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

Vice Chairman

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

STEVE LARGENT, Oklahoma

RICHARD BURR, North Carolina

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

TOM A. COBURN, Oklahoma

RICK LAZIO, New York

BARBARA CUBIN, Wyoming

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

ROY BLUNT, Missouri

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

RON KLINK, Pennsylvania

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

TOM SAWYER, Ohio

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

BILL LUTHER, Minnesota

LOIS CAPPS, California

JAMES E. DERDERIAN, Chief of Staff

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON TELECOMMUNICATIONS, TRADE, AND CONSUMER PROTECTION

W.J. ‘‘BILLY’’ TAUZIN, Louisiana, Chairman

MICHAEL G. OXLEY, Ohio,

Vice Chairman

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

STEVE LARGENT, Oklahoma

BARBARA CUBIN, Wyoming

JAMES E. ROGAN, California

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

ROY BLUNT, Missouri

ROBERT L. EHRLICH, Jr., Maryland

TOM BLILEY, Virginia,

(Ex Officio)

EDWARD J. MARKEY, Massachusetts

RICK BOUCHER, Virginia

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

BILL LUTHER, Minnesota

RON KLINK, Pennsylvania

TOM SAWYER, Ohio

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

JOHN D. DINGELL, Michigan,

(Ex Officio)

(II)

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

FRED UPTON, Michigan, Chairman

JOE BARTON, Texas

CHRISTOPHER COX, California

RICHARD BURR, North Carolina

Vice Chairman

BRIAN P. BILBRAY, California

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

ROY BLUNT, Missouri

ED BRYANT, Tennessee

TOM BLILEY, Virginia,

(Ex Officio)

RON KLINK, Pennsylvania

HENRY A. WAXMAN, California

BART STUPAK, Michigan

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

JOHN D. DINGELL, Michigan,

(Ex Officio)

(III)

3

C O N T E N T S

Page

Hearings held:

September 6, 2000 ............................................................................................ 1

September 21, 2000 .......................................................................................... 933

Testimony of:

Bailey, Hon. Sue, Administrator, National Highway Traffic Safety Administration, U.S. Department of Transportation:

September 6, 2000 ..................................................................................... 40

September 21, 2000 ................................................................................... 1232

Brandau, Herman, Associate General Counsel, accompanied by Samuel

K. Boyden, Associate Research Administrator, State Farm Insurance

Companies ..................................................................................................... 192

Ditlow, Clarence, Executive Director, Center for Auto Safety ...................... 195

Lampe, John T., Executive Vice President, Bridgestone/Firestone, Inc.;

accompanied by Dan Saurer, Division Vice President for Technology,

Bridgestone/Firestone, Inc ............................................................................ 1234

Nasser, Jacques, President and Chief Executive Officer, Ford Motor Company ................................................................................................................ 140

Ono, Masatoshi, Chief Executive Officer, Bridgestone/Firestone, Inc.,

Gary B. Crigger, Executive Vice President, Business Planning; and

Robert J. Byant, Vice President, Quality Assurance ................................. 87

Petrauskas, Helen O., Vice President, Environment and Safety Engineering, Ford Motor Company; accompanied by Thomas D. Baughman,

Engineering Director, Truck Consumer Business Group, Ford Motor

Company ........................................................................................................ 1238

Slater, Hon. Rodney E., Secretary of Transportation .................................... 1393

Material submitted for the record by:

Blalack, K. Lee, II, O’Melveny & Myers, letter dated November 7, 2000,

enclosing response for the record ................................................................ 1406

Hester, Theodore M., King & Spalding, letter dated October 4, 2000,

enclosing response for the record ................................................................ 1405

Slaughter, Hon. Louise M., a Representative in Congress from the State

of New York, prepared statement of ........................................................... 1404

(V)

(1)

THE RECENT FIRESTONE TIRE RECALL ACTION, FOCUSING ON THE ACTION AS IT

PERTAINS TO RELEVANT FORD VEHICLES

WEDNESDAY, SEPTEMBER 6, 2000

HOUSE OF REPRESENTATIVES,

COMMITTEE ON COMMERCE,

SUBCOMMITTEE ON TELECOMMUNICATIONS, TRADE,

AND CONSUMER PROTECTION, AND THE

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,

Washington, DC.

The subcommittees met, pursuant to notice, at 1:10 p.m., in room

2123, Rayburn House Office Building, Hon. W.J. ‘‘Billy’’ Tauzin

(chairman, Subcommittee on Telecommunications, Trade, and Consumer Protection) presiding.

Members present Subcommittee on Telecommunications, Trade,

and Consumer Protection: Representatives Tauzin, Oxley, Stearns,

Largent, Rogan, Shimkus, Wilson, Pickering, Fossella, Blunt, Bliley, (ex officio), Markey, Gordon, Rush, Eshoo, Wynn, Luther, Sawyer, Green, McCarthy, and Dingell, (ex officio).

Members present Subcommittee on Oversight and Investigations:

Representatives Upton, Barton, Burr, Bilbray, Ganske, Bryant, Bliley, (ex officio), Waxman, Stupak, Green, McCarthy, DeGette, and

Dingell, (ex officio).

Staff Present: Tom DiLenge, majority counsel; Jan Faiks, majority counsel; Joe Greenman, legislative analyst; Anthony Habib, legislative clerk; Mark Paoletta, majority counsel; Charles Symington,

majority counsel; Ann Washington, majority counsel; Edith

Holleman, minority counsel; Brendan Kelsay, minority professional

staff member; and Bruce Gwinn, minority professional staff member.

Mr. TAUZIN. The committee will please come to order.

I will ask all of our guests to please take seats. We are going to

have a video demonstration to begin the hearing that will not have

great sound quality, and we will ask all of our guests to take seats,

please, and get real comfortable so that we might hear each other

in the room.

Let me welcome all of you to this extraordinarily important hearing. Actually, a joint hearing of the Subcommittee on Telecommunications, Trade, and Consumer Protection and the Oversight and Investigations Subcommittee chaired by my good friend, Mr. Fred

Upton. The two of us have asked our subcommittees to join with

us in examining the important issue of the Firestone recall and the

continuing saga of the many issues swirling about that problem.

2

Fred and I have agreed on a procedure that I hope will accommodate all of the members and will accommodate our witnesses. Let

me outline the rules of today’s hearing.

The chairman and ranking members of the committee and subcommittees will each have an opportunity to make 5-minute opening statements; and then, by agreement of the parties, we will then

reserve 3 minutes for any member of the two committees in the

order of seniority present here today when the gavel fell or upon

their appearance at the committee meeting as they arrive.

Following the opening statements, we will begin introducing panels of witnesses. All witnesses will be sworn before the committee

as this is an O&I subcommittee hearing and will give testimony

under the oath of truthfulness.

The committee will, however, begin, before opening statements,

with a demonstration of a video that I think is extraordinarily relevant and important to set the stage for this hearing. The video is

a video prepared and done by a television station in Houston,

Texas—would someone have the call letters for me, please—KHOU

in Texas; and this video was done pursuant to an investigative report in February of this year. This video was the genesis of the

original phone calls by consumers to NHTSA, which then prompted

the preliminary investigation that led to the eventual decision to

recall the Firestone tires in question. This video is of extreme importance, because it was, indeed, the catalyst for the recall that

has, indeed, begun this year and for the investigation that continues both at NHTSA and at this committee and on the Senate

side.

I will ask that everyone again be extremely quiet and comfortable, and I would ask the staff now to dim the lights and to run

the video.

[Video shown.]

Mr. TAUZIN. The Chair recognizes himself for 5 minutes.

Ladies and gentlemen, we are in the midst, I think, of a national

tragedy. Nearly 90 Americans have already lost their lives to accidents attributed to tires that are now subject to recall. Only about

1.75 million of those tires have actually been replaced. About 4.5

million of those tires are still being used in this country on vehicles

that are traveling our highways. Just this weekend in California,

a family who was on a 2-week waiting list to get replacement tires

suffered an horrific accident as the tread separated from their Firestone tires and their vehicle had a terrible collision. In Texas, a

young lad was killed this weekend again, and weekly we hear of

more and more accidents and deaths and injuries on the highway

attributed to these tires.

I think it is important for me to let you know, first of all, what

our investigation has uncovered. What we have learned in this investigation leading up to this hearing is that beginning in 1992

when claims for bodily injury and damage began being instituted

against Firestone, when those claims amounted to only 16 in 1992,

those claims, nevertheless, began to escalate dramatically in 1995

and 1996. They went from 37 claims to 150 in 1997, to 294 claims

in 1998, to 384 claims in 1999, to 772 claims, 172 have already

been registered this year, for a total of 1,800 claims for accident or

injury, resulting in nearly 90 deaths and many hundreds of severe

3

injuries. Fourteen hundred plus of these claims are related to Ford

Explorers and the same Firestone tires that have been subject to

this recall.

What we have learned are some other interesting facts. For example, the 23575R15 tire, which amounted to only 6 percent of

Firestone production of these tires, nevertheless were 36 percent of

the total separations in 1 year alone in 1999.

Much has been made of the Decatur plant issue. Decatur produces 17 to 18 percent of the tires in question, and yet 57 percent

of the total separations in the year 1999 came from the Decatur

plant. The Decatur plant is not alone. Tires are separating made

from other plants in other parts of this country.

We have also learned that this information was compiled and

available to Firestone from the year 1992 through the current period and that none of this information was shared with NHTSA.

Nor was it apparently requested by NHTSA from Firestone until

the investigation began following the video you just saw and consumer complaints to NHTSA by telephone.

We have also learned some other interesting things. We have

learned that in July 1998 a representative of the largest American

auto insurer, State Farm Insurance, on his own volition sent an email to NHTSA describing 21 incidents of failure of these tires, 14

involving Ford Explorers, and urging NHTSA to take action on the

problem. Our investigators found the memo in a file at NHTSA.

The memo went unanswered. NHTSA apparently did not respond.

In the year 1999, Mr. Boyden, who will later testify at this hearing, apparently also called the agency to update them on 10 more

incidents that occurred in 1998 and again, on a second phone call,

on 35 more incidents occurring in 1999. Again, the agency apparently did not respond nor take action pursuant to that information.

We have learned that in 1999 some very serious things were happening overseas regarding these tires or similar tires produced by

Firestone and available on Ford Explorers. We learned, for example, that in 1998 Ford dealers in Saudi Arabia began complaining

to Firestone about these tires and their failure rates in Saudi Arabia.

We have, for example, letters we are going to put into the record,

one dated 1998, in which the gentleman from the Ford dealership

is writing to the Firestone dealership, and I quote, ‘‘As you know,

this concern goes back to mid-1997 when we first notified you of

the concern. I have to state that I believe this situation to be a

safety concern which could endanger both the vehicle and, more

importantly, the user of the vehicle, so I am asking what is going

on. Do we have to have a fatality before any action is taken on this

subject?’’ 1998.

In 1999, Ford and Firestone, apparently in a dispute over who

should be responsible for replacing the tires in Saudi Arabia, Ford

assuming that responsibility, and we find a memo produced about

discussions with Firestone legal authorities indicating, in effect, in

that memo, and I quote, ‘‘Firestone Legal has some major reservations about the plan to notify consumers and offer them an option.

First, they feel that the U.S. DOT’’—the Department of Transportation—’’will have to be notified of the program since the same

product is sold in the United States’’, evidence that there was a

4

concern in 1999 that officials at DOT not know of the problem that

was occurring in Saudi Arabia, which resulted in Ford replacing,

I understand, 40,000 or more of these Firestone tires on their vehicles in Saudi Arabia.

We have also learned, and we hope to learn a lot more today,

about the testing procedures on these tires. As you have all found

from the press on the subject, Ford has recommended that these

tires be inflated at 26 pounds per square inch on an Explorer, and

there is great concern as to whether or not Firestone ever tested

under speed conditions those tires on a Ford Explorer at 26 pounds

per square inch. Firestone has not provided documents to our investigators indicating whether those tests occurred. Ford apparently has produced some documents indicating that their specs

might have required that testing. We have yet to find out whether

Firestone, and we will hear testimony today as to whether Ford,

ever conducted testing at that inflation rate on these tires.

So we will learn a great deal today about who knew what and

when. We will learn a great deal about why this recall is going so

slowly and why people are still dying on the highways and why it

took nearly 90 fatalities for us to get serious enough to expedite

and get this recall going. We have to ask ourselves why we are in

this mess and what we can do as a panel representing the Congress here to make sure this never happens again and that this recall be expedited so that fewer of our citizens lose their lives or be

seriously injured on our highways.

I want to tell you quickly what this hearing is not designed to

do. It is not a criminal investigation. It is not a legal case trying

to affix liability or blame. We are here today to hear from the principals about their versions of the facts and to determine to the best

of our ability what went wrong, what was known by what parties

when, what was done and what was not done, and what could have

been done to avert this national tragedy. From it, I hope that our

committees will produce a body of evidence from which we and

NHTSA and our Federal authorities and hopefully the companies

can make the right decisions not only to get this awful tragedy behind us as quickly as possible but to make policy that will ensure

that it never happens again.

The Chair yields back the balance of his time.

I am pleased now to welcome and recognize the ranking minority

member from the great State of Massachusetts, my friend Mr. Markey, for an opening statement.

Mr. MARKEY. Thank you, Mr. Chairman, very much and thank

you for holding this extremely timely hearing.

The hearing has been prompted by the recent announcement by

Firestone that it would recall some 6.5 million tires used primarily

on the Ford Explorer. Firestone was given the contract to produce

specially designed tires for the Ford Explorer and began production

in 1990 of such tires. Because of the boom in sales of the Ford Explorer over the ensuing years, Firestone produced large quantities

of these tires, particularly the 15-inch tire. A subsequent rise in

claims against Firestone, specifically instances where the tread and

one steel belt separated from the other steel belt of the tire, began

a number of years ago, especially when such data indicated to Firestone, to Ford, and the National Highway Transportation Safety

5

Administration that a public safety issue was at hand and that

something needed to be done, is just one part of what this hearing

will analyze.

There are, however, still many questions that need to be answered today. For example, the relationship between the tires

themselves and the automobile for which they were designed, a

sport utility vehicle, needs to be explored. NHTSA and consumer

safety groups have already noted the proclivity of SUVs to roll over

in certain situations, and NHTSA has proposed a rollover test and

reporting requirement. Have SUVs put unanticipated stress upon

those tires? In other words, if you could hypothetically take those

tires off a Ford Explorer and instead put them on to a Ford Escort,

would there still be a problem?

Now that the recall is under way, will consumers be able to replace their tires quickly? Knowing that it costs somewhere between

$300 and $400 to buy new tires, a fairly significant sum for people

on fixed incomes, will Firestone rapidly reimburse such consumers?

Are there sufficient replacement tires in all markets to go around?

Will there be prolonged delays and how can any such delays be

dealt with?

After all, both tire companies and automobile manufacturers run

the most compelling ads possible: A mother with a child in an automobile or an SUV on a rain-slick road at night, promising the consumer that if they buy that automobile, that SUV or that tire, that

that mother and child will be safe in the automobile. That is the

promise which these industries make to families, and there is nothing more heart wrenching than seeing the end of that commercial

with the child and the mother safely able to make it home.

Well, here we know that there are scores and, ultimately, maybe

hundreds of families that ultimately will not have that mother and

child or father make it home. We have to know how quickly the industry is going to ensure that every one of these vehicles has a set

of tires which can guarantee that that family can get home.

And another important question is whether NHTSA, whether the

Federal agency itself has sufficient financial and personnel resources to fully gauge important safety issues as they materialize.

In this instance, the agency maintains it did not have sufficient information to trigger an investigation sooner. Would additional

staffing and funding for the safety agency earlier have helped that

agency to notice a problem sooner and thus have saved lives? Once

a hazard arises are, in fact, the resources there to ensure that the

families of America are going to be protected?

The funding for this agency has been cut by fully one-third since

1980. Let’s say that again. Despite the number of additional SUVs

on the road, all of the additional automobiles over the last 20

years, the budget for the safety agency has been cut by one-third

since 1980.

There is something fundamentally wrong, when every single family in the United States is on the road every single day, with the

Federal Government cutting by one-third the budget for that safety

agency. It is our responsibility this year to pass legislation which

brings full funding to the safety agency so that it can guarantee

that when any kind of evidence is made available that they don’t

have to put it aside because they don’t have the full resources to

6

follow up every single lead that could potentially jeopardize the

safety of families in our country.

Thank you, Mr. Chairman. I yield back the balance of my time.

Mr. TAUZIN. The Chair is now pleased to recognize the full committee chairman, the gentleman from Richmond, Virginia, Mr. Bliley, for an opening statement.

Chairman BLILEY. Thank you, Mr. Chairman. Thank you for

holding this hearing today, which is of extreme importance to the

safety of the American driving public.

While we certainly will not get final answers today to many of

the troubling questions surrounding this matter, we can at least

begin the process of determining what we do know, what we do not

know and, hopefully, what can be done by government and industry to help avoid a similar disaster in the future. No one seems to

dispute that there is something terribly wrong with the large number of very similar and often serious accidents involving this particular Firestone tire, especially when mounted on a Ford Explorer.

But even though the cause of this problem was and remains unknown, that is no excuse for inaction in the face of mounting evidence of real and potential danger to American drivers.

On this score, I believe all of the principal parties here today let

the American public down. Indeed, it can be fairly said, if it were

not for a local television report earlier this year that we just saw,

this recent recall may never have happened. More than 2 years

ago, one of our witnesses today from State Farm Insurance Company identified a suspicious and troubling trend in serious accidents involving the now recalled tire, mostly when mounted on the

Ford Explorer. Yet when State Farm, on its own initiative, took the

virtually unprecedented step of bringing these claims to the attention of NHTSA, the Federal Government’s highway safety watchdog, that dog apparently was asleep. The data was thrown into a

file, never to be looked at again, until the Firestone media storm

broke earlier this year.

Despite the lack of response, State Farm persisted in monitoring

this trend, which took a sharp upturn in the second half of 1998,

then skyrocketed in 1999. On two more occasions in 1999, State

Farm sought to spark interest in this growing trend at NHTSA,

but despite the jump in claims, despite the severity of the accidents, despite the growing death toll, no one at NHTSA reacted

until a Houston television report on these allegations in February

of this year prompted NHTSA to open an investigation in May

which, in turn, prompted the recall action by Firestone.

NHTSA’s attempts to justify the lack of earlier action ring hollow. Transportation Secretary Slater, when recently confronted by

the media about the State Farm warnings and its own data base

of dozens of similar claims, responded that the total number of

claims were small and did not involve any fatalities. I am sure that

the American people are glad to know that our safety agency waits

until someone dies before launching an investigation into defective

products. But, as the committee uncovered from NHTSA’s own

files, the original State Farm referrals to NHTSA did include two

fatalities. So not only were Secretary Slater’s comments insensitive,

they were simply wrong as well.

7

Then there is Firestone, which bears primary responsibility in

this matter. Its data base of personal injury and property damage

claims involving this tire is numbered in the thousands. While a

significant number of claims on such a widely used tire is to be expected, Firestone said that it never even bothered to analyze this

data for unusual trends until this summer after NHTSA asked for

it. Within a matter of days, this analysis, spearheaded more by

Ford than Firestone, revealed the shocking facts that lead to the

recent recall.

Sadly, we can count the number of lives that probably could have

been saved had this analysis been done even just 2 years ago. Indeed, contrary to Firestone’s assertions, there is evidence that Firestone was analyzing such data much earlier than July of this year.

Ford Motor Company also is not blameless in this matter. Far

and away, the Ford Explorer is the most popular sport utility vehicle in the United States, carrying millions of American families to

and from work, day care, school and on vacation. Yet, Ford, too,

when faced with hundreds of complaints of major tire defects on

the Explorer, failed to respond with a sense of urgency that one

would expect when the safety of so many people rested on its shoulders. These warnings also include the dozens of Ford Explorer accidents and deaths in foreign countries allegedly resulting from similar tire failures between 1997 and 1999, forcing Ford to begin recalling the same or similar tires abroad 1 year ago.

None of this should obscure the overall excellent safety record

that both Ford and Firestone have amassed during their century

of service to the American people. But black marks like this episode can actually end up serving the people’s interest if they force

everyone to redouble our efforts to improve the safety and increase

the safety margin of these inherently dangerous, but necessary,

products.

I also hope that this sad chapter in American history may

prompt increased sharing of information among all parties represented here today—government, car and tire makers, and the insurance industry. I am confident that had everyone known the information that each individual party to this affair had in its possession this recall would have occurred far sooner and with far fewer

loss of lives.

Thank you, Mr. Chairman.

Mr. TAUZIN. Will the gentleman yield?

Chairman. BLILEY. Yes.

Mr. TAUZIN. I thank the gentleman.

I simply wanted to put one fact into the record following my

friend from Massachusetts’ statement on funding. We will offer

later on into the record a document indicating that the Defects Investigation Contract Program, which is the program within NHTSA

that does defects investigation, actually saw a 50 percent increase

in funding over the time period cited by my friend from Massachusetts—actually, a 50 percent increase from the year 1980 for this

current year.

I thank the gentleman.

The Chair will now recognize the gentleman from Michigan, the

ranking minority member of the full Commerce Committee, Mr.

Dingell, for an opening statement.

8

Mr. DINGELL. Mr. Chairman, I want to thank and commend you

and Chairman Upton for holding this hearing. This is precisely the

kind of matter which the Congress should be looking into. We must

gather and understand all of the facts so that we can assess properly the behavior of all parties to determine whether new legislation and/or improved regulation is needed. Our basic purpose here

is to see to it that the consuming public and the motoring public

is fully protected.

The recall of 14.4 million tires by Bridgestone/Firestone since August 9 is the second largest tire recall ever. It is surpassed only by

Firestone’s recall of 14.5 million tires in 1978. The recall in 1978

led to hearings where this committee disclosed many of the same

problems that are involved with the recall today. Then, like now,

tread belt separations on Firestone tires were involved in accidents

causing serious injury and deaths. Then, like now, many of Firestone’s problems related to its plant in Decatur, Illinois.

The recent recall came about only after Ford Motor Company,

whose vehicles were equipped with many of the tires, was given access to Firestone’s claims data in late July and was able to link 46

deaths and a large number of claims to accidents involving three

15-inch models of Firestone tires—the ATX, ATX II and the Wilderness AT. Since August 9, the number of fatalities attributed to

these tires has grown to 88, according to the National Highway

Traffic Safety Administration. Time, then, is of the essence. I do

note that, after my letter of August 11, Firestone agreed to speed

up its recall by reimbursing consumers to replace their tires with

those of a competitor.

More is riding on this hearing, however, than the reputations of

Firestone and Ford. Countless Americans are on the road today,

picking up their kids, driving to work, and the last thing that

should worry them is the quality and the soundness of their tires.

It is unconscionable that so many have been placed in this kind of

situation.

Today, almost 1 full month after the recall was announced, neither Firestone or NHTSA, the government agency responsible for

tire safety, has been able to identify why these tires are failing and

why serious accidents are occurring. Consumers, therefore, have

justifiably expressed a great deal of concern for their safety and for

that of their loved ones, as well as a lot of frustration about the

way this story has unfolded.

Every day there seems to be some new disclosure, fostering apprehension that Firestone may not yet have control of the problem.

The concern was compounded by a recent full-page ad placed by

Firestone in major newspapers around the country assuring consumers that it acted appropriately but acknowledging that it does

not know what is causing the tires to fail. In order to restore public

confidence, Firestone must identify the root cause of its tire failure

problem quickly and fully disclose their findings.

Consumers can also take little comfort from Firestone’s explanation of why it took so long to identify the Firestone failure problem. According to Firestone, the problem eluded them because tire

manufacturers never properly analyzed data and personal injury

claims to identify defects or problems with tires. They said the universe of claims data is simply too small to analyze. But a staff exVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 E:\HEARINGS\67111 pfrm08 PsN: 67111
9

amination of the records revealed that, since 1995, Firestone had

reports on more than 1,600 lawsuits, property claims and personal

injury claims involving their recalled tires. I must say, I find it curious that Firestone did not regard 1,600 claims as significant,

when it took only 21 claims for State Farm Insurance Company to

decide that a potential problem existed.

Records available to the committee also indicate that some at

Firestone, in apparent contradiction to its statements to committee

staff and others, analyzed their claims data for 1998. These Firestone analyses showed that the claims were especially high for ATX

tires and that the claims were highest for tires produced at the Decatur, Illinois, plant. And contrary to Firestone’s other assertion, at

least one other American tire company, Goodyear, says it routinely

looks at all of its customer data, including claims data, to identify

defect or failure trends with its tires.

Whatever else we learn at the hearing today, I hope that all involved will see the need for more open and detailed communication

regarding these critical products, and how they perform in the

field. If it is industry practice not to share claims with automakers,

then it is time for that practice to change, by statute or otherwise.

Had the Houston television station not run the story that we have

seen today, perhaps we would still not know about these matters.

As for NHTSA, we need to know that its resources are adequate

so that it can effectively perform its important safety work. If budget cuts and other restrictions placed on that agency prevent it from

protecting the public, then this committee should seriously look at

increasing the budget and freeing the agency from constraints. It

is also entirely appropriate at a time like this to evaluate whether

NHTSA statutory authority is sufficient, and I trust we will hear

about this as we go forward.

Again, Mr. Chairman, I thank you and Chairman Upton for holding this hearing, and I look forward to the testimony of the witnesses.

Mr. TAUZIN. I thank the gentleman.

It is now indeed my pleasure to welcome the young gentleman

from Michigan, the chairman of the Oversight and Investigations

Subcommittee of our Commerce Committee, Fred Upton.

Mr. Upton.

Mr. UPTON. Thank you, Mr. Chairman. Good afternoon, everyone.

Made in the USA means something to most Americans. It means

the highest quality product made by the highest quality work force

in the world. People who buy an American product demand and

rightly deserve the best and indeed the safest.

Today’s hearing is very personal to me, because I come from

Michigan, the auto State, the auto capital of the world.

Michiganders are ingrained with a special pride about the auto industry and its proud industrial tradition which has been a linchpin

of our Nation’s economy since the early 1800’s. When the integrity

of one of our cars is called into question, we in Michigan have a

burning interest in getting to the bottom of it and fixing it to reassure the American people and the rest of the world what they have

known for over a century, that cars from the auto State are the

best in the world.

10

Tragically, some 88 people have died in accidents involving Firestone tires. Our prayers are with those families today.

We have convened this important hearing today to get to the bottom of what is wrong with the Firestone tires and what we need

to do to fix them so that no family will have to endure the same

pain as those who have already lost a loved one. We need to know

why NHTSA, which has officials who are paid to do nothing else

but monitor accidents, has been asleep at the wheel when it had

information served up to it on a silver platter by State Farm Insurance Company which would suggest grave problems with Firestone

tires. The taxpayers demand better.

Our committee’s investigators have gone to corporate headquarters of Firestone in Nashville, Ford in Dearborn, and NHTSA

headquarters here in Washington to investigate the matter, combing literally thousands of documents, examining reams of data, and

interviewing dozens and dozens of officials to try and shed some

light on these questions. Under that information, it is our job

today, this afternoon, to ask tough questions of the witnesses to

further illuminate what can be gleaned from the information with

hopes of what we do here today can help save lives tomorrow.

I would like to note that I am not happy to learn that Secretary

Slater apparently has refused to participate in this hearing today,

despite him being just down the street. As Secretary of Transportation, it is his responsibility to oversee NHTSA’s role in the life

and safety for Americans traveling on America’s highways. This is

the people’s business, and if he can be with Cokie Roberts on the

Sunday talk shows, he certainly ought to be here before Republicans and Democrats searching for the truth on a workday.

I want to thank Chairman Tauzin for his efforts in holding this

joint subcommittee today and Chairman Bliley as well. I look forward to the testimony of our witnesses and the answers to our

questions, and I yield back the balance of my time.

Mr. TAUZIN. Thank you very much.

The Chair now yields to the designated minority representative

of the Oversight and Investigations Subcommittee, the gentleman

from Michigan, Mr. Stupak.

Mr. STUPAK. Thank you, Mr. Chairman. Thank you for holding

this very important hearing. I hope it is the first of several to look

into the tire safety issue.

Twenty-two years ago, this committee held 4 days of hearings on

the first incident of tread belt separation in radial tires. The tire

was the Firestone 500, a radial developed for passenger vehicles.

Although the 500 had a very high rate of failure at the time of the

hearings, there were 15 deaths and 16 injuries; ultimately, 41

deaths resulted.

In contrast, there are already 88 fatalities attributed to the tread

belt situation in the Firestone ATX series of tires we are looking

at today, and the number continues to grow. The reason: This tire

was placed on a sport utility vehicle, a vehicle which has a tendency to roll over when a tire fails. The tire failure is one of the top

three most serious vehicle safety defects we have ever seen in this

country. It is surpassed only by the deaths and injuries that resulted from the Ford Pinto remounted gas tank and the GMC pickVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 E:\HEARINGS\67111 pfrm08 PsN: 67111
11

up externally mounted gas tank. Unfortunately, many things have

not changed since 1978.

Firestone, then as now, has found no manufacturing or design

defect, but blames the consumer for every single failure. Firestone

alleges that consumers drive too fast, underinflate their tires, drive

in hot climates, overload the vehicle, and don’t do proper maintenance. Then, as now, Firestone Decatur plant showed up as a

source of an unusual amount of failing tires. Then, as now, Firestone cannot explain why other brands of tires do not have the

same failure rate. Then, as now, the National Highway Transportation Safety Administration, NHTSA, standards for tire strength

were and are grossly inadequate. In fact, they have not changed

those standards since 1968, long before there were steel-belted

radials and the popular sport utility vehicles.

There are a few new wrinkles. This time, the tires are found

mainly on one company’s vehicle, the Ford Explorer SUV and light

trucks. Firestone has two new factors to blame: hot climates, which

stresses its tires, and high ozone, which degrades its tires. The

other change is that Ford, until recently, had agreed with Firestone

that there was nothing wrong with the tires. Ford made these

statements despite receiving more and more complaints from their

dealers who were wondering why only Firestone tires failed.

Mr. Chairman, we are going to hear a lot today about how Firestone did not know there was a problem, Ford did not know there

was a problem, NHTSA did not know, until a Houston television

station told them there was. The documents the committee has received, along with the news reports, indicate that all these parties

knew a great deal more in 1998 and in 1999 about tire failures

than the Houston television station did. They just ignored it.

We also are going to hear from a number of witnesses that the

number of failures were so small that no one could have been expected to pay attention. Yes, the numbers began small, but because

of the propensity of the SUVs to roll over when a tire fails, the cost

in deaths and injuries was inordinately high and increasing at an

alarming rate. Both Ford and Firestone should have known and

should have watched this particular vehicle more closely. With less

than 6,000 vehicles in the entire country of Saudi Arabia, there

were 18 accidents in Saudi Arabia, including 7 fatalities in 1999.

The U.S. had 4, and there was another large group in Venezuela.

Despite what everyone says about the conditions in all of these

countries, one fact remained: Other tires under the same conditions

did not fail. That should have alerted everyone. It alerted the State

Farm Insurance Company, it alerted the Center for Auto Safety.

Unfortunately, Ford, Firestone, and NHTSA failed to act.

Mr. Chairman, we cannot depend on Ford and Firestone to tell

us what happened. American consumers are tired of hearing Firestone blame its customers for the problems found in their tires.

American consumers are tired of hearing Ford blame Firestone.

Consumers do not go out and buy Ford tires and ask the dealer to

throw in a vehicle. They buy a vehicle and the tires are part of that

vehicle.

Today I am going to ask Firestone and Ford to join with me in

calling for and cooperating with an independent review of these

tire failures worldwide to determine the cause of the failure and to

12

propose solutions and report back to this committee and the public

by the end of the year. In the meantime, I believe the recall should

be widened to include all 15- and 16-inch Firestone tires, as has

been done in Venezuela and Saudi Arabia.

We here in the United States deserve to be treated no differently

than people in other parts of the world. We deserve an answer to

the many questions that will be raised here today. I am afraid that

Firestone, Ford and NHTSA can’t find the answers. Let’s join together to call for and support a fully independent review of this situation so that we can find the answers. The public deserves an answer. This committee deserves an answer, and most of all, the families of the 88 people who have lost their lives deserve an answer.

With that, Mr. Chairman, I yield back the balance of my time.

Mr. TAUZIN. I thank the gentleman.

The Chair is pleased now to welcome the vice chairman of the

Telecommunications, Trade and Consumer Protection Subcommittee, the gentleman from Ohio, Mr. Oxley, for an opening

statement.

Mr. OXLEY. Thank you, Mr. Chairman.

We are here for a hearing on the most serious of issues: highway

safety. Every day, drivers rely on their vehicles and tires to carry

them to destinations a mile or hundreds of miles away. They want

to get where they are going and back safely. The encouraging fact

is that fatality rates have fallen in relation to vehicle miles traveled.

Today we confront something out of the ordinary, which is an unfortunately high number of accidents, some of them tragically fatal,

principally involving Ford Explorers and Firestone tires. It is the

job of the two subcommittees here today to make sure the drivers

and their families feel secure. My hope is that the Commerce Committee will be able to look at the Firestone recall situation in the

detail it deserves.

What caused these accidents? Was there a trend that could have

been identified much earlier? What needs to be done in response?

There will be questions about engineering, product quality, and

data review today. A full view of highway safety should eventually

take driving behavior into account as well. The challenge for these

subcommittees is to dig beneath the headlines of the last month

and the events of the past few years, because if the answer is too

easy, the question probably wasn’t good enough.

I extend a welcome to our witnesses, and I particularly note the

presence of Ford president Jacques Nasser, and the CEO of

Bridgestone/Firestone, Mr. Ono. You can’t write the history of the

automotive industry without the names of Ford and Firestone, and

the advances from the Model T to the cars of the new millennium

that they have been part of.

The first thing that I am looking for is assurance that every driver is being protected. Suspect tires must be replaced now.

Tire manufacturers are boosting production to help fill the current shortfall, and the exchange terms for consumers should be

hassle free. The replacement program must also be fair nationwide.

Vehicle owners in States with relatively low accident rates like

Ohio have the same right to new tires as people who live in States

with more incidents.

13

Experts are already at work trying to determine what caused the

problem and whether it is a single cause or many. Why, is one

question. When, is another. Why weren’t any tread defects detected

earlier? I find it remarkable that NHTSA did not follow up on findings made by the Nation’s largest auto insurer, State Farm, all the

way back in 1998.

Recalls of this magnitude inevitably prompt a review of regulations and practices. I suspect that there will be heightened cooperation within the automotive and tire industries from now on. The

regulatory question to ask is whether agency resources have been

put in the right place and whether regulators are focusing their attention on the most important issues. We should also resolve to do

the most good for the consumer by putting agendas aside and responding on the basis of the facts as they emerge.

I was disturbed to find a Web site called ‘‘The Firestone Tire Recall Legal Information Center,’’ which seemed to be more devoted

to finding cases for trial lawyers than providing assistance to consumers.

There will be some hard questioning today, and properly so. The

Commerce Committee has a long tradition of oversight in the public interest. We must put safety first. I look forward to our witnesses and the questioning that will follow, and I yield back.

Mr. TAUZIN. The Chair thanks the gentleman.

And the Chair now yields to the gentleman from Tennessee, Mr.

Gordon, for an opening statement.

Mr. GORDON. Let me first give my thanks to Chairmen Tauzin

and Upton, and Ranking Members Markey and Stupak for holding

this very timely hearing. I also want to extend my welcome to our

witnesses today. Following up on Mr. Oxley’s remarks, I want to

also welcome Dr. Sue Bailey who has a very short tenure at her

agency, yet brings outstanding credentials and a good reputation

from the Department of Defense as Under Secretary there at the

Pentagon.

I suspect that all of our witnesses would rather be doing something somewhere else today. But this is an important hearing; the

American public deserves to know more about what is going on,

and so I thank you for being here.

Let me also say that I suspect that a lot of the time today is

going to be spent trying to place blame and deflect blame. I want

to take a little different tack. I am more interested in, rather than

learning about the unfortunate deaths and injuries in the past, I

want to be able to save lives and injuries in the future. So I am

going to be asking you about the QS 9000 quality assurance program, whether you are satisfied with it, and whether you think the

status quo is adequate or there should be some changes. And if you

are satisfied with it, then I guess we need to learn more about that

program, and if you are not, what changes should be made. Should

that be an industry change with I guess potentially judicial oversight, as you all are very concerned about now, or should it be a—

is there a role for Congress or the administration in implementing

some of that change?

Those are going to be some of my questions. I am going to ask

everybody the same thing, so you will know what is coming. You

have 5 minutes, so it is sort of easy to rope a dope here, but I

14

would like to try to get some answers and move forward. Thank

you.

Mr. TAUZIN. I thank the gentleman.

The Chair now recognizes the gentleman, Mr. Ganske, for an

opening statement.

Mr. GANSKE. Thank you, Mr. Chairman. I was walking down the

street yesterday in Des Moines and I ran into a Ford dealer. I

asked him how this was impacting his business, and he said that

he had set aside four employees full-time to replace tires. They had

replaced 400 tires, and if they had sufficient tires, they would have

replaced double them. He saw that there might be a shortage in

September for getting those tires replaced. It affects dealerships

and people all across this country, not to mention the fears that

people have for the safety of their automobiles.

I have two questions that I want to ask all of the people today.

First I want to know from NHTSA, Bridgestone, Firestone and

Ford what they are doing to ensure that we get an impartial determination of the cause of the increased failure rates at the Decatur

plant. It seems that there isn’t controversy on the fact that there

has been a disproportionate share of failed tires from the Decatur

plant that were manufactured at the time of the strike. Data that

is provided in the testimony today from Ford shows a tread separation claims rate for Firestone 15-inch and 16-inch tires from 1995

to 1999 with about a 14 times higher incident rate—this is claims

rate—at the Decatur plant for the ATX than other plants, and

about the same, 14 times higher rate for the Wilderness AT at the

Decatur plant, in comparison to other plants.

Then, data from a chart that was provided by Mr. Ono from

Bridgestone/Firestone shows essentially the same thing. Claims per

million tires produced for the ATX shows at least a twice higher

rate for the Decatur plant than the next rate from the Wilson

plant. The same thing goes for the Wilderness AT.

So my second question that I want to ask and get on the record

from Mr. Ono and Mr. Nasser is: Do they think there is a causal

relationship between the Decatur plant strike and the tire failures?

I hope that at some time in the future, we are able to get employees and managers from the Decatur plant here to testify. With

that, I yield back.

Mr. TAUZIN. The Chair thanks the gentleman.

I yield now to the gentleman from Ohio, Mr. Sawyer.

Mr. SAWYER. Thank you, Mr. Chairman. Thank you for this hearing. I think it is probably fair to say that coming from Akron, Ohio,

there is no member here who has felt the stress and the burden

of the issue that brings us all here today. In the course of the last

century, Akron, Ohio has built millions of tires. They have gone out

across the country and around the world, and spread an industry

that has been transnational in its organization and global in its

reach, for longer than those terms have been used in their current

context.

It is a matter of personal concern to people in Akron, Ohio that

the lives of consumers be the first priority, and that the deaths of

88 people and injuries to at least 254 were linked to tread separation on tires, whether they have been built in Akron, Ohio or not.

We have not built a tire in Akron, a passenger car tire in Akron

15

in 28 years. But it remains a center point of research and development, technology and command and control in this global industry,

and the topic that brings us here today is of importance to all of

us.

Industry can’t build a perfect tire, and in the early days of the

last century, Model T’s carried as many as four tires. In the 1940’s

and 1950’s, some cars still carried as many as two. And today, cars

typically carry one. But the point remains that the only backup

piece of equipment that comes on a car is a spare tire. It is not by

accident. Tires are complex products. They may all look pretty

much the same, but they are not a commodity. They are highly engineered products that operate in one of the most extraordinarily

violent environments of any product that we expect to use in our

ordinary daily lives. A modern car develops hundreds of horsepower, hundreds of pound feet of torque; it develops extraordinary

cornering power; its steering capacity is unsurpassed in the history

of the automobile, and modern braking systems provide enormous

stress on a car in bringing thousands of pounds to a halt rapidly.

All of those forces express themselves through four small contact

patches the size of a man’s hand, of a continuously rotating tire,

and the expectations that we have of fail-safe performance from

those four contact patches is an extraordinary thing. The fact that

they perform as well as they do, 700 revolutions per mile, mile

after mile, for 50,000 miles and beyond, most frequently without

failure, is extraordinary. Those are expectations that we have, and

in large part, unless they are abused or damaged, tires function in

that way.

What is most troubling about the matter that brings us together

today is that the extremely small failure rate in itself may have exacerbated the process of finding that there was a problem and trying to identify its source and, more importantly, as a number of

members have mentioned, its cause.

I have a longer statement that I am not going to go into right

now. I hope to bring out some of the points in questions and answers. But just let me add in closing that the tire industry has

been working on updating tire safety regulation worldwide through

a complex multiyear process. The current regulations that make up

the Federal Motor Vehicle Safety Standards, Section 109, were

written in the mid-1960’s, when bias belt tires still dominated the

market. So it comes as no surprise to me today that we are likely

to be talking about bringing tire regulation firmly into the 21st

century.

I know that the industry and regulators have been working to

develop a harmonized standard for tires based on the best global

tire safety practices. In doing so, the industry has asked for

thoughtful contributions of key public interest and consumer protection groups here in the U.S. and around the world. I hope that

this work will continue and that we will set a standard for that

here today with the new perspective that today’s hearings bring.

Several questions have been raised that address this tire recall

here today. I look forward to hearing from today’s witnesses, and

simply say in conclusion, that in the course of the time in which

we have worked to look into the root cause analysis, I can tell you

16

that there is no one working on this in my district in Akron, Ohio

who is going to sleep well until the cause is found.

Thank you, Mr. Chairman. I appreciate your flexibility.

[The prepared statement of Hon. Tom Sawyer follows:]

PREPARED STATEMENT OF HON. TOM SAWYER, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF OHIO

In the course of the last century, Akron, Ohio, has built millions of tires. They

have gone out across the country and around the world and spread an industry that

has become transnational in its organization and global in its reach for longer than

those words have been used in this context.

It is a matter of personal concern throughout Akron that lives of consumers be

the first priority and there is deep concern over the 88 deaths linked to these tires

even though they were not built there. Although passenger tires have not been built

in Akron for more than 20 years, Akron remains the center point in research and

development, technology, and command and control for this global industry. We care

deeply about safety.

However, we also recognize that industry cannot build a perfect tire. In the early

part of the last century, in the days of the Model T, cars carried as many as four

spare tires. In the 1950’s, there were cars carrying two spares. Today, cars typically

carry only one. But the point remains: the only back-up piece of equipment that

comes on a car is a spare tire, and it is there on purpose.

Tires are complex products. Although they may look the same, they are not a commodity. They are a highly engineered product operating in one of the most extraordinarily violent environments of any consumer product we use in our ordinary daily

lives. Modern cars develop 100’s of horsepower, 100’s of pound-feet of torque, they

possess extraordinary cornering power and a steering capacity unsurpassed in the

history of the automobile, as well as modern braking systems designed to bring

thousands of pounds to halt rapidly. All these forces express themselves through

four patches, each the size of a human hand. The expectations consumers have of

fail-safe performance—most often met—is in itself an extraordinary thing. That

tires perform 700 revolutions per mile, mile after mile to 50,000 miles and beyond

with such low rates of failure is extraordinary as well.

In fact, what is most troubling about the Firestone ATX and Wilderness tires case

is that their extremely small failure rate itself exacerbated the process of finding

that there was a problem and trying to identify its source. And this raises important

issues about how we track these troubling accidents.

What we can expect is that when a problem occurs, it is identified, its cause is

established, and consumers are adequately protected. By voluntarily recalling millions of the ATX and Wilderness AT tires, Bridgestone/Firestone and Ford are taking steps to do this. Both companies are working to figure out what is causing the

tire tread separation. After three weeks into the root cause analysis, there are no

answers, but I can tell you with only a little overstatement that no one in working

on this in my district in Akron, Ohio, is going to sleep until the cause is found.

I would also like to add that the tire industry has been working on updating tire

safety regulation worldwide through a complex, multi-year process. The current regulations that make up the Federal Motor Vehicle Safety Standards (FMVSS) Section

109 were written in the mid1960s, when bias tires still dominated the market. So

it comes as no surprise to me today that we are likely to be talking about bringing

tire regulation firmly into the 21st century.

I know that the industry and regulators have been working to develop a harmonized standard for tires based on the best global tire safety practices. In doing

so, the industry has asked for the thoughtful contributions of key public interest and

consumer protection groups here in the U.S. I hope that this work will continue,

but with a new perspective that today’s issue brings.

Several questions have been raised that address this voluntary tire recall. I look

forward to hearing from today’s witnesses to learn how we can do better and just

how much better we can do when it comes to measuring consumer protection.

Mr. TAUZIN. The Chair now recognizes the gentleman from California, Mr. Bilbray, for an opening statement.

Mr. BILBRAY. Thank you, Mr. Chairman. Mr. Chairman, I would

like to thank the gentleman from Akron, Ohio for his in-depth report on the status of where the rubber meets the road. I would

have to sort of agree with him that I guess we take so much for

17

granted in the American social structure. The fact is, as my colleague next to me just pointed out, that you hardly know what a

flat tire is now unless something hits your sidewall, with the introduction of steel-belted tires.

I understand that there are members here who have community

economic interest about this issue and the credibility. I mean, I

think that the gentleman from Michigan can point out that the reliability we have in the automobile industry is one thing that I

think that our grandfathers could only dream up and our grandmothers could only cringe at. I guess if my father was alive today,

he would be attacking me at why my wife drove across country in

a car without her husband with her. You know, you can’t allow a

woman to go drive all the way across the country because it wasn’t

safe and it was terrible and look at all the things that could have

happened. I think it is just a testimony to the dependability of our

transportation system in this country in a lot of ways. Granted, my

wife got to see more of El Paso than they preferred to for a few

days, but that is another story.

Mr. Chairman, I would just like to speak from the San Diego

point of view, seeing everybody is talking about their little hunk of

this issue in their part of the world. As we talk about the industry,

as we talk about the automobile industry, the tire industry, the

people that build these cars and make these tires, I think we have

to remember too that this issue affects everyone in the entire country. It is something that goes beyond the people who produce the

products; it goes and ends up with those who receive the products

and pay good money for these products and expect them to perform

to a reasonable standard.

I would have to tell you that I have a consumer who is a lady

who drove this summer, as those of us in the West will do, thousands of miles on their vacation, from San Diego, by the Mexican

border, all the way up to northern Idaho with her family, with a

fully loaded Explorer; ended up getting back, even though it was

during the heat of the summer, a very hot summer this year, unloaded the car, unloaded the family, and the next trip just happened to be off to the office, and the tire became unlaminated and

fell apart, and her comment was, Thank God this didn’t happen at

70 miles an hour with a fully loaded car. It just happened at a certain time, it was the safest time to happen.

I only want to say that because I think we always talk about the

deaths and the terrible things that happen when these things fail.

We were lucky in this one case that my constituent was able to

talk about it now, rather than having her family read about her accident in the paper.

I would just ask us to get back to this issue of the fact that there

were indications of a problem—we have a problem that crosses over

two major industries that have major, major impacts on some communities in this country, and have influence in all of the communities in this country, and that is between the automobile industry

and the tire manufacturing industry. I think that we need to say,

where was the breakdown in communication? Not just where blame

rests and when and where and who could have avoided this problem, but also how do we avoid it in the future and how do we

straighten this out to make sure that when a woman wants to

18

drive her family on a vacation or a husband wants to send his wife

off on a trip, a long-distance trip in her car, one of the things we

don’t have to worry about is a faulty tire that falls apart at high

speed and causes a terrible accident. I think that is our challenge.

Our challenge is not to protect an industry, not to cover our employees and employers’ tails at this time; it is to make sure that

not only do people have a job to go to, but they also have a safe

car to drive home in. I would ask us to consider that as Democrats

and Republicans but, most importantly, as Americans today. I yield

back, Mr. Chairman.

Mr. TAUZIN. I thank my friend.

The Chair now yields to the gentleman from Texas, Mr. Green,

for an opening statement.

Mr. GREEN. Thank you, Mr. Chairman. I would like to thank you

and Chairman Upton for calling this joint hearing of both the

Telecom and Oversight Subcommittees.

I appreciate the recognition of this serious safety issue that will

address and make certain that the lives of American consumers is

not at risk as they drive their children to school, themselves to

work or take a family vacation, as my colleague from California

mentioned. I would also like to congratulate Channel 11, KHOU,

in Houston for their efforts into the loss of the life of a competing

station’s TV reporter in a tire separation accident that occurred

over 2 years ago. And I would also like to recognize my Texas colleague from south Texas where just recently there was a death of

a 13-year-old child in Texas in a rollover incident with a Firestone

tire that blew out. We need to personalize this because I know in

manufacturing oftentimes we produce a product and sometimes forget that product is so important, whether it is in my earlier business as a printer producing a product or someone producing tires

for automobiles or in my district where we produce petrochemicals.

We need to realize the impact that it can have, even a small percentage failure, on our ultimate customers.

We are going to hear from a lot of witnesses today and particularly the National Highway Traffic Safety Administration, NHTSA,

and I want to welcome all of the witnesses here. It is important to

find what Bridgestone/Firestone and Ford knew when they noticed

potential defects in the manufacture operation of these tires.

Additionally, we need to closely examine the role that NHTSA

played in these events and whether or not we may be asking that

agency whose budget has been cut approximately one-third over

the last decade to do more with fewer resources. It was noted earlier that the NHTSA section that is responsible for tire safety received a 50 percent increase since 1980, but that is 20 years and

not adjusted for inflation. When you realize that we have 41 percent more vehicles on the road today, we consider that a cut.

Just as importantly, we need to live up to the name of one of our

subcommittees that is hosting this hearing. We need to focus on

consumer protection, on how we can protect people now by speeding the replacement of tires and protecting them in the future by

ensuring that we have adequate safety rules and regulations in

place.

Again, so we all recognize the personal aspects of it, just yesterday I was in our district in Houston in 105 degree temperatures

19

and happened to have a flat tire. Being away from the closest

place, I changed the tire myself and went to the service station to

buy another one and the only tire they had to replace the one on

my Blazer, an SUV, was a Bridgestone tire. And I asked the service station, I want to make sure that it is not one of those recalled

because I had not heard Bridgestone, only Firestone, as having

problems. Hopefully, not only that tire that I bought but also many

of the tires that are at retailers around the country or in the inventory in our factories are also being checked to make sure that they

are safe. We need to look to the future to see what we can do to

correct the problem instead of just worrying about covering our

own industry or our own agency or our own Members of Congress.

I want to ensure that when consumers who have these recalled

tires on their vehicles get them replaced, that they have the ability

to choose the tires that they want. I also want to ensure that the

compensation that is going to be provided to them by Bridgestone/

Firestone and that it fairly and accurately reflects the cost of the

new tires for the consumers on their vehicles, and hope that we can

get these and other questions answered, Mr. Chairman. I yield

back the balance of my time.

Mr. TAUZIN. The Chair yields to the gentleman from North Carolina, Mr. Burr, for an opening statement.

Mr. BURR. Mr. Chairman, I would ask unanimous consent that

my written statement be entered into the record.

Mr. TAUZIN. The Chair asks unanimous consent that all members’ written statements will be made a part of the record, as well

as the written statements of all of our witnesses who will follow,

we hope soon, and without objection that unanimous consent is

granted.

Mr. BURR. I thank the Chair for that consent. I would like to

take my opportunity to more personally address those in attendance today who have the power to make decisions and the power

to implement solutions.

Mr. Nasser and Mr. Ono, let me say specifically to both of you,

please put financial and legal concerns aside today and do everything possible to make sure that the solutions are implemented in

a way that the security for every person out there is taken care of.

You have a responsibility to your shareholders, but you also have

a responsibility to those who purchase your product, and this is an

opportunity to prove exactly how strong your commitment is to

your customers.

Ms. Bailey, put the excuse aside of not enough resources and concentrate on how to work with the Congress and with these companies to make sure that NHTSA performs the type of job that I believe they are capable of doing and by design they should be doing.

On my way to the airport this morning as I complained with

coming back from a break and faced with a very difficult hearing,

I passed on the side of the road an SUV with a shredded tire, a

fresh reminder of exactly why I was headed back. Fortunately

enough it had not rolled, but I would ask everybody here to concentrate today on the individuals, the human faces behind this

issue, those who might be family members of somebody who was

killed, but more importantly the 14-plus million people who possibly today could get in a car that has recalled tires that have not

20

been switched and ask the question how far can we go. How long

will they last. Can I hold out until the replacements come. Trust

me when I say that every person who falls in that category is

stressed today relative to their safety and the safety of their families. I would ask all of you to focus on that. Let no one leave this

hearing today without agreeing that a serious problem exists and

that it must be solved at whatever cost as quickly as we possibly

can.

I thank the Chair for the leniency, and I yield back the balance

of my time.

[The prepared statement of Hon. Richard Burr follows:]

PREPARED STATEMENT OF HON. RICHARD M. BURR, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF NORTH CAROLINA

Mr. Chairman, thank you for holding this important hearing. I would also like

to thank all of our witnesses for agreeing to testify today. I should be very clear— we are not here today to point fingers of blame. We are here to find the answers

to some very troubling questions. The American people deserve answers to their

questions—not the press releases and television ad campaigns they’ve been getting.

Over the course of the last month, over 14 million tires have been recalled due

to their involvement in accidents that have taken almost 90 lives. I am troubled by

reports that Ford and Firestone may have known about flaws in the tire design and

manufacturing process for years, and that the companies continue to disagree over

proper tire pressure recommendations. I am also disturbed by the role NHTSA has

played since it was first alerted to the potential problem, apparently over two years

ago.

Mr. Nasser and Mr. Ono, we understand that you have a fiduciary responsibility

to your shareholders. But you have a responsibility to those who buy your products

as well. There are serious concerns among many in this country, and, I imagine,

most members of the committee, that your companies have not met that responsibility. I hope you will take advantage of this opportunity to address those concerns.

Dr. Bailey, it is my understanding that you are new to NHTSA. Let me apologize

in advance for what will clearly be a baptism-by-fire. Your agency, however, deserves some serious attention in these proceedings as well. Of particular concern to

me is an explanation as to why reports of 21 tread separation incidents by a large

insurer did not send up red flags at the agency.

This hearing will no doubt begin with the basic questions asked at every oversight

hearing: what did they know, when did they know it, and what did they do about

it. It will begin that way because serious discrepancies remain between the various

parties’. Having read our witnesses’ prepared testimony, it appears those discrepancies remain.

Based on what I’ve seen and heard, someone out there knew, they’ve known for

awhile, and not a great deal was done about it. This hearing, and the likely followup hearings, will seek to discover the answers to those questions. The sooner that

happens, the better for everyone involved. Just this morning, on my way to the airport, I passed a Ford Explorer parked on the side of the highway. Yes, one of it’s tires was shredded. That driver, whoever it is, deserves an answer. And that driver

deserves that answer now.

Mr. TAUZIN. I thank the gentleman. The Chair recognizes Mr.

Rush for an opening statement.

Mr. RUSH. Thank you, Mr. Chairman. Mr. Chairman, I also want

to commend you and the other chairman for this timely hearing.

We have a consumer safety crisis on our hands. Millions of consumers are driving on highways with tires that may separate and

cause fatal injuries. There are a few basic questions that we must

have answered.

The first is whether this situation is a failure of NHTSA to properly carry out its enforcement responsibilities, and the second is

whether Firestone and Ford refused to address the problem which

they knew existed for years in order to save themselves embarrassment and money. Regardless of who is responsible, it is a travesty

21

and it is an American consumer problem. American consumers are

at risk, are suffering, and are dying. The American consumer is relying on us, this committee, this Congress, this government, to protect them from incidents like this. I hope that at the conclusion of

this hearing that we will be able to determine the appropriate

course of action to prevent this problem from ever occurring again.

Mr. Chairman, I am open to any reasonable conclusion, whether

it be revisiting or upgrading our tire safety standards or whether

it be enacting tougher enforcement protocols so that NHTSA can

act quicker in similar situations or even providing for tougher penalties, including sanctions, for those who knowingly violate the

motor vehicle safety standards.

Mr. Chairman, the tire is an important and integral part of a vehicle, and we owe it to the American people to provide reasonable

protections where they cannot be expected to protect themselves.

With that in mind, Mr. Chairman, I yield back the balance of my

time.

Mr. TAUZIN. The Chair thanks the gentleman from Illinois. The

Chair now recognizes for an opening statement the gentleman from

Tennessee, Mr. Bryant.

Mr. BRYANT. Thank you, Mr. Chairman, for holding this hearing

and I want to thank also the witnesses that will be here today testifying, especially the chairmen from two great companies, Firestone and Ford, for being here today to answer our questions. I

know that this is a prolonged process for everyone here, listening

to members give opening statements, but this, as a representative

form of government, this is one of the ways that our constituents,

your consumers, can speak directly to you. That is through our

statements and comments about what we hear when we are back

in our districts talking to our constituents. Like many of the members in this room, I have constituents who are, and I believe rightfully so, very concerned about the safety of their vehicles.

It is my hope that today’s hearing will help alleviate some of

those concerns and place this issue of safety in a proper context.

I do not, like my colleague from Tennessee on the other side of the

aisle, believe that the focus of today’s hearing should simply be on

blame. That will have to ultimately be decided in other venues

across this country, as numerous lawsuits are being filed as I

speak. I believe this hearing, though, presents us with two opportunities. First, we need to examine whether or not the laws and regulations already on the books need to be enhanced to ensure consumer safety. Second, we need to determine whether appropriate

steps were taken by Ford, by Firestone, and by the National Highway Traffic Safety Administration to ensure that no more lives are

to be lost or people injured as a result of accidents associated with

the recalled tires.

I have a longer statement, Mr. Chairman, but in the interest of

time I will submit that to the record. I look forward to the testimony of these witnesses and again thank you for chairing this very

appropriate and timely hearing.

Mr. TAUZIN. I thank my friend. The Chair now recognizes the

gentleman from Maryland, Mr. Wynn, for an opening statement.

Mr. WYNN. Thank you, Mr. Chairman. I would also like to thank

Chairman Upton for calling this important hearing. At these hearVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
22

ings we sit on the dais and we are supposed to take a dispassionate

look at the issue before us; but I have to acknowledge it is very difficult because it runs through my mind that 88 people are dead

and at some point along that continuum some of those deaths were

preventable. I don’t think that is an issue, the guilt or innocence,

that this committee should attempt to resolve. It is properly before

the courts in individual claims, but it does bring to my mind the

seriousness of the issue. Some of these deaths were preventable. It

is my perspective that this hearing is not designed to determine

what went wrong with the tires. It would be nice if that were the

outcome, but I think it is probably more likely that we will explore

what went wrong with the way that we, both government and industry, respond to this type of crisis.

I have several issues that I would like to hear about from our

witnesses today, the first of which has to do with the, ‘‘legal duty

to report foreign recalls.’’ It seems to me that along that continuum

a discussion was held about whether or not officials in this country

ought to be made aware of problems, including deaths, from this

situation, this product, which occurred in other countries. Apparently a conclusion was drawn that there was no, ‘‘legal duty to report this information to U.S. officials.’’ Second, and this is probably naive on my part, I wonder whether

anyone considered whether there was a moral duty to report this

to American officials. I am very interested to hear what leaders of

these two fine companies have to say on the subject about where

responsibility lies in responding to this particular crisis and this

particular problem.

You know, many of us here would like to talk about industry

self-regulation, it has almost become a mantra, and government reduction rather than government regulation. I think this situation

has probably laid that to rest and I think this makes it abundantly

clear that there is a proper role for aggressive government regulation, particularly in areas of public safety.

Second, I am interested in hearing about the role of government

officials in responding to this crisis, specifically at the National

Highway Traffic Safety Administration. I think it has been stated

earlier it has taken an inordinate amount of time for the agency

to act, even allowing for the lack of resources, which is within Congress’ bailiwick to correct. From 1998 to May of 2000 seems to be

an inappropriately long period of time, particularly when there

were reports all around that this was a serious problem.

I am also concerned about a report that files that were initially

denied from State Farm were later found within the materials

available and existing at the agency. Some individual was not appropriately forthcoming.

Let me conclude by saying this. We will not attempt to assess

blame here and we will not attempt to determine guilt or innocence, but I hope that we will spur a very broad recall, that the

cost-benefit analysis will be set to the side and that it will have the

broadest possible recall and not just confine it to Decatur so that

as many people as possible will feel the maximum degree of safety.

I hope that this process will happen quickly, that it will not have

a lengthy delay, protracted analysis of whether we ought to expand

the recall or not and, as my colleague from North Carolina said,

23

we set aside those concerns and consider the benefit of the American consuming public.

I think this is a very good hearing and I look forward to the testimony of the witnesses, and I yield back the balance of my time.

Mr. TAUZIN. I thank my friend for his excellent statement and

yield to the gentleman from California, Mr. Rogan, for an opening

statement.

Mr. ROGAN. Mr. Chairman, I want to echo the sentiments of my

colleagues who have spoken before me in thanking you for calling

this hearing. Also I want to thank the excellent staff for their work

that has gone into the preparation of this hearing. I do have an

opening statement, but I note that we are now more than 11⁄2

hours into our hearing and we have not heard from the first witness yet. To expedite this procedure, I will take advantage of general leave and submit my opening statement for the record, and I

yield back the balance of my time.

[The prepared statement of Hon. James E. Rogan follows:]

PREPARED STATEMENT OF HON. JAMES E. ROGAN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF CALIFORNIA

I thank the Chairman for his leadership on this issue and for calling hearings on

this important subject. I also appreciate the presence of each witness here today,

and regret Secretary Slater’s decision to refuse to testify at this important hearing.

The Firestone Tire recall has been on the mind of millions of Americans for over

a month now. There is hardly a family in America who does not either own a Ford

SUV with Firestone Tires or know one who does. And for many families, and certainly for our Committee, these questions must be answered: What information was

known by the relevant parties, where was the information obtained, and why was

no action taken sooner to correct a defective product in the marketplace? The goal

of this Committee is not to affix blame or legal liability. It is our goal to expedite

answers to these questions fairly and quickly, so that policies may be pursued to

protect consumers.

Firestone tires are driven daily by millions of families, including families in my

home state of California where a large percentage of Ford Explorers, Rangers and

Mercury Mountaineers with Firestone tires currently are in use. Families that own

an affected vehicle or tire, need not just an explanation as to how this problem grew

so severe, but they need the assurance that their safety is not in jeopardy.

As policy makers, we must insure the Department of Transportation, National

Highway Transportation Safety Administration, and Congress take whatever steps

are needed to ensure defective products do not make it to the market without adequate safety review. This hearing will be an important step in that direction.

Again, I thank the Chairman for holding this urgent hearing.

I yield back the balance of my time

Mr. TAUZIN. I thank the gentleman and hope other members

might want to follow suit. The gentlewoman from Colorado, Ms.

DeGette, is recognized.

Ms. DEGETTE. Thank you, Mr. Chairman. I had the unfortunate

experience when I was a student of having a tire fall apart on me

as I drove down the highway at 60 miles per hour, and luckily I

am here today to talk about this but it was a terrifying experience

and I can only imagine what it would be like for Mr. Bilbray’s constituent with a car loaded up with children and vacation equipment.

After that experience, I decided I would no longer purchase tires

that were substandard, and that I would only purchase tires that

were the standard of the industry. So I can’t help but reflect what

the owners of the vehicles containing the 6.5 million tires of the

Firestone ATX and Wilderness tires that we are talking about here

24

today are wondering about as they drive their vehicles and they

think they too are driving the standard of the industry.

I think it is pretty clear that any entity involved with these products must act quickly and decisively to both replace the faulty tires,

and perhaps more importantly to replace public confidence in these

products. Regrettably the quick, decisive action necessary did not

occur with this recall. As the story of the recall unfolded, more

questions about corporate responsibility and culpability arose than

were answered.

The Nation’s largest auto insurance company claimed it told safety regulators at NHTSA 2 years ago of 21 failures of the kind of

tires Firestone has recalled. This is a high failure rate for tires, yet

no action was taken to investigate the failures either by Firestone

or frankly by Federal regulators. ATX and Wilderness tires were

recalled internationally long before any investigation was begun in

the U.S., and neither Ford nor Firestone informed Federal regulators of the recall. The signs were clear, the problem known and

yet NHTSA ignored warning signs. Firestone was slow to issue a

recall, and Ford failed to push them to the point. Regrettably, rather than taking clear, resolute action to recall the faulty tires as

soon as the problem emerged, the companies involved with this recall appeared to drag their feet, playing Ping-Pong with potential

blame. And I agree the purpose of this hearing is not to assign

blame but rather to figure out what can be done better and how

to restore consumer confidence. I think we are left with a lot of

questions. I am not sure that I can ask the questions in the 5 minutes allotted of the panel. Here are some of them.

Is NHTSA really this hamstrung? What tools does the Federal

Government have to monitor the safety of vehicles and their components? Is the Federal Government forced to rely on manufacturers’ own determinations about the safety of their products? And if

so, are the regulations too weak and need to be strengthened or

does the industry itself have a responsibility to increase its self-regulation?

It is clear that NHTSA was slow to act and, as I said, the companies don’t fare much better in this. This recall is costly because of

the immediate expense, but also because of the long-term effect of

rebuilding consumer confidence. I hope that today’s witnesses can

agree that the main focus of the hearing and the main focus of any

recall must be consumer safety. I also hope we can uncover what

mistakes were made in this issue and identify what steps can be

taken in the future to identify the problems sooner and to have a

quicker resolution.

Thank you, Mr. Chairman. I yield back the balance of my time.

[The prepared statement of Hon. Diana DeGette follows:]

PREPARED STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF COLORADO

Thank you Mr. Chairman.

My colleagues have clearly identified many of the problems we seek to address

in this hearing. While I hope that today’s witnesses will be able to tell this Committee why these tires are failing at ten times the normal rate, it seems more research must be done in order to answer this question.

It is clear that the dramatic failure of Firestone ATX and Wilderness tires is

wholly unacceptable. With 6.5 million of these tires on the road, as standard equipment on one of the most popular cars in America, it is also clear that any entity

25

involved with these products must act quickly and decisively to replace the faulty

tires.

However, the quick, decisive action necessary did not occur with this recall. As

the story of this recall unfolded, more questions about corporate responsibility, and

culpability arose than were answered. The nation’s largest auto insurance company

claimed it told safety regulators at the National Highway Transportation Safety Administration (NHTSA) two years ago of 21 failures of the kind of tires Firestone has

recalled. This is a high failure rate for tires, yet no action was taken to investigate

those failures, either by Firestone or Federal regulators. ATX and Wilderness tires

were recalled internationally long before any investigation was begun in the U.S.,

and neither Ford nor Firestone informed Federal regulators of that recall. While the

international recall has been broadened to include not only the 15-inch models

under recall here, but also 16-inch models, Firestone and Ford refuse to expand the

recall here at home. And, perhaps most alarming, 88 U.S. fatalities, and 250 injuries have been linked to accidents involving Firestone tires as of September 1, according to NHTSA. The signs were clear, the problem known, yet NHTSA ignored

warning signs, Firestone was slow to issue a recall, and Ford failed to push them

to that point.

Regrettably, rather than taking clear, resolute action to recall the faulty tires as

soon as a problem emerged, the companies involved with this recall appear to have

dragged their feet, playing ping pong with potential blame. Too much attention appears to have been paid to the finger pointing campaign to shift responsibility, while

not enough attention was given to indications that a recall should have been issued

long before last month. Owners of Firestone ATX and Wilderness tires are demanding to know why the effort expended in the media race to take cover and shift blame

was not redirected—initially to issue a recall earlier, or, once one was issued, to replace their faulty tires more quickly. These are questions I hope we can address

today.

The Federal agency charged with ensuring the safety of the driving public seemed

stagnant too. Massive recalls of Firestone ATX and Wilderness tires were issued in

the Middle East, South America and Asia, yet NHTSA was oblivious to them. The

agency has said they do not have the authority to require companies to provide

them with information on international recalls, nor the ability to access data that

could point to problems like this defect. Is the agency really this hamstrung? What

tools does the federal government have to monitor the safety of vehicles and their

components? Is the federal government forced to rely on manufacturers’ own determinations about the safety of their products? If this is the case, regulations are

weak indeed and it is no wonder that NHTSA was unaware of a major problem with

tires that are in wide circulation nationwide. The agency was slow to act, and

should that be the result of weak regulations or the agency’s own failures, something must change as a result of this recall.

While I am sure that we will delve deeply into the specific problems surrounding

this situation, perhaps we should also use this hearing to examine the broader

issues that surround a recall of any product. In this case, Ford and Firestone have

an enormous stake in avoiding a recall—but this is true of any company.

A recall is costly, not only due to the immediate expense of replacing a product,

but also the long-term expense of rebuilding consumer confidence in the entire company, as shown by the six percent drop in Ford’s stock on August 31. How can we

ensure that the public’s best interest is represented when a product must be recalled, not a company’s bottom line? Was this recall delayed because Firestone or

Ford feared its financial ramifications? How can we ensure that companies will act

with safety as their utmost concern to issue recalls irregardless of the perception

problems that will inevitably emerge from that act?

I hope today’s witnesses can agree that the main focus of this, or any other recall,

should be consumer safety. Additionally, I hope this hearing can uncover where mistakes were made in issuing this recall and identify what steps should be taken in

the future to detect problems sooner, to share information better and to act more

quickly to remove faulty products from the market.

Mr. TAUZIN. The Chair thanks the gentlewoman and recognizes

the gentleman from Illinois, Mr. Shimkus.

Mr. SHIMKUS. Thank you, Mr. Chairman. First, I want to welcome Dr. Bailey and let her know that most of us recognize that

you have been on the job for 3 weeks, so it is a cause by fire but

we are glad to have you here.

26

I also want to welcome Samuel Boyden from Bloomington, that

is Tom Ewing’s congressional district, with State Farm insurance

company. I think he is going to have compelling testimony and I

am glad that he is here.

Most of the comments have been said. I fall back to a lot of

things in my background, and part of the West Point cadet prayer

says, ‘‘Teach us to do the harder right over the easier wrong and

not be content with the half truth when the whole can be won,’’ and I leave our panelists with that, really echoing comments of my

colleagues, Mr. Gordon and Mr. Burr, who said let’s get to the facts

and fix the problems and move forward.

I thank you for holding this hearing, Mr. Chairman.

Mr. TAUZIN. I thank the gentleman. The Chair now yields to the

gentleman from Minnesota, Mr. Luther.

Mr. LUTHER. Thank you, Mr. Chairman, for holding this timely

hearing. I will be brief. As has been said by others, finger pointing

is the tendency in Washington. I hope, as others do, that we can

avoid this tendency at today’s hearing.

To date 88 deaths have been attributed to tread separation problems on these tires. That much we know. What we don’t know is

why 88 people and perhaps many more had to die before definitive

action was taken. Clearly the system failed the American consumer. It appears that our consumer safety standards are antiquated and must be updated, that Congress failed to act back in

1978 when faced with a similar disastrous recall, and that the communications structure between the private and public sectors and

between parties within the private sector broke down and failed.

I think this hearing can be useful in helping all of us determine

what to do next. It can help us make sure that every tire in this

country that needs to be recalled is in fact recalled immediately,

and it can help us repair the systems so that tragedies like this

never happen again. So I hope we can have a constructive, informative hearing that results in real protection and real safety for the

American consumer.

Thank you, and I yield back the balance of my time.

Mr. TAUZIN. I thank the gentleman. The Chair now yields to the

gentlelady from New Mexico, Ms. Wilson, for an opening statement.

Mrs. WILSON. Thank you, Mr. Chairman. I have spent quite a bit

of time looking at the documents related to the recall, and I have

a lot of questions for the people who will testify, but I think there

are some things which are clear to me at this point.

The first is that Firestone knew they had a problem and didn’t

act until it was forced to do so. We have seen claims in the last

month that they didn’t know until July of this year and now you

are working around the clock to find out what is wrong. That is

rubbish. You knew you had a problem a long time ago. You had

recalls in 18 countries. This committee staff has uncovered memos

going back to 1997. You knew you had a problem and you didn’t

do anything about it. We need tougher rules to protect American

consumers when multinational corporations make recalls in other

countries and fail to notify the appropriate authorities in the

United States and United States consumers.

The second thing I think we need to focus on has to do with

NHTSA. Sam Boyden is a State Farm researcher and a car buff,

27

and he sent an e-mail to NHTSA in July 1998 about 21 cases, 2

of which involved fatalities, saying there is a problem here, this

shouldn’t happen with a tire, and contacted NHTSA twice more in

1999. But those were ignored and put in a file. So why didn’t the

watchdog bark? We deserve an answer.

Third, Firestone has launched and conducted a lousy recall full

of missteps and misinformation. 9 of the 88 fatalities have occurred

in the State of New Mexico. 9 of 88. That is 10 percent of the fatalities of this tire in the State of New Mexico. The company admits

that hot weather and long distances and high speeds are factors in

these tire failures. Ten percent of the fatalities in New Mexico, a

state with less than one-half of one 1 percent of the population in

the United States. But I ask you gentlemen, to look at this map.

The blue areas are where you have prioritized your supply for fixing this recall. There is one southern, hot western state that

doesn’t make your list, and I would like to know today why New

Mexico is being overlooked by your company.

I would like to enter into the record the correspondence between

the state attorney general from New Mexico and Bridgestone/Firestone giving lip service to the problems in New Mexico and the

backlog of tires to replace the ones that are killing the citizens in

my state.

I yield back the balance of my time.

Mr. TAUZIN. Without objection the gentlelady’s request for introduction of these documents into the record is agreed to.

[The following was received for the record:]

28

29

30

31

32

33

34

35

36

37

Mr. TAUZIN. The Chair will now recognize the gentleman from

California, Mr. Waxman, for an opening statement.

Mr. WAXMAN. Thank you, Mr. Chairman, for this opportunity to

say a few words. I want to thank you for holding this hearing

today. The hearings in the House and Senate are important for the

airing of what went wrong with the deadly combination of Firestone tires and Ford Explorers. The public has a right to know

what really went wrong, who knew what when.

I want to focus in on that theme when I get a chance to question

the witnesses because I think it is important not just to have a

hearing this one time, but to learn from all of the documents what

people knew and what evidence there was that might have been a

signal to the regulators and to the industry groups and executives

that there was a problem and a signal to them that they should

have done something to prevent the tragedies that have taken

place. So having complete information is the only way we can move

forward and I hope that we will get the cooperation of all of the

witnesses in ensuring that we are fully informed.

This hearing serves a very important purpose. What follows after

this hearing and the kind of cooperation that we get from the witnesses involved and their counsels will be important in getting all

of that information that the public has a right to know.

Thank you for recognizing me, and I look forward to the testimony.

Mr. TAUZIN. I assure the gentleman that this is just the beginning of the investigation process and this committee along with the

oversight committee intends to remain vigilant until all of the facts

are known.

The Chair will now recognize the gentleman from Florida, Mr.

Stearns, for an opening statement.

Mr. STEARNS. Thank you, Mr. Chairman. I also commend you

and Mr. Upton for having this hearing.

Florida is fourth in the number of crashes yet accounts for the

highest number of fatalities, according to the raw complaint data

which has been collected by NHTSA. A question that I have, and

perhaps it is a little different than a question that some members

have talked about, which I would like to address to Dr. Sue Bailey,

who is the Administrator of the National Highway Traffic Safety

Administration, I looked over your testimony and I understand

your screening process is quite involved, and you talk about how

many cases come in and how many pieces of information cross your

desk and so forth, but I find it hard to believe that a Federal agency with millions of dollars at its disposal and top of the line analysts and engineers, was bested by a lone researcher, with a parttime interest in cars, a hobbyist who was able to come together and

identify this statistical analysis and this danger and e-mailed it to

NHTSA, and I just can’t understand, Mr. Chairman, how they with

all of their millions of dollars cannot—why they couldn’t find it before this lone researcher, part-time person dealing with cars. So I

think that is one question that we would like to hear from Dr. Bailey.

Mr. Chairman, I am obviously concerned that the Honorable

Slater, the Secretary of the Department of Transportation, is not

here. Even though Dr. Bailey is here, I think he should be responVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00045 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
38

sible and should show up here as a courtesy. We sometimes ask

him to come and it is not often. I think under these circumstances

he should be here. I think I share most of the sentiments my colleagues have already expressed, and I look forward to the hearing.

Mr. TAUZIN. I thank the gentleman. I recognize the gentleman

from New York, Mr. Fossella, for an opening statement.

Mr. FOSSELLA. Thank you, Mr. Chairman. I think today the

American people are just entitled to the truth. It appears that whoever is going to be testifying today, while not questioning their motives, I am afraid come to the table with not so clean hands. People

have died. I think the objective right now is for all of you to come

to this table, wash your hands clean and let us, let the American

people know what the truth is, because the people I represent, and

I am sure like everyone across the country, want to know right now

if they are putting their kids in the back of that car, are they getting into a death trap or not. They want to know the truth. And

all I ask you is to give it to us.

I yield back the balance of my time.

Mr. TAUZIN. I thank the gentleman. The Chair understands that

there are no other members seeking recognition for an opening

statement

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF HON. PAUL E. GILLMOR, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF OHIO

Mr. Chairman, I want to thank you for calling this hearing. The issues surrounding the tire recalls we will discuss constitute the largest public safety addressed during this Congress. I eagerly look forward to the testimony that will be

presented before us.

The problems faced by the driving public because of catastrophic tire failures are

not only serious, but also quite alarming. I am sure that many of my colleagues will

spend today focusing on the time honored Washington question of: ‘‘what did you

know and when did you know it?’’ While I see this as an important question, I, however, wish to concentrate my time on some other factors that have emerged within

the context of these problems. I am not convinced that one person, company, or

agency is to blame for all the accidents that have occurred. Rather, I think there

is more than enough places for blame to go.

Where I want to concentrate my thoughts is on design, distribution, and testing

issues. The Firestone ATX was initially manufactured as a passenger tire for use

on the Ford Explorer. This would seem to indicate to me that both Ford and Firestone were well aware of the type of tire that was being placed on the auto. I think

it is important to understand how much of a collaborative effort existed between the

two companies.

Second, I have questions about the actual design of the Explorer and how the application of Firestone tires might have caused improper and potentially dangerous

wearing on the treads.

Third, many of the accidents occurred in warm weather areas, including the Middle East, South America, and the Southwestern United States. How did the ATX,

ATX II, and Wilderness tires fare in cooler climates? Did Firestone’s Decatur, Illinois plant only supply these warmer areas? If not, how did the Decatur-produced

tires fare in other areas?

Fourth, many tire problems show up shortly after the tire has seen some wear.

The Firestone tires began having problems after a couple years of usage. I think

it is essential to know if Firestone had tested wear and how these tests were conducted. Also, does NHTSA presently require tire testing and certification? In conjunction with Firestone, had Ford conducted any testing of the ATX or other 15-inch

tires on the Explorer? If Ford tested other tires, how did they fare?

Fifth, and finally, I think we need to examine ways in which the public’s care for

their automobile can help prevent serious fatalities. One thing that sticks out for

me was whether aesthetics and, lower tire pressure were encouraged at risks to the

consumer’s safety. Also, what are essential maintenance requirements for these tires

that may not have been passed along to Explorer owners.?

39

Unfortunately, I am skeptical that our witness panels will yield any definitive answers to the conundrums vexing us. Certainly, there will be some that will conclude

that we need to expand the role of the National Highway Transportation Safety Administration (NHTSA) over sport utility vehicles. I think this is the wrong approach

to the problem. Not only had Congress given NHTSA all the funding the White

House requested, but also NHTSA was notified by State Farm Insurance Company

two years ago that a problem might exist and ignored these messages.

Mr. Chairman, our panel will not look past the problems that have precipitated

massive backlogs of tire requests at Ford dealers and tire outlets. Our duty is to

find areas where improvements can be made and public safety reassured. And,

again, I look forward to hearing from our distinguished witnesses to get their opinions. These issues concern not only those people who purchase Firestone tires and

those who drive Ford Explorers, but those of us who share the same road they do

and consider them part of our communities.

PREPARED STATEMENT OF HON. ED BRYANT, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF TENNESSEE

Thank you Mr. Chairman, I appreciate your holding this hearing, and I want to

thank the chairmen of both Firestone and Ford for taking the time to answer our

questions today. Like many of the Members in this room, I have constituents who

are, and I believe rightly so, concerned about the safety of their vehicles and it is

my hope that today’s hearing will help to alleviate some of those concerns.

I do not believe that the focus of today’s hearing should be on blame. That will

ultimately have to be decided in the courts as the numerous lawsuits already being

filed are argued before juries across the land. Rather, I believe this hearing presents

us with two opportunities. First, we need to examine whether or not the laws and

regulations already on the books need to be enhanced to ensure consumer safety.

And second, we need to determine whether or not every possible step is being taken

by Ford, Firestone, and the National Highway Traffic Safety Administration to ensure that no more lives are lost due to the accidents associated with the recalled

tires.

In order to do this, I think we need to focus on three specific areas. First, when

did the companies involved become aware of the problems associated with the tires.

According to the Wall Street Journal, Ford has indicated that examples of tire failures on Explorers in Venezuela came to its attention in late 1998. The Journal also

states that Ford began replacing tires in the Middle East last year due to similar

concerns. Yet, it’s not until a year later that a recall is issued in the U.S. At what

point did the two companies begin to investigate tire failures in the U.S., and how

much time elapsed between concerns about U.S. tires and the August 9 recall?

Could this recall have occurred earlier if NHTSA had had access to the overseas

information.

Second, is the recall broad enough. The August 9th recall has been limited to 15-

inch tires, however, 16-inch tires are already being replaced in Venezuela. And in

a consumer advisory, NHTSA has asked that the current recall be expanded to include an additional 1.4 million tires of various models and sizes. Have Ford and

Firestone begun investigating whether or not the 16-inch tires have resulted in an

unusual number of accidents?

Finally, are Ford and Firestone taking every appropriate step to replace the recalled tires. Few families in my district do not rely on their vehicles everyday, and

it is my hope that Chairman Nasser and Chairman Ono will be able to update us

on what steps they are currently taking and how long they anticipate it will be before all 6.5 million tires have been replaced.

I look forward to your testimony and yield back the balance of my time.

Mr. TAUZIN. The Chair will call the first panel. The first panel

will consist of the Honorable Rodney Slater, Secretary of the Department of Transportation, who has been invited to attend, accompanied by Dr. Sue Bailey, Administrator of the National Highway

Traffic Safety Administration. Like my friend Mr. Upton, Ms. Bailey, let me express the chairman’s extraordinary disappointment at

your boss’ failure to attend this hearing. I can’t imagine a more important hearing that this subcommittee has held in my tenure as

chairman, and I assume that Mr. Upton is of the same opinion.

This is a life or death hearing involving safety issues on the highVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00047 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
40

ways of American and I am astounded that the Secretary of Transportation, who is in town today and who was twice requested, once

by the committee and once by me personally in a letter just yesterday and publicly over the airwaves to attend this hearing, could

not find time to be with us here today to help solve some of these

issues. I am particularly concerned that he has instead invited you

to take his place here today when you are just new on the job, I

think just 3 weeks, and we want to welcome you to this incredibly

important job, and want to welcome your testimony today.

Before we begin that testimony, as previously announced, the

chairman will swear all of the witnesses in as they appear, and I

must take you through the process by which we do this.

Ms. Bailey, you are aware that this subcommittee is holding an

investigative hearing, and when doing so has had the practice of

taking testimony under oath. Do you have any objections to testifying under oath?

Ms. BAILEY. No.

Mr. TAUZIN. The Chair advises you that under the rules of the

House and the rules of the Committee, you are entitled to be advised by counsel. Do you desire to be advised by counsel during

your testimony today?

Ms. BAILEY. No.

Mr. TAUZIN. In that case if you would please rise and raise your

right hand, I will swear you in.

[Witness sworn.]

Mr. TAUZIN. I thank you, Ms. Bailey. You are now under oath

and you are recognized to give a 5-minute summary of your written

statement.

TESTIMONY OF HON. SUE BAILEY, ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, U.S.

DEPARTMENT OF TRANSPORTATION

Ms. BAILEY. Mr. Chairmen and members of the committee, I am

pleased to appear before you today to address the investigation and

the recall of Firestone tires. Secretary Slater refers to safety as the

North Star of the Department of Transportation and under his

leadership NHTSA is committed to preventing deaths, injuries and

motor vehicle crashes. I will give you a quick overview of the agency’s authority to investigate defects and describe the procedures

that the agency follows and outline the Firestone investigation.

First our authority: Congress passed the basic motor vehicle safety law 34 years ago, in 1966, and amended the law in 1974 to establish the current notification and remedy provisions. In brief, the

law provides that if a manufacturer decides that one of its products

contains a defect that relates to motor vehicle safety, the manufacturer must notify the agency and owners and provide a remedy at

no cost to the owners.

When the agency screening process identifies a possible safety

defect, our Office of Defects Investigations takes steps to open an

investigation as a preliminary evaluation. We inform the manufacturer and the public at this time. If our review of the information

at the end of the preliminary evaluation suggests that further evaluation is warranted, we move the investigation to a second stage,

the engineering analysis (EA), and we are in that stage today. At

41

this point we conduct a more detailed analysis, including appropriate inspections, tests, surveys and additional information from

the manufacturer. After the EA phase of the investigation, additional steps may ultimately lead the Administrator to decide that

a defect exists and to order the manufacturer to recall. If necessary, the agency will then go to court to enforce that order. Our

investigation of Firestone has reached the EA stage, the engineering analysis phase.

Firestone originally began producing the tires under investigation in 1991. By the end of 1999, approximately 47 million had

been produced. By that time NHTSA had received 46 reports, but

they were scattered over 9 years, about incidents involving these

tires. The tires were on a variety of vehicles, primarily, though, on

Ford Explorers. In view of the large number of tires that have been

produced and the variety of possible causes of tire failure and the

fact that all types of tires can fail and do in use, the reports we

received did not warrant opening a defect investigation at that

time.

Furthermore, the informal submission by State Farm in 1998 of

21 claims also were over a period of several years, almost 8 years,

and that also did not warrant at that time initiating an investigation.

The situation changed rapidly following the airing of a news

story by KHOU in Houston. That was on February 7, 2000, and

that dramatized the question of the tire safety. In addition to highlighting two fatalities, the story alluded to a number of other crashes and fatalities. Upon learning of the KHOU story, we contacted

the station to obtain more details. They have not given us the information we have requested, but the growing publicity generated

other reports to us, including several provided by other media outlets and by plaintiffs’ attorneys as well. Over the next few weeks

we were able to verify many of these reports.

We opened a preliminary evaluation on May 2. At that time the

agency was aware of 90 complaints. They had nearly doubled in

that time, including a report of 33 crashes and 4 fatalities. Information continued to accumulate rapidly as a result of the investigation and attendant publicity. By August 1, we had 193 complaints alleging tread separations on these tires with 21 reported

fatalities. In a meeting on August 4, we suggested that Firestone

recall the tires. On August 9, Firestone announced it would recall

14.4 million tires. As of August 31, we have had 1,400 complaints

with reports of 88 fatalities and 250 injuries.

NHTSA is continuing its investigation to determine whether additional tires need to be recalled. If we discover information that

indicates a problem in any other tire we will move promptly to

urge Firestone to expand the recall. They are closely monitoring

the recall to ensure that Ford and Firestone promptly replace all

of the defective tires. Our review of the data from Firestone has already disclosed that other tire models and sizes of the tires under

investigation have rates of tread separation as high or higher than

the tires that Firestone is recalling.

Therefore, on August 30 I recommended to Firestone that it expand its recall to include those tires. When Firestone declined to

expand the recall, we felt it necessary to issue a consumer advisory

42

on September 1 to advise owners of these tires so they could take

actions to ensure their safety. We now know that in September

1999 Ford asked Firestone to replace Wilderness tires mounted on

Ford Explorers that had been sold in states around the Arabian

Gulf. Similar actions were taken in other countries as well. Ford

would have been required to notify NHTSA of such an action if it

had occurred in the United States, but our regulations do not apply

to actions taken outside of the United States. Ford thus had no obligation to advise NHTSA when it took these actions.

If we find that we need additional legislative authority to require

manufacturers to provide in the future such information, we will

seek to obtain it. A number of claims and several lawsuits have

been filed against Ford and Firestone before we became aware of

any trend that indicated a potential defect. Our current regulations

do not require the manufacturers to give us information about

claims or litigation. We are also therefore exploring measures

which would allow us to track claims and litigation information on

a routine basis.

Mr. Chairman, I want to assure you that this investigation is the

highest priority in NHTSA, and we will remain focused on the investigation and closely monitor the recall. Thank you for holding

this hearing, and I will be glad to answer any questions.

[The prepared statement of Hon. Sue Bailey follows:]

PREPARED STATEMENT OF HON. SUE BAILEY, ADMINISTRATOR, NATIONAL HIGHWAY

TRAFFIC SAFETY ADMINISTRATION

Mr. Chairman and Members of the Committee: I am pleased to appear before you

this morning to address the investigation and recall of Firestone ATX, ATX II and

Wilderness AT tires. This is the first subject on which I have appeared before Congress as Administrator of the National Highway Traffic Safety Administration

(NHTSA), and I welcome the opportunity to address this important issue.

The agency’s mission is to prevent deaths and injuries in motor vehicle crashes.

Our program to investigate safety defects is a key part of that mission. I will give

you a quick overview of the agency’s authority to investigate safety defects, describe

the procedures that the agency follows in its investigations, outline the Firestone

investigation in that context, and share with you some of my observations about the

investigative process.

OVERVIEW

First, our authority: Congress passed the basic motor vehicle safety law 34 years

ago, in 1966, and amended the law in 1974 to establish the current notification and

remedy provisions. In brief, the law provides that if a manufacturer decides that one

of its products contains a defect that relates to motor vehicle safety, the manufacturer must notify the agency and owners and provide a remedy at no cost to the

owners. When the defect is in a tire sold as original equipment on a new vehicle,

the tire manufacturer is the responsible manufacturer, as opposed to the vehicle

manufacturer, and the remedy may either be to repair or replace the tire.

The law gives us authority to investigate possible defects, to decide whether a defect exists, and to order a manufacturer to provide a remedy for any defect. If a

manufacturer refuses to provide a remedy, the law authorizes us to go to court to

compel it to do so. This is seldom necessary. In all but very rare cases, manufacturers agree to remedy the defect without our having to reach a final decision. In a

typical year, we open between 80 and 100 defect investigations, of which more than

half result in recalls. In addition, manufacturers conduct an average of 200 defect

recalls each year that are not influenced by NHTSA investigations.

INVESTIGATIVE PROCEDURES

We receive complaints from a wide variety of sources about possible defects in

motor vehicles and motor vehicle equipment. The sources include our toll-free consumer hotline, our web page, e-mail, phone calls, and letters. We enter all complaints into a database which is continuously screened by a team of five investigaVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00050 Fmt 6633 Sfmt 6621 E:\HEARINGS\67111 pfrm08 PsN: 67111
43

tors in the agency’s Office of Defects Investigation (ODI) to identify potential defect

trends. In an average year, we receive between 40,000 and 50,000 complaints from

these sources.

When the screening process identifies a potential problem, ODI takes steps to

open an investigation as a ‘‘Preliminary Evaluation’’ (PE). We inform the manufacturer and the public at this time, and begin the process of gathering information

from the manufacturer and other appropriate sources. We give the manufacturer an

opportunity to present its views. Preliminary Evaluations are generally resolved

within four months from the date of their opening. They may be closed if we determine that further information is not warranted, or if the manufacturer decides to

conduct a recall.

If our review of information at the end of a PE suggests that further investigation

is warranted, we move the investigation to a second stage, the Engineering Analysis

(EA), in which we conduct a more detailed and complete analysis of the character

and scope of the alleged defect. The EA supplements the information collected during the preliminary evaluation with appropriate inspections, tests, surveys, and additional information from the manufacturer. ODI attempts to resolve all EAs within

one year from the date they are opened.

At the conclusion of the EA, we may close an investigation because the additional

information does not support a finding that a defect exists or because the manufacturer decides to conduct a recall. If ODI continues to believe that the data indicate

a defect, the Associate Administrator for Safety Assurance may convene a panel of

experts from the agency to review the information. The manufacturer is notified

that a panel is being convened and of the panel’s result, and is given an opportunity

to present new analysis or new data.

If the panel concurs with ODI, the next step is to send a ‘‘recall request letter’’

to the manufacturer. If the manufacturer declines to conduct a recall in response

to this letter, the Associate Administrator may issue an ‘‘Initial Decision’’ that a

safety-related defect exists. An Initial Decision is followed by a public meeting, at

which the manufacturer and interested members of the public can present information and arguments on the issue, as well as written materials. The entire investigative record is then presented to the NHTSA Administrator, who may issue a ‘‘Final

Decision’’ that a safety defect exists and order the manufacturer to conduct a recall.

If necessary, the agency will then go to court to enforce such an order.

THE FIRESTONE ATX/WILDERNESS RECALL

With this description of our investigative procedures as context, I will turn now

to the Firestone investigation.

Firestone originally began producing the tires under investigation in 1991. By the

end of 1999, approximately 47 million had been produced. By that time, NHTSA had

received 46 reports scattered over 9 years about incidents involving these tires. The

tires were on a variety of vehicles, primarily on Ford Explorer sport utility vehicles.

In view of the large number of tires that had been produced, the variety of possible

causes of tire failure (road hazards, excessive wear, etc.), and the fact that all types

of tires can fail in use, the reports that we received did not indicate a problem that

would warrant opening a defect investigation regarding these tires. The informal

submission by State Farm in 1998 of 21 claims over an eight-year period also did

not provide such an indication.

The situation changed rapidly following the airing of a news story by KHOU in

Houston on February 7, 2000, that dramatized the question of the tires’ safety. In

addition to highlighting two fatalities, the KHOU story alluded to a number of other

crashes and fatalities.

Upon learning of the KHOU story, we contacted the station to obtain more details

about the incidents. They have not given us the information we requested, but the

growing publicity generated other reports to us, including several provided by other

media outlets and by plaintiffs’ attorneys. Over the next few weeks, we were able

to verify many of these reports. We opened a Preliminary Evaluation on May 2. At

that time, the agency was aware of 90 complaints, including reports of 33 crashes,

and 4 fatalities. On May 8 and 10, we sent Ford and Firestone extensive Information Requests asking for information about the tires. At that point NHTSA began

a constant communication with both companies, which continues today.

Information accumulated rapidly as a result of the investigation and attendant

publicity. By August 1, we had 193 complaints alleging tread separations on these

tires, with 21 reported fatalities. In a meeting on August 4, we suggested that Firestone consider recalling the tires. By August 9, when Firestone announced that it

was recalling the ATX and ATX II tires, and Wilderness AT tires produced at its

Decatur, Illinois, plant, we had over 300 complaints, with 46 reported fatalities. The

44

number has continued to grow. As of August 31, we have 1400 complaints with reports of 88 fatalities and 250 injuries.

Firestone has recalled all of the ATX and ATX II tires of the P235/75R15 size

manufactured since 1991. It has also recalled Wilderness AT tires of that size made

at its Decatur, Illinois, plant, for a total of 14.4 million tires out of the 47 million

tires covered by our investigation. Firestone estimates that approximately 6.5 million of the 14.4 million tires included in the recall are still on the road. Ford and

Firestone are taking a number of measures to provide replacement tires.

NHTSA is continuing its investigation to ensure that the scope of the recall is

proper and that all unsafe tires are recalled. At our request, Firestone and Ford

have given us voluminous information about the tires, and we have sent follow-up

requests for additional information to both companies and to Goodyear Tire and

Rubber Company, for a peer comparison. We are continuing to monitor the recall

to ensure that all defective tires are replaced promptly.

Our review of data from Firestone has already disclosed that other tire models

and sizes of the tires under investigation have rates of tread separation as high or

higher than the tires that Firestone is recalling. On August 30, we recommended

to Firestone that it expand its recall to include these tires. When Firestone declined

to expand the recall, we issued a consumer advisory on September 1 to advise owners of these tires to take actions to assure their safety.

OBSERVATIONS

We now know that in September 1999 Ford conducted a campaign (referred to by

Ford as an ‘‘Owner Notification Program’’) to replace Wilderness tires mounted on

Ford Explorers that had been sold in the states around the Arabian Gulf (primarily

Saudi Arabia). Similar actions were taken in Venezuela in May 2000 and in Columbia, Ecuador, Malaysia, and Thailand. Ford would have been required to notify

NHTSA of such an owner notification program if it had occurred in the United

States, but our regulations do not apply to actions taken outside the United States.

Ford thus had no obligation to advise NHTSA when it took these actions. If we find

that we need additional legislative authority to require manufacturers to provide

such information, we will seek to obtain it.

A number of claims, and several law suits, had been filed against Ford and Firestone before we became aware of any trend that would indicate a potential defect.

We received no information about those events from the companies or from the

plaintiffs’ attorneys. Our current regulations do not require the manufacturers to

give us information about claims or litigation. The existing law gives us broad authority to seek information from vehicle and equipment manufacturers during the

course of an investigation. We are exploring measures that would allow us to track

claims and litigation information routinely.

Mr. Chairman, I want to assure you that this investigation is the highest priority

in NHTSA. We will remain focused on the investigation, closely monitor the current

recall campaign, and seek any expansion of the campaign that may be necessary.

Mr. Chairman, I want to conclude by expressing my thanks to you for holding this

hearing. I will be glad to answer any questions you may have.

Mr. TAUZIN. The Chair thanks you, Dr. Bailey, and recognizes

himself for 5 minutes under our rules.

Dr. Bailey, who made the decision in July 1998 that the report

submitted by the State Farm representative, Mr. Boyden, did not

merit further review?

Ms. BAILEY. That was part of the analysis that was done by that

individual. Again to put that into context——

Mr. TAUZIN. What individual?

Ms. BAILEY. The individual that received the complaints.

Mr. TAUZIN. Who was that individual?

Ms. BAILEY. I don’t have the name. But I do know—we are aware

of the name, and I can provide that for you.

Mr. TAUZIN. So there was an individual who reviewed the memo

from State Farm and made a decision that it did not warrant further review?

Ms. BAILEY. Correct.

45

Mr. TAUZIN. And you have the name of that individual but you

don’t have it with you. Does someone else have the name of that

individual?

Ms. BAILEY. I will see if we can pull the memo right now. If not,

we will provide it for the record.

It is Steve Beretsky.

Mr. TAUZIN. I think you probably are going to need to supply

that name to the clerk so we have it properly spelled.

Mr. TAUZIN. Was a written decision rendered in that matter not

to further review the report issued by State Farm to your office?

Ms. BAILEY. There was a memo at the time, and I think that

should also be placed in the record. It was filed. It was analyzed,

and there is a written report.

Mr. TAUZIN. Do we have a copy of that memo and written report?

Ms. BAILEY. I believe you do, but we will place it in the record.

Mr. TAUZIN. We do not have that report and would request that

you make it available to us.

Ms. BAILEY. We will provide that.

Mr. TAUZIN. Does the agency have any records of the phone calls

that Mr. Boyden will testify he placed to the agency in 1999?

Ms. BAILEY. There is no record of those phone calls.

Mr. TAUZIN. Had the agency decided to do something in regards

to the memorandum that was sent to you in July 1998, what could

the agency have done?

Ms. BAILEY. They could have begun an initial assessment. I

would like to put that into context, however, that over that 6-year

period the population of tires produced was over 40 million and so

you can see over those years there were 2 or 3 per year in terms

of the complaints.

Mr. TAUZIN. I am not asking whether it was a good decision. I

will leave that to the judgment of others. Had your agency made

a decision to proceed to begin seeking information as to these

claims that Firestone was obviously receiving for these tire failures, what could you have done?

Ms. BAILEY. Begun an initial assessment.

Mr. TAUZIN. An initial investigation could have started as early

as July 1998 based upon that memo had someone in your office decided it was worth checking?

Ms. BAILEY. If there were a trend indicated by the data, we could

have started an initial assessment.

Mr. TAUZIN. So you have the authority to do that today and you

could have done that in July 1998 had a different decision been

made about Mr. Boyden’s e-mail; is that correct?

Ms. BAILEY. That’s correct.

Mr. TAUZIN. I want to turn to the issue of testing. In our interviews with your official, apparently George Isadou, Division Chief

of the Office of Crash Avoidance, we inquired as to whether or not

NHTSA required testing of tires under speed conditions. We were

told that there was an endurance test ordered at 50 miles per hour

for 1,700 miles at 26 pounds per square inch, and that another test

is the high speed test and that is ordered for 70, 75, and 80 miles,

but only at 32 pounds per square inch.

Ms. BAILEY. That is correct, and at 95 degrees.

46

Mr. TAUZIN. The agency orders testing at 32 pounds per square

inch for speed testing, but not at 26 pounds per square inch. Why?

Ms. BAILEY. That is—— Mr. TAUZIN. Why, when Ford is instructing its customers to inflate its tires at 26, is the agency only ordering testing at 32?

Ms. BAILEY. That is the current tire standard testing. And that

is one of the things clearly that we need to review and it is being

updated at this time. In fact—— Mr. TAUZIN. So that in this case, I want to get it for the record,

when these tires were produced for this car in 1990, there was no

instructions, there was no standard, there was no requirement by

NHTSA for either Ford or Firestone to test these tires under speed

test conditions at 26 pounds per square inch; is that correct?

Ms. BAILEY. There was a standard and in fact they passed an endurance and high speed test in 1997. But you are correct about the

pounds per square inch.

Mr. TAUZIN. But it was 32 pounds per square inch.

Ms. BAILEY. Exactly.

Mr. TAUZIN. So there is not a requirement today by NHTSA on

these tire or auto manufacturers to test the tires on the vehicles

under real conditions at the pounds per square inch that they in

fact were recommending to their customers, 26 pounds per square

inch.

Ms. BAILEY. At this time there is not.

Mr. TAUZIN. Is the agency moving to change that?

Ms. BAILEY. Yes, we are.

Mr. TAUZIN. The Chair’s time has expired. The gentleman from

Massachusetts is recognized for 5 minutes.

Mr. MARKEY. Thank you. I begin by asking unanimous consent

to include in the record two charts. The first outlines NHTSA’s

overall funding and shows that, inflation adjusted, a 35 percent decrease in their budget since 1980.

The second chart shows the funding for the defects investigation programs of NHTSA which received $2.2 million in 1980 and even

though the request in the year 2000 from the administration was

3.7 million this Congress only provided 2.6 million for that program. Again an adjustment for inflation, there has actually been a

decrease in that program as well notwithstanding the numbers,

Mr. Chairman, you earlier indicated.

Mr. TAUZIN. The gentleman’s charts are admitted into the record.

Mr. MARKEY. I thank you very much. Again, even looking at that

area, the area that deals with tires, that particular unit of NHTSA

may not have uncovered a defect as Firestone has yet to identify

a defect again, only a high rate of claims against its tires. It is the

overall agency funding that we should be looking at to make sure

that they have the resources to look at every problem. And let me

ask you, Ms. Bailey, the SUVs have different variables to bear

upon tires than the smaller economy tires do. They are advertised

as off the road vehicles, driving up mountains, through the

streams. These ads make these vehicles seem as though you can

take them anywhere. On highways the SUVs have been noted to

have a proclivity to roll over. Are we testing these tires for the

right conditions? Does NHTSA need to subject these tires to a different, more rigorous standard because they are intended for SUVs

47

and are advertised for use beyond that which an ordinary automobile would be used?

Ms. BAILEY. I would agree with that and in fact we have begun

work on the updating of the tire standards. We are going to have

a proposal out in the spring, and we have asked for suggestions

from the manufacturers themselves, which I think would address

that issue, and they are to be in in October of this year.

Mr. MARKEY. Have your tire standard tests changed since 1968?

Ms. BAILEY. The tire standards clearly need updating. They originally started 30 years ago, and we have not had an update since

1968.

Mr. MARKEY. So the test we use today is a 32-year-old test even

though SUVs are advertised for off the road and when they come

back on the road may have been subjected to ordinary conditions

that ordinary tires would not have been?

Ms. BAILEY. Exactly. That is part of the reason why we would

want to update these standards.

Mr. MARKEY. I think the driving public in America deserves a

new test.

NHTSA has proposed a rollover test and a reporting requirement

on rollovers. Do you agree that the results of such testing should

be made available to consumers so that it is in their hands at the

showroom?

Ms. BAILEY. I believe that we should have a rollover rating system that would be available to consumers, yes.

Mr. MARKEY. So the information is available at NHTSA in its

files with the showroom, but the consumer does not have access to

it?

Ms. BAILEY. That’s correct.

Mr. MARKEY. Will NHTSA ensure that from now on consumers

can see it at the showroom so that they can know what the safety

record is?

Ms. BAILEY. Currently as part of the budget we are blocked.

While there is a study of the rollover rating system, I would like

to see that set aside and be allowed to move ahead with a rating

system that would be available to the consumer.

Mr. MARKEY. I think that every family purchasing one of these

vehicles should know what the danger is and it should not be some

hide and seek game with the automobile manufacturer or dealer

that requires them to be trying to intrude into the private dealings

of the automobile salesman. At the same time they may be trying

to get a discount in the price.

Finally, Ms. Bailey, the Venezuelan Consumer Protection Agency

has recommended bringing criminal charges against Firestone and

Ford. Are you in touch with your counterparts in Venezuela?

Ms. BAILEY. Could I just back up one moment and be sure that

we have in the record that the Senate included in its version of the

fiscal year 2001 DOT appropriation bill language that actually prohibits us from establishing a rollover rating system. I would appeal

to the Senate in the interest of the seriousness of the work we are

doing here today to set that aside so we can do that rating system.

I want to be clear about that.

Mr. MARKEY. I don’t think that there is a more important public

safety issue than reversing what the Senate has already done in

48

trying to prohibit you from ensuring that all consumers know what

the danger is in driving these SUVs.

On to the Venezuela question.

Ms. BAILEY. We have not been in direct contact with Venezuela.

We have been in contact with many of the other countries through

the embassies and through our safety counterparts to obtain information about the replacements or quote/unquote, recalls that were

done in other countries.

Mr. MARKEY. Do they have documents from American companies

which you do not have? Other foreign authorities?

Ms. BAILEY. I am not aware of that.

Mr. TAUZIN. The Chair recognizes the chairman of the Subcommittee on Oversight Investigations, Mr. Upton.

Mr. UPTON. Thank you, Mr. Chairman.

Ms. Bailey, thank you for being with us this afternoon.

Do you believe that NHTSA has the appropriate authority to receive information from the tire manufacturers? Or do you need

more?

Ms. BAILEY. We have authority to receive information from manufacturers, and are doing so as part of our investigation. That authority may not extend—does not extend, as you know, to incidents

that occur in other countries.

Mr. UPTON. But at least for domestic use, you believe that you

have got—the pipelines are open and you are getting the information that you need?

Ms. BAILEY. I would add one other thing. That is clearly if we

have information about some of the claims that at this point we do

not have the authority to obtain, that could have been beneficial in

this case.

Mr. UPTON. I raise that because in your testimony you said as

of May 2, at that time the agency was aware of 90 complaints, including the reports of 43 crashes and 4 fatalities, and yet on the

chart Firestone alone in 1999 it is not 90 complaints, it is 772 complaints.

Ms. BAILEY. That is because those are claims versus the complaints that we get, so that information is what I am referring to,

and I say that we need to look at our ability to collect data from

the manufacturer in regard to claims. We would be looking through

our—expanding our current regulatory capability, but if need be we

would also be looking at other ways in which we can obtain the

data that you see there.

Mr. UPTON. In a Washington Post story that ran a couple of

weeks ago, Ken Weinstein, your Associate Administrator for Safety

Assurance, says, and this is not in quotes, but the story reads as

part of its investigation the agency has requested information from

Goodyear Tire and Rubber on similar tires. Have you received that

information in the couple of weeks that you have asked for it?

Ms. BAILEY. My colleagues tell me it is due September 15. I know

it has been requested. That is an essential part of our investigation

to look at comparable or peer material.

Mr. UPTON. Are you looking beyond Goodyear as well?

Ms. BAILEY. The only request that we have at this time is for

Goodyear.

49

Mr. UPTON. Would you be able to furnish the committee their response when you receive it?

Ms. BAILEY. Yes, sir, we would.

[The following was received for the record:]

50

Mr. UPTON. It is my understanding that there is—the FARS, the

Fatalities Accident Reporting System, that contains all vehicle related fatalities as required by law. And at the end of 1998 that

data base contained 29 fatalities from accidents in a Ford Explorer

fitted with Firestone ATX, ATX II or Wilderness tires. I am a little

bit surprised that with all of the attention which has been focused

on this issue the last number of months that the 1999 data base

is not yet available. It is only through 1998.

Ms. BAILEY. It should be available within the next 2 weeks.

Mr. UPTON. We are almost in fiscal year 2001.

Ms. BAILEY. It should be available within the next 2 weeks.

Mr. UPTON. Do you think that will be helpful in determining

whether or not there are some problems with the tires?

Ms. BAILEY. I think that information is very helpful, but it is

more helpful for the purposes of the defects investigation that we

are—have undertaken—that we look at the other ways in which

the data base can be expanded.

Mr. UPTON. In looking at some testimony that was before this

subcommittee back in the seventies with regard to the Firestone

500 tire recall——

Ms. BAILEY. Yes.

Mr. UPTON. [continuing] it was noted in that testimony by then,

I think it was Chairman Moss that, as a part of the investigation,

had directed a number of inquiries to Firestone, Firestone filed objections to releasing that information. In fact, in the conclusion, it

indicated that NHTSA may exercise full subpoena power to obtain

and retain documents and information that are required to determine whether safety defects exist.

I was not eligible to run for Congress when this happened but

it was—involved again the Decatur facility. Did—has NHTSA, despite all its testimony 20 some years ago, has NHTSA had followthrough with the Decatur facility over the last 20 years at all?

Ms. BAILEY. To my knowledge, it has not been focused on Decatur, no.

Mr. UPTON. The last thing I guess before my time expires, there’s

been a real difference between the warranty claims with the tires

as well as the number of deaths associated with the accidents. How

is it that we can do a better job at getting NHTSA to get both

claims and warranty, both accidents as well as claims reported routinely to NHTSA as you look at future recalls or future instances

of problems?

Ms. BAILEY. Well, we feel that we may have within our current

statutory authority the ability to expand so that we’re able to obtain the claims that would be helpful. We’re going to explore that.

Obviously, that’s a major issue for us.

Mr. UPTON. My time has expired.

Mr. TAUZIN. I thank the gentleman. The Chair now recognizes

for his 5 minutes the ranking minority member of the full committee, Mr. Dingell.

Mr. DINGELL. Mr. Chairman, I thank you. You have been very

gracious.

Your statement says that Ford had no obligation to inform

NHTSA of the recall in Saudi Arabia and other countries last year.

51

Am I correct in assuming that NHTSA believes manufacturers

should be required to notify NHTSA of foreign recalls?

Ms. BAILEY. There was no obligation for them to do so in the

past, but at this time I think it’s worth exploring, clearly worth exploring what we can do in a global marketplace to exchange valuable information about safety.

Mr. DINGELL. Do you plan to request new authority to accomplish this purpose?

Ms. BAILEY. I plan to explore what is within our current capability and, yes, additional statutory remedy, if need be.

Mr. DINGELL. Now, did NHTSA ever upgrade motor vehicle safety standard number 109 as the committee report suggested back in

1978?

Ms. BAILEY. The answer is no.

Mr. DINGELL. Could you tell us why NHTSA did not upgrade

that standard?

Ms. BAILEY. The FMVSS 109 was last amended in July 1999 to

require a four-digit date code instead of the original three-digit

date code. The four-digit date code indicates the week of the year

of the production in the first two digits and the year of production

in the last two. For example, the date code 4599 indicates the tires

were produced in the 45th week of 1999. Several minor amendments such as labelling requirements have been made to the standard over the years.

Mr. DINGELL. Now, but why did you not upgrade that standard?

Could you submit that for—— Ms. BAILEY. I can submit that for the record. I don’t have an answer, sir.

Mr. DINGELL. All right. Now NHTSA’s tire safety standards has

not been revised since when?

Ms. BAILEY. 1968.

Mr. DINGELL. Can you explain to us whether NHTSA is considering upgrading that standard at this time?

Ms. BAILEY. We are clearly considering upgrading the standard

and have begun the process. We will have a proposal out in the

spring, but that is where it currently stands. Given the situation,

I will be looking to expedite that sooner.

Mr. DINGELL. All right. NHTSA is trying to cope with a much

larger and more complex regulatory burden than it had in 1978,

but your budget now is approximately one-third of that which you

had at that time; is that correct?

Ms. BAILEY. That is correct.

Mr. DINGELL. Now, how is that affecting the ability of NHTSA

to carry out its responsibilities?

Ms. BAILEY. I do not believe it has affected our ability to carry

out this administration. However, up to this point——

Mr. DINGELL. You are having significant problems, are you not,

in terms of addressing all of the concerns you might have? For example, your able to investigate the matters with regard to the Firestone tires at this time. Are you able, however, to catch these

things early enough? Remember, this thing has been going on for

approximately 21⁄2 or 3 years. So am I fair in inferring that it has,

in fact, impacted the ability of NHTSA to address questions of this

kind?

52

Ms. BAILEY. I think the regulatory authority to obtain data on

a worldwide basis, for instance, or to obtain claims data has affected our ability to identify the need for an investigation in this

case earlier, but it does not necessarily the funding.

Mr. DINGELL. And your problems with inadequate funding have

compounded this problem, have they not?

Ms. BAILEY. Clearly, funding is an issue when you are working

in an administration with this kind of responsibility. We want to

be adequately funded, and again, that is why we are looking for

that million dollars difference between—in this year’s budget so

that we are adequately funded in the office of defects investigation.

Mr. DINGELL. Am I fair, then, in inferring that you are telling

me you have adequate moneys to carry forward all of your responsibilities or that you do not?

Ms. BAILEY. Well, there is a proposal before Congress today, the

President’s budget is asking for, again, a million dollars above

what—an additional million dollars so that we can carry out our

mission, and so I’m hoping that we would be funded at that level.

Mr. DINGELL. Thank you. Thank you, Mr. Chairman.

Mr. TAUZIN. I thank the gentleman. Before I recognize the chairman of the full committee, I would ask unanimous consent of the

committee to have some time out of order to correct the record.

Without objection, Ms. Bailey, in answer to questions I asked you

relative to the memo—the e-mail that was received by your—by

NHTSA in July 1998, you indicated that an analysis was done and

a memo was prepared indicating that it did not deserve or require

further retention or action. I am told—I think you’re being informed of it now—that that was an incorrect statement. There was

no such memo prepared, no written analysis done in 1998; that

there was something done in August of 2000. Would you like to correct the record since you are under oath?

Ms. BAILEY. Exactly. Apparently, and I have read that memo,

but the memo that I read was created in August of 2000.

Mr. TAUZIN. So the only memo——

Ms. BAILEY. There was an analysis done by that individual

whose name I gave you but apparently no written report at that

time.

Mr. TAUZIN. Ms. Bailey, I would ask you to perhaps consult with,

again, representatives of your office. We received very different testimony in interviews with the gentleman in question. I will be specific. The gentleman in question informed our investigators that he

did not recall receiving the e-mail nor doing an analysis of it. Is

that correct or incorrect?

Ms. BAILEY. You’re saying that Mr. Beretsky says that he did not

receive an e-mail?

Mr. TAUZIN. He did not recall receiving an e-mail nor recall doing

any analysis, no memos on it. Would you consult again—I realize

you’ve been on the job for 3 weeks and we’ve got a problem here.

Ms. BAILEY. Apparently, and I’ve read a memo that discusses in

detail what the claims said, which is what led me to believe that

that memo—the internal memo led me to report to you the internal

memo in which it says it was noticed, and I saw the memo and I

saw the statistics. So I know it came in the e-mail. I have seen the

e-mail. Apparently you’re correct that Mr. Beretsky says he does

53

not recall it and that he is reconstructing now—we are reconstructing the series of events. I was not aware that he had said he

did not recall it. I only had the opportunity to read the memo

which, again, has the statistics that says they noticed the claims.

Mr. TAUZIN. So we have the record correct and complete, the information we have is that there was no written memo, no written

analysis done in 1998 of the State Farm insurance memo from Mr.

Boyden, that a memo was constructed in August of 2000 just last

month by someone in your agency trying to reconstruct the situation. That is the memo you referred to. There is no such memo of

1998; is that correct?

Ms. BAILEY. There’s not one in 1998. The part that I would like

to reinvestigate is the memo that I read, which had the statistics

and reported the complaints. We do have that, but apparently this

is a reconstruction, too.

Mr. TAUZIN. That is a reconstruction memo. So that, as far as we

know, the e-mail that was received by your agency was placed in

a file, and as far as we know and as far as Mr. Beretsky could tell

us, there was no recollection of even receiving it, much less analyzing it; is that correct?

Ms. BAILEY. Yes, sir.

Mr. TAUZIN. I thank the gentlelady. The Chair now recognizes

the gentleman from Virginia.

Chairman BLILEY. I have no questions at this time.

Mr. TAUZIN. The Chair will then move to—I recognize the gentleman from Michigan, Mr. Stupak.

Mr. STUPAK. Thank you, Mr. Chairman.

Ms. Bailey, NHTSA does not have standards for tire strength for

steel belted radial tires, correct?

Ms. BAILEY. Who am I talking to?

Mr. STUPAK. Over here. I know there’s a lot of us from Michigan.

You don’t have any standards for steel belted radial tires, correct?

Ms. BAILEY. There is not a separate standard.

Mr. STUPAK. The last standard was 1968?

Ms. BAILEY. Correct.

Mr. STUPAK. All right. So when you speak of endurance tests,

high speed tests at 95 degrees, what standard is that based upon?

Whose standard is that, to give a tire your approval?

Ms. BAILEY. That was based on the original testing that was—

of the standards for testing from 1968.

Mr. STUPAK. So when we do a testing as to the endurance of a

tire, any tire, it’s based upon a 1968 standard; is that what you’re

testifying?

Ms. BAILEY. Exactly. I can tell you what it is. It’s between 75 and

85 miles an hour. It’s at 95 degrees. It’s at 32 pounds per square

inch, and it’s with a load of 88 percent of the maximum load, but

yes, it’s a 1968 standard and clearly needs to be updated.

Mr. STUPAK. But yet in 1978, after a lengthy investigation by

this committee on tread separations on those Firestone 500 tires,

the committee concluded that the standard for the past year’s tires

was inadequate to protect public safety, the standard that was

adopted in 1968. As I said, did NHTSA ever upgrade this standard

as the committee suggested in 1978?

54

Ms. BAILEY. It is my understanding that there was a proposal to

upgrade at that time, and that when there were cutbacks in the

1980’s, that that was withdrawn.

Mr. STUPAK. Okay. In 1978—I’m not trying to beat a dead

horse—but in 1978, the Society of Automotive Engineers adopt ed

a paper that concluded that 27 percent of the vehicles they studied

had tires that were underinflated by 4 to 16 pounds per square

inch. That was a major safety issue. Is that still true today?

Ms. BAILEY. I would need to provide that for the record. I am not

aware—I could not answer that definitively.

Mr. STUPAK. Okay. In 1978, after receiving that report from the

Society of Automotive Engineers , NHTSA said it was going to require a low pressure—excuse me, require a low pressure warning

system on vehicles.

Ms. BAILEY. Yes.

Mr. STUPAK. Do you know what happened to that initiative?

Ms. BAILEY. My understanding is that that proposal, again, was

set aside with the cutbacks in the 1980’s.

Mr. STUPAK. Okay. If the recommended tire pressure means that

the tire will not perform to its tire speed rating, does NHTSA or

any other government agency have the authority to take action, in

other words, order a recall?

Ms. BAILEY. In order to order a recall, you need to go through—

to order one, a mandatory recall, you would need to have gone

through a complete investigation. It would not be from failure of

one tire standard test.

Mr. STUPAK. Okay. But if the recommended tire pressure means

a tire will not perform to tire speed rating, that is the standard set,

the tire speed rating that they give to this tire, if it is not performing to that standard, what authority do you have then,

NHTSA or any other government agency, to recall that tire? What

I’m driving at is how do we get these things off the road if they’re

not meeting the standards?

Ms. BAILEY. Well, the answer I gave earlier is the correct one,

but I think the important thing here is that you’re absolutely right,

the standards are not appropriate, the tire testing standards. They

are not long enough in endurance, they’re not at the right pressure

per square inch, they are not at the right temperature so that we

would have identified problems with these particular tires because

in fact they passed in 1997. So we need to update the tire standard

itself.

Mr. STUPAK. Okay. In response to a question from Chairman,

Mr. Tauzin, you said the speed test is at 95 degrees—95 degrees,

32 pounds per square inch. That is the current standard, and that

passed the endurance and speed test at 32 psi, but not the recommended 26 psi. The 26 psi would make it 6 pounds under your

recommended standard. So then going back to your automotive

safety engineers report, 1978, that would be a major, to use their

words, a major safety issue, would it not?

Ms. BAILEY. Your question is if they passed the test as it was set

up?

Mr. STUPAK. At the 32 pounds.

Ms. BAILEY. Right.

55

Mr. STUPAK. Okay. And then that is what you said in response

to Mr. Tauzin’s questions, it passed the endurance and speed test

at 32 pounds, not the recommended 26 pounds, that 6-pound difference there in a tire, and according to the Society of Automotive

Engineers paper, which conclude that 27 percent of the vehicles

they studied had tires that were underinflated by 4 to 16 psi’s, and

that this is a major safety issue. So running these tires that were

tested at 32 with the recommendation it’s at 26, do you agree then

that that would be a safety issue?

Ms. BAILEY. There are two issues here. Yes, it would be a safety

issue, and that is an education aspect to maintaining appropriate

psi in your tires.

The second point would be that the 26 is what is recommended,

my understanding, of the Ford Explorer, but not what the Firestone recommendation is, and we would have been testing the tires

according to the Firestone recommendation.

Mr. STUPAK. Would you be testing it not at the Firestone, but

your recommendation which was 32?

Ms. BAILEY. At 32, but you’re saying they were at 26 and that’s

the Explorer recommended psi.

Mr. STUPAK. Correct. Correct.

Mr. TAUZIN. The gentleman’s time has expired. The gentlelady

wishes to respond further?

Ms. BAILEY. Can I add one thing?

Mr. STUPAK. Yes.

Ms. BAILEY. Apparently, the endurance test itself is at 26 and

not at 32. So—— Mr. TAUZIN. If the gentleman will yield, the high speed test is

not at 26. It’s at 32.

Ms. BAILEY. Exactly.

Mr. TAUZIN. The gentleman’s time has expired. The Chair will

recognize the gentleman from Ohio, Mr. Oxley, for 5 minutes.

Mr. OXLEY. Thank you, Mr. Chairman.

Mrs. Bailey, one of the problems seems to be how connections are

made, or at least I need to understand that, especially when we’re

dealing with large data bases. How does NHTSA frame information

requests so that it receives meaningful information and doesn’t

squander time on large amounts of information that have no particular bearing on the inquiry? How are you able to focus the information given the large data base, and apparently the information

coming from other quarters? How are you able to focus in on your

information requests so that you really get at the issue at hand?

Do you have a policy or is that a seat of the pants operation?

Ms. BAILEY. The vast majority of our information comes from

consumer reports, and there is a form that is filled out. You can

obtain that on the Web page. It is taken directly through our auto

hotline. So all the information is filled out in a way that is appropriate for our data base.

Mr. OXLEY. In this case, it seems that pieces of the puzzle were

scattered among industry and agency data bases. Is there something wrong in NHTSA’s structure and process that discourages information sharing? Do we put ourselves in a situation so that it’s

more adversarial than perhaps needs be and tends to discourage

sharing of that kind of information?

56

Ms. BAILEY. I do not believe there’s an adversarial quality to our

information obtaining capability.

Mr. OXLEY. But the whole structure—— Ms. BAILEY. What we’re missing is, again, global information in

the worldwide marketplace. We’re missing information about

claims, and those are the two that we’re going to be very focused

on obtaining in the future.

Mr. OXLEY. And what are your plans then to upgrade that data

base or upgrade your ability to get that information sooner rather

than later?

Ms. BAILEY. It’s really a regulatory question, our ability, our authority to expand information, acquisition, for instance, outside of

the United States.

Mr. OXLEY. Do you have that authority now?

Ms. BAILEY. We feel we have within our regulatory capability

that authority, but if we—if we indeed need statutory remedy, we

will seek that .

Mr. OXLEY. And so you’re not prepared at this point to say

whether that needs a statutory remedy or not?

Ms. BAILEY. Not at this time.

Mr. OXLEY. What have NHTSA’s priorities been in recent years,

on the bread and butter auto safety issues or new programs? Can

you tell me how many new programs NHTSA has undertaken over

the last few years?

Ms. BAILEY. Well, the mission is to reduce injuries, save lives

and lower health care and other costs. Clearly I think there have

been real advances, because we have the safest highways we’ve had

ever in the Nation’s history. At the same time, yes, there are many

new programs, some of which you know about, our buckle-up program, our reducing drinking and driving and a myriad of other programs that we would be happy to provide for the record.

Mr. OXLEY. And you don’t feel that the emphasis on new programs is, in any way, detracted from your ability to deal with

issues that we’re talking about today?

Ms. BAILEY. No, sir, I do not.

Mr. OXLEY. And in your funding request over the years, the statistics would indicate that the appropriate part of your agency that

deals with recalls and the like have been increased by some 50 percent; is that correct?

Ms. BAILEY. The funding?

Mr. OXLEY. Yes, for that particular——

Ms. BAILEY. It depends on whether you—that’s in real dollars or

not.

Mr. OXLEY. What is the staff of the division that handles the recalls in that particular area?

Ms. BAILEY. Our staff is at about 50—47, in fact.

Mr. OXLEY. Forty-seven people?

Ms. BAILEY. Yeah.

Mr. OXLEY. And do you think—are you in a position to say

whether, in fact, that number is adequate or inadequate at this

particular time?

Ms. BAILEY. I think we clearly need to, as we have done during

this investigation, look at ways that we can increase our ability to

meet our mission. We have reassigned staff and reallocated reVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00064 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
57

sources to cope with the intensity of this investigation, which is our

highest priority in which we’re looking to expedite. So clearly, funding is an issue for us and we’re hoping that we will be funded appropriately by the Congress.

Mr. OXLEY. So you don’t think that 47 people are in a position

to handle this kind of an issue and deal with a recall of this magnitude?

Ms. BAILEY. I think we are at this point, but I believe we are

going to need additional resources in the future to continue to deal

with more vehicles on the road, complex technology, on issues like

the one we are dealing with here today.

Mr. TAUZIN. Gentleman’s time has expired. The Chair at this

point would request unanimous consent for the documents contained in these two books, book one and book two, which have been

agreed upon by both sides, would be submitted into the record subject to review by staff from both sides for confidentiality. Is there

any objection? Without objection, so ordered.

Second, before we move on, I wanted, for public information, Ms.

Bailey, I think we ought to take a moment to do this, indicate that

at the Ford Web site, consumers can obtain information on the

tires that are subject to the recall that you have encouraged Firestone to conduct and which they’re currently conducting, and that

information not only contains information about what is on your

tire, but which of the tires that are—may be on your vehicle are,

in fact, subject to recall and therefore replaceable under the recall,

and I would encourage consumers who are tuning in to this hearing to take advantage of both contacts to your office and on the

Ford Web site—I’m sure the Firestone Web site has similar information. If consumers will contact either your office or these Web

sites, they can obtain this information. This is the information I

used to go down and look at my Ford Explorer and determine that

the four tires on my truck are, in fact, recallable, and I’m apparently waiting, by the way, to find some replacement tires if anybody’s listening.

The Chair will now recognize the gentleman from Tennessee, Mr.

Gordon.

Mr. GORDON. Ms. Bailey, welcome to your new position and welcome to the committee and welcome to prime time.

Ms. BAILEY. Thank you.

Mr. GORDON. You had mentioned earlier that your agency has established some new programs, like trying to reduce drinking and

driving and trying to increase people or awareness of buckling up.

How many lives have you estimated that have saved by your efforts, your office’s efforts?

Ms. BAILEY. 10,000 last year alone.

Mr. GORDON. Well, that’s to be commended. Let me—I want to

follow a line of questioning that I mentioned earlier. As I understand it, quality assurance used to be sort of hodge podge of different approaches between the manufacturer and their components

or part makers, and basically, it was an end-result type of approach, that over the years there was involved something called the

QS 9,000 quality assistance program which changed the focus, so

that you would try to control the quality through the manufacturing process all along the way.

58

And as I understand it, both Ford and Bridgestone/Firestone are

saying that this is a good program and that there has been adequate monitoring of this, and reviewing that, they really can’t find

out what the problem is. Yet over here you have an enormous recall. So we’ve got, you know, somewhere—we have sort of a black

hole in between. Are you familiar with the QS 9,000 quality assurance program?

Ms. BAILEY. It is used extensively in the manufacturing industry.

I’m aware of that.

Mr. GORDON. Do you have an opinion as to whether it is adequate or whether there needs to be changes?

Ms. BAILEY. I would need to look into the program. I think there

are many manufacturing plants that are certified as QS 9,000, and

I don’t have a comparison as to whether that’s reasonably certified.

Mr. GORDON. Let me ask you this, too. If there are to be changes,

do you have an opinion as to whether that should just be an

industry—— Ms. BAILEY. Yes.

Mr. GORDON. [continuing] program, that percolates up from the

industry or whether there needs to be some type of coordination

with your agency, and if so, at what level?

Ms. BAILEY. Yes, I would agree that I think shared responsibility

here is what we’re talking about today, and so yes, I believe that

not only should it remain within the manufacturing industry, but

that clearly there could be government involvement as well so that

we create the best quality assurance program.

Mr. GORDON. And as we try to look to the future in determining

how can we avoid these type of problems in the future, again, do

you have advice as to a role that Congress should play in that, if

any, and a role that your agency should play, and I say expanded

from what occurs now?

Ms. BAILEY. Well, I think what we’ve identified, and I have spoken to here is that there are two areas that clearly there was information—where there was information not made available to

NHTSA. So I think that we may need to work with Congress to

look for that kind of statutory remedy, if we’re not able within our

own regulations to quickly begin to obtain that data from around

the world or about claims, and there may be other, more creative

ways that we can continue to obtain data that might allow us to

identify these problems sooner from garages, from fleet—from the

fleet industry and from plaintiffs’ attorneys, you know, wherever

we can get information.

I think it’s important to remember that the consumers need to

communicate with NHTSA. The majority of our complaints come

from the consumer, and in fact, there was information out there in

the public domain. Individuals knew they had a problem, and they

were not necessarily contacting NHTSA. So I would like that message out today that we have an 888 number which is DASH-2-

DOT. We’d like people to communicate with us and we need perhaps to inform people better about that because that’s where we

get most of our information. But clearly those other two areas are

important. In information exchange between the government and

the manufacturers themselves, there clearly was a breakdown in

communication here.

59

Mr. TAUZIN. The gentleman’s time has expired. The Chair now

recognizes the gentleman from Iowa, Mr. Ganske, for 5 minutes.

Mr. GANSKE. Thanks, Mr. Chairman.

Ms. Bailey, I pointed out in my opening statements that charts

by both the Ford Motor Company and Bridgestone/Firestone indicate that there appears to a statistically significant difference in

where these defective tires were manufactured and that a high percentage of them were manufactured at one plant, the Decatur

plant. Would you agree with that?

Ms. BAILEY. Yes, sir.

Mr. GANSKE. Can you speculate some of the factors that you

think might have caused one plant to have manufactured a large

percentage of the defective tires?

Ms. BAILEY. I wouldn’t want to speculate because we are in the

process of an ongoing investigation, and it would be inappropriate

for me to do so.

Mr. GANSKE. Well, what are some of the things you would be

looking for, defective materials?

Ms. BAILEY. Defective materials.

Mr. GANSKE. Over a 2-year period?

Ms. BAILEY. Other manufacturing questions. It’s a complex process that involves molds, it involves personnel, human error. There

are a variety of ways in which we would be, particularly through

the engineering analysis, now trying to determine what has happened here if indeed there is a defect and to provide that information.

Mr. GANSKE. Are you sending investigators to that plant to interview employees and management?

Ms. BAILEY. Not to my knowledge.

Mr. GANSKE. Why not?

Ms. BAILEY. I think that clearly is a question that we should consider.

Mr. GANSKE. I can’t believe that you haven’t thought of that. I

mean, you know, the way those tires are put together is a factor

and possible cause of their blowing apart, isn’t it?

Ms. BAILEY. For one thing, the phase we’re in now is the engineering analysis where there would be a mechanism to allow us to

do that, and we’ve only been in that phase for a period of days. The

initial phase is the preliminary evaluation in which we obtain information and analyze the data. So it may be during the engineering analytic phase that those kinds of activities are set, and I

would investigate that and get back to you about that.

Mr. GANSKE. Okay. Well, let me ask you about the engineering

phase. Who has the tires that have been recalled?

Ms. BAILEY. Firestone is in—has those tires.

Mr. GANSKE. Do you have a sample, a random sample of those

tires?

Ms. BAILEY. We would be obtaining, yes, samples of those tires.

Mr. GANSKE. Have you obtained samples of those tires?

Ms. BAILEY. Yes, we have.

Mr. GANSKE. How many tires have you obtained?

Ms. BAILEY. I could provide that for you. I don’t have a number.

Mr. GANSKE. And how do you know that they are a random sample?

60

Ms. BAILEY. I would provide you with details of the engineering

analysis that would give you that kind of specific subject matter.

Mr. GANSKE. Okay. Let’s talk about the engineering analysis. Are

you doing that in-house? Do you have the expertise at NHTSA to

do in-house analysis?

Ms. BAILEY. Yes.

Mr. GANSKE. So that the analysis that will come out will be

NHTSA’s analysis, not an analysis by Ford and not an analysis by

Bridgestone?

Ms. BAILEY. Correct.

Mr. GANSKE. When do you think that you will—when do you expect to have that analysis completed?

Ms. BAILEY. The engineering and analytic phase generally is

completed within a year. We have just begun that phase. Generally

speaking, an entire investigation takes about 16 months, 4 months

for the preliminary evaluation, and then as much as 12 months for

the engineering analytic phase. I would obviously like to see that

expedited rapidly, but as we did last week, if there’s information

that tells us that we would want to recommend a widened recall,

if there are additional tires out there that are dangerous, we will

take action to instigate that recall, and if need be, as we did last

week, through a consumer advisory, to inform the American public.

Mr. GANSKE. Do you have access to the records of the tires that

are being replaced and their serial numbers?

Ms. BAILEY. Yes.

Mr. GANSKE. So then when you ask for a sample, do you just select certain dates and times of those tires that are being replaced

so that you know that you get a random sample?

Ms. BAILEY. That’s information that has been requested and is

part of the ongoing investigation now.

Mr. TAUZIN. Gentleman’s time has expired. The Chair recognizes

the gentleman from Ohio, Mr. Sawyer, for a round of questions.

Mr. SAWYER. Thank you very much, Mr. Chairman, and thank

you, Ms. Bailey. You are being asked to respond from a very, very

narrow base of actual experience to a very broad base of concern

that’s reflected here on this committee.

Let me ask you a more general question. When an event like a

tread separation occurs that precipitates a claim, does that qualify

as a defect that must be reported?

Ms. BAILEY. When—you would certainly look at the numbers of

tread separations.

Mr. SAWYER. I’m trying to get a sense of——

Ms. BAILEY. Yes, that could constitute a defect.

Mr. SAWYER. [continuing] a claim versus an adjustment, and the

reason for which the adjustment is being made.

Ms. BAILEY. Let me say that a manufacturer is obligated to report a known—a believed defect. There is a law that states that

within 5 days they would have to report that to NHTSA. Determining when that defect—when you have a defect is a more complex question.

Mr. SAWYER. Yes, and that’s the reason I am asking, what constitutes the point at which a claim or an adjustment constitutes a

defect per se?

61

Ms. BAILEY. At times it may be not a large number of claims. It

may be a smaller number of claims. For instance—and now, there’s

a difference between the manufacturer determining that they have

a defect and notifying NHTSA and our determining that there’s a

defect. We are investigating and we will go to the end of an investigation before we determine for certain that there is a defect.

Mr. SAWYER. I agree that that’s a complex question, and it’s one

that goes to the heart of what is a useful, early warning system

for NHTSA, to be able to respond to a pattern of events.

Ms. BAILEY. Let me just say about tires in general, because I

think it’s important that we put it in perspective. Tires do fail. If

you run your tires for 40,000 miles, there’s a certain expected failure rate. It’s been asked why at times there may only be one complaint or several complaints and we initiate an investigation. That

is because there are aspects of motor vehicles which should never

fail, such as a seat belt. You may know about Chrysler, for instance, in 1996. One failure is too many. A child safety seat, there

may be one or two failures and that’s enough to instigate an investigation because that part of an automobile should never fail. Tires,

on the other hand, do fail. So putting this into perspective, there’s

a certain expected rate of failure, so that’s part of why—— Mr. SAWYER. And tires wear out, they age and they come to the

end of their life.

Ms. BAILEY. Exactly.

Mr. SAWYER. In the 1988-89 initial investigation, I’m told by several manufacturers that there was a threshold established at a .5

percent failure rate that was used to trigger an expectation of reporting; is that accurate?

Ms. BAILEY. Most of that information is held confidential, correct,

by manufacturers. Tire failure rate, that’s a different question.

Mr. SAWYER. Well, in the end, I returned back to the recall that

you have initiated this past week, with the Baja 32 by 11:15 that

had a single failure, I assume that given the universe that you are

dealing in that single failure was a high rate, but that it was due

to a puncture. I am trying to get at the question of whether or not

we’re getting the kind of information that will let us focus in on

statistically significant numbers, so that we can get at real catastrophic risks that may be out there in instead of getting lost in

a blizzard of data that doesn’t lead us particularly anywhere.

Ms. BAILEY. Let me again put it in perspective, that we receive

50,000 complaints a year at NHTSA. 500 of them deal with tires.

Fifty of them deal with Firestone tires per year. Only five or so per

year; therefore, in the decade preceding when this information

came in, only about five a year dealt with the specific tires that are

recalled today. So you can see there is a trend that we look for, or

a threshold, if you will, but the 46 over a decade when there was

a population of 47 million tires did not——

Mr. SAWYER. It did not rise to a level of that kind of concern.

Ms. BAILEY. Correct.

Mr. SAWYER. Let me ask one further question if I can, Mr. Chairman. In an arena in which manufacturers are allied with one another, owned by one another and operate in a variety of different

settings, where manufacture takes place in many different continents and where the experience from those continents may be

62

useful to us, what kind of obligations to report do American affiliates or foreign affiliates of American manufacturers have to report

those incidents in other environments?

Ms. BAILEY. They do not have an obligation to report at this

time.

Mr. SAWYER. Should they?

Ms. BAILEY. That is one of the main things we will be looking

at.

Mr. SAWYER. It seems to me that the single most undertaking in

the name of safety that the tire industry and others and the automobile industry as well has undertaken is the attempt to harmonize environmental and safety expectations of products on an

international basis. Without that capacity, it seems to me that it

would be very difficult.

Mr. TAUZIN. Would the gentleman yield to allow me to ask one

question before we move on. Does NHTSA have any intentions at

all of instituting an action against Firestone for failure to report a

known defect?

Ms. BAILEY. That would not be determined until the end of the

investigation.

Mr. TAUZIN. I thank the gentlelady. The gentleman’s time has

expired. The Chair will now recognize the gentleman from California, Mr. Bilbray. The gentleman from Tennessee, Mr. Bryant.

Mr. BRYANT. Thank you, Mr. Chairman.

Ms. Bailey, we’ve heard a great deal of testimony today, or at

least questioning, I think, sort of what I would call leading questions from folks here about your funding levels, and you seem to

have responded not maybe the way they want you to say, that

you’re underfunded and that would solve all the problems in the

world.

But I understand that State Farm and your administration have

a cooperative relationship and have worked together over the years

in situations where there have been problems, and that NHTSA

frequently makes requests of State Farm to share nonconfidential

claims material to assist you with pending and ongoing investigations. It’s extremely rare though that State Farm would, on its

own, notify you of a potential trend in claims data that they’re so

alarmed about that they come to you on their own initiative.

So my concern on this funding issue, maybe some of my colleagues who have raised this question is, if it’s misevaluated, which

apparently this was the case here, all the funding in the world is

not going to solve that. That’s an internal issue. You can have triple the budget you have and still would have missed this one because it was not analyzed, at least in a way that would adequately

show there was a problem early on.

Let me also ask you a question—that was more of a comment,

I suppose—that we on this committee understand that a large percentage of the incidents in question occurred when Firestone ATX,

ATX II and Wilderness tires were mounted on Ford—when these

types of tires were mounted on Ford Explorers. Understanding that

these tires were also mounted on several other types of vehicles,

the NHTSA ODI fatal crash summary illustrates that the number

of fatalities in Ford Explorers is significantly higher than fatalities

occurring in other types of vehicles with these same Firestone tires.

63

What are your thoughts on this seemingly fatal combination of the

Ford Explorer and these Firestone ATX, ATX II, Wilderness tires,

and are there any factors that you have identified that explain the

usually high fatality rate with this combination, or have you investigated the situation, and if so, what has your investigation shown?

Mr. TAUZIN. I believe the gentleman is referring to document No.

6 in the book, and does the gentlelady have it before her?

Ms. BAILEY. Yes, I have that, and clearly it shows a high incidence of fatalities with the Explorer, much higher than the Bronco

or the Blazer, for instance. And I think you’re right, clearly it is

a combination of situations here that in this case seems to have

created a particularly fatal outcome. Specifically, I had mentioned

earlier that we’d published a request for comments on June 1 on

the use of a stability factor for consumers and consumer information program, and the Senate included it in its version of the DOT

appropriations bill language that prohibits us from establishing a

rollover rating. I think when you look at these kinds of numbers,

you realize that I think the consumer deserves to be aware that

there appears to be a higher possibility of a fatal crash with some

of these vehicles. I don’t think we know which, and I think we need

more information, and that’s why we need a rollover rating system.

Mr. BRYANT. But is there an ongoing investigation at NHTSA

now that has the specific combination?

Ms. BAILEY. We have been prevented from continuing that. We

had begun that, but at this time we are unable to proceed until

there is a study done. So we are awaiting that, and I would like

that restriction removed so that we can do a rollover rating system.

Mr. BRYANT. And who has imposed that restriction? I may have

missed this.

Ms. BAILEY. That is part of the Senate’s version of the fiscal year

2001 appropriations bill language that is prohibiting us from doing

this system until a National Academy of Science study is performed

to assess the validity of the measure. I think it’s pretty clear it’s

a valid measure.

Mr. BRYANT. Let me ask you, and it’s my last question, and this

is kind of a follow-up to a comment that was made on the other

side about the latest recall of Firestone tires. I understand that

and know for a fact that NHTSA has recommended a recall of several other Firestone tires based upon data received since the opening of this investigation to date, and all the tires, as I understand,

the standard is all the tires receiving an overall rate of 12.6 or

higher are recommended for recall, and in reviewing the claims

data on these particular tires, there are several with an extremely

low number of claims involved and reported on these tires, so low

that it stands out.

For example, a tire that’s rated 87.5 and recommended for recall

only received two claims. Both were listed as blowouts. Another

tire with a rating of 85.5 received only one claim listed as a tire

separation. And a third tire with a rating of 82.2 received two

claims, one a road hazard and one a tread separation.

And my question to you, is it really necessary to suggest recall

on tires when the numbers are so low? And I’ll be the first to stand

up and say——

64

Ms. BAILEY. When production numbers are low, for instance, and

the rating therefore is low.

Mr. BRYANT. Right, the number of tires out there on the road are

low.

Ms. BAILEY. You may assume that, but at the same time if you

look at that information, you will see that there are production

numbers of 100,000 and 200,000 where the tread separation rate

is equal to, or sometimes significantly higher than the tires that

were already recalled. So it’s looking at the entire universe of tires,

and yes, sometimes it’s a low production number, but we still feel

if there is a high tread separation rate, that it should be recalled,

and we needed to inform the consumers of that and did so.

Mr. BRYANT. And again, I’ll be the first to recommend, in fact,

I talk to people now about this, and say we have to—if we’re going

to err, let’s err on the side of safety, but again, where there’s tire

s, where there are only one or two incidents, I’m wondering if

there’s not an overreaction to some extent, and those are the ones

I cited as examples to you.

Ms. BAILEY. Right. I think—again, we put together the population and the tread separation rate, the tread separation claims

and came up with a rate. I think you’re right, we’re erring on the

side of safety.

Mr. TAUZIN. Gentleman’s time has expired. The Chair recognizes

the gentleman from Texas, Mr. Green.

Mr. GREEN. Thank you, Mr. Chairman.

And Ms. Bailey, recognizing you’ve been on the—in your job for

such a short time and some of the questions are difficult, I think

most of us, though, want to make sure that the agency itself, not

only before you were there but after you’re gone, just like a lot of

us want to make our institutions survive and corrects problems

that we notice. In reading a lot of the briefings, I noticed State

Farm, and they will testify later today, said that they had talked

to NHTSA twice in 1999 about the rapid increase in claims they’re

seeing from these particular tires, and by early 2000, it was recorded 45 more injuries and four more deaths, and we’re told that

seeing a rapid increase in the complaints and injuries involving a

single product is a strong indication of problems, and it seemed like

there wasn’t any response from NHTSA until the Houston TV station reported it.

And I know oftentimes, whether it’s on our level on the legislative branch or on the executive side, sometimes we wait until it’s

called to our attention by the media, and by that time it’s much

too late, particularly when you have—I understand State Farm has

a cooperative office with NHTSA and would share information back

and forth.

Can you tell us why there was not any interest, and if one of the

largest insurers in the country pointed this out over a number of

years, it seemed like?

Ms. BAILEY. It’s two issues here.

Mr. GREEN. Yeah.

Ms. BAILEY. And let me just say that, first of all, this is a document that I was referring to which is the memo which looks real

official, and it’s got all of the details, but apparently this was reconstructed. So you will have to take this with a grain of salt.

65

When I read this, which says the unsolicited report, it says, this

unsolicited report was apparently sent to ODI on July 22, 1998,

through the same channel that all other reports requested from

State Farm come through. The e-mail is unremarkable stating we

have noticed, quote, unquote, 21 failures, inquiries, regarding these

particular tires, and there were details on this.

Now, this is apparently, according to my staff, a reproduction of

that original exchange which now we have clarified was not even

recalled by the individual that we had attributed it to. I think the

main issue here is that that was an informal arrangement between—and we don’t have it with any other insurance company,

but my question now stepping into this job as the new administrator is how could that happen, not that it would have instituted

an investigation. This was over several years, and it was 21 complaints out of 40 million tires. It would not have instigated an investigation. So missing this in this case did not prevent us from

doing our job.

Mr. GREEN. That’s true in 1998, but over a period of years, in

fact, early this year it was recorded 45 more injuries and four more

deaths occurred.

Ms. BAILEY. We were not made aware of that through State

Farm, if that’s what you’re indicating, but let me just say, the important point here is I want us to formalize—— Mr. TAUZIN. Would the gentleman yield for a second.

Mr. GREEN. I had the impression you were.

Mr. TAUZIN. Again, we’re under oath and we will have testimony

from a witness later on who says he did inform the agency in 1999

about additional injuries and deaths as a result. I just want to keep

the record straight on that because the gentlelady, again, may not

be aware of what he is going to testify to a little later on today,

and apparently no one at your agency recalls these phone calls.

I thank the gentleman. I will give the gentleman additional time.

Ms. BAILEY. Thank you, Mr. Chairman. I appreciate that. I’m not

aware of it and apparently they are not either, but I just would

still like to make my point that this is clearly something I’m going

to investigate, should we not have more than this voluntary informal arrangement with other insurance companies, so that we can

pay real attention to anything that comes in, whether this one

would have instigated an investigation or not.

Mr. GREEN. And, again, whether it’s informal or formal, obviously if it were formal, we would have documentation of it. But in

1998 if it was told, or 1999, and then earlier this year there was

additional—it should have raised somebody’s flag at the agency

that there may be a problem we need to look at. Frankly, being 3

weeks on the job, it would have made your situation a lot easier

today, that maybe in February, if somebody had said wait a

minute, we’ve had these over the last 3 years, let’s really look at

it and see. I think that the communication within NHTSA, and

maybe your leadership now will help that. We need to make sure

that there’s coordination within the agency and someone knows

what’s going on.

I know you already answered the question that our ranking

member mentioned, but did you know that the information that

has been received, whether formally or informally, already repVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00073 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
66

resented more deaths on fewer tires than in 1978, Firestone 500

tires?

Ms. BAILEY. But at the same time, we were receiving 2 and 3 and

4 complaints, we were receiving hundreds of complaints on other

tires at that same time. So again, it’s keeping it in perspective. It

does not mean that it is not very serious. It is, and I wish this had

been—that the information had been record appropriately.

Mr. GREEN. Another question that comes up, and I know we’ve

talked about it from other members that said, if the standard was

already inadequate for tires installed on the cars in 1970’s and it

would even be more inadequate for the heavier and sport utility vehicles, and let me tell you, coming from Texas, the SUV is our vehicle of choice. I’ve driven them for 25 years now, and it seemed

like—and that’s granted I don’t go off road except during hunting

season, but in 1978, the Society of Automotive Engineers adopted

a paper that concluded that 27 percent of the vehicles they studied

had tires that were underinflated. That was a major safety issue.

Is that still true today?

Ms. BAILEY. Well, apparently going off road works better if you

underinflate the tires. I’m certainly not recommending that, particularly the information we have here today, but it is something

that I think we may want to work into one of our public information campaigns.

Mr. GREEN. Again, historically, though, in 1978, NHTSA said it’s

going to require low tire pressure warning systems on vehicles. Do

you know whatever happened to that?

Ms. BAILEY. My understanding, it was tabled during the 1980’s

when there was a cutback on funding.

Mr. GREEN. Okay. Do you think NHTSA will revisit that issue

now to make sure that consumers know that if I drive off road I

may want to lower pressure, which is also common sense for some

of us who may do it, but that we need to make sure that consumers

know that when you’re on road, you need to inflate them to a certain level?

Ms. BAILEY. Yes, sir.

Mr. GREEN. Thank you, Mr. Chairman.

Mr. TAUZIN. Gentleman’s time has expired. The Chair recognizes

the gentleman from California, Mr. Rogan—I am sorry, the gentleman from North Carolina, Mr. Burr, is next. I’m sorry.

Mr. BURR. I thank the chairman.

Ms. Bailey, I realize you have only been there for 3 weeks,

but——

Ms. BAILEY. It seems longer.

Mr. BURR. It will seem even longer at the end of today, let me

assure you. Do you believe that the internal process at NHTSA is

one today were State Farm or any insurance company to send an

e-mail that looked like the e-mail that was sent before, a pattern,

21 specific examples, two deaths, is that something that NHTSA

today would respond to with at least a preliminary investigation?

Ms. BAILEY. I don’t know that the 21 would initiate even a preliminary evaluation, but I will say we clearly would respond differently today.

Mr. BURR. What triggered the preliminary investigation in the

spring of this year?

67

Ms. BAILEY. The history is that over a 10-year period in the

1990’s we had received 46 complaints. There was one fatality in

that, but again, that is that each year during those years, that was

about five complaints a year. So it had not triggered an evaluation

at that time—investigation.

Mr. BURR. Did it have anything to do with the Texas history and

the 25 calls?

Ms. BAILEY. Absolutely, because what that resulted in, we began

to investigate and tried to obtain information which was not forthcoming from KHOU, but it did double the number of complaints

that we received at NHTSA. So that as that occurred over the next

couple of months, it became very apparent we did have a trend,

and we opened the investigation on May 2.

Mr. BURR. But the 21 that State Farm pointed out got lost somewhere. If it hadn’t, if 25 then triggered it, wouldn’t 21 have triggered it if somebody had paid attention to the State Farm?

Ms. BAILEY. We had revisited that, and remembering that tires

are treated in a different manner than a seat belt and that was

over a decade, it still would not, even combining those two statistics, would not have triggered an evaluation.

Mr. BURR. So there’s been no change in the internal process at

NHTSA, since this investigation began, before and after?

Ms. BAILEY. We had a change 2 weeks ago in that we are now

reviewing partly to prepare for today, but partly because I’m reviewing what it is that has occurred in this investigation and how

it is that NHTSA completes its mission.

Mr. BURR. NHTSA has a monthly service bulletin, am I correct,

in the terminology that I use, some type of bulletin?

Ms. BAILEY. We are not sure what you mean, but there is a press

release that goes out on a regular basis, if that’s what you’re referring to.

Mr. BURR. What was the date of the first one that specifically addressed the concern with these tires?

Ms. BAILEY. I don’t think that——

Mr. BURR. They’re two different things?

Ms. BAILEY. They’re two different things.

Mr. BURR. I wouldn’t think that a press release—it’s my understanding there is some type of monthly publication that NHTSA

puts out. Am I incorrect?

Ms. BAILEY. But it would not include this information. It’s on recalls, the monthly bulletin you’re talking about identifies the recalls.

Mr. BURR. Okay, let me move on. You mentioned earlier if we

only had a million dollars more we could do this. Where specifically

were you talking about that million dollars?

Ms. BAILEY. That’s for the Office of Defects Investigation. It

would mean we could hire more investigators. It means we could

do more testing.

Mr. BURR. What’s your budget this year?

Ms. BAILEY. It means we could do—the budget is approximately total for NHTSA, $400 million. It is $395-plus.

Mr. BURR. It’s 362 according to the Transportation Committee.

Of that, how much of it’s the administrator’s office and staff?

Ms. BAILEY. How much is what?

68

Mr. BURR. The administrator’s office and staff.

Ms. BAILEY. Administrative staff?

Mr. BURR. Administrator’s office.

Ms. BAILEY. To break it down for you, what’s really important to know is that if you round it off to about $400 million just for the

sake of ease, about half of it goes to grants first of all.

Mr. BURR. But specifically, the administrator’s office is about 10

percent of it, right?

Ms. BAILEY. No, it’s not 10 percent. We’ll give you the number

in a minute.

Mr. BURR. That’s $35 or $36 million of $366—they’re shaking

their head. I’ll go by the numbers that I have got. Why short term?

Why don’t we reprogram within that—— Ms. BAILEY. Reprogram?

Mr. BURR. Why can’t we move money from an area—— Ms. BAILEY. We’re doing some of that right now—— Mr. BURR. [continuing] that is administrative to an area that

gives us the staffing capabilities or the resource capabilities to address hopefully a short-term problem?

Ms. BAILEY. We have done that. In fact, we have reassigned staff

and reallocated funds because of this investigation.

Mr. BURR. The one thing that has gone without mention I believe

today is that Congress 6 years ago started a new program that is

outside of NHTSA’s budget. It is the Hotline. The Hotline has in- creased from an appropriation of about $500,000 to $1.2 million or

$1.3 million.

Ms. BAILEY. But I understand it has been cut back some this

year; and we would like to see that fully funded, too, because that

is where most of our information comes in.

Mr. BURR. I wait patiently in hopes that we will get appropriations bills signed this year, but today I am not too optimistic.

Mr. TAUZIN. The gentleman’s time has expired.

Mr. BURR. The chairman has been very generous. I thank Ms.

Bailey for her testimony, and I yield back.

Mr. TAUZIN. The Chair recognizes the gentleman from Maryland,

Mr. Wynn, for a round of questions.

Mr. WYNN. Thank you, Mr. Chairman.

Dr. Bailey, welcome. I don’t envy you with only 3 weeks under

your belt, so when I use the term ‘‘you’’, I am not referring to you,

I am referring to the agency.

Several questions. First of all, it says that NHTSA had received

46 complaints over 9 years by the end of 1999. Is that sufficient

to initiate a preliminary investigation?

Ms. BAILEY. No, because that is out of a population of 47 million

tires over several years, and at the same time we were receiving

approximately 5 per year about Firestone. We had hundreds from

other tire companies.

Mr. WYNN. Is there a specific threshold number that is utilized

to initiate a preliminary investigation?

Ms. BAILEY. There is not a specific number, but it is certainly not

5 a year.

Mr. WYNN. But 5 a year represents an average. But if most of

them had occurred in the last couple of years, would that not have

kind of triggered a concern?

69

Ms. BAILEY. Part of what I am looking at as a new administrator

is what those thresholds would be, and we are doing that right

now.

Mr. WYNN. So there is a review—— Ms. BAILEY. As I say, the difference between a child safety restraint device and tires, so it is difficult to come up with a formula.

But I do believe we should develop a threshold model.

Mr. WYNN. So you are going to do that internally through regulation and won’t need legislation, is that safe to assume?

Ms. BAILEY. Right, and it clearly wasn’t 46 over 9 years, but yes,

yes, sir, we will.

Mr. WYNN. Okay. And when you look at that, do you give any

additional weight to the number of fatalities as opposed to just

complaints?

Ms. BAILEY. Clearly, catastrophic crashes and fatalities would

weigh into that formula.

Mr. WYNN. Did that 46 include the 21 that were reported by

Firestone?

Ms. BAILEY. That 46 did not. We are still evaluating where there

may have been some overlap, but it doesn’t appear that it did overlap.

Mr. WYNN. Okay. One of the things that concerned me was a report contained in the committee—well, a statement contained,

rather, in the committee report suggesting that when they inquired

about the 21 the agency was not able to produce any evidence or

recollection of it, but yet they actually found the case summaries

of 21 cases in the files of your agency. Is that—first of all, is that

true?

Ms. BAILEY. Yes. Apparently, the document that I referred to is

the document that was reconstructed, and it does have specific information that was available through NHTSA.

Mr. WYNN. Okay. So is it fair to assume that someone within the

agency misspoke about the existence of the 21?

Ms. BAILEY. The existence of the claims—what we are differentiating here is that Mr. Beretsky apparently did not remember.

That is different than it not existing. So we did have information.

He didn’t recall the information.

Mr. WYNN. Okay, fine.

Mr. TAUZIN. Would the gentleman yield for a second?

Mr. WYNN. Yes, Mr. Chairman.

Mr. TAUZIN. I thank the gentleman. I will give him additional

time.

The point I think the gentleman is making, though, is that you

received information over these years of incidents of failure. You

have counted them up. 49?

Ms. BAILEY. Well, this is different. This is the 21——

Mr. TAUZIN. That is my point, and I think that is his point. During that same period, you received an e-mail saying here is 21.

Here is a description of what happened. And somehow that got

filed away and never even got counted. I think the gentleman is

asking, what happened here? Why was it ignored in the analysis

the agency was making as it counted all of these incidents as coming into the agency? I thank the gentleman.

Would the gentlewoman respond?

70

Ms. BAILEY. There is a difference between a claim and a complaint. There should not be, though. I agree with you, that clearly,

even though these were claims obtained through an informal relationship between the one company, the one insurance company of

them all that does relate to us in that fashion, even though that

was an informal arrangement, there should be a mechanism, and

I certainly will put one into place and hope to widen our ability to

obtain that information to other insurance companies so that it

does not remain informal or separate from our normal process of

acquiring a data base.

Mr. TAUZIN. I thank the gentleman and the gentlewoman. The

Chair will extend the time for the gentleman another minute.

Mr. WYNN. Thank you, Mr. Chairman.

Dr. Bailey, do you have any mechanism for getting information

on recalls that occur in other countries?

Ms. BAILEY. At this time we do not, and they are not—a manufacturer is not obligated to provide that, but we will.

Mr. WYNN. All right. And you were clear—I think in response to

several of my colleagues you said that you definitely want the authority to compel that information?

Ms. BAILEY. Yes, sir.

Mr. WYNN. Okay. Mr. Ono in his testimony, his written statement, says that he met with you on August 8 and reviewed what

he knew, and then he voluntarily initiated the recall. Was that

meeting at your invitation, or was that—did they indicate they

wanted to come in? What were the circumstances of that meeting?

Ms. BAILEY. We arranged that meeting and recommended the recall on August 8.

Mr. WYNN. You actively recommended the recall?

Ms. BAILEY. Yes.

Mr. WYNN. But to your knowledge, had his company taken—I am

sorry, go ahead.

Ms. BAILEY. Just saying the dates are off. The actual meeting

was the 4th where we recommended the recall, but that sounds

wrong to me, too.

All right. On the 4th was the meeting where we recommended

the recall. On the 8th, they agreed to do so; and on the 9th, they

did the recall.

Mr. WYNN. I just want to clarify who took the responsibility here.

Because there is a suggestion or implication that perhaps they

came in and wanted to be good corporate citizens, and I want to

clarify that it was at your request that they came in, and that is

what resulted in the recall, and absent your request that it perhaps

may not have happened?

Ms. BAILEY. No, that is exactly how it happened, that we initiated the meeting recommending the recall, and that they agreed to

the recall and did so on the 9th.

Mr. WYNN. Okay.

Mr. TAUZIN. The gentleman’s time has expired.

Mr. WYNN. Thank you, Mr. Chairman. You have been very generous.

Mr. TAUZIN. Thank you, Mr. Wynn.

The Chair now recognizes the gentleman from California, Mr.

Rogan.

71

Mr. ROGAN. Mr. Chairman, thank you.

Dr. Bailey, although you may not have always felt it over the last

couple of hours, your presence is welcome here today.

Ms. BAILEY. Thank you very much.

Mr. ROGAN. I echo the appreciation for you coming.

Something my friend from Maryland just asked triggered a question. Is there really a difference in the way NHTSA would handle

a potential safety problem if the information came to them by way

of an informal information channel versus a formal complaint?

Ms. BAILEY. Unfortunately, in the past, that was the case. I don’t

think it was intended to be. I think there is a human error factor

here, if you will, or a systems problem, and we are going to clearly

correct that. That should not be the case. Any information that

would let us know the possible defect or need for an investigation

should be part of the data base. At this point, there is no real

mechanism for claims, because that is not something we are routinely obtaining.

Mr. ROGAN. So despite the seriousness and the potential safety

hazard of information that would come to NHTSA under your predecessors, that would never have made it into the data base if it had

not come in by way of a formal complaint?

Ms. BAILEY. No, it should have and would have by all rights. Apparently, this did not happen in this case.

Mr. ROGAN. When the State Farm information was received in

1998, was it actually received by Mr. Beretsky?

Ms. BAILEY. Apparently, it was another individual who took the

actual information; and the safety defect specialist was Mr.

Beretsky who reviewed. But there was another individual who actually took the information.

Mr. ROGAN. But Mr. Beretsky would have been the receiving official back in 1998; he isn’t just a person that reconstructed this in

a recent memo?

Ms. BAILEY. Correct.

Mr. ROGAN. Under the protocols of 1998, when information was

received from a single source of 21 problem tire incidents, including

two fatalities, was it the protocol of NHTSA then to enter that into

the data base?

Ms. BAILEY. That should have been entered into the data base,

yes.

Mr. ROGAN. And for some reason, that never happened?

Ms. BAILEY. Apparently, it did not happen.

Mr. TAUZIN. The Chair will extend the time of the gentleman for

at least 30 seconds.

Mr. ROGAN. Do you have any information in your files from 1998

to indicate that complaints about these tires had come into NHTSA

from some source other than the State Farm representative?

Ms. BAILEY. Yes. There would have been information as part of

the complaints that I mentioned that occurred during the 1990’s

where we were gathering information and it was in the data base.

Mr. ROGAN. As of 1998, how many complaints, or information of

specific incidents, did NHTSA have in relation to these tires?

Ms. BAILEY. I could give you the exact number, but it must have

been—being we got 246 by the year 2000, it must have been in the

high 30’s, I would imagine.

72

Mr. ROGAN. Typically, would that be sufficient to trigger a preliminary investigation?

Ms. BAILEY. Not with the population of 47 million tires, when

there were hundreds of complaints about other tires being received

at the same time that we were receiving per year 3 or 7 about

these particular tires, so it would have not prompted an investigation of these tires.

Mr. ROGAN. As to the complaints that you had received by the

end of 1998, were they generic complaints of all kinds of different

problems, or did they all appear to be essentially the same problem

with the same type of vehicle?

Ms. BAILEY. There were different types of problems mixed in.

They were not all tread separation problems.

Mr. ROGAN. Were the bulk of the complaints received about tread

separation?

Ms. BAILEY. I believe the majority of them were tread separation,

is that correct?

They don’t want to say that, so we will provide that for the

record.

Mr. ROGAN. Okay.

Ms. BAILEY. I know a lot of them were.

[The following was received for the record:]

A global search of NHTSA’s Office of Defects Investigation’s (ODI) general database (DIMSII) for all complaints on Firestone tires from January 1, 1990, to December 31, 1998, reveals a total of 356 records, which in turn, when duplicate records

are eliminated, represent 336 distinct consumer complaints. Of these, 14 mention

the words ‘‘. . . tread separat...’’ in the text of the complaint. This would include

‘‘tread separated’’, ‘‘tread separating’’, ‘‘tread separation’’, etc.

A more focused search in DIMSII for complaints about Firestone ATX, ATX II,

and Wilderness A/T tires for the same time period reveals 14 records, one of which

mentions ‘‘tread separation.’’ This is the number of complaints that would have been

seen by a screener looking at the DIMSII consumer complaint data for these tires

at the end of 1998.

During the spring of 2000, as part of her preparation for the formal opening of

the Firestone investigation, the ODI investigator searched DIMSII using a broader

definition for all reports relating to Firestone tires and tires regardless of make on

Ford Explorers. She then reviewed each complaint summary to identify those that

seemed to be within the scope of the anticipated investigation. This effort yielded

32 reports received by NHTSA by the end of 1998,11 of which mentioned ‘‘tread separation’’ on the original document. After the formal opening of the investigation, an

additional four reports were identified to have involved tread separation, so of these

32 reports, 15 are now known to have involved tread separation.

Mr. ROGAN. Mr. Chairman, thank you. I yield back.

Mr. TAUZIN. I thank the gentleman.

The Chair recognizes the gentleman from Minnesota, Mr. Luther.

Mr. LUTHER. Thank you, Mr. Chairman.

First of all, before I ask any questions, as I understand it, you

have issued an advisory recommending the recall of an additional

1.4 million. So my question is, what kind of a danger is posed, in

your view, by those additional tires?

Ms. BAILEY. Let me, first of all, say that I think that was excellent work on the part of the NHTSA staff. It shows that, even during an investigation, they are acquiring data at a rapid rate; they

are analyzing the data; and when they see a serious safety problem

like was apparent in the high tread separation rates of those additional almost 1.5 million tires, they were alert enough to make me

73

aware of that. We were able then to recommend a recall, but, more

importantly, let the American public know about the danger.

Mr. LUTHER. Thank you. And where does that stand as of this

time? You recommended it, and where does the recall of those additional tires stand?

Ms. BAILEY. We are not able to direct a mandatory recall until

we finish the complete investigation, which was why it was important that we do the consumer advisory, because that could be theoretically as long as a year, though I want to see this completed

within 6 months.

Mr. LUTHER. Have you received any response as of this time to

your recommendation?

Ms. BAILEY. From the manufacturer?

Mr. LUTHER. Right.

Ms. BAILEY. Firestone did not choose to recall those tires at that

time, and I am sure you can—they could make a statement to that

effect as to the reasoning.

Mr. LUTHER. Now I would like to go back to the discussion——

Ms. BAILEY. Let me just add, it was a short timeframe. We determined on the 30th that we had a serious problem, and on the 31st

they determined they didn’t want to make a recall. As you know,

that was going into the Labor Day weekend; and we did not feel

we could withhold that information from the American public about

1.4 million tires.

Mr. LUTHER. Sure.

Back to the information you received 2 years ago from State

Farm. The question that comes to my mind is whether or not the

individuals within the agency had the necessary statutory and regulatory authority and tools, if you will, to act upon that information. You have already indicated, I believe, if I understand it, that

recalls outside the country are not something you could—you are

entitled to get information on. Does that also extend to any activities outside the country—and I believe you have also indicated that

you were not entitled to get information on claims. I assume that

applies to both outside the country and within the United States.

I would like you to verify, if you could, my understanding on

those two points, and are there other constraints because your

agency would not have the appropriate statutory and regulatory

authority so that they would be limited when put on notice of a

possible problem?

Ms. BAILEY. First, we would have to have the authority to obtain

the information, and then we could use that information in order

to deal with the particular manufacturer in the same way we are

in this investigation.

Mr. LUTHER. And that is why I asked the question. What I would

like to know is, in what areas do you not have necessary statutory

or regulatory authority in order to get the job done for the American consumer? You have indicated a couple already. Claims information, you would like to have that authority, as I understand it.

Second, you would like to have authority to get any kind of information necessary, I assume, from outside the United States, not

just recall information but claims information and presumably

other information. What else, in addition to that?

74

Ms. BAILEY. Well, those are the two main issues here. If the

claims information that we now know of were made available, it

would have changed the course of events here. If we had known

about the foreign recall or replacements, that also could have

changed the course of events. So those are two areas that are high

on my priority list to look at in terms of our authority and being

certain that, in the future, we are able to obtain that data.

Mr. LUTHER. So basically what you are saying is that in 1998

your employee did not have the authority to go to a manufacturer

and say, please tell us if you have had complaints or problems; is

that correct?

Ms. BAILEY. We could go to a manufacturer and request that information. We couldn’t—there was no obligation of the manufacturer to provide information from outside the United States.

Mr. TAUZIN. Would the gentleman yield for a second?

Mr. LUTHER. I will yield, Mr. Chairman.

Mr. TAUZIN. The staff has asked me to clarify this, Mr. Luther,

and I will yield additional time, if you don’t mind.

Our understanding is that you do have the authority to request

of a company like Firestone or Ford information referenced to recalls or replacements in other countries. You could request that at

any time. And the question is, if you did hear about an action in

Venezuela or Saudi Arabia, if that came to your attention, doesn’t

your agency today have the authority to say, tell us about what is

going on in Saudi Arabia or Venezuela? And if you do, what would

be the obligation of the company to whom you sent such a request?

Ms. BAILEY. They are not obligated to provide us with information about defects or recalls in other countries.

Mr. TAUZIN. They could refuse to answer the questions you asked

them?

Ms. BAILEY. I guess what you are asking is, if we make the request of information, would they give that to us, versus them being

obligated to provide it.

Mr. TAUZIN. Without a request.

Ms. BAILEY. Yes. If we were aware of it and made the request,

they would provide that.

Mr. TAUZIN. So that what you are saying is that, absent a request from NHTSA, they don’t have a legal obligation to voluntarily provide you the information.

Ms. BAILEY. Exactly.

Mr. TAUZIN. But you always had and have today the capacity to

request that information, in which case you would receive it, would

you not?

Ms. BAILEY. Yes.

Mr. TAUZIN. Mr. Luther, I yield back.

Mr. LUTHER. Thank you, Mr. Chairman.

So you are saying that, if you make a request, there is an obligation then to respond to that request, even if it includes information

from outside the country?

Ms. BAILEY. Yes.

Mr. LUTHER. And would that be true of claims also, whether outside or inside? In other words, could you make a request?

Ms. BAILEY. Made a request——

75

Mr. LUTHER. If you made a request for claim information, what

claims have been filed outside and inside the United States, would

they be under an obligation to provide that?

Ms. BAILEY. If we made the request, yes.

Mr. LUTHER. Finally then, let me, before I wrap up, on that current advisory recommending 1.4 million more tires, how serious a

danger is that currently to the American public, in your view?

Ms. BAILEY. I felt it was serious enough to do the first consumer

advisory during an investigation that has ever been done by

NHTSA. The point being is that I looked at the data. There were

tread separation rates in the tires that were proposed. Again,

sometimes it was a small population, but sometimes it was 100,000

produced or 200,000 produced, and those tread separations were

significantly higher, sometimes several times higher than the tread

separation rate of the tires that were already recalled.

Mr. LUTHER. So if I understand what you are saying, then that

recommendation for another 1.5 million tires in your view is presenting a very serious safety hazard to the American public as of

this time?

Ms. BAILEY. Serious enough where I would still recommend a recall of those tires.

Mr. LUTHER. Okay. Thank you.

Mr. TAUZIN. I thank the gentleman.

The Chair recognizes the gentleman from Illinois, Mr. Shimkus.

Mr. SHIMKUS. Thank you, Mr. Chairman. We have gone over this

before, but, for myself, defects get reported, claims do not?

Ms. BAILEY. The obligation to report? Yes. If you know of a defect, if a manufacturer knows of a defect, they are obligated to report that to NHTSA.

Mr. SHIMKUS. But if there is a claim, that doesn’t mean that a

defect reporting has been done?

Ms. BAILEY. Correct.

Mr. SHIMKUS. And if there is an industry-to-industry—say that

there is a blowout and the insurance company pays out to the

claimant. The insurance company then goes to Firestone and says,

okay, this is a faulty tire; pay me what I had to pay in the claim.

That is not reported?

Ms. BAILEY. That is not reported either.

Mr. SHIMKUS. And I think those are things that we need to probably have added to your tools—— Ms. BAILEY. Exactly.

Mr. SHIMKUS. [continuing] so that we can connect the dots better

than having a TV station do it for us, would you agree?

Ms. BAILEY. Right.

Mr. SHIMKUS. What would also help connect the dots is if we

knew and if industry knew that they were making recalls overseas

that that was reported back to you?

Ms. BAILEY. Right.

Mr. SHIMKUS. Mr. Chairman, that is all the questions I have. I

yield back.

Mr. TAUZIN. The Chair recognizes the gentlewoman from Missouri, Ms. McCarthy.

Ms. MCCARTHY. Thank you very much, Mr. Chairman.

Dr. Bailey, thank you very much for your testimony here today.

76

I wanted to spend a moment with you on an item that was in

the Wall Street Journal today from a column by Timothy April on

Firestone, who has been here before, where it talks about in the

wake of the 1978 recall there were a flurry of proposals—probably

by members of this committee more senior than I; this is only my

third term here—for regulatory changes aimed at tightening——

Ms. BAILEY. It is only my third week. I just thought I would

share that with you.

Ms. MCCARTHY. So I am speaking with someone even more junior.

All these notes were dropped or sharply watered down after the

Reagan administration came into office and proclaimed one of its

goals to be lightning the regulatory burden on businesses. And the

article goes on to talk about a number of proposals, one to require

the auto and tire industry to come up with a system for warning

drivers when pressure in their tires have dropped, other proposals

about under-inflation and so forth, requiring tire makers to print

identification numbers on the exterior. I think some of these have

been mentioned by other members in questioning earlier today.

But the article goes on to point out that most tire makers, including Bridgestone and Firestone, say they favor updating regulation;

and in a panel much later today Clarence Ditlow from the Center

for Auto Safety is going to talk about some of the standards that

do need to be upgraded and that have not been acted on by your

administration. So I wonder if I could just ask you a question or

two about some of these suggested changes; and if you have

thoughts on other standards that you intend to address and haven’t

shared with the committee, I would be glad to have you share those

at this time.

Do we now need standards on rollover protection, including

stronger standards on roof strength for rollover protection?

Ms. BAILEY. Yes.

Ms. MCCARTHY. Okay. And what about tire recalls and replacement policy? In 1978, tires didn’t last as long as they do now. Radial tires now last 55,000 miles or more. I was flying here today

on the plane sitting next to a gentleman reading these articles, and

we got to talking about it. And he had tires on a different vehicle

than Ford go out and he had had the car for less than a year—

or just over a year. So the warranty had expired, but the same

problem existed on his tires, and he managed to get them replaced.

But the manufacturer has no obligation to replace a tire for free

if it is more than 3 years old on some vehicles, 1 year on others.

Shouldn’t replacement policy be looked at and maybe have Congress remedy it by providing for reimbursement in the statutes or

something to make sure that consumers are protected?

Ms. BAILEY. You mean in a recall situation or a warranty situation?

Ms. MCCARTHY. Warranty situations where, in fact, a tire goes

bad because of a problem like this or another serious problem not

anticipated following the warranty expiration.

Ms. BAILEY. If it is a problem like this and it is a recall situation,

we do have an amendment that is at this time to extend the recall

period by several years.

77

Ms. MCCARTHY. What about if it is just a guy sitting next to you

on a plane today whose tires went out. He wasn’t hurt, and it just

happened, and he had to fight with lawyers and others to get them

replaced? Should the Congress take a look at recommending this,

or can you do that?

Ms. BAILEY. That sounds like a warranty issue for the manufacturer.

Ms. MCCARTHY. Exactly. That is what people at the Center for

Auto Safety are saying. Some of these things need to be rethought.

Tires last longer now, or the warranties have changed, and maybe

we need to take a look at that.

Ms. BAILEY. Well, again, I think that is part of our amendment

that extends the recall time. But I think, of what you have mentioned, I think the serious issues are the possibility of developing

a system so that most of us who would not be aware when our tire

pressure is incorrect would be alerted to that, a mechanism for

that. And our rollover rating system also I think is a real safety

issue. So those I clearly would support.

Mr. STUPAK. Would the gentlewoman yield?

Ms. MCCARTHY. Of course.

Mr. STUPAK. I want to follow up on one of the first questions you

asked.

Dr. Bailey, in this whole situation today, you have indicated you

only had a few reports about these tires, but we talked a lot about

1978 and the Firestone 500. So when I am driving down the road

and if I have a blowout, with all due respect I don’t think of

NHTSA. I go back to where I bought my tire and where I bought

my car, and that is what the American people do. We don’t really

think of calling you to report this.

In 1978, though, you said that Firestone 500—you had lots of

complaints, and that is how you learned about it. That is what

started this situation for the recall of the Firestone 500. We don’t

have that situation here today in 2000. What happened in that 20-

year period? Why was the agency able to act quickly or more quickly based upon numerous complaints in 1978 but not as quickly as

we would like to see here in 2000? What was the difference? Were

there policy changes? I think Ms. McCarthy hit on part of it in her

first question. What happened?

Mr. TAUZIN. The gentlewoman’s time has expired, but the gentlewoman may respond.

Ms. BAILEY. I would need to have the numbers to look at how

quickly they responded and to what number, but I think it brings

up the question of a threshold, and I think we do need to develop

a formula so that we have a clear threshold that takes into account

a variety of factors, including the stats and numbers of——

Mr. TAUZIN. The gentlewoman’s time has expired.

The chairman must move to recognize another member, unless

we get a unanimous consent request.

Ms. MCCARTHY. Mr. Chairman, I would request unanimous consent for an additional minute.

Mr. TAUZIN. Without objection, so ordered.

Ms. MCCARTHY. I yield to the gentleman from Michigan.

Mr. STUPAK. I think you will find, in 1978, NHTSA back then

had a good working relationship with garages, with tire garages,

78

repaired tires and things like that. In 1978, the information that

was gleaned that came through your agency was because we had

people back then, and as Ms. McCarthy said in her first statement

or her first question, there have been a number of budget cuts.

I know there has been a lot of talk about getting more money

and more money here where those budget cuts really hurt and

American consumers no longer have protection, is we don’t have

the eye and ears in the field like we did back there 1978. Now we

have to rely on the American people to alert us when something

is going on.

With all due respect, I just don’t think of NHTSA when my tire

goes out. You had people checking with the garages, and they

would see a pattern. Because a manufacturer does not have to report a tire or an automobile manufacturer does not have to report

unless they consider it a defect. And if you do not consider it a defect, there is no duty to report to you. Therefore, there is no knowledge on your part of a defect that is occurring.

With that, I yield back.

Mr. TAUZIN. Before he yields back, I think it is important to

point out that our investigators queried your personnel on that

very issue and we got a different answer. We were told that this

formal program was eliminated in the 1980’s, but NHTSA continues the informal contacts. The liaison office for NHTSA informed

our investigators that the formal program back in the 1980’s was

thought to be fairly useless. Is that accurate?

Ms. BAILEY. Which formal program?

Mr. TAUZIN. The formal program of having people in the garage

shops reporting to NHTSA?

Ms. BAILEY. We do still communicate with garages, yes.

Mr. TAUZIN. You still do that today.

Ms. BAILEY. With garages, yes.

Mr. STUPAK. But it is not a required formality like it was in the

1970’s where you actually had people going out there and doing it,

not relying on people to contact you. You actually took the initiative, and you didn’t need to wait and react, like we are here today.

Ms. BAILEY. Okay.

Mr. TAUZIN. I think the information was just sent in in those

days; and you still maintain those informal contacts, do you not?

Ms. BAILEY. There are still contacts made with garages.

Mr. TAUZIN. I thank the gentlewoman.

The gentlewoman’s time has expired.

The gentlewoman from New Mexico is recognized.

Mrs. WILSON. Thank you, Mr. Chairman.

I appreciate you being here, and I appreciate your endurance as

well.

In your testimony, I would like to get back to the State Farm

claim report in 1998 which you testified did not provide an indication that would justify opening a defect investigation. Yet, I have

from the staff investigation of the NHTSA documents, in 1994,

NHTSA opened a preliminary evaluation on Michelin tires—— Mr. TAUZIN. Document number 2, page 13, if people wish to refer

to it.

Ms. BAILEY. In this book?

Mr. TAUZIN. Document number 2, page 13.

79

Mrs. WILSON. It is a NHTSA decision document on opening a

preliminary evaluation on tread separation on a Michelin tire

based on five complaints which resulted in no injuries and no fatalities. Was there a change in the guidance for your employees between 1994 and 1998 as to what justified opening a preliminary investigation?

Ms. BAILEY. There at this time is not a formula that dictates

what the threshold is that would warrant initiating an investigation. Clearly, there needs to be, and that is one of the things I

think we will be identifying, whether or not—what is the criteria

for an investigation.

Mrs. WILSON. So is it now really just one guy’s call? Is it just one

person’s call within your agency as to whether they start this paperwork?

Ms. BAILEY. No, it is not one individual, but it is clearly within

the NHTSA staff, and it may not be an individual, but at the same

time, I don’t think it is a clear enough process. I don’t think we

have defined the mechanism well enough.

Mrs. WILSON. Looking back on it now, do you think that decision

to say this doesn’t meet the threshold for opening a preliminary

evaluation, do you think that was the right call?

Ms. BAILEY. You mean from the 21?

Mrs. WILSON. From the State Farm report in 1998 of 21 claims

and two fatalities?

Ms. BAILEY. Before I would determine what that threshold is, I

would want to analyze an appropriate formula for determination.

I am not sure that 21 over 8 years still necessarily reaches that

threshold, but I don’t understand three being the threshold either.

So I think we need to determine what is an appropriate threshold

when millions of tires are being produced.

Mr. TAUZIN. Would the gentlewoman yield for a second?

Mrs. WILSON. I yield to the chairman.

Mr. TAUZIN. I wish to correct the record. The 21 incidents reported we are told is over a 6-year period, not an 8-year and not

a decade but over a 6-year period.

I thank the gentlewoman.

Mrs. WILSON. Is it unusual for a company that is approached by

NHTSA to refuse to recall these other tires, these 1.4 million tires

you issued the warning on? When NHTSA goes to a company and

says we think you have a bigger problem here, is it unusual for a

company to refuse?

Ms. BAILEY. As you know, my tenure is short at this point, but

my review of this and what has been provided to me about the institutional memory, if you will, or the historical pattern is that,

generally speaking, when we recommend a recall and have statistics to support that, that, generally speaking, that is voluntarily accomplished with the manufacturer.

Mrs. WILSON. Now, this happened just before this last holiday

weekend. Were you surprised by Firestone refusing to expand the

recall?

Ms. BAILEY. Yes, I was surprised.

Mrs. WILSON. How did you react?

80

Ms. BAILEY. By saying then, we need to determine how we best

inform the American public about this problem, and we determined

that that was an advisory, and—— Mrs. WILSON. Were you told by Ford Motor Company about the

Saudi Arabia problem or about Venezuela?

Ms. BAILEY. We were not told until after we had already opened

the investigation—on May 2.

Mrs. WILSON. So there was no voluntary information provided by

Ford America that they had a problem overseas?

Ms. BAILEY. No.

Mrs. WILSON. For your employees, when they are deciding

whether to open a preliminary evaluation, are there guidelines? Is

there a criteria that they used that is formalized in any way within

your department?

Ms. BAILEY. For a preliminary evaluation, there is an initial assessment done previously in which we obtain data, review data,

analyze data, before doing the first phase of an investigation, which

is the preliminary evaluation. So there is an assessment of the data

that has been presented or obtained prior to opening the investigation that is done methodically.

Mrs. WILSON. What I am asking is, is there a policy and procedures manual? Is there training that is done that tells your employees, here are the criteria, here are the things that you should

take into account when you get consumer complaints or e-mails in

from insurance companies on how you are supposed to evaluate

this? What criteria you should use in deciding whether to start a

preliminary investigation, or to take that e-mail and put it in your

circular file?

Ms. BAILEY. Well, apparently, with an e-mail, in that informal

arrangement, that was either not spelled out or not clearly enough

spelled out as to what to do with that form of a warning.

Mr. TAUZIN. The gentlewoman’s time has expired.

The Chair recognizes the gentleman from New York, Mr.

Fossella.

Mr. FOSSELLA. Thank you, Mr. Chairman.

In an effort just to solidify the truth, I just want to make sure,

Dr. Bailey—there was an article in the Washington Post dated August 25 with Secretary Slater who said that regulators launched an

investigation into the problem of tires as soon as they received

complaints linking the tires to fatalities. Have I heard you correctly

today? You said that did not occur, right?

Ms. BAILEY. Clarify for me what your question is.

Mr. FOSSELLA. Well, regarding the State Farm e-mail in 1998,

presumably, the agency was notified 2 years ago, and you are

claiming that nothing happened, right?

Ms. BAILEY. It is important that—yes, there was one crash with

two fatalities in that group; and so, apparently, the Secretary was

not aware of that. But, at the same time, he did not necessarily

misspeak, because he was talking about the complaints, and that

is different than the claims. I don’t mean to—that should be—— Mr. FOSSELLA. I just want to set the record straight. Just so the

Congress knows and the American people know, nothing happened

when the agency was first notified, right? Regulators did not

launch an investigation 2 years ago, correct?

81

Ms. BAILEY. Correct.

Mr. FOSSELLA. So you are correct, and this is incorrect?

Ms. BAILEY. I believe—— Mr. FOSSELLA. You can’t both be right.

Ms. BAILEY. Absolutely, and that is incorrect, but I think the information he had at the time is what created the confusion.

Mr. FOSSELLA. Okay. And if I heard you correctly before with respect to the protocols, the claim in 1998, the e-mail should have

been logged, so this debate about funding is moot, because I think

you used the words it was a ‘‘human error?’’ Ms. BAILEY. If you are asking did I think the funding created

that problem, it did not create the problem.

Mr. FOSSELLA. It did not. So the conversations centered on funding had nothing to do with the fact that this e-mail was not logged

in 1998, right?

Ms. BAILEY. Right.

Mr. FOSSELLA. And is it safe to assume then that if that had

been logged adequately that it perhaps would have launched an investigation or it would have caused NHTSA to open an investigation about a year earlier?

Ms. BAILEY. My trend analysts tell me that, even combined,

given the population of tires and the years, 6 years for the State

Farm data and the 1991 to 2000 data of the 46 complaints, that

that would not still have triggered an investigation. But I think

what we recognize here is that we need to review whether or not

we have an appropriate threshold formula.

Mr. FOSSELLA. Okay. Regarding some of these, aside from this

review that is ongoing, you mentioned before about the standards

and the tests, and there is some debate as to Ford recommending

whether the high speed tests between 75 and 85 miles per hour,

32 pounds per square inch, Ford recommends 26. When did you

begin—when did the agency begin to reevaluate the standards inasmuch as it hasn’t happened I guess in 22 years?

Ms. BAILEY. Apparently not soon enough. I mean that seriously.

Mr. FOSSELLA. Is that what NHTSA has said, that we need to

change this?

Ms. BAILEY. I think there has been ongoing work, but I think it

was not the highest priority in that, prior to the previous recall,

there had not been—you know, of the two major recalls, I think

that it was not a high enough priority.

Mr. FOSSELLA. But you mentioned before I think that this is

going to be changed. There isn’t a date in the near distant past

that someone said we have to change this?

Ms. BAILEY. We are definitely updating at this time; and we have

a proposal coming in in the spring, which is still not soon enough,

given what——

Mr. FOSSELLA. I am just curious as to, if you think that is that

vital, why wouldn’t you do it tomorrow?

Ms. BAILEY. What I am saying to you here is that this is where

we are today. And in the last 3 weeks I have reviewed these issues

and that is one that I believe we need to expedite. We are, by the

way, looking to manufacturers for comments on that as well.

Mr. FOSSELLA. Okay. Fair enough. The notion that this foreign

recall and you can’t trigger an internal investigation until you are

82

notified, is there any proactive end of NHTSA to say, you know

what, folks, there is a recall in Saudi Arabia; there is a recall in

Venezuela; perhaps we should dive into this on our own.

Ms. BAILEY. Well, that is the point we were just making. Had we

had some sense that we should be regularly obtaining that information, requesting that information, that may have come to light.

I still don’t think that is the best method. I think, instead, we

should have authority to require that any recalls or replacements

or serious problems outside of the United States with products that

affect Americans should be reported to NHTSA. We need the authority to do that.

Mr. FOSSELLA. The last question, Doctor, is that you mentioned

before a lot of the regulatory reforms that I guess were talked

about in the 1970’s, and I believe if I heard you correctly, you said

they were not implemented because of the cuts in the 1980’s. Have

there been any of these regulatory changes that were proposed in

the 1970’s done in the last, say, 7 or 8 years?

Ms. BAILEY. Of the ones we mentioned, no.

Mr. FOSSELLA. So it wasn’t anybody’s fault. Again, I am not trying to point fingers here. They were proposed in the 1970’s; you

said they weren’t implemented in the 1980’s. Presumably, you

would have had the power—not you personally but the agency—in

the last 4 to 7 years, and that wasn’t done, right?

Ms. BAILEY. That was not done.

Mr. FOSSELLA. Thank you very much.

Mr. TAUZIN. The Chair recognizes the gentleman from Illinois,

Mr. Rush.

Mr. RUSH. Thank you, Mr. Chairman.

I know that you have been here for probably longer than you

would have liked to have been, and hopefully this will be very

brief.

My first question to you is, why has NHTSA allowed Ford to sell

tires that can be filled to PSI beyond the Federal testing standards? If that is the case, then why is that the case?

Ms. BAILEY. You mean Ford’s recommendation to set it at 26

pounds per square inch rather than above 30?

Mr. RUSH. Right.

Ms. BAILEY. There is not, to my knowledge, a mechanism in

place that would allow us to interfere with that kind of a recommendation, but I think it is a valid point and something I would

like to review.

Mr. RUSH. Do you think that there is possibly some type of regulatory initiatives that you would be able to undertake?

Ms. BAILEY. There may be, but I think the question is really one

for Firestone, too. They produced the tires and recommended that

they be inflated at a higher rate, so that is where perhaps the

question—the answer would lie.

Mr. RUSH. Okay. If you had known in 1997 or 1998 about the

Middle East and the recall in the Middle East and also Venezuela,

can you comment on what you think that your agency might have

done had you had that information?

Ms. BAILEY. I would have initiated an investigation.

Mr. RUSH. Do you think—what do you recommend that this Congress do to assist you in terms of giving you more statutory authorVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00090 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
83

ity or regulatory authority to ensure that this problem doesn’t reoccur in the future?

Ms. BAILEY. I hope to very quickly determine what our regulatory authority is, and if we don’t have enough, I would want to

work with Congress to get a statutory remedy for that.

Mr. RUSH. Thank you, Mr. Chairman. I yield back.

Mr. TAUZIN. I thank the gentleman.

The Chair recognizes the gentleman from Oklahoma, Mr.

Largent.

Mr. LARGENT. Thank you, Mr. Chairman.

Dr. Bailey, welcome to Washington. I hope you brought a dog.

This is kind of baptism by fire, I think. My colleague from Illinois

said that you have probably been here longer than you had hoped.

I would say just the opposite. I wish you had been at NHTSA

longer than you have and that your organization would have sent

somebody that actually had been in place that we could ask questions of here today.

Why would the National Highway Traffic Safety Administration

send somebody that has only been there for 3 weeks?

Ms. BAILEY. I hope because they have confidence not so much in

me but in the wonderful staff at NHTSA who work diligently to

provide safer highways for Americans.

Mr. LARGENT. Well, unfortunately, we don’t get to question staff,

we just get to question you, and I think that it was a poor decision

by NHTSA to send somebody that has only been there for 3 weeks,

so I apologize to you for kind of throwing you into this. But I do

have some questions based upon your testimony that you submitted to this committee.

Earlier, one of my colleagues asked you about a data base that

you received called FARS, Fatality Accident Reporting System. My

question to you, in your testimony it said on page 4, we opened a

preliminary evaluation on May 2, 2000. At that time, the agency

was aware of 90 complaints, including reports of 33 crashes and

four fatalities. Those figures, 90 complaints, 33 crashes, four fatalities that initiated the preliminary evaluation on May 2, were some

of those statistics derived from this data base called FARS?

Ms. BAILEY. No. They were all complaints that were received in

the normal fashion. No. To my knowledge, they were not part of

the FARS data, that that is information that was obtained in the

usual fashion.

Mr. LARGENT. Okay. Then that leads me to this question. It

seems to me some of my colleagues have alluded to the problem

that at NHTSA really was that you did not have enough information. I would suggest that maybe you had too much information.

Because my question then goes back to this FARS, Fatality Accident Reporting System, that contains all vehicle-related fatalities

reported to NHTSA by law enforcement.

Mr. TAUZIN. The committee will please be in order. There is a

buzz.

Would the gentleman restate his question?

Mr. LARGENT. What the heck do you guys do with this data base

that is reported to you by statute from all of the law enforcement

agencies around the country? What do you do with this? Because

in, let’s see, it says from 1998, from the end of 1998, you had inforVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00091 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
84

mation in that data base given to the National Highway Traffic

Safety Administration that there were 29 fatalities from accidents

in a Ford Explorer fitted with Firestone ATX, ATX II, or Wilderness tires. What is the problem there? You have all of this information from 1998, and yet it takes—you either ignore this or don’t

look at it, or what happens to this information?

Ms. BAILEY. The 1998 data you are referring to is the State Farm

data?

Mr. LARGENT. No, I am not. I am referring to the FARS, Fatality

Accident Reporting System, that you had access to at the end of

1999 that reported 29 fatalities from accidents in a Ford Explorer

fitted with Firestone ATX, ATX II, or Wilderness tires that the

agency had access to. What is going on with that data base? What

are you doing with it?

Ms. BAILEY. I assume that is included in the information of the

46. I will provide that for the record and ascertain the answer to

your question.

Mr. LARGENT. Do you understand what I am saying? In other

words, you had this information a year ago.

Ms. BAILEY. I think that is part of the data base.

Mr. TAUZIN. Would the gentleman yield for a second?

Mr. LARGENT. Sure.

Mr. TAUZIN. The 46 instances that you keep referring to are complaints from consumers who called in and reported incidents to

you, correct?

Ms. BAILEY. Correct.

Mr. TAUZIN. What Mr. Largent is referring to is a law enforcement reporting system that reported to you, separate of any constituents or consumers’ reporting, 29 deaths related to Ford Explorers fitted with these Firestone tires, and that information was

available to you as early as—when was that?

Mr. LARGENT. In 1999.

Mr. TAUZIN. In 1999. It was a 1998 statistic. The question he is

asking is, why didn’t that trigger action by the agency?

Ms. BAILEY. If, in fact, that information is totally separate from

the data that we received in that year, 1997, which did include the

information I referred to in that decade, then I would want to know

why that information was not combined in the data base. But there

is the possibility that it is. I will take that for the record and ascertain exactly what happened to that information and whether or not

it overlaps with the——

[The following was received for the record:]

Yes, the there are two separate data bases. However, the FARS database did not,

and does not, indicate the manufacturer, brand, or model of tire that was on any

of the vehicles involved in a fatal crash. Thus, there is no way to search FARS to

see if any particular brand or model of tire is over represented in fatal crashes.

After the Office of Defects Investigation (ODI) decided to open its investigation

into Firestone tires, and after the agency became aware that most Ford Explorers

were originally equipped with the tires under investigation, ODI worked with the

staff of NHTSA’s National Center for Statistics and Analysis (NCSA) to identify

fatal crashes in FARS involving Ford Explorers in which the item ‘‘tires’’ was listed

as a related factor. This was done because ODI wished to ascertain whether the

tires on those vehicles were covered by the investigation. That effort is ongoing.

The questions raised by the Committee suggest a need to consider linking the

FARS data base and the consumer complaint data base, if such a linkage would improve NHTSA’s ability to detect safety-related defects. A related question is whether

changes in either data base could increase the benefits of such a linkage.

85

Mr. TAUZIN. Steve, if you will yield again, I want you to get a

picture of our frustration with this system. Here we have an agency that is receiving independently by 1998, by your testimony,

about 30 complaints of tire failures, most of them separations leading to serious injuries or accidents, what have you. You have a

State Farm report that is filed to your office with another 21 incidents, two fatalities. You have a FARS report coming in from the

law enforcement agency saying 29 fatalities. You are getting an

awful lot of information. Mr. Largent is pointing out that you are

getting a heck of a lot of information that something is terribly

wrong out there. People are dying in Ford Explorers outfitted with

these Firestone tires. Nothing happens until a station in Houston,

Texas, runs an expose on it in 2000.

The frustration we all have with this is the argument your agency is making that you weren’t getting enough information. You

were getting information by people dying on the highways constantly from State Farm, from FARS, from individual complaints

to your agency, and nothing happens. And the concern we all have

is, why didn’t that trigger something happening? Why was five

complaints without a fatality in 1994 enough to trigger an investigation, but all of this information was not?

There is something—there is a disconnect here that I don’t understand, and I can’t for the life of me understand why anybody in

America could understand it today. And if we are going to move

from this place to a place where it doesn’t happen again, we have

to understand what broke down. Why did this e-mail get filed

away? Why did this FARS report get ignored? Why wasn’t there

somebody at the agency looking at all of this information together

and understanding that there was something awfully wrong on the

highways of America and that something ought to be done about

it?

I know you can’t answer that. That is what frustrates us, that

we don’t have a good answer to that.

I thank you, Steve. I am sorry, I got a little excited. But we are

talking about, again, life and death, and I don’t know how many

people—Mr. Wynn said it—how many people died unnecessarily because the recall didn’t come until 2000, when it could have come

in 1998 if somebody had been awake and not asleep at the switch

somewhere. Thank you, Steve.

Mr. LARGENT. Do I have any time left, Mr. Chairman?

Mr. TAUZIN. The Chair will extend the gentleman’s time.

Mr. LARGENT. Thank you very much.

Let me say that, in conclusion, I would just like to say that I appreciate where we are today. My chief of staff has a Mercury Explorer-like car with these tires on it, just got them taken off. Has

a little baby that is just turning a year old, so I am glad where we

are at now. The question is why we couldn’t have been there sooner

and if, in fact, as the chairman mentioned, we could have avoided

some of the tragedies that have occurred over the last 12 months.

My question, Dr. Bailey, would be, what, if anything, will the National Highway Traffic Safety Administration do differently as a result of this experience?

Ms. BAILEY. We will be answering some of the questions that are

asked here today. I am asking those same questions. I will cerVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00093 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
86

tainly look into the FARS data as to whether or not there is an

overlap between our data base and that information. As I have indicated, we clearly need in a global marketplace to have information from around the world. We are seeking to do that. We will find

a remedy for that, and we will find a way to obtain claims information that would have let us have the knowledge that would have

initiated an investigation sooner.

Mr. LARGENT. Thank you, Mr. Chairman. I yield back.

Mr. TAUZIN. I thank the gentleman.

If there are no further requests for time, Dr. Bailey, let me again

thank you. I know this was hard on you for only 3 weeks on the

job. You have, in my opinion, done a very remarkable job considering those circumstances.

Please tell your boss hello for us. I wish he had come today.

You are dismissed.

Ms. BAILEY. Thank you.

Mr. TAUZIN. The Chair will now call the second panel.

Before I do, let me make an announcement. There will be votes

at 6 o’clock, ladies and gentlemen. There will be a series of three

votes on the House floor. We will get interrupted for that vote, and

then we will come back and continue the hearings until we complete them. I apologize for the length of the hearings to all witnesses, but this is again awfully serious business.

We will call the second panel, which consists of Mr. Masatoshi

Ono, Chief Executive Officer of Bridgestone/Firestone, Incorporated; accompanied by Mr. Gary Crigger, Executive Vice President for Business Planning; and Mr. Robert Wyant, Vice President

of Quality Assurance.

Before we begin the testimony, I will recognize the gentleman

from Michigan to administer the oath. I believe you have to stand

up to do it. I failed to do that.

Mr. Upton is recognized to administer the oath of truthfulness.

Mr. UPTON. Gentlemen, as you understood from the first panel,

we have a long-standing tradition of taking testimony under oath.

Do you have any objection to that?

Mr. ONO. No.

Mr. UPTON. The committee rules also allow you to have counsel

if you want, counsel to help represent you. Do you desire to have

counsel represent you?

Mr. CRIGGER. We are advised by——

Mr. UPTON. If you could just announce his name for the record.

Mr. SMITH. I am Colin Smith of the law firm of Holland &

Knight.

Mr. UPTON. Okay. If you would raise your right hands.

[Witnesses sworn.]

Mr. TAUZIN. Thank you, Mr. Upton.

Mr. Ono, you are recognized to give your statement, sir. Your

written statement is a part of the record, and you have 5 minutes

to summarize that statement at this time.

87

TESTIMONY OF MASATOSHI ONO, CHIEF EXECUTIVE OFFICER,

BRIDGESTONE/FIRESTONE, INC.; GARY B. CRIGGER, EXECUTIVE VICE PRESIDENT, BUSINESS PLANNING; AND ROBERT

J. WYANT, VICE PRESIDENT, QUALITY ASSURANCE

Mr. ONO. Chairman Tauzin, Mr. Upton and members of the committee, thank you for providing me with this opportunity to appear

before you here today. I have practiced my speech so that I may

deliver it in English. However, I must use the translator and two

of my senior executives to respond to questions. I am 63 years old,

and I have never made a public appearance like this before, so I

am more than a little bit nervous.

As Chief Executive Officer, I come before you and apologize to

you and the American people, especially for the family they have

lost, loved ones, in these terrible rollover accidents. Also, I come to

accept full and personal responsibility on behalf of Bridgestone/

Firestone for the events that led to this hearing. Whenever people

are hurt or fatally injured in automobile accidents, it is a tragedy.

Whenever people are injured while riding on Firestone tires, it is

cause for great concern among Bridgestone/Firestone management

and our 35,000 American employees.

On August 8, we met with the National Highway Traffic Safety

Administration. We reviewed what we knew at that time about the

performance of the tires which are associated with tread separations and accidents primarily on the Ford Explorer vehicle.

On the following day, August 9, Bridgestone/Firestone announced

a voluntary safety recall of 6.5 million tires.

Since that time, our highest priorities have been to complete the

recall as quickly as possible and to determine the root cause of the

tire failures.

At this time, we have replaced nearly 2 million of the recalled

tires. We have maximized worldwide production of replacements for

tires that have been recalled. To speed up the process, we are using

our competitors’ tires and airlifting additional replacement tires;

and these shipments will continue as long as necessary.

We have a team working around the clock using all our available

resources to try and determine the root causes for the tire problem.

We are reviewing every aspect of our manufacturing and quality

control processes. This includes microscopic examination of many

recalled tires. In addition, we are working with Ford Motor Company and experts to thoroughly examine every possible cause.

Unfortunately, I am not able to give you a conclusive cause at

this time. However, you have my word that we will continue until

we find the cause.

While we search for the root cause, we are also undertaking the

following actions:

First, we will appoint an outside independent investigator to assist in tire analysis and determine the root cause of the tire problem we have experienced. We are taking this action to help assure

you and the public that Firestone tires are reliable in the future.

Second, we will fully cooperate with this committee about the

safety as well as problems that have occurred with our tires. We

will release data and information in order to assure consumer safety with our products.

88

Third, we are accelerating the rollout of a nationwide consumer

education program. The program will be run through more than

7,000 company stores and Firestone dealers. It will provide consumers with information on proper tire maintenance through the

use of in-store videos, showroom displays, brochures, windshield

tags, and tire pressure gauges.

Fourth, we pledge to continue working with NHTSA toward developing early understandings and complete reporting of accidents

and developing approaches that make it easier for drivers to determine tire pressure.

In closing, I would like to ask two of my senior executives to join

me so that we can more efficiently respond to your questions. Mr.

Gary Crigger is Executive Vice President of Business Planning, and

Mr. Bob Wyant is a Vice President of Quality Assurance.

Thank you, Mr. Chairman.

[The prepared statement of Masatoshi Ono follows:]

PREPARED STATEMENT OF MASATOSHI ONO, CHIEF EXECUTIVE OFFICER,

BRIDGESTONE/FIRESTONE, INC.

On August 9, 2000, Bridgestone/Firestone, Inc. (‘‘Firestone’’) voluntarily recalled

an estimated 6.5 million tires manufactured by Firestone in North America in the

1990s. Firestone undertook this massive effort in the interest of public safety and

in cooperation with Ford Motor Company and the NHTSA.

The recalled tires, all P235/75R15 Firestone Radial ATX and ATXII tires manufactured in North America and P235/75R15 Firestone Wilderness AT tires manufactured at its Decatur, Illinois plant, have been used for most of the last decade as

original equipment on light trucks and sport utility vehicles, including the popular

Ford Explorer.

Because of the safety issues involved, Firestone chose not to limit the recall to

a particular manufacturing period or to tires sold only in the last few years. Instead,

Firestone is replacing its customers’ tires or reimbursing customers who purchase

competitors’ tires, no matter how old and high mileage their recalled Firestone tires

might be.

A small percentage of recalled tires have experienced tread belt separations in a

number of serious accidents. It should be kept in mind that all steel belted radial

tires will ultimately experience tread belt separation if pushed to their limits. Tread

belt separations are usually caused by damage to the tires, improper repairs, overload, underinflation, or simply by using tires with excessive wear. However, such

separations can also be caused by defects. We are searching hard to determine

whether there was a design or manufacturing cause of these tread belt separations.

We believe the vast majority of the recalled tires are safe, but the incidents and injuries involving these tires led to the recall.

Since the recall was announced, there has been strong public reaction, most of it

negative. Firestone has received substantial criticism, including claims of shoddy

manufacturing processes and attacks on the quality of our workforce. Class action

lawsuits have been filed asking courts to order changes in the scope or timing of

the recall. Interest groups aligned with parties adverse to the tire industry have

urged that Firestone recall up to 34 million additional tires, despite a lack of any

basis for such a massive recall.

The facts are that Firestone’s actions in early August were both timely and adequate. Indeed, a more limited recall of tires would have been justified, but Firestone

broadened the recall to assure safety and consumer confidence.

Firestone vigilantly monitors data on the in-service performance of its tire lines.

We do product testing; we study warranty adjustment data; and, where possible, we

analyze failed tires returned from the field. All these indicators showed satisfactory

performance on the part of these tires. The ATX, ATXII and Wilderness AT tires

passed design, development and Federal Motor Vehicle Safety Standard testing, as

well as Ford’s development and test track requirements. Our warranty returns and

adjustment data place these tire lines roughly in the middle of all our lines. And,

our analysis of failed tires has shown that failures were caused by external damage,

by improper maintenance, or by operating with tire pressure significantly below the

26 psi level recommended for the Explorer by Ford.

89

Historically, Firestone has not used property damage and personal injury claim

data as a reliable indicator of tire performance. There are generally not a sufficient

number of claims from which to draw meaningful conclusions. However, because of

the growing number of failure reports this summer and the lack of any indication

of problems using the traditional methods of assessing performance, Firestone analyzed the claims data in a joint effort with Ford, and the analysis showed a substantial number of claims in the P235/75R15 size and an overrepresentation of tires produced in the Decatur plant. That analysis, coupled with reports of serious accidents

involving tread belt separations on Ford Explorers especially in hot climate states

led Firestone to decide on August 8, 2000, to conduct a voluntary recall for customer

safety reasons.

To reiterate, Firestone has not historically relied upon property damage and personal injury claims data in analyzing our tires’ performance. Property damage

claims do not involve injuries or death. They are claims people make, usually for

vehicle damage, and most of them never become lawsuits.

Firestone certainly knew there had been accidents and injuries involving tread

belt separations of our tires on Ford Explorers. Company and outside experts had

examined tires involved in a number of those accidents. Again, those analyses did

not suggest any problem with the tires. It was only when we focused on the property

damage and other accident claims data that we saw the potential problem with the

tires we ultimately decided to recall.

Working together with Ford, Firestone has taken extraordinary measures to speed

up the recall by urging other tire manufacturers to ramp up production, by airlifting

tires from Japan, and by significantly increasing the output of American plants.

Firestone is also reimbursing customers who replace recalled tires with competitors’

brands.

Firestone welcomes the opportunity to set the record straight in its testimony before the Committee. To that end, Firestone has given the Committee the documents

produced to the NHTSA and the Company’s responses to questions asked by the

Committee’s investigative staff. This testimony also provides further background information regarding the manufacture and use of tires and the reasons for and status

of the recall.

I. STEEL BELTED RADIAL TIRES AND TREAD BELT SEPARATIONS

Since its introduction in the 1970s the steel belted radial tire has become the predominant tire used on American vehicles, including passenger cars, light trucks and

sport utility vehicles. The term ‘‘steel belted radial’’ refers to a tire that includes

within the body of the tire multiple steel belts that provide support for the tread

and stability to the tire. Steel belted radial tires are manufactured in layers encased

in ‘‘skim stock,’’ or rubber compound. Once the layers are assembled in the tire manufacturing plant, the tire is ‘‘cured,’’ a process involving the application of heat and

pressure to the raw or ‘‘green’’ tire. What emerges from the curing mold is the finished tire, which is fully inspected before it leaves the factory.

The manufacture of steel belted radial tires is a complex procedure utilizing a

host of raw materials, assembly procedures, and other processes. Steel belted radial

tires have provided the American driving public with literally hundreds of trillions

of miles of safe service. However, unlike most of the components of a vehicle, tires

are subjected to continuous severe operating conditions because they are always in

contact with the road. Tires fail and tires wear out. This is why vehicles are sold

with spare tires and why in 1999 alone more than 270 million tires removed from

service were disposed of the United States.

If a steel belted radial tire is damaged or improperly maintained, the inner components of the tire may begin to separate, particularly when there is excessive heat

build-up within the tire, which is most commonly caused by underinflation. The

causes of underinflation are numerous, and include punctures, road hazards, improper repairs, and simple lack of maintenance. A steel belted radial tire operated

in a chronically underinflated state will tend to show inner component breakdown,

eventually leading to a tread belt separation.

Tread belt separations do not often lead to accidents. In most situations, drivers

are able to bring their vehicles to a safe stop on the side of the road. In some tread

belt separations and other tire disablements, drivers do lose control, and accidents,

including vehicle rollovers, can occur. If the driver in this situation has taken the

all important, and in most states mandatory, precaution of fastening the safety belt,

even vehicle rollovers are less likely to cause serious injury or death.

90

II. THE PERFORMANCE AND SAFETY RECORD OF P235/75R15 FIRESTONE RADIAL ATX, ATXII

AND FIRESTONE WILDERNESS AT TIRES

A. General Production Numbers and Usage of ATX and Wilderness Tires

Firestone manufactured the P235/75R15 Radial ATX tires from the mid-1980s

until this year. This tire type was approved as original equipment on the initial

Ford Explorer. The approved application was designed and manufactured to performance specifications provided and approved by Ford. When Ford redesigned the

Explorer in 1994, Firestone redesigned the tire, again to Ford’s performance specifications. Further vehicle design changes in 1996 led to the new P235/75R15 Wilderness AT tire, which replaced the Radial ATXII at approximately that time. Firestone

estimates that it has manufactured more than 20 million Radial ATX and ATXII

and Wilderness AT tires in the P235/75R15 size.

The Radial ATX and Wilderness AT lines have been used primarily for all-terrain

sport utility vehicles. Approximately seventy percent of Firestone’s production was

manufactured for original equipment installation primarily on Ford Explorers. The

other thirty percent was devoted to replacement tires used primarily on Explorers

and other SUVs.

Because of the solid field performance of the ATX and Wilderness lines on the

popular Ford Explorer, Firestone’s first notice of a lawsuit involving a claimed tread

belt separation and Ford Explorer rollover was in 1995. This case was ultimately

tried to a defense verdict in favor of both Ford and Firestone in Phoenix, Arizona.

B. Traditional Tire Industry Measuring Sticks for Field Performance

Since tires are constantly being changed, repaired, and replaced, the tire industry

has developed guidelines for tracking field performance, commonly known as ‘‘tire

adjustment data.’’ An ‘‘adjustment’’ occurs when a customer discovers. for example,

uneven or unusual wear on a tire, and brings the vehicle to a tire dealer or store

asking for a new or replacement tire. Depending on the reason for the customer dissatisfaction, the retailer ‘‘adjusts’’ the tire by providing the customer with either a

new replacement tire or by offering a discount on the customer’s purchase of a replacement tire.

In Firestone’s system, the retailers track and record this adjustment information,

using various adjustment codes for different tire conditions. Tread belt separation

is a common reason for adjustments on steel belted radial tires.

Adjustment data provide Firestone with a reliable measure of actual field performance of a particular tire. In contrast, data concerning property damage claims

and lawsuits, because of the relatively small numbers of such incidents, are not

viewed as reliable indicators of a tire’s performance in the field.

Adjustment data for the tires that are the subject of Firestone’s recall were within

the historically low range of all Firestone tire products, including the adjustments

for tread belt separations (Charts 1 and 2). In addition, the number of claims that

had been made against Firestone on these tires was consistent with the-high volume

of production and sales and with the vehicle application. On the lawsuit front. as

recently as May 31, 2000, Firestone had been notified of 71 lawsuits involving tread

belt separations of ATX or Wilderness AT tires.

Any incident of personal injury or death involving a Firestone product is a matter

of great concern to the Company. As previously noted, however, tread belt separation is essentially an inevitable characteristic of tire use in normal service, no matter how well the manufacturer designs and produces the tires. In a large production

tire line or type, there will be incidents of tread belt separations and, in America’s

litigious culture, damage claims.

The P235/75R15 tires in question are an exceptionally large population. The approximately 15 million Firestone tires used on the Ford Explorer are the largest single vehicle application in Firestone’s history and perhaps the largest in automotive

history. (Vehicle manufacturers do not often ‘‘single source’’ to the extent Ford has

with this popular vehicle.) In such a vehicle population, particularly one involving

all terrain tires and the unique loading and hard service of sport utility vehicles and

light trucks, some number of tread belt separation incidents and claims would be

fairly expected.

Additionally, these types of vehicles present risks and accident severities different

from ordinary cars. Rollover accidents present an enhanced potential for injury and

death, particularly and principally when occupants do not wear seatbelts.

In February 2000, television station KHOU ran a report on tread belt separations

of Firestone ATX and Wilderness tires and their involvement in Ford Explorers rollovers. Following that news broadcast, Firestone received an increased number of

claims and lawsuits, the most serious of which seemed to be occurring in the warmest climates in the United States. In May of this year, the NHTSA began a PrelimiVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00098 Fmt 6633 Sfmt 6621 E:\HEARINGS\67111 pfrm08 PsN: 67111
91

nary Evaluation of certain tires including the radial ATX and Wilderness AT lines.

Following the commencement of that May 2000 Preliminary Evaluation, Firestone

received notice of an even larger number of claims and lawsuits allegedly involving

tread belt separations on Firestone tires, predominantly tires mounted on Ford Explorers. Meanwhile, however, the historical adjustment data relied upon by the tire

industry and by the NHTSA to track tire performance continued to indicate that

these particular tires did not raise any type of safety issue.

III. THE REASON AND BASIS FOR THE RECALL

In July 2000, Firestone provided the NHTSA with adjustment data, data on property damage claims, data on claims for personal injury and lawsuits, and related

information regarding the history of the Firestone tire products that were the subject of the Preliminary Evaluation. Ford requested that Firestone provide Ford with

the same information on claims and adjustments. Ford then performed a statistical

analysis using Firestone’s data. Rather than focus on adjustment data, that analysis

focused instead on the smaller and less representative universe of data arising from

property damage and personal injury claims. The conclusion drawn by Ford and

Firestone from this analysis was that the tires that eventually became the subject

of the recall were overrepresented in the claim data. (Chart 3) Tires manufactured

in the Decatur plant were also overrepresented.

Given the number of serious accidents involving tread belt separations that surfaced after the onset of the NHTSA preliminary evaluation, and after Firestone reviewed the data analysis as presented and compiled by Ford during the first week

of August 2000, Firestone decided, in conjunction with Ford and after advising the

NHTSA, to initiate the voluntary recall that is the subject of this hearing.

What that means is that Firestone stepped out of historical tire industry product

performance evaluation procedures and relied upon a different form of data to initiate this safety recall. Taking into account the immense popularity of the Ford Explorer and the high number of these vehicles on America’s roads, Firestone determined that in the interest of customer and public safety, it should immediately announce a recall of the overrepresented tires. Firestone acted immediately upon its

receipt and review of these factors and did not delay the announcement or initiation

of the recall for any reason.

Firestone also initiated the recall without identifying or pinpointing any particular cause or explanation for the apparent anomalies in the claim data. In fact,

as mentioned above, Firestone’s forensic review of tires returned from the field over

the past several years and allegedly involved in such accidents indicated that the

treads separated from these tires not because of a design or manufacturing defect,

but for particular reasons such as underinflation, punctures, improper repairs, and

other general maintenance problems. Thus, none of the yardsticks typically relied

upon to measure tire performance indicated that the recalled tires were unsafe. But

Firestone decided to proceed with a recall given the heightened concern for the safety of its customers and the motoring public.

IV. FIRESTONE’S ROOT CAUSE EVALUATION

Firestone decided that it would recall the tires in the overrepresented population

instead of waiting to perform an analysis as to why the data showed what it did.

Immediately following the recall announcement, Firestone has devoted many employees to the task of reviewing the manufacturing practices and processes of the

recalled tires, as well as all other available data to determine a root cause of failures of the tires. Along with Ford, Firestone has analyzed the design and development of the tires at issue, intensively evaluated processes at the Decatur plant, and

is now in the process of cutting and inspecting recalled tires, all in an effort to determine the root cause of the tire failures at issue. Ford and Firestone have also

conducted a review of Firestone’s Technical Center in Akron.

As of the submission of this testimony, Firestone’s evaluation is not complete.

Firestone is considering all potential factors at this time, including plant operations

in the 1994-1995 time period. While Firestone is anxious to complete its root cause

evaluation, Firestone realizes that it is of utmost importance that the Company not

rush to any judgment.

V. RECALL/REIMBURSEMENT DETAILS

Firestone is replacing recalled tires as quickly as possible and has been since the

day the recall was announced. Rather than wait until we had sufficient tires in inventory to replace the recalled tires, we went forward with the recall on August 9,

2000, out of deep concern for customer safety.

92

There has been some confusion about the recall program. While we are assuring

adequate shipments of replacement tires to the Southern and Southwestern states

where more than 75% of the reported accidents have occurred, we are shipping tires

to all states. Working together with Ford, Firestone has taken extraordinary measures to speed up the recall by urging other tire manufacturers to ramp up production, by airlifting tires from Japan and by significantly increasing the output of

American plants.

Customers whose recalled tires are replaced at one of our 1,500 Company stores,

8,500 authorized retailer locations, or 3,000 Ford, Mercury and Mazda locations, will

have their tires replaced, mounted and balanced at no charge, with no taxes

charged.

If the customer elects to purchase competitive tires as replacements for the recalled tires, Firestone will reimburse purchase costs, up to $100.00 per tire, an

amount Firestone believes to be fair and reasonable. In the reimbursement situation, the customer needs to obtain and keep a receipt or invoice from the supplier

of the tires, return the recalled tires to a Company store, authorized retailer or auto

dealer location, obtain a recalled tire surrender receipt, and mail the appropriate

documents to Firestone.

Firestone estimates that nearly 1.5 million tires have been replaced in the first

month of the program. Firestone is committed to customers’ safety and urge all drivers to keep their tires inflated to the level specified by the vehicle manufacturer.

For drivers of Ford Explorers and Mercury Mountaineers with this size tire we are

recommending an inflation of 30 psi.

VI. CONCLUSION

Firestone acted promptly and responsibly in this difficult situation. It has cooperated and will continue to cooperate fully with the NHTSA and with this Committee.

93

94

95

96

Mr. TAUZIN. Thank you, Mr. Ono.

Mr. Ono, the one thing you didn’t commit to do is to agree to recall the 1.4 million tires that NHTSA has announced just a minute

ago should be recalled in their opinion. Why not?

Mr. CRIGGER. I believe I can address the question, Mr. Chairman. The requested recall on the 1.4 million tires involve several

populations of tires and the use of claims data, in some cases

where only one claim was made against an entire population of

tires. We are looking at all of those. We are trying to analyze what

should happen in all of those cases. We don’t think that we have

at this point a standard based on claims that would be relevant to

that population. Many of those tires are tires that are used in hard

service and different conditions, and the claims represent claims,

not necessarily defects, and we need to investigate those before we

can make a determination.

Mr. TAUZIN. Now, our investigators for a week now have been requesting information from your company as to what tests were run

on these Firestone tires. Specifically, we have been requesting information as to whether Firestone ever speed-tested these Firestone tires on a Ford Explorer under conditions of 26 pounds per

square inch pressure. Your company as of last night informed us

that it couldn’t tell us what tests were run and what were not run.

Is that correct?

Mr. CRIGGER. I believe I should defer to Mr. Wyant for that answer.

Mr. TAUZIN. Mr. Wyant.

Mr. WYANT. I am not certain that I understand your question.

Mr. TAUZIN. Let me be clear. We have asked you for a week to

tell us what tests were run on these Firestone tires under speed

conditions and 26 pounds per square inch. As of last night your

folks informed our investigators that they could not give us this information. Is that correct and why not?

Mr. WYANT. I heard you say ‘‘on a vehicle,’’ and that is why I

asked you to repeat the question. The question, as I understand it,

is a request for data on high speed testing, and certainly we have

done high speed testing.

Mr. TAUZIN. We have asked for a week now for documents identifying what tests were run at high speed, if any. You have not provided them to us. As of last week we were told you could not provide them at this time; is that correct?

Mr. WYANT. My understanding is that we have provided computer printouts.

Mr. TAUZIN. Let me make a request upon you and ask for your

commitment. This committee has the power of subpoena and I can

put it to a vote if necessary. I would rather not do that. I would

rather your company at this moment commit to us to give to this

committee the records of all speed tests done on Firestone tires at

26, 30, 32 and 35, whatever pounds per square inch they were tested, from 1990 to the present time.

Mr. WYANT. We will certainly give this committee any data that

they request.

Mr. TAUZIN. Do we have a commitment that we will receive it?

Mr. WYANT. Yes.

Mr. TAUZIN. I do not have to subpoena it?

97

Mr. WYANT. You do not have to subpoena us for any of this information.

Mr. TAUZIN. Did you test Firestone tires under speed conditions

at 26 pounds per square inch?

Mr. WYANT. I cannot confirm that, and that is what this around

the clock search has been because there are numerous high speed

tests, as mentioned by Dr. Bailey. There are different standard

tests which measure high speed characteristics of tires. And then

in some cases, limited cases, they are high-speed tested or there

are tests that are conducted at application inflation.

Mr. TAUZIN. So the answer is you don’t know? And we will only

know once you submit the documents to us?

Mr. WYANT. That’s correct.

Mr. TAUZIN. Number 3, we have in our possession a memo from

Ford Motor Company in reference to the Saudi Arabian replacement of tires. It reads as follows. ‘‘Firestone Legal has some major

reservations about the plan to notify consumers and offers them an

option. First, they feel that the U.S. DOT will have to be notified

of the program since the same product is sold in the United

States.’’

Is that report in this Ford memo accurate?

Mr. CRIGGER. I am not aware of the particular meeting or comments, but I do know that in Saudi Arabia the action was taken

by Ford and it was taken as a customer satisfaction issue.

Mr. TAUZIN. Was the position of Firestone Legal in 1999, when

this action was taken, that one of the reasons you didn’t want to

assume responsibility for a recall in Saudi Arabia was the concern

that the Department of Transportation officials in the United

States would find out about it?

Mr. CRIGGER. No, sir. I am not aware of the Legal Department’s

opinion on that issue.

Mr. TAUZIN. You were not aware of it. Mr. Ono, were you aware

of it?

Mr. Wyant, were you aware of it?

Mr. Ono, have you answered? Were you personally aware of your

Legal Department’s position that it didn’t want DOT to find out

about a recall in Saudi Arabia?

Mr. CRIGGER. Mr. Chairman——

Mr. TAUZIN. It is document number 39 in the book if you wish

to refer to it.

[Mr. Ono’s responses are through an interpreter.]

Mr. ONO. That I am not aware of.

Mr. TAUZIN. Mr. Wyant, are you aware of it?

Mr. ONO. I was not aware of that, but I was informed that there

was a recall in Saudi Arabia for customer satisfaction reasons.

Mr. TAUZIN. Mr. Wyant, are you aware of the position that the

Ford document refers to that Firestone was concerned about DOT

finding out about a recall in Saudi Arabia and therefore preferred

not to have a formal recall?

Mr. WYANT. I am not aware of that discussion and did not participate in it. I am aware that there were some discussions. That

was through counsel, I believe.

98

Mr. TAUZIN. So you were aware that there were discussions

about not agreeing to a recall because it would trigger information

to DOT?

Mr. WYANT. I am not aware of the direction as you state it. I am

aware that there was a conversation concerning that reporting

process.

Mr. TAUZIN. When were you aware of that?

Mr. WYANT. I have only recently become aware of that.

Mr. TAUZIN. How did you become aware of that?

Mr. WYANT. I was made aware of it this afternoon. I did not participate in that process.

Mr. TAUZIN. Who made you aware of it?

Mr. WYANT. Counsel.

Mr. TAUZIN. So legal counsel for Firestone has now informed you

that there were such discussions in 1999 with Ford?

Mr. WYANT. That’s correct.

Mr. CRIGGER. Let me correct. I think what legal counsel has informed is that they said that there was a question about this issue,

not that that was a position that was taken.

Mr. TAUZIN. Let me try again, Mr. Wyant. What were you informed? Mr. Crigger is apparently editorializing your comments.

Tell me what you were informed.

Mr. WYANT. I was simply informed that there was a conversation

concerning this subject. That is all I really know about it.

Mr. TAUZIN. So the subject was discussed. Were you informed

that Firestone did in fact have a concern about DOT finding out

about a recall in Saudi Arabia?

Mr. WYANT. I was not informed about any position of that sort.

Mr. CRIGGER. If I can elaborate. There was no decision by Firestone Legal that impacted the recall in Saudi Arabia or the customer satisfaction action of Ford. There was a joint technical team

of both Ford and Firestone that reviewed product in Saudi Arabia

and found that there were not conditions, that the conditions

present did not indicate any defect in tire.

Mr. TAUZIN. Mr. Crigger, the memo from Ford says that Firestone had two reasons why they were concerned about notifying

customers and offering them an option, I assume an option to replace the tire. The first was U.S. DOT would find out about it and

the second is that the Saudi government would see it as a recall

and react dramatically.

Is this memo accurate?

Mr. CRIGGER. I am not aware of that memo or the meeting. I am

aware that Firestone Legal informed us that there was a question

about this issue, but not that there was an opinion about the issue.

Mr. TAUZIN. Did Firestone at any point following this recall on

its own seek to inform DOT that these tires were being replaced

in Saudi Arabia?

Mr. CRIGGER. No. Firestone took no action in Saudi Arabia.

Mr. TAUZIN. Did you read this memo?

Mr. CRIGGER. No.

Mr. WYANT. I have not read that memo.

Mr. TAUZIN. Why don’t you take time and read it. It is paragraph

4 of the document.

99

Mr. Wyant, look at paragraph 4 and you will see the recitation

of Chuck Seilnacht, I can’t pronounce his name, the recitation of

his version of what was going on and why Firestone objected to notifying customers and offering them options to change out tires. Do

you want to comment on it? Any one of you. Mr. Crigger?

Mr. CRIGGER. I have no knowledge of this particular issue, but

the only comment I have is that the action that was taken in Saudi

Arabia was a customer satisfaction action. A team of both Ford and

Firestone looked at the tires, made an evaluation that there was

no defect involved but there were unusual circumstances. There

were circumstances of people reducing air pressure—— Mr. TAUZIN. There were people dying in accidents and Ford auto

dealers were calling and complaining about the safety implications

of these tires, and you are saying it is a consumer satisfaction

issue?

Mr. CRIGGER. But there was no evidence of any defect. Yes, there

were failures, but they were due predominantly to underinflated

tires, to bad punctures and this sort of activity that was discovered

by the technical team.

Mr. TAUZIN. I am going to have to wrap up because we all have

time restraints.

Mrs. WILSON. Mr. Chairman, will you yield?

Mr. TAUZIN. I will be happy to yield.

Mrs. WILSON. You say there is no defect and this is all just consumer problems and underinflation. This is an internal Firestone

document, which I think you probably recognize.

Can you tell me why it is that so many more consumers were

underinflating their tires in 1996 as opposed in other years earlier?

What changed in terms of consumer behavior?

Mr. CRIGGER. The response previously was in response to the

Saudi Arabia issue.

Mr. TAUZIN. I thank the gentlewoman. Let me ask you quickly.

Look at those statistics. Look at the chart. These are your documents. Ms. Wilson has just shown you an internal document of

Firestone. There is a huge spike in claims for tire separation.

Eighty percent are separation of Firestone tires resulting in serious

accidents, injuries, bodily and property damage.

She is asking the question we should all ask. Is that because consumers were changing the inflation on their tires in 1 year out of

all of these years?

Mr. CRIGGER. Obviously not.

Mr. TAUZIN. Obviously not. So why do you keep making that

claim? Why do you keep telling the American public that it is their

fault, that they are inflating their tires wrong when we look at statistics that indicate that something is wrong with the tires.

Mr. CRIGGER. We don’t mean to say that it is America’s fault. It

is not. We are very concerned about all of the incidents that have

occurred. We regret terribly what is happening. And if we could

have prevented it, we would have prevented it. Unfortunately this

kind of data, this kind of claims data—— Mr. TAUZIN. Mr. Crigger, if you weren’t so interested in keeping

the facts from the Department of Transportation, maybe you would

have prevented it.

Mr. Markey is recognized.

100

Mr. MARKEY. Thank you, Mr. Chairman. I am going to continue

down this same line of inquiry so that I can understand what it

was in Saudi Arabia that your company did not think was relevant

to the American marketplace.

Mr. Ono, what is unique about Saudi Arabian driving that would

not be relevant to the American marketplace. Since this vehicle is

advertised as an all-terrain vehicle, they are Wilderness tires, what

is it about unusual conditions in Saudi Arabia that would be different from how this tire is advertised for use in the American

marketplace?

Mr. ONO. Well, the first thing I can mention is the speeds at

which the vehicles are driven. We are looking at an average of 100

miles per hour and also I would mention the heat that is involved,

that it is hot. Also, I would mention the severely underinflated

tires, and I would consider this a major cause.

Coming to the United States, you realize in comparison there is

a lack of care for the tires. That would be my conclusion.

Mr. MARKEY. Mr. Ono, are you aware that most of these accidents have occurred in the southern part of the United States? Are

you aware that it is very warm in the southern part of the United

States?

Are you aware that in many of the areas of the United States,

because of the great distances that these vehicles are driven at

great speeds and over terrain which would be equal in terms of the

test which you would place this tire at, why do you—why did you

not in your corporate analysis take the experience which you had

in Venezuela and in Saudi Arabia and relate it to the fact that

most of these accidents in the United States were occurring in our

hot climates, in our more rural areas where they would be used in

almost the identical conditions as they were being used in Saudi

Arabia and Venezuela?

That is a question for Mr. Ono.

Mr. ONO. First of all, as far as the Venezuela issue is concerned,

I would mention that they were primarily locally made tires, so the

materials were different. So I would say that they were different.

Also, with regard to Saudi Arabia, I mentioned underinflated

tires being used frequently in operation.

Interpreter correction: Correcting the reference made about

underinflation, referring to Venezuela as well as Saudi Arabia.

Mr. MARKEY. How does Mr. Ono differentiate?

The INTERPRETER. The interpreter has not finished the interpretation.

Mr. ONO. As far as Saudi Arabia is concerned, there is rough terrain there and so road hazards are very frequent, and for that reason I would not equate the two as being the same.

Mr. MARKEY. Let me speak back to Mr. Ono again. Mr. Ono has

to understand that the United States in its southern area is very

warm, in many parts over 100 degrees for the entire summer. Most

of these accidents have occurred in that part of the country. By not

relating the obvious similarities between Saudi Arabia and the

United States, you give our consumers the impression that you

don’t care about their safety even though the conditions are very

similar to those in Saudi Arabia.

101

Mr. ONO. That is not the case because we give first priority to

safety.

Mr. CRIGGER. If I could add a couple of points, I think it would

be helpful here. The committee does have a copy of the Middle East

tire survey that was done at the time to review the Saudi Arabian

situation. There were two things. One, the tire that was being discussed, and that was a 16-inch tire, and all of our data that we

have about the performance of the 16-inch tire in the United States

says it is fine, it meets all parameters that we want for safety and

for quality. So we didn’t have any indication that there was a problem.

What we did do, along with Ford, a test in Southwest where we

pulled off tires in hot climates and checked those tires, and we

found no problems with those tires. So the follow-up with that

found that there was not an issue.

Mr. MARKEY. The problem you have here, Mr. Crigger, is that

the kinds of conditions that Mr. Ono is citing as the reason why

you would not share that information with the American consumer

is that—is that the conditions are different when in fact the conditions are identical. So for us it appears that Firestone was hiding

information from the American consumer that was directly relevant to the safety of their families in vehicles using Firestone

tires.

Mr. TAUZIN. The gentleman’s time has expired. Mr. Ono may respond if he would like to.

Mr. Ono, would you like to respond to the gentleman’s statement?

Mr. ONO. It is not that we are hiding information. We have conducted this research with Ford, and we have shared our data with

Ford. Certainly in addition to being hot, it was the severely underinflated tires driven at high speeds, and I would say these were the

major factors, and I am referring to Saudi Arabia.

Mr. TAUZIN. The gentleman from Michigan, Mr. Upton, is recognized, the chairman of the Oversight Subcommittee.

Mr. UPTON. Thank you, Mr. Chairman. Mr. Crigger and Mr.

Wyant, these numbers on the board here, 294 claims in 1997, 384

claims in 1998, 772 claims in 1999, did those numbers actually

cross your desk? Did you see that as those years came about?

Mr. CRIGGER. I did not.

Mr. UPTON. Mr. Wyant?

Mr. WYANT. I did not.

Mr. UPTON. Who at Firestone tracks these numbers?

Mr. WYANT. I can’t tell, but I believe those are property damage

claims, property damage claims.

Mr. UPTON. So in your role you don’t see those numbers on even

a yearly basis?

Mr. CRIGGER. No, sir, I personally don’t see those.

Mr. WYANT. I believe they are reported on an annual basis. But

to put it in context, the normal process for our company, and I believe for the tire industry, although there may be some disagreement on that, I believe the standard or norm is the customer warranty adjustment process where it is customer satisfaction driven,

and it is not customary to utilize claims because typically the

102

claims are very low and you can’t use them to assess product performance or product quality.

Mr. UPTON. I tell you what concerns me. This is a letter that is

in the book. I will read it to you. It is brief. This is a letter from

John Behr, an account executive at Firestone to Ford Motor Company.

Mr. TAUZIN. Document 17.

Mr. UPTON. Thank you. It is after the Saudi Arabian recall. It

is dated March 11, 1999. It just says this. ‘‘Obviously that return

rate is extremely low and substantiates our belief that this tire performs exceptionally well in the U.S. market.’’ Now, as I have looked at some of the statistics with regard to the

tires that have been a majority of the claims, the tires in question

amount to about 10 percent of Firestone’s total tire production from

1997 to 1999. Ten percent of the tires. Yet better than 50 percent

of all of the tire claims are these tires. Shouldn’t that have put

Firestone on notice that there were some problems with the tires,

particularly when 50 percent of those tires were from the Decatur

plant. If that is not a signal that you have a problem with the tires,

versus everything else that you produce, how is it that you tell

Ford in this letter that the tire performs exceptionally well? That

is an A.

Mr. CRIGGER. I believe in this case, sir, you are looking at the

tire P25570R16.

Mr. UPTON. Right, for the Explorer.

Mr. CRIGGER. This is the 16-inch tire. This tire performs exceptionally well. The tires that have the safety issue that we have recalled are the P23—— Mr. UPTON. Were these tires not recalled in Saudi Arabia or replaced?

Mr. CRIGGER. The 16-inch tire in Saudi Arabia was replaced by

Ford on the basis of customer satisfaction, but not on the basis of

defect in the tire. As I mentioned, both companies looked at the

performance of the tire, and you have a copy of our report, and the

technicians concluded that it was not a tire defect that was involved here.

Mr. UPTON. What do you do with the tires when you know that

50 percent of the tire claims coming from 10 percent of your production have problems?

Mr. CRIGGER. What we——

Mr. UPTON. You have known that for 3 years.

Mr. CRIGGER. Unfortunately, in hindsight you are right. We wish

we had looked at claims the way that we now look at claims.

Claims have never been a performance indicator. I know now, looking back historically, it is something that we wish we had seen.

But we had always looked at the indicators that we would normally

use and that the industry uses: The performance testing, the tire

warranty information, which is the largest pool of information concerning the performance of a tire, and of course inspection of tires

in the field. And all of those indicators indicated all along that

these tires were fine. They were performing well. They had good

numbers with respect to adjustment and so on.

Only after we got into this in more depth, particularly after we

saw the serious injury claims mounting this year, did we begin to

103

collect information of all kinds. And yes, we analyzed along with

Ford information associated with claims.

Mr. UPTON. Chairman Nasser in his testimony on the next panel

says it has been standard practice in the automobile industry that

tires are the only part of the vehicle not warranted by the vehicle

manufacturer. They are the only part for which manufacturers do

not receive field performance data. At Ford this will change. I presume he is going to add emphasis when he delivers that in his

statement.

Are you going to agree with Ford’s request? Allow them to receive your field performance data?

Mr. CRIGGER. We are going to cooperate with Ford, yes.

Mr. UPTON. And he is correct that you did not provide that material up to this point?

Mr. WYANT. The claims data has not been used for measurements of tire performance, but adjustment data has.

Mr. UPTON. This says field performance data. I presume this

means testing on the track.

Mr. WYANT. They see every bit of the field performance data that

is devoted to approving a tire. I believe that is referring to adjustment data which is periodically reviewed. But if they want larger

review or total review, I don’t think that we would have any problem with doing that.

Mr. UPTON. Have they requested that in the past and you have

not delivered?

Mr. WYANT. Only periodically and in special circumstances and

I think there was a review, and I might be wrong on memory, on

this particular tire, that is the 16-inch Explorer tire that was reviewed with Ford to my knowledge. That was a request to do that

and we complied.

Mr. UPTON. I talked with some of the Firestone dealers in my

district this morning, and they indicated that all of the tires that

they are swapping with customers, all of the tires that they are

then retrieving from customers are in fact going back to Firestone.

Have you found anything yet from any of the tires that you have

taken back from customers?

Mr. WYANT. At this point there are maybe thousands, certainly

there are over 500 tires back in Akron when we came here, there

may be over a thousand now, and they are being micro analyzed

by the Ford people and outside parties, including outside laboratories and specialists, to try to determine the cause because unless

we come up with cause, we don’t have an answer to the problem.

So we must find the cause, and we are doing everything we humanly can to find that. And believe me, there is nobody that wants

to find cause more than we do.

Mr. UPTON. There is a shortage of tires to be used as replacement tires, as I have heard from my folks in Michigan. During this

shortage, is Firestone allowing other manufacturers’ tires to be

used as replacement tires?

Mr. CRIGGER. Yes. We have opened it up so that any tire that

a consumer can find for their vehicle, they may take that tire as

a replacement and then we will reimburse them.

Mr. UPTON. So Goodyear or General, it doesn’t matter?

104

Mr. CRIGGER. That’s correct. We have gotten good cooperation

from our competitors to increase the supply of tires.

Mr. TAUZIN. The gentleman’s time has expired. Go ahead, Mr.

Markey.

Mr. MARKEY. On this recall, is Firestone going to reimburse for

the labor as well? It was original equipment. In addition to the new

tires, will you give the $50 or $75?

Mr. CRIGGER. We are reimbursing up to $100 per tire for consumers who have other product put on the car if they are able to

find a competitor tire.

Mr. MARKEY. Does that include the labor to put the tire on?

Mr. CRIGGER. Yes, that accounts for the complete replacement.

Mr. TAUZIN. The gentleman’s time has expired. The gentleman

from Michigan, the ranking minority member of the full committee,

Mr. Dingell, is recognized.

Mr. DINGELL. Thank you, Mr. Chairman. Gentlemen, you have

indicated that Ford conducted an analysis of Firestone’s claims

data. Ford is your largest customer. Ford requested the data on

June 8. Firestone did not give it until July 28, 7 weeks later. Can

you tell me why?

Mr. WYANT. Ford did request the data in conversation. It was

further—subsequently further solidified in a phone call request.

And in response to them we requested confidentiality of the data

as it was submitted to NHTSA with confidentiality, and my recollection is that it took approximately 4 weeks to get confidentiality

agreed to. Ford did submit the data.

Mr. DINGELL. Ford didn’t want to give you confidentiality, but

you wanted confidentiality?

Mr. WYANT. That’s correct.

Mr. DINGELL. As recently as April 28 of this year, just 4 days before NHTSA initiated its investigation, Firestone provided Ford

with assurances that its Wilderness and ATX tires were okay. I

would refer you to the memo from Mr. Robert O. Martin,

Bridgestone/Firestone’s Vice President for Corporate Quality Assurance. In that memo, Mr. Martin says Bridgestone/Firestone’s Akron

Technical Center analyzed 243 tires taken off 63 Ford vehicles and

their mileage ranged from 11,320 to 76,092 miles. According to Mr.

Martin, he said as follows: Examination of the tires revealed no

tire deficiencies and that the tires performed as expected.

That is in addition to the other memo that we have here which

says approximately the same thing a year earlier. Can you tell me

how Firestone’s technical center missed seeing the problem?

Mr. CRIGGER. This was the Southwest test that I referred to earlier. I don’t think there was a problem found in these tires. That

was the point of the test. It was a follow-up.

Mr. DINGELL. You will note that this is 4 days prior to the time

that NHTSA initiated its investigation, a time following a number

of things, including the television show which was shown earlier,

pointing out major defects in those tires.

Mr. CRIGGER. Well, I think the population of tires is huge. There

is 14.4 million tires involved in the population that was recalled.

Mr. DINGELL. You also had complaints during this time and previous to this time about Bridgestone/Firestone tires; had you not?

Mr. CRIGGER. Yes. We had had complaints.

105

Mr. DINGELL. The Firestone recall affected a number of Ford vehicles. It also affected Mazda, Navaho SUVs and V series pickup

trucks. The NHTSA advisory last week also affects the Chevy Blazer SUV and three model years of Nissan pickup trucks. There are

a number of different vehicles and a large number of vehicle models that were made by different manufacturers. Doesn’t that tell

you there must be something wrong with the tires and not with the

vehicles?

Mr. CRIGGER. We certainly had our concern about safety issues

and the tires, and that is why we recalled the tires that we did.

That is a fact.

We are looking now for the root cause. Even though these incidents are horrible and we regret every one and wish we could

change it, it nevertheless is a small population that we are trying

to identify in terms of root cause.

Mr. DINGELL. You had figures on a large number of tires on different vehicles on different models.

Now, tell me how the plant at Decatur operated during the period of the strike, which began in July 1994 and ended in December 1996. I am told that the replacement workers first entered the

plant in January 1995. Now I would ask, first of all, how many of

these replacement workers were used for inspectors, quality control

and positions like awlers to address the problem of blisters in tires?

Mr. CRIGGER. My understanding is that replacement workers

were not used in the quality control inspection.

Mr. DINGELL. Can you make that as a flat statement?

Mr. WYANT. I have been told that as a flat statement.

Mr. DINGELL. You have been told but you do not know it.

Mr. WYANT. I was not there.

Mr. DINGELL. How many were used for inspectors, and how

many were used for awlers?

Mr. WYANT. The replacement workers went through the same

training processes as everyone else. The last place they wound up

was in these critical technical positions, including the laboratories,

the final inspection which includes repair or, as you state, awling.

Mr. DINGELL. I am going to ask that the Chair do assist me in

procuring further information on that particular point.

Now—— Mr. TAUZIN. Let me do that for the gentleman. Do we have an

agreement from Firestone that you will submit the information requested by Mr. Dingell to the committee?

Mr. CRIGGER. Yes. No problem.

[The information referred to follows:]

106

107

108

109

Mr. TAUZIN. Mr. Dingell, proceed.

Mr. DINGELL. Your statement says, and I quote, ‘‘Our analysis of

the failed tires has shown that failures were caused by external

damage, improper maintenance or by operating the tire with pressure significantly below the 26 pound per square inch level recommended for the Explorer by Ford.’’ By significantly below 26

pounds per square inch, do you mean 20 pounds per square inch

or below?

Mr. WYANT. Excuse me, Congressman, are you in the Southwest

survey?

Mr. DINGELL. That is in your statement.

Mr. WYANT. The Southwest survey had numerous tires in it, in

the teens, that is correct.

Mr. DINGELL. Thank you. Mr. Chairman, I have used my time.

Mr. TAUZIN. The Chair is always pleased to follow the gentleman’s line of questions and I appreciate them, sir.

The Chair now recognizes Dr. Ganske.

Mr. GANSKE. Thank you, Mr. Chairman, and, Mr. Ono, thank

you for coming a long ways to be with us today.

Mr. Ono, do you agree that the tires made at the Decatur plant

have a significantly higher failure rate than the same type of tires

made at other plants?

Mr. ONO. I believe you can say that based on the claims data.

110

Mr. GANSKE. Mr. Ono, the tires made at all of the plants were

inflated or it was recommended that all of the tires made at all of

the different plants, it was recommended that they be inflated at

26 pounds on the Explorer; is that right? Was there any difference

in inflation recommendations between the plants of the tires made

at the Decatur plant versus any of the other plants?

Mr. ONO. I was not too clear on your question, but I believe our

tires are designed to a spec given by Ford of 26 psi.

Mr. GANSKE. And there was no difference between the tires made

at the Decatur plant and the other plants in terms of that recommendation?

Mr. ONO. Absolutely none.

Mr. GANSKE. But the tires at the one plant failed more than the

tires made at the other plants. So if the inflation pressure, which

was the same for the ATX tires from all of the plants, that couldn’t

be the cause of the difference in the failure rate at the Decatur

plant then, couldn’t it?

Mr. ONO. Well, that was our thinking as well, and we conducted

for approximately 2 months an investigation with the cooperation

from Ford and also by getting help from Japan, but we were not

able to find a major problem.

Mr. GANSKE. Okay, so we are in agreement. The tire pressure

was not a factor because it was the same for all of the ATX tires

regardless of which plants that they were produced in. So that gets

me back to Mr. Dingell’s question. There was a lot of labor strife

and striker replacement at the Decatur plant. You had a lot of new

workers on the line. Were experienced inspectors replaced during

the strike?

Mr. WYANT. Was the question directed at me?

Mr. GANSKE. No, I would like Mr. Ono to answer that if he

would, please.

The INTERPRETER. You are asking about inspectors?

Mr. GANSKE. Yes.

Mr. ONO. I believe Bob would be able to respond to you in greater detail.

Mr. WYANT. As I explained with Congressman Dingell, I am not

100 percent certain about the timing because you said by the end

of the strike—— Mr. GANSKE. During the strike.

Mr. WYANT. That information or documentation of that will have

to be provided.

Mr. GANSKE. All right.

Mr. CRIGGER. I can say that it is my understanding that it was

supervisors and salaried quality assurance people that performed

that function initially.

Mr. GANSKE. That it was supervisors——

Mr. CRIGGER. And salaried quality assurance people.

Mr. GANSKE. Does the company have any records from the Decatur plant indicating problems with quality control during that time

period, Mr. Ono?

Mr. WYANT. May I attempt to answer the question?

Mr. GANSKE. Sure.

Mr. WYANT. We have extreme amounts of process control data.

The process begins at the front of the plant, which is raw mateVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00118 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
111

rials, through every process in the plant out to the warehouse, and

the probable cause team or the team to find cause has been

through millions and millions of pieces of data trying to find out

if there is a measurable quality control item within the plant that

would indicate that. At this point we do not have that and that is

why we are asking for outside support from independent third

party people.

Mr. GANSKE. So your answer is that you don’t know at this time?

Mr. WYANT. I do not know at this time.

Mr. GANSKE. Maybe you know this. Were the numbers of defective tires pulled off the line different during the strike than at

times other than the strike?

Mr. WYANT. Pulled off the line means for some reason, cause?

Mr. GANSKE. Yes.

Mr. WYANT. Not to my knowledge.

Mr. GANSKE. Do you know that for a fact? Have you looked at

that?

Mr. WYANT. I have not looked at that.

Mr. GANSKE. My final question is: Will that data be made available to NHTSA?

Mr. WYANT. Certainly.

Mr. GANSKE. I thank you. I yield back the balance of my time.

Mr. TAUZIN. The Chair is advised that there are three votes now

being called on the floor and perhaps it is appropriate now for us

to take a break. What we will do is recess until 6:45. That will give

everybody a chance to have a good break. The Chair announces a

recess until 6:45.

[Brief recess.]

Mr. TAUZIN. The committee will please come back to order. We

will ask our guests to take seats and someone to catch the doors.

It will take a few minutes to settle down.

Mr. Ono, let me welcome you again, and as we left for the votes,

we had completed questions on this side. The Chair now recognizes

Mr. Sawyer from Ohio for a round of questions.

Mr. STUPAK. I think I’m next.

Mr. TAUZIN. I’m sorry, Mr. Stupak from Michigan.

Mr. STUPAK. Thank you, Mr. Chairman. Mr. Ono, would you and

Bridgestone/Firestone join me today in calling for and cooperating

with a blue ribbon, truly independent panel to perform a review on

the AT, the ATX and the Wilderness tires to determine the cause

and propose solutions? Would you give us that commitment today?

Mr. ONO. Yes, I do commit.

Mr. STUPAK. Thank you. Firestone has maintained that the problem is not tire failure, but yet Goodyear Wranglers on the same vehicles under same conditions do not experience a tread belt separation. How do you explain that these failures are occurring in an abnormally large percentage of Bridgestone/Firestone tires but not

Goodyear tires?

Mr. CRIGGER. We recognize that there’s a problem. There’s no

question there’s a problem. I don’t have any data on the Goodyear

performance or Goodyear tires, but when we recognized this problem, that’s why we recalled the tires.

Mr. STUPAK. But the problem then has to be in the tire, right?

112

Mr. CRIGGER. There’s something we’re looking for in the tire,

that’s exactly right. We’re looking for a root cause in that tire. As

I mentioned earlier, the incidents that we have are so serious that

they stun us all and they’re shocking to us all. And we’re looking,

though, at a huge population of tires to find out why, what is a relative few are creating such problems.

Mr. STUPAK. When you design and build a tire you take in consideration, do you not, that consumers drive too fast, that they

drive underinflated, that they overload their vehicles. That’s all in

consideration of tires—when you design a tire, don’t you?

Mr. CRIGGER. I think Bob probably should.

Mr. STUPAK. Okay. Mr. Wyant.

Mr. WYANT. Certainly a certain amount of that is included and

is indicated in tire and rim load inflation tables as an example, but

when you’re talking about low inflation level, particularly when

you get down into the teens or 15 below, no, that is not included

in the design standard.

Mr. STUPAK. But in this tire, those factors are taken into consideration, correct?

Mr. WYANT. Those service factors, no, they are not. Tires will not

run in those low inflation conditions.

Mr. STUPAK. So when you design a tire, is it your testimony,

then, it can only run underneath the specifications you say?

Mr. WYANT. The tire in this particular case specified at 26 psi

will run at 26 psi, and if maintained in that range it will perform.

Mr. STUPAK. Then why does Firestone have a separate tire for

high-speed driving called the URH-rated tire and why do you have

a special service tire that’s developed for another part of the world

and why do you have an S-rated tire that’s more resistant to puncture and other things? All the excuses you’re giving why the American consumer is having problems with these tires, you make a special tire for those areas.

Mr. WYANT. You’re referring to I believe top-flight types of tires

or high-speed tires, tires that are designed for high speeds, meaning 95 and up.

Mr. STUPAK. Well, I’m talking about the URH-rated tire, I’m

talking about the off-road tire, and you have a special service tire

that you use. I’m talking about a tire that’s S-rated. So you can’t

have it both ways. You can’t say if you’re going to run at high

speeds you’ve got to have this tire. You can’t say that if you’re

going to run underinflated you’ve got to have this tire. And you

can’t say to the American people, if you’re going to do all those

things, you go and use the tire for a certain part. These tires are

built to withstand wear and tear that the American public and

Saudi public and Venezuelan and all the rest of them use.

Mr. WYANT. They are designed to perform in an extremely difficult environment, and yes, they are designed to perform in that

region. But as example, high-speed—such as in Saudi Arabia and

even in Venezuela—tires are not designed to go 40-, 50-, 60,000

miles at 95 miles an hour and up.

Mr. STUPAK. Are you saying, then, the only tires that are allowed

are 40-, 60,000 miles tires that are driven at high speed?

Mr. WYANT. I missed the first part, sorry.

113

Mr. STUPAK. Are you saying, then, that if your tire has 40,000

to 60,000 miles on it, it cannot go at a high speed?

Mr. WYANT. No, I didn’t say that. I said if a tire is not designed

for that, it cannot do that.

Mr. STUPAK. Well, what are the limitations then on this tire, this

15-inch, this P235/75R15-inch tire? What are the limitations?

Mr. WYANT. With respect to speed?

Mr. STUPAK. Any limitation you place on this tire.

Mr. WYANT. I’ll make the case before—there was a discussion

about Saudi Arabia.

Mr. STUPAK. No, no. I’m talking about American consumers. I go

out and buy my Ford Explorer and they have 235/75R15. What limitations would you place on me, as a consumer with that SUV, with

your tires? What limitations would you give me?

Mr. WYANT. Well, the tire is not a speed-rated tire, meaning it’s

not designed for the 95-mile-per-hour and up under continuous

service. It is designed for this market at speeds below that.

Mr. STUPAK. All right. What about off the road, what about low

pressure? Do you give me a guide on how many times I have to

check my tire, my pressure?

Mr. WYANT. If the tire runs at low speed for limited times at reduced inflation, it can run off the road. The difficulty comes when

you then come back on the road; if you do not reinflate, then you’re

severely overloaded, and particularly if you run high speeds.

Mr. STUPAK. In testimony earlier, I thought, Mr. Ono, that you

said that when you were talking about the Venezuela tires, that

you used different materials to build that tire, and most of those

tires were—the problems in Venezuela were used with different

materials. Was that a correct statement?

Mr. ONO. Well, the steel use is different. In America polyethylene

is used, while—polyester—correction. In the United States polyester is being used. In Venezuela nylon-embodied poly is used and

also compounds used are different.

Mr. STUPAK. But still in Venezuela the tires that had difficulties

were American-built ones, plus Venezuela-built tires?

Mr. ONO. It was—they were the Venezuela-built tires that had

problems in Venezuela, and as far as the ATX and the ATX II tires,

those tires were also recalled in Venezuela.

Mr. STUPAK. I realize they were recalled.

Mr. ONO. Correction—replaced in Venezuela. That is, the tires

recalled in the United States, the ATX and the ATX II, were also

replaced in Venezuela. I’m talking about 235/75R15.

Mr. TAUZIN. If the gentleman would yield a second, it’s my understanding there was a Ford replacement in Venezuela that included Venezuelan-made as well as American-made tires, and that

there has subsequently been a Firestone recall with reference to

Venezuelan-made tires that has extended the recall in effect. Is

that correct?

Mr. CRIGGER. My understanding is that the Firestone action had

to do with Venezuelan-produced tires. Venezuelan——

Mr. TAUZIN. The Firestone action. But the Ford action had to do

with both Venezuelan- and American-made tires. I yield back to

the gentleman.

114

Mr. STUPAK. Were any of those Venezuelan tires ever imported

or exported here to the United States?

Mr. CRIGGER. No.

Mr. STUPAK. Thank you, Mr. Chairman.

Mr. TAUZIN. I thank the gentleman. The time has expired.

The Chair now recognizes the gentleman from Tennessee Mr.

Bryant.

Mr. BRYANT. Thank you, Mr. Chairman. Gentlemen, I have a

number of questions I do want to ask you, and I might begin with

my understanding of your explanation of this chart and the increase in the claims which I understand to be domestic claims, the

charts from 1992 to 2000; and for the first 3 or 4 years they’re relatively the same, and then there is an incline beginning in 1996.

Is there any explanation you can offer those of us here that are

looking at this chart for that dramatic increase over a number of

years? Did something happen 1995/1996 that—in regards to this

tire, and I understand most of these were tread separation and had

to do with SUVs and maybe even the Explorer. Did the Explorer

change? I mean, what happened? Do you have any explanation?

Mr. CRIGGER. I wish we knew what happened. We’re searching,

as Mr. Wyant said, we’re searching diligently trying to look for root

cause. We really want to identify this root cause. We want it because the American people need it. We need it. We need to understand it, and it’s been elusive. The chart that’s shown represents

I think probably less than two one-hundredths or two-tenths of 1

percent of all of these tires. It’s a small population. It’s critical, of

course, because of the damage that we’ve seen, but we haven’t been

able to identify that yet.

Mr. BRYANT. Now you say in terms of quality control—and I

guess that’s, Mr. Wyant, in your area—that what you used as a

measuring stick was not necessarily the claims made but rather

the adjustments that you would make under the warranty provisions. And I understand in reading some of the data that’s been

provided that that standard was within an acceptable margin, parameters—is that correct—during all these years?

Mr. WYANT. That’s correct.

Mr. BRYANT. Now, is that consistent, that the adjustments would

be within an acceptable standard, yet claims made would be clearly

outside?

Mr. WYANT. Let me explain. That chart as an example, as Gary

said, is in the recall population from—that is .02 percent. So we’re

looking for this sort of needle in the haystack. But when the needle

in the haystack is there, it’s terrible. We know that. We don’t know

why but we know it’s terrible.

That particular chart there has not been used. We have used adjustment data because it is a more precise measure, and within the

adjustment population things look normal. In fact, some of these

tires look excellent, but still, we have got this needle in the haystack phenomenon that is not good. So based on, in fact, claims

data, not understanding the cause, and not really understanding

the phenomenon, we took out 14.4 million tires on the basis of safety, even though we did not know the cause.

Mr. TAUZIN. Would the gentleman yield a second? This needs to

be clarified. The tires that fail in these claims appear normal until

115

they blow. No one in their right mind would take them in under

warranty. They wouldn’t show up as a warranty claim, would they

not?

Mr. WYANT. It has been our company’s practice for many years

to provide customer satisfaction. In that population, our tires that

in fact have punctures, repairs, et cetera, the population distribution within that I am unsure of.

Mr. TAUZIN. Let me say it a different way. The idea of relying

upon warranty claims to decide whether you’ve got a problem or

not doesn’t make any sense when it comes to tires that blow apart

because they look normal. I have got four of them sitting downstairs in the basement, in the parking lot, under my Ford Explorer.

I just went and looked at them this morning, and they all look perfectly normal. But any one of them could blow if I drive at a high

speed in hot conditions and low inflation—all these combination of

elements. I would never take one of those four tires in for warranty. It would never show up as a problem until it blew and I’m

dead.

That’s the problem with the statistics we have here and how

did—and why did Firestone not understand that as they were calculating and collecting these statistics? I don’t understand why you

continue to rely upon warranty data to decide you had a problem

is my point. I thank the gentleman.

Mr. BRYANT. Mr. Wyant, do you have any comment? I have another question if you don’t.

Mr. WYANT. Yes. Obviously at this point, with the circumstance

that has occurred, we are looking closely at this type of claim data.

Certainly that is true. Normal tread separations have some type of

warning to them. In many reports here there is not a warning.

There is not a warning with a blowout or a massive puncture, as

an example, or a bottoming out on a chuckhole. So there are events

for which there is not warning, and in this particular case, there

are reported incidents, many, where there’s not warning for a tread

separation. That is not normal.

Mr. CRIGGER. Because there are normally tread separations in

tires; I mean, some level, that occur in all tires. I think you will

find that. But of course what’s happened here is the incident of the

tread separation is greater, that’s why we were concerned, and the

result has been terrible.

Mr. WYANT. Explain to me why on this particular tire that you,

as manufacturer of the tire, recommend that it run at 30 psi on the

Explorer, but yet Ford—and I assume in their manual, manual for

the Explorer—recommends at 26 psi?

Mr. CRIGGER. Bob, of course, could speak to the technical detail,

but from the nontechnical point of view it’s simply to add a margin

of safety, particularly during this time when we have tires on the

road, not yet replaced, which we’re trying desperately to get replaced by every means we know.

Mr. BRYANT. Weren’t these recommendations in place before this

whole situation came to the public?

Mr. CRIGGER. I don’t believe they were.

Mr. WYANT. No, they were not.

Mr. BRYANT. They were not?

Mr. WYANT. They were not.

116

Mr. BRYANT. You were in the room when I asked the—I think

it was Dr. Bailey—about the statistic that seemed to be out of kilter in terms of the number of incidents and fatalities with the Explorer as opposed to—with these tires on the Explorer—as opposed

to other vehicles, other SUVs with these same tires. Do you have

an explanation, any accounting for that?

Mr. WYANT. I believe you’re referring to the FARS data; is that

correct?

Mr. BRYANT. Yes, I believe so.

Mr. CRIGGER. Well, we know in total that our tires were sourced

to the Explorer vehicle and the great majority that were only a couple of years when other tires were sourced to that vehicle. So there

is a combination of our tires on that vehicle out there in a great

abundance and perhaps more than any other vehicle combination,

I don’t know. I think it’s one of the largest ever for Firestone on

one vehicle population.

Mr. WYANT. My hesitation on that response was due to the fact

that I believe the FARS data does not typically state the brand or

tire. What it states, I believe, is that—an alleged tire-related issue,

and when you look at it that way I believe the numbers are something like 5 percent of the FARS population is alleged to be tire

related.

Mr. BRYANT. In some of the materials—this will be my last question—that was prepared by the committee for me to review, and I

mentioned this to Dr. Bailey and I’m not sure I understood her explanation about the new recall of the, what, 1.4 million tires, and

how in the material that was furnished to me by the committee,

they indicate there’s a number of examples, the so-called population, that there really are only a few; like in some of these tires,

there’s only maybe one incident or two incidents. But because of

the relatively low number of tires out there, it meets their formula,

that they have to be recalled. Can you explain that to me? Is she

right or is that—is it true?

Mr. WYANT. Let me try to answer that one because I was there.

Mr. BRYANT. I’m sorry. Who’s going to try to answer?

Mr. WYANT. I’m going to try to answer because I was there. The

original request from NHTSA to expand the recall, our decision

was that we could not make a decision at this time and would come

back to that issue after these hearings, after these proceedings,

when we could look at it with a clearer mind, so to speak.

It was recognized that there were tires in there being requested

for recall that had one alleged incident, and that does not appear,

even though the rate is higher and we acknowledge the rate would

be higher, but the base is low, and one incident will drive the data

back and forth. And that is one of the reasons for discomfort with

the use of claims data. When the volumes enumerator or denominator are low, it jumps all over the place.

So if you take a number and say that is the level and everything

above that is going to be recalled, it is very problematic. I think

it’s a very problematic issue for the industry.

Having said that, we have cooperated extremely openly with

NHTSA and certainly will continue to do that. That issue needs to

be resolved. If there’s a new bright line based on claims data, I

think it needs to be one that is agreed to by NHTSA and by the

117

industry and that it can in fact be done. So our decision at that

time is we could not decide at that moment.

Mr. CRIGGER. I think that, just to add, I think that points out

why claims data had never been looked at in this way, because the

normal circumstance was that there might be one or two claims,

and that’s a claim, not an actual defect. That’s just a claim. What

happened differently here is when we looked at these and the numbers and the incidents and put all that together, then we wish, of

course, we had looked at claims long ago.

Mr. BRYANT. Thank you, Mr. Chairman.

Mr. TAUZIN. I thank the gentleman. The Chair recognizes the

gentleman from Tennessee, Mr. Gordon.

Mr. GORDON. Thank you. Let me first say to our guests, this has

been a long day and I appreciate your patience. It’s long for all of

us.

As I understand it, Ford requires suppliers to use the QS-9000

quality assurance program to control the quality of parts throughout their manufacturing process, including Bridgestone/Firestone,

and also that Ford can assure conformity of this QS-9000 procedure, either directly or through a third party. And through the conversations that my staff have had with your office, what has been

relayed to me is that both Firestone and Ford feel like that this

process was followed properly, that the assurance or the quality

program was followed, and that the verification was followed, and

you have gone back over this and you still can’t find a problem.

However, we have a problem or you wouldn’t have the recalls. So

we sort of have this black hole, this disconnect in between.

Again, my interest is more looking to the future and the lives we

can save in the future and the problems we can save rather than

trying to point fingers here, and so I would ask that through this

long and excruciating review of this control assurance program,

what have you discovered? I mean, what do we need to do different

in the future? How does this need to be changed? And I would just

like whoever to address it.

Mr. WYANT. I’ll try to address it. We are a QS-9000 certified company, and it by definition requires pretty high frequency of audits,

both externally—in our case it’s Lloyds of London—and internally

where we have to audit ourself and record, and the key foundation

is continuous improvement. In this particular case, in let’s say the

Decatur plant in, I believe it was September 1997, the plant was

certified for QS-9000. I think the data to date shows in fact that

the Decatur plant, if you look at 1997 on from adjustment data and

in claims data—but I have some uncertainties about claims data— looks very good. So looking at it that way, one could say that the

maybe QS-9000 is a causal factor here. QS-9000 encompasses the

entire plant from front to back, and that’s my comment.

Mr. GORDON. Well, I would also assume that QS-9000 means a

continuing improvement of it and trying to do better. So my question to you is, after you have gone back over this a number of times

what needs to be improved, what needs to be changed within this

quality assurance program both as a supplier as well as a manufacturer in terms of their verification?

Mr. WYANT. Obviously, this is one of the difficulties until we find

this cause, this low-frequency event but serious event. Until we

118

find that, I really cannot answer that question. That’s why cause

is so important.

Mr. GORDON. Well, is this just a Bridgestone problem or is this—

and in terms of this QS-9000—or is this an industry problem that

needs to be reviewed? I mean, who needs to take the lead in doing

what, so that this doesn’t happen again? Should Bridgestone clean

up their mess and that’s it? Should Ford do a better job in trying

to—when I say Ford, any of the manufacturers—in verifying? Do

you need additional—does NHTSA need to come in and do more?

Mr. WYANT. I think there have been some very good suggestions

made including NHTSA, and particularly, the testing process has

already begun, including the industry and NHTSA and SAE to see,

to try to determine if that is, let’s say, the missing link; can it be

discovered or uncovered in that process. So I think those are all

good moves.

Mr. GORDON. Do we leave this as a consumer—what’s going to

make me feel better here? Do we leave this up to private industry

and yourself to do to a great extent what you did with this earlier

QS-9000 and to come up with this procedure, let us know what it’s

going to be, and then we feel comfortable with that; or does there

need to be a greater role for the National Highway Traffic and

Safety Administration coming in as a monitor there?

Mr. WYANT. I think we’ve already agreed that we need to have

a joint investigation, if you will, of this, including NHTSA, us outside parties and organizations, like the rubber manufacturer associations, which means the tire industry.

Mr. GORDON. Again, I’m not looking at who’s at blame now. How

do we get a better process?

Mr. CRIGGER. Well, I think—I was just going to say I think

maybe part of what Bob is saying is that the better process is to

have all of these agencies and industry looking at what can be

done, and we’re committed to work with NHTSA, this committee or

whoever, to find any improvement that will ensure against this

kind of event again.

Mr. GORDON. And so how do we get that process? I mean, do we

wait for you to do it or do we need—you know, should it be congressional action? How do we get this process started?

Mr. CRIGGER. I believe some of the process has already begun.

I don’t know what the next steps would be, but I believe this looking at new ways and new methodologies within NHTSA has already begun.

Mr. GORDON. It would seem to me that if you don’t have an answer, then we’re going to have to supply the answer. Thank you,

Mr. Chairman.

Mr. TAUZIN. The Chair thanks the gentleman. The gentleman

from North Carolina, Mr. Burr, is recognized for 5 minutes.

Mr. BURR. Thank you, Mr. Chairman. Mr. Chairman, would it be

appropriate if I asked the crowd if there are any representatives

here from NHTSA still?

Mr. TAUZIN. Yes, it would certainly be appropriate.

Mr. BURR. Would the record be so kind to show that nobody from

NHTSA is here for the remainder——

Mr. TAUZIN. Would the gentleman identify himself.

119

Mr. WOMACK. I’m John Womack, deputy chief counsel for

NHTSA.

Mr. TAUZIN. Deputy chief counsel, John Womack.

Mr. BURR. I appreciate the gentleman for identifying himself and

would only make the comment to my colleagues here that I would

have hoped that a large amount of the NHTSA team would have

stayed, that I think it’s valuable to hear the firsthand information

from not only these witnesses but Mr. Nasser and Ford, and hopefully it would give them some insight as to some of the challenges

they’re dealing with.

Mr. TAUZIN. Would the gentleman yield?

Mr. BURR. Yes.

Mr. TAUZIN. I think there are two other NHTSA personnel here.

Would you identify yourself for the record?

Mr. YOUNG. My name is Bob Young. I’m defects investigator with

the ODI. I’m here for that precise reason.

Mr. BURR. I appreciate that. I would encourage you not to be as

reluctant to identify yourself next time somebody asks for—— Mr. TAUZIN. And there’s an additional NHTSA personnel, I

think.

Ms. DRONEBURG. Hi, my name is Terri Droneburg.

Mr. TAUZIN. She didn’t hear that. She was the investigator on

the Firestone case. Please supply your name to the clerk.

Mr. BURR. I’m only sorry after hearing that, Mr. Chairman, that

she wasn’t on the panel with Ms. Bailey to testify, since she was

intricately involved.

Mr. TAUZIN. Mr. Burr, if you would yield for a second, too. Let

me compliment Mr. Nasser. He’s been sitting here all day and I appreciate that, sir. I think it’s not only good that you came but good

that you stayed and heard these other witnesses. I appreciate that.

Mr. Burr.

Mr. BURR. I thank the chairman for his indulgence and let me

once again thank Mr. Ono for his attendance and the distance he’s

traveled. Although my questions won’t be directed at him, it’s not

because I don’t want him to contribute to any answers if he feels

so moved, but I will address them to his colleagues, Mr. Crigger

and Mr. Wyant.

Let me ask both of you, were you briefed by your legal counsel

prior to this testimony, and if so, were there areas that your legal

counsel told you to stay away from or not answer?

Mr. CRIGGER. No, sir.

Mr. WYANT. No.

Mr. BURR. Were you briefed?

Mr. WYANT. We were certainly briefed, but there’s no area that’s

off limits.

Mr. BURR. Let me ask you, there was a settlement—I say that

for the lack of the correct understanding—with at least State

Farm, possibly other insurance companies, on issues that they felt

were Firestone’s responsibility because they were exposed for damages that they felt were the result of the defect in tires. Firestone

settled those; am I correct?

Mr. WYANT. Yes, that’s correct.

Mr. BURR. Was Firestone the only insurance company that that

type of thing happened?

120

Mr. WYANT. I wouldn’t think so. State Farm is the largest vehicle

insurer in the country. I believe they have over 20 percent of the

markets.

Mr. BURR. Was part of the agreement with State Farm that you

would not have to admit to a tire defect?

Mr. WYANT. I don’t know anything about that, sir.

Mr. CRIGGER. I’m not aware of the question.

Mr. BURR. I mean, you two are apparently intricately involved in

finding a solution to the current problem that you have, and the

reason that I ask both of you the question is that I would hope that

also the Firestone information would have—or, excuse me, the

State Farm information would have been shared with two people

who are intricately involved in finding a solution to a tire problem.

Did you have something else?

Mr. CRIGGER. Well, I was going to say I’m informed there was

no settlement with State Farm, that individual lawsuits have been

settled.

Mr. BURR. There was, though, some type of, was there not a— okay. I’ll take your legal counsel’s shaking of his head as there was

no type of reimbursement made to State Farm, but clearly, there

were for the cases that State Farm had insured.

Mr. CRIGGER. There where cases that were handled by State

Farm, that’s correct.

Mr. BURR. Which again I would stress, that if you two are intricately involved in the solution, as I would expect NHTSA to be intricately involved in the information that’s out there, that both of

you ignored very pertinent information, or somebody in your companies, as it related to what State Farm and, in NHTSA’s case, one

particular claims adjuster had in fact identified.

Let me move on to specifically the Middle East and to Saudi. In

Saudi Arabia—— Mr. TAUZIN. Would the gentleman hold for a second?

Mr. BURR. Be happy to.

Mr. TAUZIN. We have being distributed a document—what’s the

number of it, 75—which relates to the claims or subrogation claims

that were settled for losses for the year 1995, 1997, 1998 and 1999.

Mr. BURR. I thank the chairman.

Mr. TAUZIN. And would note that for the record. I thank the gentleman.

Mr. BURR. Do either one of you suggest that there’s not a defect

in at least some of these tires?

Mr. CRIGGER. No, I certainly wouldn’t say that. There’s clearly

something wrong. There’s something to be found here. This is not

normal.

Mr. BURR. Do you also agree that there must be a defect in some

of the tires you had in Saudi?

Mr. CRIGGER. That was not the finding in the case of Saudi.

Mr. BURR. And what was the suggested pressure of the tires in

Saudi based upon Firestone specs?

Mr. WYANT. That would be a Ford Motor Company spec. I’m not

certain what it was. I believe it was 28 or 30, but I think they

should answer that.

Mr. BURR. Well, I have certainly gone through your field survey,

the Saudi field survey, and tried to determine it. And the reference

121

point used for 54 percent were over 30. I interpreted that meaning

30 was the benchmark.

Mr. CRIGGER. I think 30 was the pressure in Saudi.

Mr. BURR. Is there a reason it was 30 there but that you agreed

to 26 here?

Mr. CRIGGER. Again, I’m not the technical person, but I believe

in the case of Saudi Arabia we’re talking about a larger tire, a 16-

inch tire, and in the case of the recall tire we’re talking about a

15-inch tire.

Mr. BURR. In one of the instances in Saudi, a Firestone representative sent a letter to a dealer who had been persistent about

the problem that he saw in more than one case. Let me read you

the response that went back. This would be on tab 15, if you’re interested. The response that went back is: Entire pressure should be

checked every 2 weeks at least and before every long distance

drive. I’m sure you will agree that it cannot be guaranteed that the

tire was used at a proper tire pressure throughout its life.

Does Firestone still stand by that statement from a Firestone

representative that not only the customer is responsible but that

even though you can’t guarantee that the customer does it, that

you have no obligation, no exposure?

Mr. CRIGGER. I’m sorry, sir, I missed the last part of your—— Mr. BURR. In this particular case the Firestone response was the

customer should be checking the tire pressure every 2 weeks and

before long distance drives, and we—it says: I am sure you will

agree that it cannot be guaranteed that the tire was used at the

proper tire pressure throughout its life.

In other words, there may have been a time when the tire pressure went up or down from what we suggested, and that’s the fault

of the consumer.

Mr. TAUZIN. For the record, again we are talking about document

15.

Mr. BURR. And I think that that response from Firestone is from

Keshav Das, K-E-S-H-A-V, last name D-A-S.

Now, let me ask you, what does the manual say, because I think

I’ve heard both of you quote that customers are supposed to check

their tire pressure every month. Is that not correct? Did I not hear

one of you or both of you state that earlier?

Mr. WYANT. I don’t believe we stated that but that would be considered a normal practice, yes.

Mr. BURR. Then why would a Firestone representative put in a

letter that it’s the customer’s responsibility for them to check it

every 2 weeks and before a long distance drive?

Mr. WYANT. I think there are, even in this country, advisories to

check your inflation or adjust your inflation when you change the

load or if you’re going to high load in long distance travel. I think

that’s considered normal, and that may have been considered in

this 2-week response, particularly in Saudi where there is significant deflation/reflation issues because of going off road in the sand.

Mr. BURR. I could ask a number of other questions and I’m not

going to for the sake of time and because I think I would go over

ground already plowed. But let me just make an observation on my

part. I hope that Firestone understands the frustration that I think

all members on this committee share because we read statements

122

like this that clearly lead us to believe that Firestone was attempting to push aside a potential problem, and pretty soon the problem

just got so big that a response to a dealer or a settlement on a subordinate claim wasn’t enough.

Now, I’m not sure whether it was Houston TV or whether it was

Ford Motor Company or whether it was NHTSA, it’s sort of irrelevant. We’ve got to solve this problem and I wish I could agree with

you. I mean, I would like to have you stand up and say, you know,

what we put in that letter was a bunch of crap, that was not a sufficient response to our dealer, for our customer. We should have

been more concerned, we should have had our eyes open.

But that’s not the impression that we get when we read document after document after document where we’re debating who

was supposed to check the tires, how often were they supposed to

check them, and whether in fact Firestone has any responsibility

in it. My hope is that you will find that defect and that you will

find it quickly and that we will know the scope of the problem.

I thank the chairman for his indulgence and I yield back.

Mr. TAUZIN. I thank the gentleman. If he’s looking for a real good

case in the documents, look at document 80. Mr. Kenneth Bondi,

who was told by the Firestone company that his treads were worn

and that was the problem. And he responded, Well, that’s neat, but

I didn’t send you the treads, they’re lying on the highway; I sent

you the tire without the treads. How do you know they were worn?

And Firestone paid him. It’s an interesting document. Read it. The

Chair recognizes the gentleman from Ohio, Mr. Sawyer.

Mr. SAWYER. Thank you very much, Mr. Chairman. I think if

there’s anything that the committee has learned this afternoon and

this evening is that the issues that we’re dealing with here today

are enormously complex, the stakes are high, and that we’re all

searching for an answer.

Let me ask you this. I have got a series of relatively quick questions, I hope. Is it fair to say that a tire is a complex instrument,

that the actual compounds, the sourcing of materials, the manufacturing process, the design of the tire and the ambient conditions at

specific manufacturing locations could have an effect on the performance of the tire in a way that could contribute to the kind of

phenomenon that we’re discussing here today?

Mr. WYANT. That is correct. The one thing I would like to make

clear, that I don’t believe it has been made clear, but one of the

reasons the inflation issue continues to come up, as it would with

any tire manufacturer, is that it is the most essential part of the

performance of a tire. Without sufficient air pressure you will get

a tread separation, and that is a normal event when you have that

condition. It is normally exhibited by shoulder wear, as you pointed

out, and it is evidence of a separation inside of the tire because

that’s what tires do.

Mr. BURR. Would my friend from Ohio yield 1 second?

Mr. SAWYER. Can I get my time back?

Mr. BURR. If the chairman will indulge you. Let me just make

this point, Mr. Wyant. I don’t believe that the habits of Americans

as it relates to checking their tire pressure has changed significantly in this decade, and the belief that a reduction in tire pressure has caused this aberration because everybody’s running them

123

at a lower rate is just not believable. If it was the case because of

the habits of most Americans, there would be more than your tires

blowing up on the road. I am even guilty of running my tires at

less than the recommended rate because I don’t check them as frequently, and I think I know more than average in America.

Mr. CRIGGER. I agree with you on that. That’s true and I don’t

think we’re trying to say that there’s some change in the habits of

people that have caused underinflated tires to be the reason for

this phenomena. What I think—we’re just saying that normal,

under normal conditions, you would expect to see tread failures associated with underinflated or other phenomena, improper repair,

punctures and so forth.

Clearly what we have here is a problem. There’s no question

about that, and we’re looking for the solution. What is the root

cause of that problem? But there’s a level, there’s a level of masking that had existed because there is a—in a sense, a normalcy because of the outside impacts and influences on the tire that got lost

here, and now we have found the problem and we’re trying to identify it.

Mr. TAUZIN. The gentleman from Ohio has the time.

Mr. BURR. I thank my friend from Ohio.

Mr. SAWYER. Thank you, Mr. Chairman. My point was that it

seems to me there’s clearly a complexity of cause involved in all of

this and that it could be any of these variables or it could be a combination of these variables working together. Am I correct in that

assumption?

Mr. CRIGGER. [Nodding in the affirmative.]

Mr. SAWYER. In the course of the life of a tire design, does a tire

remain stagnant—is the design and the manufacturing of that tire

consistent over the life of a model or does that—does that model

migrate, does it evolve in its design?

Mr. WYANT. The normal practice as I described before, it’s under

a QS-9000, there are continuous changes or continuous upgrades in

processes, in designs and in manufacturing; that is correct.

Mr. SAWYER. Is it possible that that abrupt change could be the

product of one or more of these design variables in the productive

life of that design?

Mr. WYANT. It certainly could. Unfortunately, we do not have

that narrowed down.

Mr. SAWYER. You don’t have it narrowed down yet, but that’s the

sort of thing I assume that you’re looking for.

Mr. WYANT. That’s correct.

Mr. SAWYER. In the course of all of this do you continuously test

the tire according to NHTSA standards for the changes that are

taking place or does this take—how frequently do those tests take

place?

Mr. WYANT. We have rather frequent high speed and endurance

checks in production, and there’s a whole schedule for doing that,

and it depends on how frequently and the volume of production;

but these checks are made as an ongoing matter of business.

Mr. SAWYER. These tests were initially put in place, am I correct,

in 1968?

Mr. WYANT. That’s correct, on the DOT.

124

Mr. SAWYER. And they were design ed for tires that were largely

bias belt tires as the state-of-the-art as it existed 32 years ago.

Mr. WYANT. That’s correct.

Mr. SAWYER. Would it be your suggestion that one of the elements that we need to undertake as we look at all of this is to look

at the testing protocols, their appropriateness to the product and

their appropriateness to the application to which they’re going to

be put in the real world?

Mr. WYANT. We certainly agree with that and we would cooperate with NHTSA and the industry to accomplish that goal.

Mr. SAWYER. Let me just close with this, Mr. Chairman. You

may recall that in July we had a hearing where Secretary Slater

and Secretary Richardson were here with regard to the matter of

fuel consumption. On that occasion, I said let me mention one way

that we can make a difference in our fuel consumption that’s enormously important. The appropriate inflation level of tires makes a

huge difference in fuel consumption, and simply checking your tires

once a month not only decreases fuel consumption dramatically but

it increases the life of the tire.

It seems to me that that kind of continuous education is an enormously important part of what we do here today, what tire manufacturers and tire dealers ought to do on a continuing basis and

what government agencies ought to do if we’re going to promote the

responsible use of products like tires that we place our lives on.

Thank you, Mr. Chairman.

Mr. TAUZIN. I thank the gentleman. The Chair recognizes the

gentleman from California, Mr. Rogan.

Mr. ROGAN. Thank you, Mr. Chairman. Gentlemen, thank you for

your patience here today. I would like to go over briefly my notes

respecting the chronology of the Firestone tire sales overseas during this period. I want to make sure I have it right. If I misstate

something, please feel free to correct me.

With respect to the Firestone tires that were sold in the Middle

East, it was 1997 when the first complaints on the performance of

the 16-inch Firestone tire were reaching your office; is that correct?

Mr. WYANT. I’m aware of a tire coming in to the Akron Tech Center. I’m not certain if it was 1997 or 1998, but there was a tire.

Mr. ROGAN. Would it be fair to say that some time at or about

1997, a number of complaints at some point started coming in

about the Firestone tire performance in the Middle East?

Mr. WYANT. That’s fair.

Mr. ROGAN. And essentially, you checked those on a case-by-case

basis and found that all of the problems emanated from some sort

of customer abuse, but not from tire defect?

Mr. WYANT. That’s correct.

Mr. ROGAN. And at some point Ford Motor Company decided to

simply recall all of those 16-inch tires that had been sold on Ford

vehicles in the Middle East?

Mr. WYANT. Correct.

Mr. ROGAN. Was that a unilateral decision by Ford or did Firestone participate and agree to that?

Mr. WYANT. We did not participate in that.

125

Mr. ROGAN. Then at some point Firestone learned that there

were similar problems with tires being used in Venezuela, Malaysia and Thailand on both the 15-inch and the 16-inch tires, correct?

Mr. WYANT. Venezuela is correct. I’m fuzzy and uncertain about

the Malaysia, Thailand.

Mr. ROGAN. Do any of the other witnesses—— Mr. CRIGGER. I’m not aware of those other countries, but I know

in the case of Venezuela, we were talking about Venezuelan-produced product.

Mr. ROGAN. And that was on the 15-inch and 16-inch tire?

Mr. CRIGGER. I believe that’s correct.

Mr. ROGAN. When you say a Venezuelan-produced product, is

there any kind of product oversight that is done on foreign companies that Firestone owns to make sure that they are at least producing the tire to standard?

Mr. WYANT. They fall under QS or corporate QA types of processes and procedures, as do all of our plants, but they have local

market conditions.

Mr. ROGAN. But is there a reason why you differentiate and say

a ‘‘Venezuelan-produced’’ tire—is there anything about it being produced in Venezuela that makes it somehow less reliable than, say,

a domestically produced Firestone tire made here in the United

States?

Mr. WYANT. The Venezuelan issue is one of mislabeling of tires,

and there’s a significant number of tires in the market that are

mislabeled that are being recalled as a customer satisfaction issue

and replaced.

Mr. ROGAN. My question is, from Firestone’s perspective, do you

maintain certain safeguards and quality control over all of your

products that are manufactured, whether they’re manufactured offshore or here in the United States?

Mr. WYANT. That’s correct.

Mr. ROGAN. And that would also apply to Venezuela?

Mr. WYANT. Correct.

Mr. ROGAN. So was there anything about the fact that Firestone

tires were manufactured in Venezuela that, in and of itself, would

cause anyone to have any concern about quality of manufacture?

Mr. WYANT. Those were the tires that were mislabeled.

Mr. ROGAN. But not, not mislabeled to where the quality of the

manufacturer was concerned?

Mr. WYANT. That’s correct.

Mr. ROGAN. And those tires were also recalled by Ford in a unilateral action?

Mr. WYANT. Yes .

Mr. CRIGGER. Supplemented now by our own action earlier this

week after working with Indecka, the agency there.

Mr. ROGAN. When you received these reports from the Middle

East, and at least from Venezuela and from apparently some other

offshore jurisdictions, did that give cause for concern to Firestone

that there may be a design defect or a product defect in the domestically produced Firestone 15- and 16-inch tires?

Mr. CRIGGER. As we discussed earlier, in the case of Saudi Arabia, which is the one I know from discussion the most about, the

answer was no, because the team of engineers that went and invesVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00133 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
126

tigated tires there, including both Ford and Firestone engineers,

did not find a tire defect at the root of the problem in Saudi Arabia.

Mr. ROGAN. The reason I asked the question is that when I

looked at the documents it appeared that Firestone was satisfied

that this was a unique circumstance in the way the tires were

being used in Saudi Arabia or the Middle East that didn’t apply

here domestically, and so there was no cause for concern.

Mr. WYANT. That’s correct. Both Bridgestone/Firestone and Ford

Motor Company had joint surveys in Saudi Arabia, and as a result

of that, there was a joint survey in the southwest part of the

United States to confirm that the tires in this market were okay.

Mr. ROGAN. Mr. Chairman, may I ask the committee’s indulgence

for 1 additional minute?

Mr. TAUZIN. Would the gentleman repeat his request?

Mr. ROGAN. If the committee would indulge me with 1 additional

minute.

Mr. TAUZIN. Is there any objection?

Mr. ROGAN. I just see that the red light is on, and I don’t want

to impose on the committee’s time.

Mr. TAUZIN. I think the gentleman has—we show you having 35

more seconds. Proceed, sir.

Mr. ROGAN. Then can I have a minute and 35 seconds?

Mr. TAUZIN. Is there any objection? Without objection, the gentleman’s time is extended.

Mr. ROGAN. I thank the chairman and my colleagues. The reason

I asked the question, gentlemen, is that it at least appears to me

that the concern was not limited to these overseas tires; both Ford

and Firestone undertook additional tests on these tires in the

United States in 1999 and 2000. And so if you were simply satisfied that this was a condition peculiar to Saudi Arabia, there

wouldn’t be a need for an additional 2 years of testing, and that’s

where I’m seeking the clarification.

Mr. WYANT. The action in the United States was to confirm that

they indeed were okay. All of our data shows that there is no problem on those tires in the United States.

Mr. ROGAN. But when did you get back the report that said that

the condition is peculiar to Saudi driving conditions? That wasn’t

as late as middle of 2000, was it? It didn’t take 2 years to get that

report generated to you, 2 to 3 years?

Mr. WYANT. No, I’m on memory here again. I think it was middle-ish of 1999 from the Saudi survey, somewhere in there, maybe

earlier.

Mr. ROGAN. But Firestone continued conducting tests even up to

2000 but never notified NHTSA of any of these concerns?

Mr. WYANT. I’m not sure what tests you’re referring to that we

continued. We did a joint survey to evaluate the product. That’s

correct.

Mr. ROGAN. And that went all the way into 2000 and still up

until 2000?

Mr. WYANT. I’m not sure exactly when that was.

Mr. TAUZIN. The gentleman’s time has expired but the gentleman

may respond.

Mr. WYANT. It’s correct.

Mr. TAUZIN. That’s correct.

127

Mr. ROGAN. Is it July 7, 1999? Does that date ring a bell?

Mr. WYANT. No. On what part, sir?

Mr. ROGAN. On the survey that came back.

Mr. WYANT. No.

Mr. TAUZIN. The Chair will allow a response and we’ve got to

move on, Jim. Please respond to Mr. Rogan’s question and we will

move on to Mr. Green.

Mr. CRIGGER. That’s correct; July 7 for the Middle East tire survey.

Mr. TAUZIN. The Chair recognizes the gentleman from Texas, Mr.

Green.

Mr. GREEN. Thank you, Mr. Chairman. And like everyone else,

it has been a long day, not only for ourselves but for our panel and

even the next panel. Let me talk about the particular interest I

have, because—and I appreciate my colleague from California, because coming from Texas we’re now looking at the Department of

Transportation complaints summary. It seems like 75 percent of

the failures come from Texas, and maybe it’s because this last 2

months we’ve had, you know, 100 degree temperatures every day.

It was 105 in Houston, maybe not as bad as Saudi Arabia, but

pretty close; or maybe it’s because in Texas we do drive a lot of

SUVs and use a lot of tires.

What is the average warranty on an ATX? Is it 50-, 60,000

miles?

Mr. WYANT. I don’t believe there is a mileage warranty on that

tire.

Mr. GREEN. It seems like when I go buy a tire and my constituents do, they have a warranty of the more you pay, the better your

warranty, 40-, 50-, 60,000 or some even 70-, I think. Is there any

kind of—Firestone’s bound to sell a warranty or guarantee a tire

for a certain number of miles?

Mr. WYANT. You are correct. Certain levels of tires, and generally

there are price positions that cover different types and levels of

warranty.

Mr. GREEN. I am looking at the complaints, and it shows mostly

ATXs. Does anybody have an idea what the typical—would it be

40,000, 50,000, 60,000?

Mr. WYANT. It would tend to be at the higher end.

Mr. GREEN. So 60,000 wouldn’t be out of sight?

Mr. CRIGGER. I don’t think there is a particular mileage warranty that was associated with this particular tire, I mean as a

stated mileage warranty.

Mr. GREEN. Okay. That is surprising. Because, having bought

tires for many years, typically you do have some type of warranty.

Mr. CRIGGER. I think this would come sort of under the standard

warranty, which would be we would adjust up to 6 years, I believe,

depending upon——

Mr. GREEN. Well, that gets into my next question. You had lots

of questions on what Firestone is doing to correct the problem. Obviously, a lot of our constituents, particularly mine in Houston,

Texas, may have tires that are the ATX that may need to come in;

and we understand from earlier testimony there is a waiting list.

I would like to hear some of the questions about how Firestone is

128

compensating some of these customers for these recalled tires. It is

my understanding there is an offer of a $100 rebate per tire?

Mr. CRIGGER. That is correct.

Mr. GREEN. I happened to purchase a Bridgestone yesterday be- cause of a tire mishap, and it was $116, and that wasn’t bad because it wasn’t the size tire that we are talking about, but it was

for an SUV, and I am interested in how this offer compares to what

the average ATX tire would be. Is an ATX tire about $100 or $120,

in the Texas market, for example?

Mr. CRIGGER. I don’t know that answer specifically, but my un- derstanding is that the $100 should be able to cover ordinary tire

replacement, including the labor.

Mr. GREEN. Okay. And are you prorating it for tire wear? For example, if I had four ATXs on my Explorer and I drove it for 25,000,

is that $100 going to be covering all four, each tire, or is there

going to be an adjustment based on the wear?

Mr. CRIGGER. No, there is no adjustment for wear. We are replacing the tires, regardless of wear or age.

Mr. GREEN. Okay. Some of the impression I received from your

testimony and also the concern I have—and I think my colleague

from Ohio realizes how important it is that we as tire consumers

check our tires. In your testimony, you said tread belt separations

are usually caused by damage to the tires—improper repairs, overload, underinflation or simply by using tires with excessive wear.

That statement is in no way trying to transfer the responsibility to

the user from the production?

Mr. CRIGGER. No, sir. We know we have a problem here, and we

are trying to find it. That is simply the standard condition that we

are talking about tires. When—— Mr. WYANT. One comment on that. Again, the shoulder wear

issue does happen in service, and it is very—it is not infrequent to

see belts that are worn off and exposed and the tire is brought in

for an adjustment, and certainly that is a tread separation, but

that is what happens out there.

Mr. GREEN. In using SUVs for many years, like I said, I don’t

get to hunt and fish near as much as I would like, but you typically

do lower your air pressure when you are off road, but you fill it— you put more in it when you are driving like everyday city driving

or over the road. So I think most people who have those understand that, that if you—so, hopefully, they do remember, because

if they don’t remember to take it out, they will probably get stuck

somewhere.

The other thing, when someone brings their ATXs in with the $100 rebate, are they required to buy other Firestone tires, or can

they buy Bridgestone or some other tire?

Mr. CRIGGER. No, any tire. They can go have their tires replaced

with our tire, a competitor tire, wherever, and then they come in

to turn in the tires, because we have to account for them under the

recall, and then they get a refund for them.

Mr. GREEN. Okay. Thank you, Mr. Chairman. I appreciate the

time.

Mr. TAUZIN. The Chair thanks the gentleman.

The Chair recognizes the gentlewoman from New Mexico, Mrs.

Wilson.

129

Mrs. WILSON. Thank you, Mr. Chairman.

In a letter to the New Mexico Attorney General, Glen Hass from

Bridgestone explains that you abandoned your phased recall, but

you do say—he does say that ‘‘the shortage of replacement tires at

this point requires prioritization of those tires which are available

in order to maximize overall public safety. We are attempting to

address that issue generally by directing greater numbers of tires

proportionally to those areas where we have experienced the greatest number of incidents.’’

Why isn’t New Mexico on the list?

Mr. CRIGGER. My understanding is that all of the hot States are

trying to be satisfied in their needs. We are trying to satisfy all of

the requirement everywhere.

As you mentioned in the letter, we quickly abandoned the phased

recall idea. The phased recall idea was never meant to be, although

there was a misunderstanding that State 1 would be handled first,

and then only after it was handled would State 2 be handled and

so on. But we are trying to go where there is the greatest need.

We are doing everything we can to get tires to all of the States;

and, as we have just discussed, we have opened it up so that any

competitor tire available anywhere that a consumer can find for a

replacement is eligible for the replacement, as long as it is within

the parameters of the vehicle.

Mrs. WILSON. Let me ask that again. You have given a list of

where your highest priority States are based on your analysis of

the incidents. Why isn’t New Mexico on the list?

Mr. WYANT. At the time of the creation of that list, I believe New

Mexico was right at the cutoff of phase 2 when it was originally

described. It just went in sequence, and it was just a cutoff based

on where does it begin to level out. Now, that may be slightly different now, but that is——

Mrs. WILSON. That was just based on numbers of incidents, is

that correct?

Mr. WYANT. That is correct.

Mrs. WILSON. Not numbers of incidents per capita, right?

Mr. WYANT. Right.

Mrs. WILSON. How many people are there in the State of California—Jim, can you help me?

Mr. ROGAN. Thirty-four million.

Mrs. WILSON. Thirty-four million in California, 1.6 million people

in New Mexico. Ten percent of your fatalities are in the State of

New Mexico, and you didn’t bother to figure out that per capita

might make a difference?

Mr. CRIGGER. Clearly, that was a mistake. Clearly, we have

abandoned that kind of a program; and we are trying to satisfy everyone’s needs as quickly as we can. We didn’t wait to make the

recall. As soon as we understood what was happening, we took the

tires back. We didn’t know why, but we took the tires back.

We couldn’t, of course, have an inventory of that many tires; and

we couldn’t—the industry couldn’t supply that many tires. So we

have made some mistakes along the way, there is no question. But

we didn’t make a plan—we didn’t have a plan that was all worked

out. We simply reacted as quickly as we could, and we have been

130

changing and modifying as we have gone along to try and make it

better for consumers wherever we can.

Mrs. WILSON. You know, it would be nice—you are saying here

tonight that clearly you have made mistakes. Boy, that is real clear

now. But it would have been real nice if you had been willing to

acknowledge that in 1997 when you began gathering data that said

that over 2,500 tires were separating. It would have been even better if, when the Attorney General wrote to you from the State of

New Mexico, that you would have acknowledged that in the letter

that you sent back to her and said, yep, whoops, you are right, let’s

fix it.

Let’s talk a little bit about that data. You have said, said publicly

many times and said here again today, that you are working

around the clock to find the root cause. When did Firestone start

working round the clock to find the root cause?

Mr. WYANT. That was about the same time or slightly prior to

the decision process in early August.

Mrs. WILSON. So you started working round the clock in August

of 2000, is that correct?

Mr. WYANT. That is correct.

Mrs. WILSON. What were you doing while you were gathering

this data and running your tests and going out to Phoenix and Tucson and trying to figure out whether you had a problem?

Mr. CRIGGER. Well, we are always monitoring field performance,

as I mentioned before. And, believe me, this is extremely regrettable as we look back in hindsight. But the type of claim data that

we are talking about there was not used as a measure of performance indication.

Mrs. WILSON. What was this data used for?

Mr. CRIGGER. It was a summary of the number of claims, and I

believe it was used in an accounting sense.

Mrs. WILSON. To determine your profit and loss and liability,

wasn’t it?

Mr. CRIGGER. It was a summary of the liability, that is correct,

but it was not an indicator——

Mrs. WILSON. So you looked at it from a financial point of view

but not a consumer safety point of view?

Mr. CRIGGER. I am sorry to say that I believe that is the case.

Obviously, that is different today. But the information that we

were looking at—in-plant testing, field testing, warranty data—all

of the information that was—that we relied on for quality and assurance that the tires were good all looked right. It all looked good.

Now, what we have seen different here—and you are right. When

you look back at this you see that this is a different phenomena.

This is a population of tires that is so big that the claims data have

validity, and we never had a population of tires like that before.

Now, of course, we have seen it; and we acted on it as soon as we

saw it. I wish we could have seen it sooner.

Mrs. WILSON. I guess I would just end by saying this: I am a probusiness Republican. I am married to an insurance defense attorney. We talk a lot about liability in our house and about tort reform, and I usually lose a little credibility with every audience

when I admit that I am married to a lawyer. Despite that, he is

a nice guy. But it seems to me I am looking at a company that pays

131

attention to claims data as it affects profit and loss and liability,

and you have lost your way. It is about time you fired your lawyers

and started listening to your hearts and protecting the people of

this country. And when you do that, you will recover your reputation as a great American company.

Thank you, Mr. Chairman.

Mr. TAUZIN. I thank the gentlewoman. As a recovering lawyer,

I want to applaud your statement.

The Chair recognizes the gentleman from Minnesota, Mr. Luther.

Mr. LUTHER. Thank you, Mr. Chairman.

I want to follow up a little bit on the testimony about claims. As

I understand what you are saying is that you have always looked

at warranty data rather than claims data in judging performance

or making a decision on a recall. Is that what I hear you saying?

Mr. CRIGGER. That is correct.

Mr. LUTHER. When did you change your policy and begin starting

to look at claims data?

Mr. CRIGGER. My understanding is that when we were working

in the preliminary evaluation, gathering data, supplying data to

NHTSA, that this kind of data came into play, we started looking

at it, collecting it. I also understand that it wasn’t captured in all

of the easy electronic ways that some of the other data was, and

so it had to be compiled, but that is—— Mr. LUTHER. So, really, it is within the last month?

Mr. CRIGGER. It was very close to the time in which we made the

recall determination, that is correct. Not that we hadn’t looked at

this data. That is the problem here, is that we had looked at it and

we had never looked at it in conjunction with performance of tires.

Mr. LUTHER. Well, I guess where that would take me is how

many claims do you have today?

Mr. CRIGGER. I don’t know the answer to that. I am advised that,

associated with the original population of the preliminary evaluation, it was about 2,400 claims.

Mr. LUTHER. Okay. And over what period of time? In other

words, when did they start? What percentage are in litigation?

Mr. CRIGGER. Over a period of 10 years, and less than 10 percent

of them are litigated.

Mr. LUTHER. And I assume expert opinions have been rendered

in those cases? Experts have been hired by the adverse parties and

opinions have been rendered?

Mr. CRIGGER. Yes.

Mr. LUTHER. Would that span the entire 10 years then?

Mr. CRIGGER. During that time, yes. That is one of the things

that, because the numbers have clearly this year gone up dramatically, attendant to the publicity and everything else, but they

weren’t known in those numbers before, and as we did the forensic

analysis, just as you suggest, with experts other than our own on

tires and individual cases, in virtually all of those cases there were

punctures, improper repairs or something that influenced the tire

from the outside.

Mr. LUTHER. What opinions have been rendered by the adverse

parties in those cases?

Mr. CRIGGER. There have been a variety of opinions that have

been rendered.

132

Mr. LUTHER. Can you share some of them with us?

Mr. CRIGGER. Sorry, these are just—it is not an area that I am— in addition to the kinds of things that I describe, there have been

opinions or claims of design defects, certainly manufacturing defects, contamination, other areas.

Mr. LUTHER. Would you be willing to share those opinions with

the committee at the request of committee staff?

Mr. CRIGGER. Yes, yes, we will.

Mr. LUTHER. And have some of those cases been settled?

Mr. CRIGGER. I believe they have.

Mr. LUTHER. Are any subject to confidentiality agreements?

Mr. CRIGGER. My understanding is that confidentiality agreements are in place in some cases to protect industry trade secrets.

Mr. LUTHER. And obviously protecting any trade secrets, setting

that aside, are you willing to waive those confidentiality agreements in order to get the information to the committee?

Mr. CRIGGER. Other than the necessity to get release from plaintiffs in some of those cases, yes.

Mr. LUTHER. But at least from your standpoint, you are willing

to waive them.

Mr. CRIGGER. Particularly settlement amounts and those kinds of

things, nontrade secret areas, yes.

Mr. LUTHER. I am referring to the causes here and the information.

Mr. CRIGGER. That is not—my understanding is that that is not

subject to confidentiality.

Mr. LUTHER. But in any event, from your standpoint, you will

certainly waive that so that the information can be made available.

Mr. CRIGGER. That is correct.

Mr. LUTHER. When did you start doing an internal analysis within your company of these claims?

Mr. CRIGGER. Well, as I mentioned, my understanding is we have

always looked at claims, but they have been looked at separately.

They weren’t part of what I would call the QA review of tire performance, so that data has been looked at.

Mr. LUTHER. And there are documents, internal company documents that reflect these claims—— Mr. CRIGGER. Yes.

Mr. LUTHER. [continuing] and the analyses that have been done?

Mr. CRIGGER. I am sure that is correct. But only in the most recent case, which, of course, is the most serious case, did this become a factor in our discussion of performance.

Mr. LUTHER. But those internal documents again would be available to the committee?

Mr. CRIGGER. I believe they have been provided.

Mr. LUTHER. And if not, any request——

Mr. CRIGGER. We certainly will honor the requests, yes.

Mr. LUTHER. Thank you.

Then, on the final point, on the current advisory from the agency

on the 1.4 million tires, when will you be able to decide on that?

Because, obviously, any member of this committee can have constituents right now driving with those tires, and I am sure everyone would be very interested in knowing exactly when can we have

a firm decision from you on that.

133

Mr. CRIGGER. I understand we are trying to diligently look at

those individual cases. Because, as I mentioned earlier, in many of

those, there is only one claim that has generated the rate, and we

are trying to do that in a matter of days.

Mr. LUTHER. Okay. So we are looking at a matter of days on each

of the categories that fit within that request?

Mr. CRIGGER. I think to review all of the categories.

Mr. LUTHER. Okay. Thank you.

Thank you, Mr. Chairman.

Mr. TAUZIN. If the gentleman will yield, does that mean you will

have a public decision within a few days on whether to agree or

not agree on these new recalls or expansions?

Mr. CRIGGER. Yes.

Mr. TAUZIN. So we are a matter of days away from a decision?

Mr. CRIGGER. That is correct.

Mr. TAUZIN. Thank you, Mr. Luther.

The gentleman from Illinois, Mr. Shimkus, is recognized.

Mr. SHIMKUS. Thank you, Mr. Chairman.

The first question is pretty basic, and it is to Mr. Ono. Because

I have received this question and so I would like for Mr. Ono to

answer it, and then I will tell Mr. Ono how I answered the question.

The question posed to me today was, what do I tell the employees at the Decatur Firestone plant? So my question is, if you were

asked that question, what would you tell—what is your message to

the Firestone employees in Decatur, Illinois, today?

Mr. ONO. As far as my message to the employees at the Decatur

plant, I have already issued a message to improve quality even

more and have asked for their endeavor in this area.

Mr. SHIMKUS. I was asked that by one of the local medias. Decatur is approximately 30, 35 miles from my district. I do have some

of your employees as my constituents. My response to the employees is work with management, produce the best quality tire, and

regain the trust of the American people. And that is in the best interests of my constituents who work in your facility and hopefully

you can move in that direction.

Mr. CRIGGER. We know we have 2000 dedicated, committed employees in Decatur, and we want to find the root cause so that we

can satisfy the country and satisfy Decatur.

Mr. SHIMKUS. Mr. Chairman, that is all the questions I have. I

yield back.

Mr. TAUZIN. I thank the gentleman.

The gentlewoman from California, Ms. Eshoo, is recognized for 5

minutes.

Ms. ESHOO. Thank you, Mr. Chairman, for calling this all-important hearing.

I would like to begin by asking the people that are here testifying, when you began to reimburse buyers of ATX and Wilderness

tires who experienced this tread separation, when did you start reimbursing them?

Mr. CRIGGER. You mean under the recall program?

Ms. ESHOO. No. Just the very first time that something happened, when did you start to reimburse for the tread separation?

134

Mr. CRIGGER. Well, if I understand the question, we would have

done ordinary warranty adjustments from the first incident or the

first presentation——

Ms. ESHOO. Well, I don’t think this is ordinary warranty adjustment. I don’t think that is what the hearing is about. I think you

know exactly what I am asking about. I am not talking about tires

that may end up with X number of nails in them. I am talking

about the tires that are in question.

So what I am looking to determine from you is, when this began,

when was there a reimbursement of these—on the ATX and the

Wilderness tires? Maybe I should ask you when you began to reimburse State Farm policyholders or any other policyholders for damages that were sustained from tread separation?

Mr. CRIGGER. Let me see if I——

Ms. ESHOO. I can’t believe that this is a clouded question. I

mean, I am known for being pretty direct, and I don’t know how—

let me move on and ask how many reimbursements you made and

how much was paid out?

You don’t know anything about that either?

Mr. CRIGGER. I am still not sure of your question. I think the

first lawsuit that was brought on these recalled tires was in 1994.

Mr. TAUZIN. Will the gentlewoman yield?

Ms. ESHOO. As a result of that, did you initiate any corrective action on your part? Were there any mini-recalls? Was there any

change in tire makeup? Was there testing?

Mr. CRIGGER. I don’t think there—on each individual case, of

course, there is a forensic analysis. In the 1994 case, there was no

determination of any tire problem associated with that case, but we

do continuous field survey, continuous testing and continuous monitoring of the warranty data.

Ms. ESHOO. So it was so insignificant—this is what I seem to be

getting here—it was so insignificant that until the 6.5 million tires

were determined to be part of a recall that the action was just so

slow that you considered it insignificant?

Mr. CRIGGER. No, it is never insignificant when anyone is injured

or there is a loss of life associated with our product.

Ms. ESHOO. So when was the flag raised? What was the determining factor, whether it was reimbursement to buyers relative to

the problem? When did the red flag go up with Firestone/

Bridgestone?

Mr. WYANT. The decision was made on August 8, and the announcement was made on August 9, and that is when the reimbursement program began.

Ms. ESHOO. There never was any reimbursement before that?

Mr. WYANT. Okay. Reimbursement in a general term in the tire

industry. Radial tires particularly come out of service quite frequently due to tread separations or wearout to tread separations;

and, in that sense, there is adjustment or reimbursement as a

course of business to satisfy customers; and that has been practiced

for many years for all tire companies.

Ms. ESHOO. So business was going along just fine until August

8? Is that what you are saying?

Mr. CRIGGER. No, obviously not. Obviously not.

135

Ms. ESHOO. Why can’t you answer that question then? Were

there any indicators, any red flags, anything that went up before

this debacle, this consumer debacle, public relations debacle for

your company, tragedies for families? Was there anything that you

ever considered before this that you can share with us?

Mr. CRIGGER. All of the information that we used, the traditional

information to evaluate the quality and performance of tires

showed these tires to be good tires, effective tires.

Ms. ESHOO. Let me ask, what do each one of you drive? What

kind of tires do you have?

Mr. CRIGGER. I have Wilderness tires.

Ms. ESHOO. You have what?

Mr. CRIGGER. I have Wilderness AT tires.

Ms. ESHOO. What have you done? Have you gone to your local

dealer?

Mr. CRIGGER. They are not among the recalled population.

Ms. ESHOO. Are you worried about driving them yourself, or your

family?

Mr. CRIGGER. No, I am not. Obviously, Firestone is very concerned about this.

Ms. ESHOO. Do you really mean that?

Mr. CRIGGER. We have employees as well—we are a big organization in terms of employees, and our employees drive on these same

tires that are being recalled. If we had had any indication that we

should do something, we would have done it. We have done the

right thing. We reacted when we knew. We wish we knew earlier.

Clearly, we wish we knew earlier. None of us—it rips the hearts

out of the whole company and the individuals in it to think that

people have died on our tires.

Ms. ESHOO. Well, then why are you resistant to the additional

1.4? Where is that resistance coming from and why?

Mr. CRIGGER. We are trying to evaluate that now. But, as I mentioned, in those cases—— Ms. ESHOO. If you didn’t evaluate the data before, though, why

would the American public trust you to evaluate data fairly

now——

Mr. CRIGGER. Clearly, we have—— Ms. ESHOO. [continuing] when the signal only went up on August

8?

Mr. TAUZIN. The gentlewoman’s time has expired.

The gentleman may respond.

Mr. CRIGGER. Clearly, we need to regain America’s trust. There

is no question about that. And we want to do that. We are trying

to do that.

Ms. ESHOO. Can the rest of the people at the panel just answer

the question?

Mr. TAUZIN. The gentlewoman’s time has expired.

I had a request from Mr. Dingell who had to leave early because

of his foot injury to make the vote, and he asked for additional time

to ask a question. Is there any objection? Without objection, Mr.

Dingell is recognized for 2 minutes.

Mr. DINGELL. Mr. Chairman, I thank you.

Gentlemen, your statement says that in its efforts to find the

root cause of the problem, Firestone is looking at plant operations

136

in the mid-1990’s. This included a period of time when Decatur and

other Firestone plants were operated with replacement workers.

Now, I would like to bring to your attention a graph over there

which shows in purple the claims rate attributable to tires produced at the Decatur plant during the time it was operated by replacement workers and the claims attributable to that plant after

the strike ended in 1996. This graph was prepared at my request

by Ford Motor Company who used Firestone’s tread separation

data. As you can see, claims attributable to production at Decatur

dropped dramatically after the strike ended. From January 1995 to

November 1996—when replacement workers operated the plant— the claims rate was extremely high: 404 claims per million tires

produced. After November 1996, when permanent workers were allowed to return to their jobs, the claims rate attributable to production at the plant fell 55 percent to 183 claims per million tires produced.

Now, I would note that to me, at least, the claims rate of 183 per

million is still too high. But the question now is, does this analysis

not indicate to you and to me that a significant part of the problem

at Decatur occurred during the time the plant was operated with

replacement workers?

Mr. WYANT. We don’t have any disagreement about the timing.

We believe the strike was 1994-1995 with replacement workers,

and it is coincident with that peak, and we are looking at that,

have been looking at that, and it is still on the table, but we are

not here to blame the workers of the Decatur plant.

Mr. DINGELL. It is pretty hard to say it is a coincidence. You had

a lower level of failure and complaints and then the strike came.

You put in replacement workers. Then you had a significant increase in the number of claims. Then, when the regular workers

came back, the level of claims subsided.

Now, what could have caused the ATX 15-inch tires produced at

Decatur to account for such a large number of claims during that

period?

Mr. WYANT. That is what we are trying to determine through the

cause team to find out that same answer. We would like to know

what that answer is. We just do not know at this time.

Mr. DINGELL. You have not been just looking at this today. This

is a question that has been before you for a long time. Here you

have a question of replacement workers in there. It is the only

thing that anyone here can point to. Can you point to anything else

which would indicate a basis for assuming that this was a cause

for this enormous increase in the level of claims?

Mr. WYANT. I am not prepared to say that that is the cause. It

is coincident in time. We all agree.

Mr. DINGELL. Now, let us look here. Decatur is not even the largest producer of ATX 15-inch tires. Joliette and Wilson are both

larger producers of these tires, are they not?

Mr. WYANT. That is correct.

Mr. DINGELL. Now, you indicated to me earlier that replacement

workers were not used in positions that required technical expertise such as inspectors, quality control and awlers. Now, are you

able to make—can you tell me who was used to do that kind of

work? Was it replacement workers? Was it regular workers who

137

had been doing the work previously? Was it management? Who did

that work?

Mr. WYANT. The people that did that work at that time at the

initiation of the replacement program were salaried people, they

were supervisors, they were QA people, they were lab technicians.

And, as I indicated before, we will get you documentation that

shows what happened throughout that process. I do not know if

that was 100 percent of the way or part of the way.

Mr. DINGELL. All right. Now, it must be observed that in those

plants for that kind of work, you did use hourly, blue collar workers, did you not, for inspectors and for awlers?

Mr. WYANT. That is correct.

Mr. DINGELL. That is correct. So you lost the entirety of them,

of that body of workers when the strike occurred, did you not?

Mr. WYANT. That is correct, but we—— Mr. DINGELL. That is correct.

Mr. WYANT. But we retained, of course, the supervisors in those

areas and other technical people.

Mr. TAUZIN. The gentleman’s time has expired.

Mr. MARKEY. Will the gentleman yield briefly?

Mr. DINGELL. If I have time, I will be happy to yield, but I am

afraid the 2 minutes are all gone.

Mr. MARKEY. I would just like to follow up on this Decatur question just for a second. When did you find out that there was a higher rate of separations at the Decatur plant than other plants?

Mr. WYANT. The claims data indicated that when we went into

the detailed analysis here at the end of July.

Mr. MARKEY. So the end of July was the first time that you knew

that you had a higher rate of separation at Decatur than the other

plants?

Mr. WYANT. The big indicator was on the claims data. If we look

at the adjustment data, there is lesser of an indicator, that is correct.

Mr. MARKEY. Well, let me refer you to—in book 1 here. Do you

have it down there? In book 1, tab 25. In book 1, there is a chart

on tab 25, a memo to Dave Lobbe from William Thomas. And the

date is—let me get the date here. The date is January 19, 2000.

So it was the beginning of this year. If we move into this tab and

you move about 10 pages in, what you will find is the 1997 separations by plant; and under your own document here it says that 57

percent of the total separations in 1999 came from the Decatur

plant.

Mr. TAUZIN. Which, by the way, was 10 percent of the total production.

Mr. MARKEY. And then it lists all the other plants. Moreover, a

little bit later, which I am sure was of great concern to you, about

3 pages later in this memo, it says that 62 percent of the total separation costs came from the Decatur plant. So that must have been

of great concern to someone in the corporation, that at only one

plant 62 percent of your costs were now rising from these separations. This notice that you had of this problem was January 19,

2000.

Moreover, on the first of those pages that I referred you to, it actually has the 1998 numbers as well which shows that the lion’s

138

share of the problems in your operation came from Decatur. And

I am not talking 20 percent or 30 percent but 57 percent, 62 percent of your problems. Don’t you consider that to be notice that you

had a serious problem at the Decatur plant?

Mr. TAUZIN. There is a document a year earlier than that, Mr.

Markey, in the books that shows the same thing. By the way, my

correction, it was 18 percent of total production with 57 percent of

separations, but there is a document a year earlier than the one

Mr. Markey is citing.

Mr. MARKEY. So following up then on the point that Mr. Dingell

made, the temporary workers were hired; they made these tires. In

1998 and 1999, in your own document, you have evidence that the

Decatur plant is responsible now for the lion’s share of all of the

separations of your entire operation. Do you consider that to be notice that you had a serious problem with these tires that were affecting the public?

Mr. CRIGGER. As we discussed earlier, I wish we had looked at

this kind of a document in conjunction with our performance in

terms of the tires. This was looked at in a different way——

Mr. MARKEY. What was the document prepared for? The document was prepared in order to identify problems at your plant. The

document was prepared in order to find out what the liabilities for

your company would be because of defects in a product that the

public was buying. For what other reason would this document

have been prepared other than for you to identify a serious problem

at the Decatur plant subsequent to the strike which had led to the

production of these defective tires?

Mr. CRIGGER. Clearly, we have a problem at the Decatur plant;

and we are trying to determine the cause. It would be easy to

blame the replacement workers, but we haven’t been able to pinpoint that——

Mr. MARKEY. I am talking about you now. I am not talking about

the replacement workers. I am talking about this is a January 19,

2000, memo to you. You did not begin this recall until August.

Mr. CRIGGER. That is correct.

Mr. MARKEY. Why did you wait 9 months? You knew in January

that you had a serious problem, and you waited until August to recall the tires.

Mr. WYANT. Just to comment on that, we are not here to make

excuses about that, and we have acknowledged that issue. But

some of the confusion—confusing factors about this, there was increasing production in this time period, and there is abundance of

flotation-type tires that are in this plant, and they are on—substantially on this list, of the 1.4 million, and they are an extraordinary service, much more difficult service, higher percent off the

road, and it makes it more difficult to make the analysis clear. As

Mr. Crigger said, in hindsight, we should have taken this as a flag

and should have done a better job of investigating.

Mr. TAUZIN. Proceeding a little bit out of order now, and we are

going to wrap up your testimony in just a second, but I want to

follow up on both of my friends’ questions. You provided NHTSA

and us with this 1998 separations by plant graph that Mr. Markey

is citing. Did you prepare one for 1997? We don’t have it.

139

Mr. WYANT. We will check. If we have it, we will certainly give

it to you.

Mr. TAUZIN. Is this an annual preparation and do you have them

for previous years? If you do, I am making a formal request upon

you for those documents.

Mr. WYANT. Yes.

Mr. DINGELL. Mr. Chairman.

Mr. TAUZIN. Mr. Dingell, you have a few seconds left of that 2

minutes I gave you, sir.

Mr. DINGELL. I will try and do it.

I note here that Firestone representatives have told me that during the period between July 1994 and the end of the year, which

was before the replacement workers were brought in, the Decatur

plant produced 641,325 tires. How many did they produce after

that, after the replacement workers were brought in during a similar period of time?

Mr. WYANT. I do not have that information available to me.

Mr. TAUZIN. Would you please supply those production figures?

Mr. WYANT. We can get those figures.

Mr. DINGELL. I am curious how you could have produced this

number of tires at Decatur when you apparently had a strike or

some kind of difficulty going on.

Well, thank you, Mr. Chairman. You have been very generous.

Mr. TAUZIN. Thank you, Mr. Dingell. Again, we tried to accommodate you. I hope you understand that. We try to accommodate

all members, but we also have to accommodate our future panel.

Mr. Ono and Mr. Crigger and Mr. Wyant, at the initiation of this

question and answer session, I made a request upon you which you

agreed to honor in supplying this committee with all of the test

data on these tires. I want you to know why we want it, because

we may have future inquiries directed to you.

We are going to want to know whether or not you were aware

in 1989 and 1990 that Ford was going to recommend and was, in

fact, recommending 26 pounds per square inch in their Ford Explorers and, knowing that, did you, in fact, test in high speed for

that pressure. And if not, how is it that you certified these tires

to Ford so that they would put them on the Ford Explorer line as

it went out to consumers not only in America but across the world?

Those are very important questions, and I can’t get answers to

them because you have failed over the last week to supply us with

test data information.

Mr. WYANT. We have been looking for that data almost around

the clock, and it is older data and we have not yet found that.

Mr. TAUZIN. I hope it doesn’t show up on somebody’s coffee table,

but I expect to see it as soon as you find it so that we can proceed

with these questions.

The record will stay open for 30 days, as is our custom. We reserve the right to submit written questions to you as well as to

make further requests for documents. We hope that you will comply.

As I pointed out, we do have the power of subpoena. I would

rather not have to exercise it, if you will be as freely cooperative

as you have indicated you want to be today.

140

There have been numerous requests from other members for documents. I hope you have a good list of them, because we do. We

will be expecting to see them as quickly as you can obtain them

for us.

I don’t have to tell you that this is not the end, this is just the

beginning of this inquiry. We are as anxious as I hope you are to

see this behind us and Americans and citizens of the world who

buy your products much safer individuals.

We thank you for your testimony, and you are dismissed.

Mr. WYANT. Thank you very much.

Mr. CRIGGER. Thank you.

Mr. TAUZIN. The Chair will now call the third panel, which will

consist of Mr. Jack Nasser, President and Chief Executive Officer

of Ford Motor Company in Dearborn, Michigan; Mr. Thomas

Baughman, Engineering Director, Truck Consumer Business Group

of Ford Motor Company; and Helen O. Petrauskas, Vice President

of Environment and Safety Engineering of Ford Motor Company.

The Chair recognizes—it will just be Mr. Nasser. Then we will

welcome Mr. Nasser, and the Chair recognizes Mr. Upton to administer the oath to the witness.

Mr. Upton.

Mr. UPTON. Mr. Nasser, we thank you for waiting patiently

throughout the day. And as you heard with the first two panels,

we have a long-standing tradition of taking your testimony under

oath. Do you have any objection to that?

Mr. NASSER. No.

Mr. UPTON. The committee rules allow you to be represented by

counsel as well. Do you wish to have counsel?

Mr. NASSER. No, I don’t.

[witness sworn.]

Mr. UPTON. You are now under oath, and I yield back to Chairman Tauzin.

Mr. TAUZIN. Thank you, Mr. Upton.

Mr. TAUZIN. Mr. Nasser, as is customary, your written statement

is a part of our record. You have 5 minutes to summarize so that

we might get into questions and answers. And you are welcome,

and, again, my appreciation for your reconsidering and being with

us today and particularly for sitting through this long hearing at

this point. Mr. Nasser.

TESTIMONY OF JACQUES NASSER, PRESIDENT AND CHIEF

EXECUTIVE OFFICER, FORD MOTOR COMPANY

Mr. NASSER. Good evening, Chairman Tauzin and Chairman

Upton and members of the committee. I appreciate the opportunity

to be here. I know that this has been a very complicated and very

sad situation, and we are all concerned.

But before I discuss the Firestone recall, I would like to say a

few words about our company. As I think everyone knows, Ford

has a distinguished heritage and a bright future, and, without

question, it is an American icon. Throughout our history, our

strength has been with our employees and loyal customers.

Thirty-two years ago, I joined Ford Australia as a trainee, and

I never dreamed some day I would lead Ford Motor Company and

represent the Ford team. I am here tonight because I know that

141

you and the public have questions about the tire recall, and I am

here to answer those questions, and I will remain here until you

are satisfied.

Now, let’s get to the heart of the issue. When did Ford know

there was a problem with the Firestone tires? What have we done

about it, and what are we going to do about it in the future?

Let’s start with, first, when did Ford know there was a problem

with the Firestone tires?

Now, I have said this before, Mr. Chairman, but I think it is

worth repeating. Because tires are the only component of a vehicle

that are separately warranted, Ford did not know—I will repeat

that—Ford did not know that there was a defect with the recalled

tires until we virtually pried the data from Firestone’s hands and

analyzed it ourselves. It was only then, a few days before the recall

was announced, that Ford engineers discovered the conclusive evidence that the tires were defective. We then demanded, insisted

that Firestone pull the tires from the road.

Looking back, and it is easy to look back at this point, the first

signs of a problem developed in Saudi Arabia, and we have had a

lot of discussion on the Middle East and Saudi Arabia during this

hearing. It first started when our dealers reported to us complaints.

We immediately asked Firestone to investigate. Firestone did so,

and they concluded that the tread separations were caused—and

you heard that earlier this evening—by improper maintenance and

road hazards that are unique to that environment.

I have to say that we were still very troubled by that explanation, so we didn’t stop there. We then asked Firestone to conduct

all sorts of tests on those tires, and after each and every test Firestone reported there was no evidence of a defect. This did not satisfy our Saudi customers; and, for us, customers are paramount.

So, about a year ago, Ford replaced the Firestone tires. We replaced them with Goodyear tires, because we had no choice. We did

it because we put our customers first.

I should add that at the very same time that we were going

through those issues in Saudi Arabia, we wanted to know if our

U.S. customers were having tire problems. This goes back to early

last year when we asked Firestone to review its data, and we were

assured at that time that there was absolutely no problem in the

U.S. Our data as well as government safety data didn’t show anything either, so we had nothing to go on at that point. Firestone

was saying, no problems. The government data suggested there

weren’t any problems. Our own data, which is limited because we

don’t warrant the tires, suggested no problems.

We still felt that we should do more. We didn’t want to stop

there. We kept on going, and we asked Firestone for one more evaluation, a deep-dive, thorough evaluation, particularly in the Texas,

Nevada and Arizona area, because that is where a lot of these tires

and a lot of the volume happened to be. Firestone reported back,

as before, that there was absolutely no defect, and you heard some

of that earlier this evening.

My purpose isn’t to finger-point—that is not what this is about—

but simply to tell you that at each and every step, Ford actively,

proactively took the initiative to uncover the tire problem and to

142

try and find a solution. But it was not until Firestone’s confidential

claims data became available to us that it became clear that something had to be done. Looking back, particularly after listening to

the testimony this evening, if I have one single regret, it is that

we did not ask Firestone the right questions sooner. That is my

single regret, that we didn’t ask them the right questions sooner.

So what have we done so far? Because we are here and we have

to try and find a solution. We started by insisting that Firestone

recall the bad tires. I can take you through a chronology of that

later, if you wish.

I then made a commitment to our customers that Ford would

dedicate all of its resources to support the Firestone recall. In just

3 weeks over 1.7 million tires have been replaced.

We also worked very closely with Firestone’s competitors, the

global tire industry, to increase tire availability. I spoke to the

heads of every one of those companies to encourage them to get

good tires into the U.S. market as quickly as possible. We also suspended production at three of Ford’s plants, because we wanted to

free up more replacement tires for the recall.

In summary, we did everything we possibly could to replace bad

tires with good tires as quickly as possible.

Now, looking forward, what are we going to do? Because I share

the sentiment of the committee. That is the most important thing.

We can’t let this go on.

Mr. Chairman, there are almost 3 million Goodyear tires on Ford

Explorers that have not had, as far as we know, one tread separation problem—3 million tires on Explorers. So we know that this

is a Firestone tire issue, not a vehicle issue. But we stand back

from it and say we have got to make sure it just doesn’t happen

again.

So today we are announcing—and I think this has to be done

jointly with NHTSA and the committee and with the cooperation

of other manufacturers and the global tire industry—that we implement two new reforms that we feel are critical for customer

safety going forward.

First, we will work with the tire industry to implement an early

warning system. This early warning system will be designed to detect the first sign of tire problems on vehicles already on the road;

and this reporting system must use comprehensive, real-world data

that we now know is so critical to spotting defect patterns.

Second—and this was mentioned earlier by the safety agency—

because everyone’s products and our products are increasingly sold

around the world, this is a global marketplace, we will advise U.S.

safety authorities of safety actions that are taken in overseas markets and vice versa. From now on, when we know it, so will the

world.

I have to say that I have received hundreds of letters from Ford

owners, and I have spoken personally with many of them, and, believe me, some of these conversations have been extremely difficult.

I want you and all Ford owners to know that we at Ford will not

rest until every bad tire is replaced. I will do everything in my

power as the President of the Ford Motor Company to maintain the

confidence and the trust of our customers.

143

Thank you, and I would be pleased to answer your questions at

this time.

[The prepared statement of Jacques Nasser follows:]

PREPARED STATEMENT OF JAC NASSER, FORD MOTOR COMPANY

Good afternoon, Mr. Chairman, members of the Committee. I am Jac Nasser,

President and CEO of Ford Motor Company. I have been with Ford Motor Company

for more than 30 years in a variety of positions around the world. I am proud of

the great contributions Ford Motor Company has made to improving the standard

of living of millions of people around the world. I am driven to make sure that everything we do serves all customers, and clearly their safety is uppermost on our

minds. For that reason, I am deeply troubled by the fact that there are defective

tires on some of our vehicles.

As you know, Firestone manufactured and warranted these tires. However, because so many of these tires were used as original equipment on Ford products, we

have taken extraordinary steps to support this recall and ensure the safety of our

customers. Ford Motor Company is absolutely committed to doing the right thing

to protect our customers and to maintain their trust.

Throughout this period, we have been guided by three principles. First, we will

do whatever we can to guarantee our customers’ safety. We are committed not only

to their physical safety, but also their feelings of security when driving our vehicles.

Second, we are working hard to find and replace bad tires with good tires. That includes making sure that we understand the scope of the problem and finding the

cause of the problem. Third, we will continue to be open about any data, statistics

or information that we have, and will share anything new as soon as we know it.

Because I don’t want there to be any question about our openness, I wanted to

personally discuss Ford’s actions with you at this hearing.

Actions We Have Taken

Now, let’s talk about the actions Ford has taken to support the recall and why

we believe these are the right actions.

First, this is a tire issue, not a vehicle issue. We have millions of Goodyear tires

on 1995 through 1997 Explorers—the same specification tire operating under the

same conditions—and they haven’t experienced these problems.

Furthermore, the Explorer is one of the safest SUVs on the road. Proof of this

is our exemplary safety record over the last decade. The most recent data from the

Department of Transportation show that the Explorer has a lower fatality rate than

both the average passenger car and competitive SUV, as shown in Attachment 1.

Additionally, Explorer’s fatality rate in rollover accidents is 26 percent lower than

other compact SUVs (Attachment 2).

Second, we strongly support Firestone’s decision to recall 15’’ ATX and Decaturbuilt Wilderness AT tires. Based on the Firestone data we have, we’ve determined

that these tires are problem tires. Charts summarizing our detailed analysis of the

Firestone data are included in Attachments 3 through 11.

What we still don’t know is why these tires fail. We are working hard on that.

Customer Focus

As I said, our top priority is to replace faulty tires as fast as possible. I’d like to

highlight a few of the many things we have done to support Firestone’s recall and

speed replacement. As of September 1, about 1.5 million tires have been replaced—

about 23 percent of the total population of affected tires. We worked with the tire

industry to increase production of 15-inch tires by more than 250,000 tires per

month by the end of September. We have suspended production at three assembly

plants, adding approximately 70,000 tires to the replacement population. We have

engaged 3,100 Ford and Lincoln-Mercury dealers to perform tire replacements.

We’ve also made a major effort to communicate information about the Firestone

recall to our customers. For example, we have opened an additional call center to

deal specifically with inquiries on the tire recall. We are using our website to provide detailed information on the recall action. And we are running national and

local newspaper and television ads to alert customers to the recall and show them

how to tell if their vehicles are affected.

Overseas Actions

I would also like to comment on our actions overseas. When reports of tread separation in the Middle East came to our attention, we asked Firestone to investigate.

They concluded that the tire failures were due to external causes, such as poor repairs, road hazard damage, and extreme operating conditions. But given the probVerDate 11-MAY-2000 13:13 Apr 12, 2001 Jkt 010199 PO 00000 Frm 00151 Fmt 6633 Sfmt 6621 E:\HEARINGS\67111 pfrm08 PsN: 67111
144

lems our customers were having, we decided to replace the tires with a more puncture resistant tire.

Another market where we have experienced tire problems is Venezuela. The situation in Venezuela is complicated by the fact that about three-quarters of the tires

were locally produced. Again, Firestone concluded that the tread separations were

caused by poor repairs, road hazard damage, and extreme operating conditions. In

May, we began replacing all the Firestone tires on Ford Explorers and certain light

trucks in Venezuela.

Concern about the safety of all of our customers, including our U.S. customers,

drove us to look aggressively for evidence of a defect in the U.S. at the same time

we were taking actions overseas. I share this with you, not to finger point at Firestone, but simply to tell you what we did. As early as April of 1999, we were searching all available data bases—our own and the government’s. We asked Firestone to

check its records. And we had new tires tested under three separate, severe test

conditions to try to cause tread separation to happen. Last Fall, we kicked off a tire

inspection test program in the Southwest of the U.S. No defect trend was found.

When NHTSA opened their investigation, and required Firestone to assemble and

provide data on property damage, personal injury, and lawsuits, Ford insisted on

obtaining the data as well. When we received the data late in July, we quickly analyzed it and identified the problem tires that were recalled August 9.

It has been standard practice in the automotive industry that tires are the only

part of the vehicle not warranted by the vehicle manufacturer. They are the only

part for which vehicle manufacturers do not receive field performance data. At Ford,

this will change.

Through all this, we were always open and sought only to find the facts and do

the right thing for our customers.

Conclusion

Our mission remains to replace bad tires with good tires as quickly as possible.

The safety, trust and peace of mind of our consumers are paramount to Ford Motor

Company.

145

146

147

148

149

150

151

152

153

154

155

156

Mr. TAUZIN. Thank you, Mr. Nasser.

The Chair recognizes himself.

Let’s first examine indeed what Ford knew and when Ford knew

it. You candidly admitted that you regret not asking Firestone

early enough for data. Our evidence is that you, in fact, asked for

the claims data after NHTSA began the investigation, is that right?

Mr. NASSER. Can I take you through the chronology at this point,

Mr. Chairman?

Mr. TAUZIN. Well, I won’t have time for the whole chronology,

but am I right on that point?

Mr. NASSER. It won’t take long. We requested it on June 6. That

was the first request. Our second request was on July 11. Our

third request was on July 15. Our fourth request was on July 20.

We finally received the data on July 28.

Mr. TAUZIN. Well, let’s look at the data, and help me with this.

These are claims brought by claimants whose tires caused them to

have an accident, in their opinion. And of this 1,800 claims, about

1,400 involved, we are told, Ford Explorers, about that number.

Was Ford Motor Company not sued in these same lawsuits?

Mr. NASSER. I am sure we had lawsuits, but we never knew what

the problem was.

Mr. TAUZIN. Was Ford a part of the lawsuits?

Mr. NASSER. I am sure we were.

Mr. TAUZIN. In the context of Ford being sued along with Firestone, did you not also as a company keep claims data?

Mr. NASSER. We did not have claims data on tire problems.

Mr. TAUZIN. So you don’t have and never kept the same kind of

claims data that Firestone had?

Mr. NASSER. We do not keep claims data on tires.

Mr. TAUZIN. Did you keep records of complaints by Ford dealers

about these tires?

Mr. NASSER. I don’t think that we actually get a very good data

base on that.

Mr. TAUZIN. What is your service hotline all about?

Mr. NASSER. It is a method where customers and dealers can call

in.

Mr. TAUZIN. I want to take you to one. Document 71, page 3. It

is dated 8-19-96, pretty early in this process, and it is a report

summary to the tech service hotline from apparently a dealer, I

can’t tell which dealer it was, but it says ‘‘tires make a knocking,

thumping noise. You can see the tire belt distort if you spin them

up. Dealer has 16 Explorers like this. What can be done. Balancing

has no effect. You have to replace the tires.’’

It is a clear indication from a dealer to your service hotline that

there is a tire problem out there dated 8-19-96.

Did a report like this to a hotline not raise a red flag at Ford

that there was a tire problem on its Explorers?

Mr. NASSER. If you go back to our history of the defects at any

time, whether in the U.S. or anywhere else, we tried to get to the

bottom of the defects. When you are selling 7 million vehicles a

year, of course we will have calls that relate to service issues.

Mr. TAUZIN. You get my drift. There is a lot of stuff going on.

A lot of tires are failing. You are being sued and Firestone is being

157

sued. Dealers are issuing calls to your hotline, 16 Explorers at one

dealer.

Mr. NASSER. Mr. Chairman, let me just add a comment. 16 Explorers, we don’t want one Explorer that has any problem. But if

you look at the safety record of Explorer, if you look at the quality

level of Explorer.

Mr. TAUZIN. Mr. Nasser, you don’t have to sell me. I bought an

Explorer already. I am an Explorer owner.

What I am trying to ask you, when your dealer calls a hotline

and says we have 16 Explorers where the tires can’t be balanced

because the tire belt distorts when you spin them, you have to replace these tires, that seems to tell me as a motor company that

Firestone is selling me some defective tires. Wouldn’t that tell you

that in 1996?

Mr. NASSER. Looking back on it now, that certainly seems that

is the case. We went into a rigorous review and analysis of every

one of those cases.

Mr. TAUZIN. I want to point you to document 54 as well. It is

Ford document dated 9-14-99, which is your customer complaint

system, and it indicates that you found 32 possible tread separation claims on Firestone and Goodyear. So you are at least getting

information from customers that these tires supplied by Firestone

are giving you problems, and Goodyear, by the way. Ten of 32 possible claims were from Goodyear and this is dated 9-14-99. Ford is

during this period receiving information from its customers and

from its dealers that somebody is giving you bad tires.

Mr. NASSER. That is why throughout this period we kept requesting more data, trying to understand it. As you said, these were possible tire issues.

Mr. TAUZIN. Let’s talk about what Ford could have known had

some things happened, and I want to find out if they happened.

You heard me ask about testing. Did Ford in the early stages of

producing the Explorer and equipping them with Firestone Wilderness and ATX tires, in those early stages, 1989, 1990, did Ford request Firestone to do a high speed test at 26 pounds per square

inch recommended pressure? MR. NASSER. We did. We asked Firestone to conduct high-speed tests on those tires at 26 psi.

Mr. TAUZIN. At high speed?

Mr. NASSER. At all types of conditions.

Mr. TAUZIN. Did you receive evidence that they did so?

Mr. NASSER. Let me go through the analysis that we went

through and then I will answer your question directly. We did tell

Firestone to conduct high-speed tests on these tires using the 26

psi. The air pressure was in the specifications that we gave to Firestone, and that is the specification and the certification that Firestone signed off on. And as you heard, Firestone said publicly that

26 psi is okay.

In addition, because——

Mr. TAUZIN. You interpret your specs to require them to do testing.

Mr. NASSER. Exactly. But we still weren’t quite sure. So in addition to that we ran tougher tests and we ran those vehicle tests at

26 psi on those Firestone tires.

Mr. TAUZIN. Do you have records?

158

Mr. NASSER. We will give you the records. They go back to 1989

and also to 1994. The tests are 200 miles an hour, at a minimum

of 100 miles per hour.

Mr. TAUZIN. At 100 miles an hour, not 200, I hope.

Mr. NASSER. 200 miles at 100 miles an hour.

Mr. TAUZIN. That is more like it. I have an Explorer, and it will

not do 200.

Mr. NASSER. We will put a super charger on it for you, Mr.

Chairman. In addition to that, we also did tougher tests that include durability tests and J-turn tests, and at that point we were

still very sure that these tires would meet every durability that we

had.

Mr. TAUZIN. Firestone certified the tires to you after you sent the

specs to them. Did they specifically send you any test data that

they may have run on the tires for speed testing at 26 psi?

Mr. NASSER. I am not aware of that and I don’t think that we

have that.

Mr. TAUZIN. What about in process testing, did you request Firestone to continually test in process these tires through the years

of manufacture and sale to Ford Motor Company?

Mr. NASSER. In the spring of 1999, when there were allegations

of tire pressure issues, we asked Firestone to do tough tests, high

speed tests, durability tests and they did that at 20 psi.

Mr. TAUZIN. I understand those special tests. I am asking for regular, routine, in process testing.

Mr. NASSER. We did not.

Mr. TAUZIN. Did not. Let me make the same request upon your

company that I made upon Firestone and ask you if you will cooperate. Will you supply this committee with all of the documentation of whatever tests were run on these tires at high speed under

the pressure that you recommended consumers drive your Ford Explorers?

Mr. NASSER. Of course we will.

Mr. TAUZIN. Let me turn quickly to the question of the Saudi

Arabia business. You made a great commitment here today, Mr.

Nasser. You are going to tell not only our Federal agencies but

other agencies around the world when you discover problems. That

is obviously the way that it should be, but that was not the way

that it was in 1999 in Saudi Arabia. Why not?

Mr. NASSER. If you go back to Saudi Arabia and look at the history, we didn’t really have any good information. We knew there

were problems. We didn’t know what the problems were. We kept

going back and trying to find out. We kept asking Firestone. Finally in desperation, in desperation, we moved from Firestone tires

to Goodyear tires. We did that because we wanted to give our customers more durable tires.

Mr. TAUZIN. But in the Ford memo that we have often quoted,

where there is a mention of Firestone legal team being concerned

about the DOT, noticing what was going on in Saudi Arabia, there

was a second page. It was redacted from the first copy that we got

from Ford but you have since supplied it to us. On the second page

there is a reference to the fact that Lieutenant Corey McGiffrey in

the OGC was asked last Monday about the proposal, he didn’t

think that working on a case-by-case basis with the owners of the

159

damaged vehicles presented a problem, but he was concerned about

the implications of owner letter, and in parentheses, ‘‘similar to the

Firestone concerns.’’ He was going to check with one of his colleagues and get more information. This seems to imply that Ford

was in this memo saying that they shared Firestone’s concerns that

the Department of Transportation in America would find out what

was going on out there.

Mr. NASSER. That was a Firestone concern. We didn’t head in

this direction. We didn’t go in this direction. We went and replaced

those tires with Goodyear tires.

Mr. TAUZIN. But what I am saying is the memo your company

supplied to us seems to indicate that your own people shared the

Firestone concerns that—— Mr. NASSER. I agree with that.

Mr. TAUZIN. [continuing] the Department of Transportation

might find out about this.

Mr. NASSER. I agree. That is why we are proposing in the future

we take away those fears and it becomes open and transparent.

Mr. TAUZIN. Why didn’t you let DOT know in 1999 what was

happening in Saudi Arabia?

Mr. NASSER. Because at the same time everything that happened

in Saudi Arabia, we went back to Firestone and we said check the

U.S., are there any potential issues in the U.S.? And the answer

was always no. Nothing. By the way, those same tires, those 16-

inch tires are exceptional tires.

Mr. TAUZIN. I understand, Mr. Nasser. But when we read a document that says that your people share the concerns of Firestone

that the DOT not find out about this, it raises a specter that both

you and Firestone preferred that our agency for safety in America

not know what was going on in Saudi Arabia. I deeply appreciate

your commitment to make sure that never happens again, but do

you understand the implications of that kind of concern?

Mr. NASSER. I do. It isn’t shared in our hearts and it isn’t what

we are about in the company.

Mr. TAUZIN. The Chair recognizes the gentleman from Massachusetts, Mr. Markey.

Mr. NASSER. Mr. Chairman, I would also like to add one further

point. I don’t want to leave the impression that what we did in

Saudi Arabia was something that we handled in a secret manner.

This was handled openly with the dealers. There was a service recall bulletin, so it wasn’t something that we did at midnight. This

was an open replacement program for our customers.

Mr. TAUZIN. But the whole concern, the whole idea of not doing

a formal recall——

Mr. NASSER. This is a formal recall.

Mr. TAUZIN. My understanding is if you go back to the first page,

that one of the reasons why apparently Firestone wanted you to do

it and take responsibility for it was because they did not want to

be part of a plan to notify customers and offer them an option because of DOT finding out about it.

Mr. NASSER. Mr. Chairman, I respectfully disagree with you.

That is Firestone’s opinion. We disagreed with that. We went

ahead and replaced the tires with Goodyear tires and we did it

with a service recall bulletin.

160

Mr. TAUZIN. If you disagreed with Firestone, why weren’t you

willing then to notify the U.S. Government agency that you were

replacing these tires?

Mr. NASSER. Because at the very same time we asked Firestone

whether they had an issue here in the U.S. and there is a letter

in the file that you have that specifically said absolutely not. And

at that point we went straight to Goodyear.

Mr. TAUZIN. The Chair recognizes Mr. Markey.

Mr. MARKEY. Thank you, Mr. Chairman.

Would you support giving rollover test results to customers in

the showroom when they are purchasing vehicles from the Ford

Motor Company?

Mr. NASSER. We do. Anything that can help communicate safety,

that can get the message across on better products we support.

Maybe at this point, Mr. Chairman, if I may, I would like to show

a chart on Explorer because I think there has been a lot of discussion on Explorer and many of you are Explorer owners and I know

many people in America, families in America own Explorers. I

want to share this data with you because Explorer—SUVs in general are safer than cars. The Explorer is one of the safest SUVs.

In addition to that, there was an issue of rollover. Explorer is better than the average SUV in terms of rollover by almost 30 percent. So every way that you look at it, whether you look at the five

star ratings given by the government, we have more five star ratings at Ford. That is the top safety rating. We have more than any

other company in the U.S. So anything that communicates

safety—— Mr. MARKEY. So you would accept a requirement that all of this

information be made readily available to a consumer in the showroom?

Mr. NASSER. Yes.

Mr. MARKEY. Do you oppose the effort in the Senate to block

NHTSA’s ability to be able to conduct tests on rollovers and to impose reporting requirements? Do you oppose that effort in the Senate?

Mr. NASSER. We do not.

Mr. MARKEY. You support—— Mr. NASSER. What we would like to do is to make sure that the

stability index, if that is what you are talking about—— Mr. MARKEY. Do you want to block NHTSA’s ability to have rollover tests and reporting requirements? There is now an effort in

the U.S. Senate to prohibit NHTSA from doing that. Are you with

NHTSA on that issue or are you opposed to NHTSA?

Mr. NASSER. There are two issues. One is a stability index. We

feel that anything that can further stability and safety and can

communicate what that is we are for it, and NHTSA has a proposal

and we support that proposal.

Mr. MARKEY. Do you support giving the agency the ability to figure out what is best for safety in the SUV area for the American

consumer?

Mr. NASSER. Yes, we do with cooperation from the manufacturers.

Mr. MARKEY. Do you support the Senate’s effort to block

NHTSA’s ability to put these new regulations on the book?

161

Mr. NASSER. I am not aware of the Senate’s effort. We support

any safety action that is sensible and has real world improvements

for customers.

Mr. MARKEY. That leaves you enough wiggle room to come back

tomorrow and say you don’t believe that proposal in the Senate

right now is unreasonable and that is what is troubling to me. If

you don’t know what this proposal is in the Senate, then you are

really calling into question our ability to really give any

credibility——

Mr. NASSER. I am saying that we will support any real world improvement in safety. And if the proposal supports that, we will be

100 percent behind it.

Mr. MARKEY. It would be helpful that you would submit in writing your position on that issue.

Mr. NASSER. We will do that.

[The following was received for the record:]

162

163

164

165

166

167

Mr. MARKEY. Thank you.

Now, what is again difficult for me to understand is the situation

in Saudi Arabia not being seen by your company as being kind of

equivalent to conditions in Nevada or other states that are in the

deep southern part of our country in terms of climate. You indicate

that you did request an additional study to be done by Firestone

in that area. The conclusions which were reached in your opinion

indicate that Firestone basically said there is no problem in the

United States. What would be helpful for us to understand then is

what it was that was unique in Saudi Arabia that they identified

and explained to you that was different from the conditions in Nevada, for example, in terms of the wear and tear on tires that were

causing those accidents.

Mr. NASSER. I think in Saudi Arabia there are a couple of things.

Probably the major difference was the repairability of the Firestone

tire in the Saudi Arabian conditions and the fact that people deflated and inflated tires very frequently for off-road use.

When we went to the Southwest of the U.S. to do a more indepth study that we did jointly, it was pretty clear that we couldn’t

see any defects at that point.

After hearing the testimony from Firestone this evening, it is

very clear that we weren’t looking at the claims data. And on the

recall tires, we did not see that claims data until late in July.

Mr. MARKEY. There has been a claim that Ford engineers advised underinflating Explorer tires to reduce rollover risk even

though underinflating tires increases the risk of thread separation.

Is that true?

Mr. NASSER. It is not. The tire pressure rating on the Explorer

was specified and well known right from the start. It was meant

to get the best ride and handling and derivatively, and there are

many vehicles on the road today at 26 psi, and I think you have

heard from Firestone very clearly that it is a red herring. It is not

an issue. This is a tire issue, not a vehicle issue.

Mr. MARKEY. Are there documents at the Ford Motor Company

that indicate this tradeoff between tire inflation and rollover risk?

Mr. NASSER. When vehicles are being developed, prior to the production of a vehicle there are many tradeoffs that happen. So I am

sure the highly trained Ford engineers when they were developing

the Explorer over 10 years ago looked at various tire pressures,

shock absorber, damping ratings, different suspension systems, different handling, different steering. That is part of the development.

Mr. MARKEY. Can you provide for the subcommittee documents

in your possession at Ford Motor Company that relate to this question which engineers had to consider at your company between the

168

risk, the tradeoff between tire inflation versus the rollover risk,

could you provide those documents to us?

Mr. NASSER. We would be pleased to do that and we would be

pleased to bring the engineers that worked on the original Explorer

back in to talk to the committee and explain exactly how vehicles

are developed because it is an extremely complicated process.

Mr. MARKEY. Thank you, Mr. Chairman.

Mr. TAUZIN. Thank you, Mr. Markey. The Chair recognizes the

chairman of the O&I Subcommittee, Mr. Upton.

Mr. UPTON. Thank you, Mr. Chairman. Mr. Nasser, a couple of

times this evening you indicated that perhaps you wished we had

the hindsight to ask the right questions or at least get the right

answers when the questions were asked.

Going back to the questions that Mr. Tauzin asked with regard

to the tests on the tires, anyone who looks at the documentation

given to us, maybe 26 psi, but certainly the heat, you look at the

southern states, you look at the heat and you look at the speed of

these tires as well, you indicated that the tests that you asked for

and in fact were at 26 psi, 100 miles an hour for 200 miles, did

you ask for those tests in the heat, in the California, Texas, Arizona type setting as well?

Mr. NASSER. Those tests are done at various road conditions and

various temperature conditions.

Mr. UPTON. So you will be able to share that data with us?

Mr. NASSER. Yes.

Mr. UPTON. Second, you don’t look just at brand new tires off the

rack, do you look at tires that have experienced 10, 20, 30, maybe

even 40,000 miles as well?

Mr. NASSER. We look at wear characteristics and we specify wear

characteristics, and we look at how the tire performs over the life

of the tire. And of course the life of a tire has changed dramatically, as many people have mentioned here. It used to be 20, 30,000

miles maximum. Now we are talking about 60, 80,000 miles. So the

whole environment of the lifetime of the tire has also changed dramatically.

Mr. UPTON. In your written testimony, and you will recall me repeating this earlier this evening, but in your written testimony you

indicated that it has been the standard practice in the automotive

industry that tires are the only part of the vehicle not warranted.

They are the only part for which manufacturers do not receive field

performance data at Ford. This will change. How quickly will it

change? You heard Firestone earlier this evening indicate that they

will comply with your request. Has it been difficult getting them

to move?

Mr. NASSER. In the past, and it goes back to the Motor Vehicle

Act of the late sixties so it is a 30-year-old act, vehicles were under

one act and one warranty and tires were under another. And I

think many things have changed since then. We have seen tires

that last longer, vehicles that have versatile and flexible capability

on road, off road. We have a whole variety of hybrid vehicles and

we now have a global economy. I think it is time that the tire manufacturers, the safety agencies and the automotive manufacturers

came together and we shared that data. We shared quality and we

shared customer input. We plan to initiate that in terms of real

169

world data feedback as quickly as we can. We have started with

Firestone and I have talked to the other tire companies also.

Mr. UPTON. Are you satisfied that Firestone has shared with you

the information that you are going to make public in the future?

Mr. NASSER. I am not sure, to be quite honest.

Mr. UPTON. Have you talked with other members of the alliance,

GM, Chrysler, others, about requesting the same information from

their tire——

Mr. NASSER. I have not done that. But clearly for it to be effective we need it on an industry basis and probably on a global basis.

I know the tire companies in the North Atlantic Global Forum have

started a dialog on tire standards that would be at least for Europe

and the U.S.

Mr. UPTON. Have Ford engineers looked at defective tires?

Mr. NASSER. We have. We have brought back something like 300

tires and we are doing our own analysis. We cut up the tires and

tried to analyze them and tried to understand them. We are not

tire experts, so we have brought in outside experts to help us and

we are also working with Firestone. So we are doing it independently. We are doing it with outside experts and we are doing it together with Firestone.

Mr. UPTON. I talked to one of my dealerships today and one of

them indicated that they had received yesterday literally a shipment of hundreds of tires to be used for customers that wanted to

replace their Firestone tires and these tires that came in were a

competing brand. As I recall, I think they were General tires. Yet

they were not sure whether the warranty information or the arrangement that could be made in fact could use these specific tires

and they were waiting to hear from Ford, even though they delivered them, whether or not they wanted—they wanted a clarification whether or not they could use another brand, another manufacturer’s tire. Do you know the answer to that question?

Mr. NASSER. Other brands are suitable and we have agreed to 34

different types of tires that can substitute for the Firestone tire.

They do include General tires. They include Michelin tires, Goodyear tires. They include a whole broad array of tires.

Mr. UPTON. Thank you, Mr. Chairman.

Mr. TAUZIN. The gentleman’s time has expired. The Chair recognizes the ranking minority member of the full committee, Mr. Dingell, from Michigan.

Mr. DINGELL. Mr. Chairman, thank you.

Mr. Nasser, I have here a Ford warranty book on the Explorer,

and in it it says as follows: Authorized Ford Motor Company dealers will repair, replace or adjust all parts on your vehicles except

tires that are defective in factory supplied materials or workmanship for 3 years or 36,000 miles, whichever occurs first.

Then I read in the Firestone book here this language. It tells me

if I have a tire problem I should, ‘‘see my Firestone retailer listed

in the yellow pages under the tire dealers retail.’’

Now, I think this tells me two things. One, Ford provides the

warranties on all parts of a new car or truck except tires; is that

correct?

Mr. NASSER. That is correct.

170

Mr. DINGELL. And the tire warranty on a new car is provided by

whatever company made the tire; is that correct?

Mr. NASSER. That is also correct.

Mr. DINGELL. Is this a standard industry practice?

Mr. NASSER. As far as we know all major manufacturers around

the world have a similar process.

Mr. DINGELL. Manufacturers of autos and tires have the same

practice. So it is a standard industry practice?

Mr. NASSER. Yes.

Mr. DINGELL. So when consumers have a problem with a tire on

a new Ford vehicle, they go to the tire company; is that right?

Mr. NASSER. That’s correct.

Mr. DINGELL. They don’t take these problems to the Ford dealers?

Mr. NASSER. That’s correct.

Mr. DINGELL. If Firestone is having a large number of their tires

returned off Ford vehicles, Firestone will be hearing about them

from their dealers; is that right?

Mr. NASSER. That is what happens.

Mr. DINGELL. But Ford will not hear about it unless Firestone

tells Ford; is that correct?

Mr. NASSER. That is normally right. We sometimes hear about it

through a hotline, as the chairman indicated. But I would say the

majority of feedback from customers would go through the tire

dealer.

Mr. DINGELL. Does Firestone give you periodic reports about how

their tires are performing? Do they give you periodic adjustment

rate reports and the like? Do other tire manufacturers give you

such information?

Mr. NASSER. Historically Firestone from time to time, as they

mentioned, share the warranty or what they call adjustment claims

with us.

Mr. DINGELL. From time to time, what does that mean?

Mr. NASSER. Probably once a year or less.

Mr. DINGELL. On a regular basis?

Mr. NASSER. Not on a regular basis. And the claims data that we

finally pulled out of the system so we could analyze it, the data

that we had been asking for for months, that data has never been

shared with any of the manufacturers, as far as we know.

Mr. DINGELL. Now, to your knowledge do tire manufacturers provide that source—you have just answered that question.

So under the current procedure Ford would not know about high

adjustment rates on tires unless you know about it from some

other source; is that correct?

Mr. NASSER. That’s probably true.

Mr. DINGELL. And that is probably true throughout the industry?

Mr. NASSER. We believe so.

Mr. DINGELL. Can you tell us why this system is set up this way?

Why don’t you get regular performance information from the manufacturers on how tires are doing, doing these things on these vehicles?

Mr. NASSER. That really goes to the heart of the proposal of our

early warning system because I think that really must include regular information, real world information coming in from the field

171

on how every tire is performing, and it can’t be just the warranty

data. It can’t be just the police data. It can’t be just the personal

injury or vehicle damage data or the hotline to the safety agency.

It really has to be all of those coming in together so that we get

a 360 degree view the way a customer would look at it for tire performance.

Mr. DINGELL. When you began your designing of the Explorer,

you gave to the tire manufacturers the specifications for that particular vehicle and the specifications for the tire; is that correct?

Mr. NASSER. That is correct.

Mr. DINGELL. Those specifications you gave on the tire were essentially performance specifications as opposed to design specifications, were they not?

Mr. NASSER. That is also true.

Mr. DINGELL. Have you ever given or has anybody in the industry ever given design specifications to a tire manufacturer?

Mr. NASSER. I don’t believe so. The tire manufacturers consider

that proprietary information. They guard that jealously within each

of the brands, and the industry practice is to set a standard in

terms of speed, durability, ride and handling, and then on a periodic basis have quality input.

Mr. DINGELL. So Ford leaves to the manufacturer of the tire the

design of the tire to meet particular sets of specifications; is that

correct?

Mr. NASSER. Yes, it does.

Mr. DINGELL. Bottom line, tire manufacturers have complete control and responsibilities for the design, construction, composition

and workmanship and materials used for the tires manufactured?

Mr. TAUZIN. The gentleman’s time has expired.

Mr. NASSER. They are the experts.

Mr. DINGELL. I thank you, Mr. Chairman.

Mr. TAUZIN. Thank you. The Chair now recognizes the gentleman

from Ohio, Dr. Ganske.

Mr. GANSKE. Thank you for the late hour, Mr. Nasser.

Earlier when I had a chance to question Mr. Ono from

Bridgestone, we talked a little bit about the difference in tire failure rates at different plants and it looks like the Decatur plant has

a high level but when I look over at that data it also looks to me

like the rates for a couple of the other plants are higher than it

should be. And there is a dispute, I think it is fair to say, that were

the tires flawed or were they underinflated.

It seems to me that we have heard when tires are run at low

pressures it causes excess heat which can damage the tires and

heavier models such as a sport utility vehicle generally needs more

pressure than a lighter one. Why on a vehicle most like the Explorer, the Ford Ranger pickup, built on the same frame using the

same tires, Ford recommends a higher pressure?

Mr. NASSER. We have different tire pressures for different tire

sizes and different vehicles.

Mr. GANSKE. These are the same tires.

Mr. NASSER. Tire pressures vary by vehicle depending upon the

optimal level of ride and handling for those vehicles.

I have got to say, Congressman, that I think it became pretty

clear from the Firestone testimony today that 26 psi is okay. It is

172

an appropriate tire pressure. You heard it from Firestone. We went

through how many competitive vehicles have 26 psi. Toyotas, Nissans, other products. We have 3 million Goodyear tires on Explorers at 26 psi. No problems. So I don’t know why we keep going

back to the tire pressure issue. We are confusing the public. We are

not getting to the root cause, and the more we talk about the tire

pressure issue, the less time we are going to have on concentrating

on what the real issue is for our customers.

Mr. GANSKE. Excuse me, but it seems to me that there has been

ample testimony today that the tire failures have occurred in

places where it is hotter, that—do you dispute the fact that a tire

at a lower pressure heats up more than a tire at a higher pressure?

Mr. NASSER. Of course it is a variable. But the tire pressures we

were talking about, we are talking about 10, 12, 15 psi, not 26.

Mr. GANSKE. Do you have a number of these tires that have been

recalled?

Mr. NASSER. We do. We have brought back about 300 of them.

We are looking at them. We have independent bodies looking at

them as well.

Mr. GANSKE. What kind of independent bodies do you have?

Mr. NASSER. These are tire experts. We will share that with the

committee.

[The following was received for the record:]

173

174

Mr. GANSKE. You selected them?

Mr. NASSER. Yes.

Mr. GANSKE. Did you have input from NHTSA when they looked

at the tires?

Mr. NASSER. There are not that many around the world. I am

sure between NHTSA and Ford and Firestone, we have them all

tied up at the moment.

Mr. GANSKE. How are you determining which tires you look at?

Mr. NASSER. Randomly, and we have concentrated on some of the

higher mileage tires as well and some of the high temperature.

Mr. GANSKE. We had testimony earlier from NHTSA that they

want to do their own testing.

Mr. NASSER. They should.

Mr. GANSKE. Have they contacted you yet for random samples of

those tires?

Mr. NASSER. I am not aware of that. Normally the tires are going

back to Firestone. We are getting some of those tires back because

we would like to do our own testing as well.

Mr. GANSKE. So you have initiated those tests?

Mr. NASSER. We have.

Mr. GANSKE. What have you found so far?

Mr. NASSER. We have not reached any conclusion so far. We have

just started.

Mr. GANSKE. Congressman Tauzin mentioned some memos from

the Middle East where people have problems coming in over a line

that was set up for complaints. On May 12, 1999, Ford issued a notice to all Ford dealers in the Middle East that directed them to

inspect the tires of all SUVs every time a vehicle is brought into

the dealership for any type of service. That memo was written several months before Ford recalled the tires in August 1999, and a

copy is in tab 43. Was this memo directing dealers in the Middle

East to inspect the tires of every SUV that came into the dealership for service Ford’s first official response to the tire problem?

Mr. NASSER. Congressman, it was during the period where we

were trying to understand exactly what the problem was.

Mr. GANSKE. Why didn’t you at that time if you directed all of

your dealers to be inspecting all of these tires, knowing that there

seemed to be some problem, why didn’t you send out a letter to all

SUV owners with those kinds of tires at that time?

Mr. NASSER. We were asking Firestone because in the U.S. Firestone warrants the tires. In the Middle East market, where there

really isn’t a very good network of customer feedback, we were

going to our dealers to get them to help us get Firestone data. That

was the difference. That is the only difference between the two.

Mr. TAUZIN. The gentleman’s time has expired. The Chair——

Mr. GANSKE. 30 additional seconds.

Mr. TAUZIN. Without objection, proceed.

Mr. GANSKE. But you are telling your dealers to look at those

tires that come in in May and, yes, it may be difficult to track

down every one in the Middle East that has bought one, but you

have dealers and they are servicing vehicles. Why not make an effort at that time for those people in that area to notify them that

there is a problem if you are instructing your dealers that there is

a problem?

175

Mr. NASSER. Because at that point, and that was just a couple

of months before we really gave up with Firestone and went with

Goodyear, we were trying to understand exactly what the problem

was.

Mr. TAUZIN. The gentleman’s time has expired.

Mr. GANSKE. I thank the chairman.

Mr. TAUZIN. The Chair recognizes Mr. Stupak for a round of

questions.

Mr. STUPAK. Thank you. Mr. Nasser, would you and Ford join

with me in calling for and cooperating with an independent panel

to review the AT, the ATX and the Wilderness tires to determine

the cause and proposed solutions?

Mr. NASSER. We would welcome that.

Mr. STUPAK. Okay. In documents, and I am looking at document

number 32 in the books there, it says Explorer tire DNP. What

does DNP mean?

Mr. NASSER. Dealer notification or something. I am not sure. We

have so many acronyms at Ford I don’t think that anyone really

understands any of them. ONP?

Mr. STUPAK. DNP, D as in ‘‘dog.’’

Mr. NASSER. We will send you a notification of that following the

meeting.

Mr. STUPAK. My question is this. In there it says, and this is

Ford in Venezuela actions. It says to align with JCC, DNP and to

improve Explorer market image, FOV, Ford of Venezuela, introduced the same GCC Goodyear tire for all new Explorers beginning

in July 1999. I take it starting in July 1999 all Ford Explorers in

Venezuela had Goodyear tires as opposed to Firestone tires?

Mr. NASSER. That is when we started the replacement program

in Venezuela.

Mr. STUPAK. Okay.

Mr. NASSER. What we tried to do in Venezuela, and Venezuela

in this situation is a mess because you have got, as you heard, mislabeled tires, 15-inch tires, 16-inch tires, local tires, imported tires,

a data base in terms of accidents and incidents that is very primitive.

Mr. STUPAK. So any Explorer sold in Venezuela starting in July

1999 came with Goodyear Wranglers on; is that correct?

Mr. NASSER. That’s correct.

Mr. STUPAK. But you didn’t recall the tires on vehicles already

sold until May of 2000. Why did you wait 8 months to recall the

other tires if it is such a mess in Venezuela?

Mr. NASSER. Because we understood that there were some issues,

but we didn’t really know the magnitude of them, and we wanted

to at least put a stop to building any more future potential problems. So we moved quickly as we had done in the Middle East to

do that.

Mr. STUPAK. But I guess I am looking at your—again your Explorer tire DNP, and it indicates from several newspaper clippings

at least 60 cases have been identified. The issue has a high fatality

rate. Ford of Venezuela will initiate a joint investigation with local

and U.S.-based Firestone technical personnel. I guess the part that

bothers me, July 1999 you stop Firestone and go to Goodyear, but

176

you waited until almost May of 2000 to recall the ones already out

there?

Mr. NASSER. Yes, and we did that 5 months before Firestone and

the government got involved. We did that on a voluntary basis.

Mr. STUPAK. In the memo it says background since July 1997.

Even at meetings in Caracas with a group of independent lawyers

representing four customers.

Firestone continues to state there is no problem with the tire— with the—— Mr. NASSER. Are you talking about in the U.S. now?

Mr. STUPAK. Yes.

Mr. NASSER. I think Firestone clearly indicated that there is a

problem with those tires that were included in the initial recall,

and my impression is that they are looking at the additional tires

that the safety agency here in the U.S., the additional 1.4 million

tires, as a potential add to the original program.

Mr. STUPAK. Firestone states that underinflation, high speeds,

things like that, is the cause of the problem with the tire. I think

that is what we all got out of here.

Mr. NASSER. I didn’t get that out of here, I’m sorry. What I got

out of here is that they really weren’t sure what the defect is, that

it is very clear when you look at the population of tires that were

built in the Decatur plant and those tires that were included in the

original recall of August 8, manufacturing defects and other issues

are——

Mr. STUPAK. Mr. Nasser, even in Venezuela, to go through your

problem descriptions, underinflation, all of the same reasons. My

point being this, in Venezuela, Saudi Arabia, you replaced both 15

and 16-inch tires?

Mr. NASSER. Uh-huh.

Mr. STUPAK. Why don’t you do the same here in the United

States? You did it in Taiwan and Malaysia, Venezuela and Saudi

Arabia. Why do you do it differently here?

Mr. NASSER. Because the data doesn’t support it. Are you data

driven or not? The data doesn’t support it. As soon as the data supports it, we volunteer it. We didn’t wait. We didn’t wait for Firestone or NHTSA or Congress. We didn’t wait for anyone. We went

ahead and did it.

Mr. STUPAK. What data supported replacing 16-inchers in Saudi

Arabia, Venezuela, Malaysia and Taiwan? What data did you have

then that would require you or have Ford recall the 16-inchers in

these other countries and not here?

Mr. NASSER. In those countries we were getting anecdotal data

because there isn’t any formal data that there were issues on the

Firestone tires. If I go to Venezuela, the day we announced the recall in Venezuela, the day we announced it, we went to NHTSA

here in the U.S. and we informed them, we told them about the

data.

Mr. STUPAK. What is the information, your data that would make

you recall the 16-inchers in Venezuela, Saudi Arabia, Taiwan—— Mr. NASSER. Data that they were unhappy with Firestone tires.

Mr. STUPAK. So if the American public says we are unhappy with

the 16-inch Firestone tire on our Ford Explorer, and I think it is

standard on Eddie Bauer, you will replace them?

177

Mr. NASSER. Congressman, look at the data. That data represents customer input and that customer input is world class. If

customers turn around—— Mr. STUPAK. The reason that we are here is because of consumer

input to the U.S. Congress, and that is why the first day back we

have been at this hearing now pretty close to 9 hours, I am sure

that we will be here 12 hours. I think it is fair to say that consumers in the United States are not happy and certainly have lost

some faith here in both Firestone and Ford about the whole tire

thing. When they see 16-inch tires recalled in other countries, they

are saying why not mine if they are the same tire?

Mr. TAUZIN. The gentleman’s time has expired.

Mr. STUPAK. Thank you.

Mr. TAUZIN. Mr. Nasser, you may respond.

Mr. NASSER. We feel for our customers as much as you do. They

are our customers. We have despaired when we can’t get to the

root cause. We went through and analyzed it so we can understand

exactly what is going on in the U.S. We don’t want to replace good

tires with good tires. We want to replace bad tires with good tires

and that is what we have done. If the data supports it, we will replace it.

Mr. TAUZIN. The gentleman from Tennessee, Mr. Bryant, is recognized.

Mr. STUPAK. Can you give us the data that would require the 16-

inchers?

Mr. NASSER. The data is publicly available now.

Mr. STUPAK. Can you identify it?

Mr. NASSER. I have a chart on it.

Mr. STUPAK. Does that include Venezuela, Saudi Arabia? The answer is no. What is the data for those four countries, Malaysia,

Saudi Arabia, Venezuela, Taiwan?

Mr. TAUZIN. The Chair requests that you supply that information

to the committee and recognizes the gentleman from Tennessee,

Mr. Bryant.

Mr. BRYANT. Thank you, Mr. Chairman.

Mr. Nasser, thank you for being here today. We have a lot of

questions and obviously these are very important matters that we

are discussing. I am a former owner of an Explorer for a couple of

years back in the 1997-1998 timeframe and we were satisfied with

the performance there. It was a leased vehicle, so I had to turn it

back. You testified earlier today in the Senate?

Mr. NASSER. I did not.

Mr. BRYANT. Did a representative of Ford?

Mr. NASSER. Yes, we had Helen Petrauskas and Tom Baughman,

who are sitting behind me.

Mr. BRYANT. The issue of low pressure does keep coming up, and

that is a concern because of these piles of papers that we have reviewed and admittedly some of this comes from Venezuela and the

Mideast. There are indications in there that the Ford dealerships

were encouraging Ford owners to use the lower pressure, the 26 psi

in their tires. It has been brought up today too in terms of the

issue of stability and that knowing concern out there, does it provide better stability, and fishtailing is mentioned in one of the

white papers, that people operate at a lower pressure because of

178

the fishtailing effect sometimes. And we understand that operating

at a lower pressure causes problems with the tread and the separation of tire, so there is a tension there and I think that is where

some of us have been going just to make sure that we cover all of

the bases. I think you have made certainly an effective presentation, but those are the kinds of gnawing issues that are still out

there.

Would you care to comment in terms of those last remarks and

maybe again try to ease some of our concerns about the low pressure issue?

Mr. NASSER. This is really a message to our customers all over

the U.S.

The Explorer is an American classic. It is a family vehicle. It is

a five star rated vehicle. It is one of the safest vehicles on the road.

That is not just recent history. That is over a 10-year period. It is

a vehicle that people depend on because it is versatile, because it

is flexible, because it can do all of the things that they want to do

in their life-style. And we are proud of it and there are almost 4

million Explorers on the road and people love them. Now let me get

to the tire issue that you talked about.

We have 3 million Goodyear tires on Explorers that have been

on the road for years. We don’t know of any problems. We have

competitive vehicles with very similar tires and 26 psi. We don’t

know of any problems. We saw that the defect pattern on the 15-

inch tires from Firestone was very correlated, directly linked to certain plants and certain time periods.

So I step back from that and we are convinced that we have set

the vehicle at the right level, handling, steering, stability. When

you look at Explorer rollover, it is one of the best SUVs in terms

of rollover protection. It is one of the best in terms of serious accidents. Now that didn’t happen by chance. It happened because we

have highly trained engineers and people within the company who

care deeply about our customers.

So we are not having an esoteric argument here about pressure

in tires. When people talk about low pressure in tires affecting stability, they are talking about people who bring the tire pressure

down to 10, 12 psi, and then don’t inflate it again at high speed.

And I think someone mentioned earlier that some communication

on tire care is probably needed at this point because I believe most

of us, most customers, take their tires for granted because generally they are so robust, they are so good, they are so strong in

today’s modern vehicle.

Mr. BRYANT. Given the excellent product that you have in the

Explorer and the excellent performance and favorable rating over

the years, can you not also give some credit to Firestone, who I assume has had a long-standing relationship with your company up

until recently in terms of good tires?

Mr. NASSER. Firestone and Ford have had a tremendous relationship. It goes back from the start of both companies. And I have to

say they have built millions of good tires and that relationship has

been strong. We also have to say that recent events have been disappointing to us and I have said that we value our customers’ security and safety and peace of mind above any other relationship that

we have. So going forward, our relationship with Firestone, as it

179

would be with any other supplier that let us down, is on a day-today basis.

Mr. TAUZIN. The gentleman’s time has expired. Finish up with

this question.

Mr. BRYANT. You had mentioned, I think, in your opening statement about the second thing that you want to bring out or maybe

it was the first, somewhere along here, a tire pressure early warning system.

Mr. NASSER. I did not mention that, but I personally support

that. I think that was something that was mentioned by the safety

agency, Ms. Bailey, and we think if we can do it in a practical way

where customers will really use it and they can easily monitor

what the tire pressures are and they can adjust them easily, I

think that would be a magnificent add in terms of peace of mind

and safety.

Mr. BRYANT. I misread it in terms of the location. It was in the

white paper that we reviewed, and I think you mentioned it in your

testimony. It corroborates that there is a problem out there when

you run these tires at pressure lower than recommended and this

kind of problem can develop.

Mr. NASSER. That’s correct.

Mr. BRYANT. And the early warning system would be a device

that Ford would recommend which would prevent the situation of

people running their tires at lower than recommended air pressure.

Mr. NASSER. We would.

Mr. TAUZIN. The gentleman’s time has expired. The Chair recognizes the gentleman from Ohio, Mr. Sawyer.

By the way, the reason that I love my Explorer is because it is

paid for.

Mr. NASSER. I will add that to my description next time I talk

about it.

Mr. SAWYER. Thank you. We have covered so much ground today

and I am grateful for your presence, Mr. Nasser. The issues we are

talking about go back to the very beginning of the tire and automotive industries. The relationship in terms of warranties I suspect

are deeply embedded in the culture of both industries, and probably go back to a time when tires were not as reliable as they are

today.

Mr. NASSER. Exactly.

Mr. SAWYER. And it was an absolutely necessary financial relationship, one that was built on trust and confidence and has grown

over the years. But that relationship has been built into law now

and it was—you mentioned earlier that tires are no longer really

separate in the design dimensions of a car. They are integrated

into the suspension systems, the damping rates, the spring rates,

and have really become—steering, and have become a functional

part of the suspension as well as the drive train and other components.

Should we be thinking about more modern ways to integrate the

design and the performance of tires into the performance of the vehicle itself? Should we revisit the National Traffic and Motor Vehicle Safety Act of 1966, which has built this separation into law, and

should we look at new ways to integrate that performance?

180

Mr. NASSER. I can’t think of many things that haven’t changed

since 1966, and particularly in this area where vehicle dynamics,

steering, suspensions, just the overall personality and feel of the

vehicle is now being—it is in the bloodstream of every part of a car

or truck, and tires are becoming more and more a fundamental

part of—— Mr. SAWYER. It is only through those four contact patches that

in fact all of the design performance that you have built into your

cars really gets carried out.

Mr. NASSER. That is correct. So we would support a review and

we think that it should be a cross-industry review that includes not

only the safety agencies and government, but also the tire companies and the automotive manufacturers.

Mr. SAWYER. You mentioned the Trans-Atlantic Business Dialogue and the kind of work that has gone on toward harmonization

over the last decade. I asked the Firestone people earlier, would

you support transparent reporting procedures to share information

about vehicle and tire performance on a transnational basis?

Mr. NASSER. Ford Motor Company certainly would support that.

Mr. SAWYER. Let me finally close with a question that Mr. Bryant suggested. A number of tire companies have worked to build,

particularly with regard to run plant technology, to build sensing

systems so you would know when you were losing pressure. I spoke

last week with an after-market provider of those kinds of systems.

He says that he can provide in a way that is not very efficient after

market sensing systems that will provide information not only on

tire pressure but temperatures on a continuous basis. Is that the

sort of thing that Ford would considering offering as an option on

their vehicles?

Mr. NASSER. I think on certain product lines it would be a very

popular option, but it needs to be friendly to the customers. It can’t

be a scientific device that is so difficult that you need a professor

of engineering to figure out.

Mr. SAWYER. It needs to be easy to use and indicate by idiot

lights on the dashboard when you have a problem, but the information would be useful?

Mr. NASSER. Very useful.

Mr. SAWYER. Let me close by saying that I am particularly interested in revisiting the question whether or not the separation of

performance and design as it existed 44 years ago—34 years ago,

really makes the kind of sense today that modern tire and automotive engineering technology makes possible. Thank you.

Mr. TAUZIN. I thank the gentleman. The Chair recognizes the

gentleman from North Carolina, Mr. Burr.

Mr. BURR. Mr. Nasser, throughout this whole process has there

ever been a point where Firestone has objected to doing anything

that Ford has asked of them?

Mr. NASSER. I would say ‘‘objected’’ is probably a strong word,

Congressman. But when we asked for the claims data, it isn’t—it

isn’t usual business practice for someone like the Ford Motor Company to ask a supplier four times for data before we get an answer.

Mr. BURR. Was there ever a point either in Saudi Arabia or in

Venezuela where Ford made a request of Firestone to do a recall

and they objected?

181

Mr. NASSER. In both cases we decided to go alone because we

couldn’t get cooperation.

Mr. BURR. Was there a request of Firestone for them to either

recall the tires or to participate in a recall that they objected to?

Mr. NASSER. In both cases we asked for assistance from Firestone, and I think you have heard the Firestone testimony where

they said they declined to participate. And when they declined to

participate, we didn’t want to leave our customers on their own so

we went ahead.

Mr. BURR. Is Ford concerned with any other tires specifically in

Saudi Arabia on other Ford vehicles that there may be reports on

now that are beginning to show the same tread separation, specifically Navigator and Expedition?

Mr. NASSER. I am not aware of any, but if we find any we will

handle it in exactly the same way.

Mr. BURR. Let me suggest to you that tab 52, 53 and 55 are documents dated September 1999 which reflect the concerns that Ford

is having with tread separation, problems with tires on Ford Expedition and Lincoln Navigator. They were directed to the Ford Customer Service, and I won’t give their quote, but specifically they

say we see a pattern began. To your knowledge there is nothing ongoing at Ford that is looking potentially at other tires on other

Ford vehicles currently?

Mr. NASSER. I am not aware of any.

Mr. BURR. There was no notification by Ford to NHTSA of the

possibility of additional vehicles and/or tires?

Mr. NASSER. Not that I’m aware of, and I don’t think there are

any other notifications going on.

Mr. BURR. Let me read one quote out of the document, and I

quote, ‘‘We’ve already received complaints from customers regarding the tire burst on the 1999 model year Expedition. As you will

agree, we cannot afford to take any chances concerning fatalities

involved in the Explorer accident s and the negative word of mouth

generated for this model. I would encourage you to check with your

folks to look specifically at those memo s and to see if there’s some

action that you, as the head, need to look at.’’

Let me ask specifically, what’s changed for Ford since the Texas

television expose where Ford’s comment was that they blamed driver record?

Mr. NASSER. You know, you go back to I think it was Channel

11; they deserve a medal actually because they did focus attention

on this. In all of the times that we went back and asked, are there

problems, it was always ‘‘no problems,’’ ‘‘no problems’’; and Channel

11 started everyone to think, well, wait a minute, maybe there

really is something there; let’s dig deeper, let’s ask different questions, let’s look at this from a different perspective.

So that was the start of a very different investigation. It had an

impact on us. So I’m sure it had an impact on other people.

Mr. BURR. Let me ask you the last question that I hope you

would expect to be asked this today. In your TV ad you were very

specific from a standpoint of your family having three Ford Explorers. Do they currently have any recalled tires on them?

182

Mr. NASSER. No. They’ve got the 16-inch tires on them, and they

have been, as the chairman indicated, faithful, wonderful vehicles

for them.

Mr. BURR. If they had recalled tires, would you be anxious to

change those?

Mr. NASSER. Yes, I would, and that’s why we’re working as hard

as we can and talking to other companies beyond Firestone to get

as many tires as quickly as possible.

Mr. BURR. Thank you for your honesty and also for your patience

today, and I yield back.

Mr. TAUZIN. I thank the gentleman.

The Chair recognizes the gentleman from Illinois, Mr. Rush.

Mr. RUSH. Thank you, Mr. Chairman.

Thank you, Mr. Nasser, for your patience and for your veracity

in terms of answering some of the questions that my colleagues

raised.

Let me ask you about the warranty initiatives that you indicated

in your earlier testimony that you feel will be a part of a new arrangement, a new agreement, where consumers would have the

warranty on their tires as a part of their standard warranty package when they purchase new vehicles.

Can you tell me, is this a negotiating point now that you have

with Firestone and other tire manufacturers in the Nation?

Mr. NASSER. Congressman, most tire manufacturers have a warranty, but it is a complicated warranty, and I heard you ask Firestone for their warranty and I heard them bumble through the answer. So I’m not going to be able to give you a better answer than

that.

Many of the tire companies have a warranty that is really based

on the number of miles that the tire has traveled. So it’s a graduated warranty period. Some have been going up to 80,000 miles,

but your reimbursement differs by how many miles you have traveled; and I think what we need here is a little more clarity to the

consumer about exactly what the warranty conditions are.

So I support you fully. Consumers need to know exactly where

they stand with warranty on an important component such as a

tire.

Mr. RUSH. So, in other words, the future customer, Ford’s future

customer, will have two sets of warranties—would continue to have

two sets of warranties, is that right, one for the tire and one for

the other parts of—Ford parts. Is that right?

Mr. NASSER. That will continue to be the case unless we find

that it is better for our customers to do something differently, and

that’s going to be part of the review that I think needs to happen

going forward.

Mr. RUSH. Let me ask you this. You basically in your testimony

have—if I interpret you correctly, you basically feel as though Ford

has been somewhat of a victim here also, in terms of these tires

that have been recalled and the fact that Ford customers have experienced injury—accidents, injury and even possibly deaths as a

result of these faulty tires. Is that correct?

Mr. NASSER. Our customers have been the victim and that’s why

we’re mad. That’s why we’re upset because our customers have

borne the brunt of this, and we don’t like it, because we love our

183

customers and they love their Ford products. So when we’re let

down and we then let our customers down, we just don’t like that.

Mr. RUSH. Mr. Nasser, in discussions that I had with some of the

committee staff a few moments ago, I asked them about the last

recall, massive recall in the Nation, and they informed me that

they, in fact, had read this committee’s transcripts of the recall

that was conducted some 22 years ago.

My question is, what’s different now 22 years later? What didn’t

we learn 22 years ago that we should have learned, that would

have helped—prevented us from being at this point today? How

was Ford affected by the recall some 22 years ago and where have

we let the Nation down? Where has the Congress let the Nation

down? Where have Ford and other automobile manufacturers let

the Nation down, and certainly where has Firestone let the Nation

down again 22 years later? And what’s to give the consumers the

confidence that down the line we won’t have the same tragic occurrence and be right back here in this committee room again somewhere in the future? Can you answer?

Mr. NASSER. I think it’s a very pertinent question, and it’s one

that we have obviously been asking ourselves time and time again,

and the answer probably lies in how we look forward now at the

changes that we have to make.

You know, history’s important; you get good lessons from history.

But we really now have to start to look forward and say, what do

we need to do better, what do we need to do differently, how do

we stop this from happening again. And I think the suggestions

that I mentioned earlier are two steps that will help, that will help

consumers, that will help make the communication of customer

feedback on tires and vehicle quality more open so we cannot have

this dialog 22 years from now.

So there are our two suggestions.

Mr. RUSH. Thank you, Mr. Chairman. I yield back.

Mr. TAUZIN. I thank the gentleman.

The Chair recognizes the gentleman from Illinois, Mr. Shimkus,

for a round of questions.

Mr. SHIMKUS. Thank you, Mr. Chairman. And it’s been a long

day and we appreciate your attendance and your straight answers.

I think one of the things that many members are dealing with

is—and you commended the Channel 11 story, and I think we did,

too, for having that first airing. And as I’ve been trying to talk to

the reporters from here and from at home, explaining the hearing,

I’ve been using the terminology, you know, what Channel 11 did

was, they connected the dots before Ford did, before Firestone did,

before NHTSA did, before we all did. And one of the things we

have to—in trying to identify the problem is then come up with solutions.

So as my colleague from Illinois—how do we get off this treadmill

so we’re not here again is, we need to address legislatively how are

we one of the first ones; or how is industry partnership or a thirdparty group, how can we connect the dots. And I think you addressed that in your opening statement, but I wanted to also applaud Channel 11 for the work that they did in investigative reporting and stuff that we don’t see, I don’t think, too often today.

184

And one of the things that hasn’t been addressed, but was addressed in this Time magazine article, is a debate—and I should

ask if Firestone is still in the audience; I didn’t ask them when the

time was right—but a debate on the nylon cap issue, and whether

the time that we have eased the speed limitations and the engineering and the tires along with all this and a need to rethink

about going back to the nylon cap, which some of the Bridgestone

tires of this size made in Japan still have.

My question to you, Mr. Nasser, in giving specifications to the

manufacturer to produce a tire for the Explorer, did you consider

returning to the nylon cap as part of the specifications?

Mr. NASSER. We don’t specify a cap, an additional nylon cap or

not. We specify standards that the tire has to meet, and to my

knowledge, the tire industry in the U.S. does not have the nylon

cap.

Interestingly enough, and I’ll preface this by saying that I’m not

a tire expert, but I believe that for many of the tire manufacturers

their tires—the tires that they use in very arduous conditions in

some of the developing countries of the world, they add the nylon

cap as an added protection for puncture, not necessarily for speed

or for durability, but just to make the tire more robust in terms

of puncture capability, but I think that’s a question that you should

address to the tire industry.

Mr. SHIMKUS. And I’ll—at the chairman’s discretion, how best to

do that, I’ll leave that up to the chairman. I know we had talked

about that.

Mr. TAUZIN. The record remains open. The gentleman can submit

written questions, which we’ll submit to Firestone. Be happy to do

that for the gentleman.

Mr. SHIMKUS. Thank you, Mr. Chairman. And just to close out

this point, when we talk about the Firestone 500 and the separation there, it’s my understanding that the nylon cap was a solution

to that problem, and when we had the lower speeds, it was determined that that was no longer the need. Now we’re at some higher

speeds with new vehicles. I think it’s a point well taken.

I’d like to also offer you, as I did Mr. Ono, a chance to address

some of the—your employees, some of them may be in my district.

You have a St. Louis assembly plant. I’m right across the river. I’m

sure there are a few employees that live in my district. Based upon

your experience here today, the testimony, if you could send a message to them, what would you tell them?

Mr. NASSER. I think Ford employees all around the world and

I’m sure in your district, Congressman, are devoted to customers.

I mean, that’s what runs through our bloodstream. It’s in our DNA.

It’s what we think about all the time. And I’m sure they’re disappointed when they hear about some of the allegations that are

around Explorer, because Explorer, as I said before, has been just

a wonderful vehicle, and we have two assembly plants in the U.S.

that are devoted to Explorer. The work force in both plants are

world class, the quality is top notch, and customer satisfaction is

at very, very high levels; and I’m proud of them. I’m proud of the

way they have reacted over the last several months. They have

worked hard. They’ve been involved in retrieving tires. They’ve

185

been involved in better understanding customer data, and I’ll pass

that message on to them from you.

Mr. SHIMKUS. I yield back, Mr. Chairman.

Mr. TAUZIN. I thank the gentleman.

The Chair recognizes the gentleman from Minnesota, Mr. Luther.

Mr. LUTHER. Thank you, Mr. Chairman.

And thank you, Mr. Nasser, for your testimony. There was some

dialog earlier about how a company like yours does get information

on problems like this, and I assume one of the ways that you do

get information is through the claims that are brought, because— can I assume that in a lot of the claims—I haven’t seen a chart for

you, but in a lot of the claims here, you would be involved; in other

words, the claim would be brought against Firestone and against

you? That would be the case, wouldn’t it?

Mr. NASSER. The claims that you see on that chart, as I understand it, are vehicle damage, property damage, personal injury.

Mr. LUTHER. Right.

Mr. NASSER. Damage claims. So we may see, going back to your

description, Congressman, a dot here and there. We do not see

those trends, and we don’t see them—it wasn’t until we asked for

that data and we analyzed it by month, by plant of production, by

type of tire, by type of vehicle that we cracked the code.

So getting a legal case here and there distresses us. We don’t like

that because it means a customer is unhappy, but it really doesn’t

give us data that we can work with. We’re a data-driven company,

and you can’t react to here’s a little issue here, here’s another problem here. We want to get the data in a form that can be analyzed.

Mr. LUTHER. Okay.

You, I know, were here when you heard testimony about how the

claims information was handled by Firestone. I believe you were

here in the room.

Mr. NASSER. Yes.

Mr. LUTHER. How do you handle claims information? Is it similar

to the way Firestone does?

Basically, as I heard them testify, they look at it from an accounting standpoint. It did not—it did not factor in safety and recalls and these kinds of decisions.

When you get claims information, how do you treat it? How do

you deal with it within the company?

Mr. NASSER. The claims information we get are very minor, so

we don’t take any regard to the cost of that. What we want is all

of the information coming in on total claims because that gives us

a trend. We’re interested in customer satisfaction and making sure

that every one of our customers is delighted with their product. We

don’t drive the company by trying to analyze and manage claims

data. We don’t even get the claims data; Firestone gets the claims

data.

Mr. LUTHER. Well, I assume that you would be involved in a

number of the claims against Firestone. I mean, it would be very

typical for a claim to be brought against both the manufacturer of

the vehicle and the manufacturer of the tire.

Mr. NASSER. That’s true.

Mr. LUTHER. And so at this time that you were making the diligent effort that you have referred to, to try to get to the bottom

186

of this, did you in fact check with the people who were handling

the claims who would have been privy to a considerable amount of

claims information at that time, because already by 1996 and 1997

we’re getting into the hundreds of claims, many of those would

have of course involved you to some extent as well.

Did you make any inquiry or check into the people handling this

for you?

Mr. NASSER. We looked at many of those claims, but we couldn’t

see any trend; and we went from there to the NHTSA safety agency data, and as you heard from Ms. Bailey, there wasn’t anything

there. We went back and asked Firestone one more time, give us

some feedback. We couldn’t find anything there, but our claims

data is open. We don’t close it. So anyone can look at it. We’ll make

it available to the committee. You can look at it. I don’t think you

will find anything there that would clearly indicate the problem

prior to when we put it together.

Mr. TAUZIN. Mr. Luther, would the gentleman yield a second?

Mr. LUTHER. Certainly.

Mr. TAUZIN. I want to inform the gentleman that one of the requests we’ll make upon Ford, and a very detailed request, is exactly for that, see if you did do any analysis of these lawsuits,

whether they were related to something wrong with the vehicle or

something wrong with the tires. It’s rather hard for me to believe

that somebody in your company wasn’t doing that.

Mr. NASSER. We would be doing it.

Mr. TAUZIN. So we would request that you diligently search for

any analysis or charts or research done on that single question, because that obviously is central to the question of whether or not

you had notice of these tire defects.

Mr. LUTHER. Thank you, Mr. Chairman.

Can we assume then, along with that, similar to Firestone, that

you would waive any confidentiality?

Mr. NASSER. Yes, we would.

Mr. LUTHER. Thank you. Appreciate that.

I think, Mr. Chairman, considering the time—and I appreciate

your responses and, we’ll follow up on that information. Thank you.

I yield back.

Mr. TAUZIN. Thank you, Mr. Luther.

The Chair recognizes the gentlelady from New Mexico, Mrs. Wilson.

Mrs. WILSON. Thank you, Mr. Chairman.

Mr. Nasser, I appreciate your patience today as well, and I’ll try

to be brief. You said in your opening statement that your engineers

analyzed information after you pried it from Firestone, after you

asked for it in June or July, and you then insisted on a recall.

Did your engineers actually analyze information or are you just

talking about the claims rates that you analyzed?

Mr. NASSER. The claims, and we asked—as I said, we asked for

the claims in June and we asked——

Mrs. WILSON. So it was looking—there’s no further engineering

analysis that you have done?

Mr. NASSER. No, no. The engineering analysis, Mrs. Wilson,

we’re doing right now.

187

Mrs. WILSON. I’d like to follow up on some of the questions Mr.

Luther was asking with respect to cases in which you are a codefendant. I assume you have to do the same annual SEC filings

as every other public company. How many pending lawsuits are

there for your model years 1994, 1995, 1996 and later involving

rollovers and blown tires?

Mr. NASSER. I think there are about 50—50 for the last 10 years.

Mrs. WILSON. Fifty pending lawsuits in the last 10 years?

Mr. NASSER. Fifty lawsuits over the last 10 years.

Mrs. WILSON. And have you settled any of those lawsuits in

which you were a codefendant with Firestone?

Mr. NASSER. I’ll have to ask that.

Mrs. WILSON. Yes, you have?

Mr. NASSER. Yes.

Mrs. WILSON. What percentage—without getting into the details

of any particular claim for which there is a confidentiality provision, what percentage liability has Ford assumed in those settlements?

Mr. NASSER. I don’t know. We can certainly provide that and we

can give it to you, if that’s acceptable—by case, you can look at it

case by case.

Mrs. WILSON. Does your attorney know what percentage liability

you’ve assumed?

Mr. NASSER. It varies by case, he’s saying.

Mrs. WILSON. I would like to have that data, Mr. Chairman.

Mr. TAUZIN. The Chair will request that you submit the data to

the committee.

[The following was received for the record:]

Firestone/Ford Settlements of Lawsuits Alleging Tread Separation on P235/75Rl5 Firestone Tires

Approximate date of settlement Firestone % of total

settlement Firestone settlement amount Ford % of totalsettlement

Ford settlement

amount

September 1996 ........................... 60% $450,000 40% $300,000

January 1998 ............................... ............................. unknown ............................. $950,000

March 1998 .................................. ............................. $50,000 ............................. unknown

March 1998 .................................. ............................. unknown ............................. $10,000

April 1998 .................................... ............................. unknown ............................. $55,000

June 1998 .................................... 62% $165,000 38% 1 $101,000

August 1998 ................................ ............................. unknown ............................. $221,000

October 1998 ............................... 85% $850,000 (12/98) 15% $150,000

December 1998 ............................ ............................. unknown ............................. $25,000

May 1999 ..................................... ............................. $250,000 ............................. unknown

June 1999 .................................... 77% $250,000 23% $75,000

September 1999 ........................... 86% $1,900,000 14% $300,000

September 1999 ........................... 79% $2,980,000 (12/98) 21% $800,000

September 1999 ........................... ............................. unknown ............................. $25,000

November 1999 ............................ 83% $975,000 17% $200,000

November 1999 ............................ ............................. unknown ............................. $175,000

December 1999 ............................ ............................. unknown ............................. $125,000

December 1999 ............................ 59% $10,000 (2/00) 41% $7,000

March 2000 .................................. ............................. unknown ............................. $25,000

April 2000 .................................... 92% $4,400,000 (9/00) 8% $400,000

August 2000 ................................ ............................. $235,000 ............................. 2 unknown

TOTALS ..................................... ............................. $12,515,000 ............................. $3,944,000

1 According to Firestone data only

2 Ford dealership

Mrs. WILSON. Mr. Nasser, in the cases in Venezuela and Saudi

Arabia, why wouldn’t Firestone participate?

188

Mr. NASSER. We don’t know. We just don’t know and we were

frustrated. So in the end, when they declined, we just went ahead.

Mrs. WILSON. So they just said no, and when you asked why

not—I mean, I assume you would.

Mr. NASSER. They said they just didn’t want to participate. They

didn’t think they had a problem.

Mrs. WILSON. Why do you think they wouldn’t participate?

Mr. NASSER. I don’t know.

Mrs. WILSON. I have been kind of watching body language and

listening to comments and so on throughout the day, and things

like evaluating your relationship with your supplier on a day-today basis and letting us down and bumble through their answer,

pry data from them. When you restart the lines, the Explorer lines

that you have suspended in order to use those tire s for replacements, why on Earth would you bolt on Firestone tires at the end

of the line?

Mr. NASSER. Because when you look at the data on many of their

tires and many of their plants, they have got world-class tires, and

if we suspected any differently, we would stop.

Mrs. WILSON. But you are a customer-driven company where

quality is job one. What do your customers want?

Mr. NASSER. Well, I think looking forward—as we go forward

and as we get past this replacing these bad tires with good tires,

I think your question is a good one; should we offer our customers

a choice of tire, should they be able to choose the type of tire that

they want, and I think the answer to that is yes. Industry practice

has always been limit the tire selection on a vehicle, and I look at

that experience and I say maybe that isn’t what a customer-focused

company should be.

Mrs. WILSON. I have also been listening to some of the words

that you have used, and it’s clear to me that some of the lessons

of quality that America has learned over the last decade have been

learned at Ford, and the first criterion for the Malcolm Baldrige is

leadership, and I wanted to thank you for yours.

Mr. TAUZIN. I thank the gentlelady.

The gentleman from Missouri, Mr. Blunt, is recognized.

Mr. BLUNT. Thank you, Mr. Chairman. I have a couple of questions.

I know you have been here a long time, Mr. Nasser, and you may

have answered these before, and I’ll try to be brief and I’ll listen

carefully. That way I won’t have to go back and review the entire

record. On the question of notification, was the company ever—was

the company ever under the impression that you would have to

give notification to the U.S. regulators when you made overseas— when you recalled tires overseas?

Mr. NASSER. No, it’s clear that it isn’t necessary, but in the case

of Venezuela, when we decided to replace the Firestone tires in

Venezuela, we informed NHTSA. That very same day we told them

about it.

In the case of Saudi Arabia last year, as you saw from that letter, we didn’t because we were frustrated with the discussions with

Firestone, and we had determined at that point that the best data

we had, that we did not have a problem in the U.S. market. Going

forward, I think it is in the customers’ best interest that if there

189

are safety recalls anywhere in the world, that customers get a view

of that because it will help customers decide. It gives customers a

better basis for making a choice.

So I’d say, going forward, we’re going to do it voluntarily, whether it’s enacted as legislation or not.

Mr. TAUZIN. Would the gentleman yield just for a second just to

make the record clear? It is correct, Mr. Nasser, that the Venezuela

recall occurred after NHTSA opened its investigation here in the

United States?

Mr. NASSER. Yes, it was about a week after.

Mr. TAUZIN. And when you notified NHTSA of the Venezuela incident, NHTSA was already involved in a U.S. Investigation?

Mr. NASSER. Yes, it was.

Mr. TAUZIN. Thank you, sir.

Mr. BLUNT. Just to follow up on that point, since your company

intends to do it voluntarily, I assume you’d have no problem that

there was a Federal requirement that it had to be done; but in

terms of good business practice and following up on your product,

you think that it should be done, and you intend to do it in the

future in any case?

Mr. NASSER. We would support a regulation in that direction,

yes.

Mr. BLUNT. Well, was it—not to carry this point too far, but

wasn’t there a memo—I believe it was in March 1999 where the

memo indicated—I read this in the Wall Street Journal, so I’m sure

it’s not news to you—where the memo indicated you thought—that

Ford thought, from advice they’d gotten from Firestone, that they’d

have to report on a recall outside the United States?

Mr. NASSER. I’m not sure what you’re referring to there.

Mr. BLUNT. There was a Wall Street Journal article, I believe

yesterday, that talks about a March 12, 1999, memo, internal

memo, it sounds like.

Mr. NASSER. It’s the memo we talked about earlier in the testimony.

Mr. BLUNT. Well, I was gone earlier, so if you would just give me

a little brief review of that.

Mr. NASSER. Firestone believed that if they concluded that there

was an issue, then they would have to inform the U.S. regulators.

That’s what that memo is about, and I think it’s in the evidence.

Mr. BLUNT. Technically is that not accurate, if they concluded

there was an issue overseas, that they wouldn’t have to technically

inform now under the law?

Mr. NASSER. There isn’t a law that mandates that declaration.

Mr. BLUNT. But you intend to do that voluntarily and would have

no problem if that was a requirement?

Mr. NASSER. Yes, we do.

Mr. BLUNT. Thank you, Mr. Chairman. Mr. Chairman, thank you

for the time.

Mr. TAUZIN. Thank you, Mr. Blunt.

Before we conclude, Mr. Nasser, Mr. Rogan, I think, is on his

way and had a few questions.

Let me request if there are any other members who would like

to ask for time for any additional questions. We’re going to do like

Todd Martin, we’re just going to keep on going until we finish this

190

match, and we have another panel. Mr. Boyden has been waiting

very patiently to come and testify along with Mr. Ditlow, and if Mr.

Shimkus is not arriving very, very soon—Mr. Rush has a question,

and the Chair recognizes Mr. Rush for that question.

Mr. RUSH. Mr. Nasser, we’ve heard a lot about the Ford Explorer

and some of the other vehicles. I wonder, does the Lincoln or the

Mercury Mountaineer, do they have the same Firestone tires that

are at issue today?

Mr. NASSER. Yes, they do.

Mr. RUSH. My wife wanted me to ask you that question, because

she has one.

Mr. NASSER. Well, she should check to make sure it is one of the

tires that is included in the recall, because the Mercury Mountaineer, of course, would have various types of tires, but she may

have it. She should check, and if she does, give me a call.

Mr. RUSH. Thank you.

Mr. TAUZIN. Thank you, Mr. Rush.

Mr. Nasser, let me explore one item with you that we thought

would get explored and has not been done yet. That is in the Venezuela document 32, Explorer tire DNP, current status on the reference project, background, July 1997, Ford representatives were

called to a meeting in Caracas with a group of independent lawyers

representing four customers. Do you have it?

Mr. NASSER. Yes, I do.

Mr. TAUZIN. Down in the middle of the page, ‘‘The results of

these investigations were inconclusive, although several findings

were made;’’ and if you go down to the last one there, ‘‘high incident vehicle rollover after a tire blowout or tread loss has not been

detected for other vehicle brands. Toyota, GM and Chrysler all

have significant presence in this market segment.’’ This is a finding in the Venezuelan investigation that other

brands or vehicles—Toyota, GM, Chrysler—present in the marketplace, did not have the same high incidence of vehicle rollover after

a blowout or tread separation as did the Ford Explorer. Can you

explain that finding in light of your statistics indicating a much

safer statistical profile for the Ford Explorer here in America?

Mr. NASSER. I can’t explain it because, as you know, in Venezuela, the data on accidents and safety isn’t very good. In the U.S.

that data is probably the best in the world.

We have 10 years of history on the Explorer here in the U.S.

market. It is one of the safest SUVs. Whether you look at it in

terms of serious crashes or whether you look at it in terms of rollover, it’s one of the best products in the SUV market in relation

to rollover accidents.

So as with many things in Venezuela, it’s probably going to take

a little bit of time to really get into it and understand what the

data will tell us.

Mr. TAUZIN. Well, also—and I have trouble with these acronyms,

but he also says, ‘‘beginning first quarter 1999 to FOV’’——

Mr. NASSER. That’s Ford of Venezuela.

Mr. TAUZIN. [continuing] ‘‘notified the situation to explore a

PVT’’——

Mr. NASSER. Plant vehicle team.

Mr. TAUZIN. Thank you, ‘‘and the TVC’’——

191

Mr. NASSER. I’m glad I’m here as an interpreter.

The truck vehicle center. You will catch me soon, I’m sure.

Mr. TAUZIN. [continuing] ‘‘the truck vehicle center notified of a

similar issue occurring in GC’’——

Mr. NASSER. That’s the Gulf, they’re the Gulf countries.

Mr. TAUZIN. [continuing] ‘‘Gulf countries where WDMO’’——

Mr. NASSER. World direct markets organization.

Mr. TAUZIN. No wonder you’re chairman, ‘‘was about to initiate

a DNP’’——

Mr. NASSER. Dealer notification program.

Mr. TAUZIN. [continuing] ‘‘consisting of a tire change to Goodyear

brand.’’

We don’t have a date when this happened, although this finding—this indicates, ‘‘beginning first quarter of 1999,’’ This must

have happened in 1998. All right.

Mr. NASSER. No. The Goodyear happened around the middle of

last year, and the recall happened, as you know, around the middle

of——

Mr. TAUZIN. Let me try this again. The language says ‘‘beginning

first quarter of 1999.’’ This seems to indicate this was written in

1998.

Mr. NASSER. No. It says, ‘‘beginning first quarter of 1999 FOV

notified the situation.’’

Mr. TAUZIN. I see. So this is probably something that happened

in 1999?

Mr. NASSER. Right.

Mr. TAUZIN. And you have no explanation for why this finding

occurred in Venezuela when your own statistics indicate differently

here in America?

Mr. NASSER. It’s definitely different in the U.S. and that they’re

public data; and we’re at the moment, as you know, trying to understand the situation in Venezuela.

Mr. TAUZIN. Mr. Nasser, I believe that concludes—Mr. Shimkus,

I understand, is not going to make it—I mean Mr. Rogan is not

going to make it. Let me apologize for holding you for that purpose,

and thank you for your appearance today along with Mr. Ono and

Ms. Bailey with NHTSA. We’re going to have another panel.

We obviously are going to keep this record open. We will have

written questions that members and staff will submit to Ford

Motor. We would appreciate your response to those questions, as

well as to the submissions of documents that have been requested

at this hearing today.

And let me on behalf of the committee thank you for the commitments that Ford Motor has indicated at the hearing today.

The commitment to make sure that NHTSA is aware of any safety actions taken in other countries is frankly deeply appreciated.

It’s a huge step in the right direction, and we’re anxious to work

with you and the tire companies in your efforts to devise an early

warning system for tire defects, and that is extremely important.

As Mr. Burr has pointed out, they are indications of other trends

that I hope everybody is alerted to and that we can all focus on

so that we don’t end up, as Mr. Rush pointed out, in another mess

like this 1 day.

192

I thank you very much for your testimony and you are dismissed.

Thank you.

The Chair will now welcome, and with deep appreciation, Mr.

Samuel Boyden, the Associate Research Administrator of the State

Farm Insurance Companies in Bloomington, Illinois, who is accompanied by Mr. Herman Brandau, Associate General Counsel for

State Farm Insurance Companies; and Mr. Clarence Ditlow, the

Executive Director for the Center for Auto Safety here in Washington, DC.

Let me, pursuant to the rules of our committee hearing, make

you all aware that this subcommittee again is holding an investigative hearing, and in doing so, has had the practice of taking the

testimony under oath. Do you have any objection to testifying

under oath?

The Chair then advises each of you that under the Rules of the

House and the rules of this committee you are entitled to be advised by counsel. Do any of you desire to be advised by counsel during your testimony today?

In that case, would you please rise and raise your right hand as

I swear you in.

[Witnesses sworn.]

Mr. TAUZIN. You are each now under oath and let me begin by

welcoming Mr. Samuel Boyden, the Associate Research Administrator, State Farm Insurance Companies, for your testimony, sir.

TESTIMONY OF HERMAN BRANDAU, ASSOCIATE GENERAL

COUNSEL, ACCOMPANIED BY SAMUEL K. BOYDEN, ASSOCIATE RESEARCH ADMINISTRATOR, STATE FARM INSURANCE COMPANIES; AND CLARENCE DITLOW, EXECUTIVE DIRECTOR, CENTER FOR AUTO SAFETY

Mr. BRANDAU. Thank you. I’m going to begin the testimony for

State Farm, and then Mr. Boyden will conclude our testimony.

Mr. TAUZIN. That’s fine. Mr. Brandau is recognized.

Mr. BRANDAU. Mr. Chairman and members of the subcommittee,

my name is Herman Brandau. I’m Associate General Counsel for

State Farm Insurance. My responsibilities include coordination of

our many public policy initiatives relating to auto safety. Accompanying me today is Samuel Boyden, an Associate Research Administrator at State Farm.

Both of us work at our company’s headquarters in Bloomington,

Illinois. We would like to thank the members of the two subcommittees for inviting State Farm to testify today on this very important auto safety issue.

State Farm is the Nation’s largest auto insurer with 37 million

policies and one out of every five cars insured. One of our top priorities at State Farm is to promote improved vehicle and highway

safety. We have worked to find legislative, regulatory and competitive solutions to reduce auto crashes and protect those involved in

crashes. We have taken a lead role in creating two of the most important vehicle and highway safety organizations, the Insurance

Institute for Highway Safety, which is chaired this year by our

CEO, Ed Rust, and the Advocates for Highway and Auto Safety,

which I cochair this year.

193

Our current initiatives in highway safety include a partnership

with the Children’s Hospital of Philadelphia to research the causes

of childhood deaths and injuries and highway crashes in a project

where we use our research to identify and suggest ways to improve

dangerous intersections. Our history and current activities on highway safety are further elaborated in our written statement.

State Farm collects and examines claims data for multiple business purposes. If problems with a particular product cause or contribute to an individual claim, we then seek compensation from the

manufacturer. In some instances, the same information developed

for State Farm’s internal business purposes can help safety experts

identify potential problems.

Mr. Boyden will now discuss his activities and relationship with

NHTSA.

Mr. TAUZIN. Thank you. Mr. Boyden is recognized.

Mr. BOYDEN. Mr. Chairman and members of the subcommittees,

my name is Sam Boyden. I’m Associate Research Administrator.

My work at State Farm involves gathering and analyzing data on

auto industry and damage-related issues from our claims file s for

a number of business purposes. We are not safety regulators, but

rather, where appropriate, we communicate data to NHTSA, the

lead vehicle safety agency.

Since the mid-1990’s NHTSA has sent us on a monthly basis details of safety-related recalls and other investigations that have

been opened, upgraded or closed during that period. We sometime

receive special requests on data for specific vehicles for safety concerns that have not been upgraded to a public investigation.

In response to these requests, we have searched for matching

claims based on information reported to us from our local claims

offices throughout the country. Our function is to serve the claims

department as a resource for inquiries we receive from the field.

We are not a repository of all claims data. Information that is received by us is provided at the judgment and discretion of our individual claims representatives. Most of the data we provide NHTSA

is in response to a request from the agency. However, we do notify

NHTSA of potential claims trends being reported from our field offices.

We are in regular communication with NHTSA by e-mail and

telephone on a wide range of related issues. In a year, we share

information on approximately 150 investigations and evaluations

that are undertaken by NHTSA. Identifying trends and claims data

is quite different from the requirements of investigating safety concerns and issuing product recalls. State Farm does not report defects. Rather, it reports claims trends that may reflect the possibility of a product defect.

Regarding the Firestone tire issue, on July 22, 1998, I had a conversation with NHTSA and followed up with an e-mail stating we

had noticed 21 reports regarding Firestone ATX tires. I noted that

14 of the 21 reports were for tires on 1991 to 1995 Ford Explorers.

Subsequently, during the summer of 1999, I telephoned NHTSA to

discuss this issue, among others, with them. Again, on December

2, 1999, I receive d a phone call from NHTSA to discuss a number

of vehicle-related issues. During our conversation, I again mentioned the Firestone ATX tire issue.

194

On April 25, 2000, in response to a request from NHTSA, I sent

an e-mail in which I provided additional information on Firestone

ATX, ATX II and Wilderness tires. I gave a breakdown by calendar

year, the tire type for the period covering 1996 through April 2000,

and provided information on 70 reports.

We thank you for the opportunity to appear before your subcommittees. In particular, we would like to thank the staff of the

committees for their help in preparation for this hearing.

Auto safety is a prime concern for State Farm. If there is any

other information or assistance that we can give these subcommittees or your staff on this or other safety-related matters, we’ll always be available to assist.

[The prepared statement of Herman Brandau and Samuel

Boyden follows:]

PREPARED STATEMENT OF HERMAN BRANDAU, ASSOCIATE GENERAL COUNSEL AND

SAMUEL BOYDEN, ASSOCIATE RESEARCH ADMINISTRATOR, STATE FARM INSURANCE

COMPANIES

INTRODUCTION

My name is Herman Brandau, I am Associate General Counsel for State Farm

Insurance. My responsibilities include coordination of our many public policy initiatives relating to auto safety. Accompanying me today is Samuel Boyden, an Associate Research Administrator at State Farm. Both of us work at our company’s headquarters in Bloomington, Illinois. We would like to thank the members of the

two subcommittees for inviting State Farm to testify today on this very important

auto safety issue.

State Farm is the nation’s largest auto insurer with 37 million policies and one

out of every five cars insured. One of our top priorities at State Farm is to promote

improved vehicle and highway safety. We work to find legislative, regulatory, and

competitive solutions to reduce auto crashes and protect those involved in crashes.

We also seek ways to reduce injuries by restraining or protecting vehicle occupants.

One of the first highway safety issues State Farm addressed was the problem of

‘‘booby-trapped’’ roads. We worked to improve the designs of bridges, poles, warning

signs and other roadside hazards so as to minimize the chance of death or serious

injury resulting from collision with these objects. In the 1960s, we worked to create

the Insurance Institute for Highway Safety (IIHS). IIHS is the leading private vehicle and highway safety research organization. It attacks safety issues by addressing

the three major safety components: the highway, the driver, and the vehicle. Ed

Rust, our Chairman and CEO, is the current IIHS chairman. In the 1970s and early

80s, State Farm was involved in the battle to obtain airbags for passenger vehicles.

State Farm was the lead party in the case that reached the Supreme Court, which

led to reinstatement of the passive restraint requirement. In response to the Court’s

decision the passive restraint rule was reinstated. This decision and later federal

legislation led to the current requirement that all passenger vehicles have both driver and passenger side air bags. In 1989, State Farm was one of the companies that

helped form the Advocates for Highway and Auto Safety. This organization includes

insurers, safety groups, medical groups, law enforcement organizations and consumer advocates working to improve vehicle and highway safety. Working with the

Advocates, we have sought legislation to reduce drunk driving, improve vehicle safety and increase seat belt use. I serve as the current co-chair of the Advocates for

Highway and Auto Safety.

In more recent years, we have played a major role in a number of safety related

initiatives. We helped create the the Airbag and Seat Belt Safety Campaign whose

objectives include improving adult and child restraint usage and the enactment of

primary seat belt laws. We have also entered into a partnership with the Children’s

Hospital of Philadelphia to research the causes of childhood death and injuries in

highway crashes. The partnership’s researchers recently released important research results recommending increased use of booster seats by children between the

ages of 4 and 8. In 1999, we undertook our dangerous intersection project. We use

our research to identify intersections where there are the most crashes and have

offered to assist communities to study ways of improving safety at these intersections. We also work directly with automobile manufacturers on issues of

reparability.

195

State Farm collects and examines claims data for multiple business purposes. If

problems with a particular product cause or contribute to an individual claim, we

seek compensation from the manufacturer. If a trend emerges with the same product—either from our own data or as identified in a product recall—we respond to

our claim employees’ inquiries with information helpful in seeking compensation

from the manufacturer. In some instances, the same information developed for State

Farm’s internal business purposes can help safety experts identify a potential problem.

Sam will now discuss his activities and relationship with The National Highway

Traffic Safety Administration (NHTSA).

INFORMATION EXCHANGE WITH NHTSA

My work at State Farm involves gathering and analyzing data on auto injury and

damage related issues from our claims files. We are not safety regulators, but rather

where appropriate, we communicate data to NHTSA, the lead vehicle safety agency.

Since the mid 1990’s, NHTSA has sent us, on a monthly basis, details on safety related recalls and other investigations that have been opened, upgraded or closed

during that period. We sometimes receive special requests for data on specific vehicles for safety concerns that have not been upgraded to a public investigation. In

response to these requests, we search for matching claims based on information reported to us from our local claims offices throughout the country. Our function is

to serve the Claims Department as a resource for inquiries we receive from the field.

We are not a repository of all claims data. Information that is received by us is provided at the judgment and discretion of individual claim representatives.

Most of the data we provide NHTSA is in response to a request from the agency.

On occasion, however, we advise NHTSA of potential claim trends being reported

from our field offices. A decision to initiate a contact with NHTSA is based on a

number of factors, including whether a search of our information reveals a number

of similar reports or cases with possible safety implications with a particular vehicle

model within a specific time frame. We are in regular communication with NHTSA

by e-mail and telephone on a wide range of related issues. In a year we share information on approximately 150 investigations and evaluations that are undertaken by

NHTSA. Identifying trends in claims data is quite different from the requirements

of investigating safety concerns and issuing product recalls. State Farm does not report defects; rather it reports claims trends that may reflect the possibility of a

product defect.

FIRESTONE TIRE ISSUE

On July 22, 1998, I sent an e-mail to NHTSA stating we had noticed 21 reports

regarding Firestone ATX tires. I noted that 14 of the 21 reports were for tires on

1991 to 1995 Ford Explorers. I did not receive any particular response or follow up

from NHTSA at the time. I continued to communicate with NHTSA on a great number of issues. Subsequently during the summer of 1999, I telephoned NHTSA and

discussed this issue among others with them again. On December 2, 1999 I received

a phone call from a NHTSA representative to discuss a number of vehicle related

issues. During our conversation I again mentioned the Firestone ATX tires issue.

On April 25, 2000 in response to a request from NHTSA, I sent an e-mail in

which I provided additional information on Firestone ATX, ATX II and Wilderness

tires. I gave him a breakdown by calendar year and tire type for the period covering

1996 to April 2000. I provided him information on 70 reports.

We thank you for the opportunity to appear before your subcommittees and in

particular we would like to thank the staff of the subcommittees for their help and

assistance in preparation for this hearing. As we noted in our statement, auto safety

is a prime concern for State Farm. If there is any other information or assistance

that we can give these subcommittees or your staff on this or other safety related

matters, we will always be available to assist.

Mr. TAUZIN. Thank you, Mr. Boyden.

Mr. Ditlow, the Executive Director of the Center for Auto Safety

here in Washington, DC.

TESTIMONY OF CLARENCE DITLOW

Mr. DITLOW. Thank you, Mr. Chairman and other stalwart members of the committee. I’m happy to see you stayed to hear a few

words from us. I’ll keep them brief.

196

The Center for Auto Safety has been looking at automobile defect

s for 30 years, and we have never seen or found an automobile defect before it was found by the automobile manufacturers. And in

March, on the 2d of this year, I gave a talk at the Clemson University Tire Industry Conference, attended by executives from the auto

companies and from the tire companies. And at that time I told the

assembled audience that the Firestone ATX on Ford Explorers was

the next Firestone 500, and the No. 1 tire concern from consumers

was why were so many Ford Explorers rolling over after Firestone

ATX tread separation—2 months before NHTSA opened its investigation, 5 months before the first recall.

And NHTSA had an earlier warning from State Farm, as we

have just heard, in 1998 and we’ve seen today a lot of analysis by

this committee and by Ford and Firestone of the 2,400 Firestone

claims. Yet I saw a document submitted by Ford Motor Company,

dated July 24, cover letter in the public record at NHTSA, discussing the fact that Ford Motor Company in its owner reports had

received about 1,100, as I recall, complaints of blowout, tread separation and other tire failures in the subject vehicles.

Now, that’s getting up to knowledge at Ford Motor Company and

a level of Firestone, but the trouble is, for the American public, and

this goes across the—all the different sources of data that we have,

that information is not yet in the public file. The American—so we

would like to analyze it. We’d like to look at it, find out what types

of complaints they are. How do they compare to the Firestone

claims? When do they occur? What tires are they on? Those are all

unanswered questions.

The two big questions for the American public today are, if Ford

recalled the 16-inch tire abroad, why aren’t they recalling it here?

If the Decatur plant is making bad tires, why aren’t other tires at

the Decatur plant being recalled? Until we have that information

on the public record giving explanations that we can understand

and not being held confidential, position is, all the Firestone ATX,

all the Firestone ATX II and all the Wilderness tires regardless of

the plant and regardless of the size should be recalled.

The final thought that I would like to give you on the investigation process is that historically the agency has opened investigations on as few as one complaint. The seminal litigated case in this

country is the Kelsey-Hayes wheels case that was opened, as the

court of appeals noted, on the basis of one complaint. The failure

rate was 0.2 percent on the wheels and they set forth the test for

looking at defects, the balance, the frequency versus the severity.

When the Center for Auto Safety testified before this committee

in 1978—and I was the individual doing it—there were 14,000, or

14,000 consumer complaints on the Firestone 500 tires, only 41

deaths. Today, we see 1,400 complaints but 88 deaths. The difference is the vehicle that it is on, and we should go forward—and

I want to do one thing. I want to commend this committee for putting on the public record more information than the public has received to date from NHTSA, Ford or Firestone.

Thank you.

[The prepared statement of Clarence Ditlow follows:]

197

PREPARED STATEMENT OF CLARENCE DITLOW, CENTER FOR AUTO SAFETY

Mr. Chairmen and members of the Subcommittees, thank you for the opportunity

to testify on the recall of Bridgestone/Firestone tires on Ford light trucks and sport

utility vehicles (SUVs). I am Clarence Ditlow, Executive Director of the Center for

Auto Safety (CAS) which is a non-profit organization founded by Consumers Union

and Ralph Nader in 1970 but is now independent of both. The Center works to improve vehicle and highway safety.

In May 1978, I testified before this Commerce on the Firestone 500 steel-belted

tires when CAS successfully campaigned to get 19.5 million Firestone tires recalled.

Unfortunately, one of the key recommendations of the Committee to upgrade Federal Motor Vehicle Safety Standard (FMVSS 109) was never acted on by the National Highway Traffic Safety Administration (NHTSA). FMVSS 109 which sets performance standards for tire strength, endurance and high speed performance was

developed in the late 1960’s and early 1970’s when there were very few radial tires

and no SUVs on the road. NHTSA withdrew the only enforcement action it ever

brought under the standard because it was so vague and difficult to enforce. A tire

for an SUV could be certified to the even more lenient Safety Standard 119 for nonpassenger tire cars.

Although there are many similarities between the Firestone 500 and the Firestone/Ford tire failures, there is a key difference—the role of the vehicle on which

the tires are mounted. In the Firestone 500 recall, there were more tires and complaints (14,000 then versus 1,400 today) but fewer deaths (41 then versus 88 and

rising today). The primary vehicle in which Firestone ATX, ATX II and Wilderness

tire tread separations and deaths have been associated is the Ford Explorer, an

SUV which has been marketed as a passenger car. Although the Explorer meets essentially the same standards as passenger cars (albeit on a delayed schedule) there

are no standards on rollover and only a weak standard on roof strength for rollover

protection.

Although the Explorer superficially drives like a passenger car, it is easier for a

driver to lose control of an Explorer than a passenger car when a tire fails. When

the Explorer goes out of control, it is more likely to roll over than a passenger car,

and when it rolls over, its occupants are likely to be injured.

In short, the Ford Explorer or other SUV is the worst kind of vehicle on which

to put a bad tire. A tread separation or other tire failure can lead to a fatal rollover.

A tire made for an SUV like the Explorer should have an extra margin of safety

built into it like a nylon ply because the consequences of failure can be so bad. If

reports that Goodyear tires on Ford Explorers have had no tread separations prove

true, then it is critical to examine the differences between the Goodyear and Firestone tires on these vehicles.

As the tragic toll of 88 known deaths and 250 injuries continues to climb and

more information is added to the public record, it becomes clearer and clearer that

both Ford and Firestone knew more earlier but failed to act until there were too

many complaints, deaths and injuries to conceal Firestone tire failure on Ford Explorers from public attention. Yet all the new information generates more questions

than answers:

• Who set the specifications for the ATX, ATX II and Wilderness tires? Did Ford

‘‘squeeze the rubber out’’ by requiring too light a tire with too low rolling resistance?

• If only the Decatur, Illinois Firestone plant made bad Wilderness tires due to poor

quality control and worker unrest, than why aren’t other tires produced there

equally bad?

• If only 15’’ tires are bad, then why did Ford recall 16’’ Firestone tires in other

countries? And why didn’t Firestone recall any tires in other countries?

• Why did Ford make suspension changes in Venezuela and not in the US? Was

Firestone aware of the suspension changes made by Ford?

• If 26 pounds pressure is too low, why did Firestone go along with Ford?

• What are the failure rates on ATX, ATX II and Wilderness tires and what are

the failure rates on other Firestone tires made during this time? Do these tires

have lower failure rates on other SUVs?

• What is the difference between the different size ATX, ATX II and Wilderness

tires?

• Did GM and other auto companies set different specifications for their tires?

• Were Firestone tires certified and tested to FMVSS 109 passenger car tire standard or the more lenient FMVSS 119 light truck tire standard?

• What Firestone tires are on what vehicles and what is the difference in failure

rates by different applications?

198

Firestone and Ford Early Knowledge

Emerging information show that both Ford and Firestone had early knowledge of

tread separation in Firestone tires on Ford Explorers and other Ford vehicles. Product liability lawsuits were filed in the early 1990’s on Explorer rollovers caused by

Firestone tire failures. NHTSA began receiving consumer complaints in 1990-93 and

provided Ford and Firestone with summaries of all such complaints as part of its

standard policy. In 1996, Arizona state agencies confronted Firestone about tread

separations, particularly in hot weather, in Firestone steel-belted radials. In 1998,

Ford began receiving complaints on Firestone tire failures on Explorers in other

countries. That same year, State Farm Insurance informed NHTSA that it had received 21 damage claim reports on Firestone radial failures. In late 1999, Ford

began to replace Firestone tires on Explorers in other countries but failed to notify

NHTSA.

By late 1999, information that Ford and Firestone were settling product liability

lawsuits with gag orders reached CAS through Strategic Safety, a consulting firm

which has played the leading role in uncovering the Bridgestone and Ford tire crisis. At about the same time, the number of lawsuits and Explorer rollover accidents

had reached such a critical mass that local media in Texas, California and Florida

began to investigate and contact. By March 2, 2000, CAS had received so much information that I spoke at Clemson University’s Annual Tire Industry Conference attended by auto and tire officials and asked why so many Firestone ATX tires were

failing on Ford Explorers and called it the next Firestone 500. At the same time

Strategic Safety and CAS urged NHTSA to open an investigation on this matter

which it did on May 2, 2000.

Why Didn’t NHTSA Learn About Firestone/Ford Earlier

Tire defects are difficult to discover because so few consumers complain about

them and because existing crash data bases are not detailed enough to identify

them. When CAS initiated its efforts on the Firestone 500, we received no more

than 100 tire complaints per year compared to 15,000 vehicle complaints. NHTSA

is no different than CAS and receives very few tire complaints compared to vehicle

complaints. To compound matters, few of the consumers who do complain provide

the crucial tire identification number located on the inside side wall or even the size

and model of tire. CAS goes back to consumers for such information but can no

longer do so in the case of complaints in NHTSA’s data base because NHTSA keeps

their identity confidential.

NHTSA should have opened an investigation in 1998 when State Farm provided

information on the 21 claims because the agency often opens a defect investigation

on as few as two complaints as this Committee has noted in the past. Rather than

being low, the 21 State Farm claims is almost astronomical. NHTSA needs to cast

a broader net on tire complaints because so few come into the agency and because

the consequence of tire failure can be so catastrophic compared to other defects. If

NHTSA doesn’t have the authority to compel information on foreign recalls, then it

should be given that authority by Congress.

CAS v Bridgestone/Firestone and Ford

On August 25, CAS sued Bridgestone/Firestone and Ford in US District Court for

the District of Columbia to obtain an injunction ordering the replacement of all

ATX, ATX II and Wilderness tires regardless of size and plant where made. This

lawsuit is the first ever filed by against CAS auto/tire industry companies and reflects our concerns over the design of these tires for Ford SUVs. Recalls by Ford

in foreign countries have not been limited to 15’’ Firestone tires and should not be

limited to 15’’ tires in the US. For the Wilderness AT, this cannot be a Decatur IL

plant problem or all tires lines and models made at Decatur would be equally defective. We are pleased to see that NHTSA has begun to support our position by requesting the recall of 1.4 million more Firestone tires including many models in

sizes other than 15’’ and in particular 16’’ Wilderness AT tires from the Wilson NC

plant made for 1996-98 Ford F150s. However, we are very disturbed to see that

NHTSA has chosen not to make public its list of 88 deaths which would show the

manufacturing plant, size and model of each tire linked to a death. We also question

why NHTSA has put so little information into the public file on this investigation

and has not even put into the public record requests for confidential treatment of

information submitted by Ford/Firestone.

Legislative Recommendations

A particular dilemma with tire recalls is that a manufacturer has no obligation

to replace a tire for free if it is more than 3 years old. With radial tires that last

50,000 miles or more, this limit should be repealed. If a manufacturer conceals a

199

defect until the statutory period for free repair or replacement expires, they can get

away without a recall. In cases of concealment, the statutory limit on free replacement and repair should be tolled. Moreover, the statute does not provide for reimbursement where a consumer pays for replacement or repair prior to a recall. Congress should remedy that by providing for reimbursement in the statute.

The Firestone/Ford recall of 6.5 million tires to date shows another problem in

the recall system—the shortage of critical safety components such as these tires in

large recalls. If parts and tires are unavailable from the recalling manufacturer,

then the public rides at risk until replacements become available for their vehicles.

CAS is aware of at least 5 deaths in rollover accidents involving Firestone tire tread

separation on Ford Explorers since the initial recall was announced. Although Ford

and Firestone have announced they would reimburse consumers who buy competitor

tires, there is no guarantee they will do so. Indeed, Firestone rescinded its offer

until a Kentucky court issues an order prohibiting it. The Safety Act should be

amended to give NHTSA the authority to order replacement and repair from competitors where there is an imminent safety hazard and the recalling company cannot meet demand.

Since NHTSA failed to implement this Committee’s recommendation in 1978 that

FMVSS 109 be upgraded, Congress should amend the Safety Act to require NHTSA

to upgrade not only FMVSS 109 but also FMVSS 119 with specific direction to determine whether a even more stringent tire standard should be set for SUVs with

their higher rollover propensity than passenger cars. This Committee should also direct NHTSA to reassess its 1981 decision to drop its proposed rulemaking on low

tire pressure warning devices.

The maximum present penalty for concealing a defect and failing to conduct a recall is a maximum fine of $925,000. Interestingly, the highest fines ever assessed

have been against Firestone and Ford—$500,000 against Firestone in 1978 over the

500 steel-belted radial and $425,000 against Ford in 1999 over the defective ignition

switches that started vehicle fires. The Safety Act should be amended to provide

criminal penalties for knowing and willful violations of safety standards and refusal

to recall in line with FDA and CPSC authority and in removing the ceiling on civil

penalties under the Safety Act to be in line with the Clean Air Act which has no

ceiling for violation of vehicle emission standards.

These legislative recommendation are designed to prevent another public safety

crisis like the Firestone tires on Ford Explorers from ever happening again. But for

now, the single most important thing to be done is for Ford and Bridgestone/Firestone to recall all ATX, ATX II and Wilderness tires regardless of size and plant

where made.

Mr. TAUZIN. Thank you, Mr. Ditlow.

The Chair recognizes himself.

First of all, Mr. Ditlow, when was that information of 1,100 tire

failures submitted to Ford?

Mr. DITLOW. That was submitted—July 24, which was put in the

docket at NHTSA; the cover letter——

Mr. TAUZIN. July of this year?

Mr. DITLOW. July of this year in its investigation.

Mr. TAUZIN. So that’s at NHTSA right now?

Mr. DITLOW. It’s in the record, but hasn’t been analyzed.

Mr. TAUZIN. Let me turn to you, Mr. Boyden. What prompted you

on your own volition to send the e-mail to NHTSA detailing the 21

cases of tire separation and accident and fatality to the attention—

what made you think that that was pretty significant?

Mr. BOYDEN. Okay. The way we receive this information is when

our claims representatives phone in to our corporate office. They’re

trained to see things unusual in the claims that they’re handling,

and at that point contact us at corporate; and generally they’re inquiring if there’s already a recall or an investigation regarding that

problem.

Also, as they’re calling, we collect that data from that claim.

200

Mr. TAUZIN. So you have claimants around the country calling

you and saying, what’s going on here, is there a recall pending, investigation, something going on, claims reps calling you?

Mr. BOYDEN. And we, at that point, also collect that information

for internal purposes. During 1998 and—June 1998 we received a

call. In July 1998 we received three calls, all for Firestone ATX tire

tread separations. In the process of looking back at any previous

records we had, that’s when we spotted the others.

Mr. TAUZIN. So the calls alerted you to look for the trend, and

you discovered it?

Mr. BOYDEN. Correct.

Mr. TAUZIN. And you thought it was serious enough that NHTSA

ought to know about it?

Mr. BOYDEN. From what we were seeing, we had ATX tires mentioned in each one of these files, tire tread separation. We had

some pretty serious losses in the almost 21. There were two fatalities, and with that information, like I said, we can’t determine if

that’s an actual defect, but it was definitely a claims trend we were

seeing.

Mr. TAUZIN. Did you see any other trend like that with other

tires?

Mr. BOYDEN. No, not at that time.

Mr. TAUZIN. So this is pretty unique and you reported these 21

cases with this unique pattern to NHTSA. Did you get any reply

from NHTSA?

Mr. BOYDEN. During 1998 is when we really first started e-mail

communications. At the first of the year, we had some difficulties.

Mine weren’t reaching NHTSA and theirs weren’t reaching me, and

we worked through that, but we pretty much came to the protocol

that I would call, discuss something first, and then e-mail, and if

they didn’t get it, they would call me and the same——

Mr. TAUZIN. Did they ever call you and say, did you get our email?

Mr. BOYDEN. No.

Mr. TAUZIN. As far as you know, they never tried to communicate

back with you after they received your e-mail detailing this very

alarming trend?

Mr. BOYDEN. Not on that particular issue. As I mentioned earlier, though, we are in conversation on 150 different investigations

in the year. So we’re constantly speaking.

Mr. TAUZIN. But you called them back, and you called them back

obviously to talk about a number of things, but you gave them an

update, didn’t you?

Mr. BOYDEN. Yes.

Mr. TAUZIN. When did that occur?

Mr. BOYDEN. That was in midyear 1999, and for whatever reason

I didn’t have that logged.

Mr. TAUZIN. But you called them midyear and gave them a report. And what was your report?

Mr. BOYDEN. The report was—when I shared the information in

July 1998, we only had four reports called in for 1998. It’s something we need to keep in mind here, too—I’ve heard this phrase

used a few times—this is not our universe of claims. These calls

201

that come in to our corporate office are at the discretion of our

claims reps. They’re not required to call these in.

Mr. TAUZIN. So these didn’t represent all the cases? These represented—these were the ones they thought serious enough to call

you and talk to you about it and say, what’s going on here?

Mr. BOYDEN. By the end of 1998, we had received 10 more.

Mr. TAUZIN. You received 10 more by the end of 1998. So for a

total of 14 in 1998?

Mr. BOYDEN. Correct.

Mr. TAUZIN. And you notified the agency of this?

Mr. BOYDEN. Right.

Mr. TAUZIN. What did the agency tell you?

Mr. BOYDEN. I can’t remember.

Mr. TAUZIN. Who did you talk to?

Mr. BOYDEN. At that time, we had one contact that we dealt with

all the time.

Mr. TAUZIN. Was his name Bill Duckwitz? ?

Mr. BOYDEN. Correct.

Mr. TAUZIN. So you talked to Bill Duckwitz at the agency, who

was the liaison, I believe, to State Farm, correct?

Mr. BOYDEN. Correct.

Mr. TAUZIN. And you don’t recall what he had to say, but as far

as you know, you never heard any more from him?

Mr. BOYDEN. Generally, there weren’t any of our phone conversations that dealt with one subject.

Mr. TAUZIN. You dealt with a number of subjects. But you then

you received a call from him on December 2, 1999?

Mr. BOYDEN. Right.

Mr. TAUZIN. And that is logged at State Farm?

Mr. BOYDEN. That was logged.

Mr. TAUZIN. We have a copy of that log and a copy of your memo

on it, and you talked about a number of things, but it says you

talked about the Firestone ATX tires. What did you tell him in December 1999?

Mr. BOYDEN. Again, that the numbers seem to be escalating.

Mr. TAUZIN. In fact, you gave him some more numbers, didn’t

you?

Mr. BOYDEN. Correct.

Mr. TAUZIN. How many more?

Mr. BOYDEN. Like mid-30’s.

Mr. TAUZIN. Yeah. We have 35 in our records.

You reported 35 more incidents like the 10 you reported in the

second phone call and the 21 you reported in the e-mail. That’s 21

and 10 is 31 and 35 more, 66 incidents you reported from July

1998 to December 1999 to the agency.

Did you expect the agency to take you seriously and start an investigation?

Mr. BOYDEN. I know that NHTSA has a lot of investigations that

they are working on. As far as my knowledge of their internal

workings, I can’t really speak for their internal workings.

Mr. TAUZIN. Mr. Ditlow, you make the point that one complaint

was enough at NHTSA to provoke one of the most important cases

dealing with safety in the history of the agency. Here were 66.

202

Does it surprise you the agency did not begin an immediate investigation?

Mr. DITLOW. It goes beyond that. It shocks me because these

weren’t just complaints; there were fatalities in there. And they

pay particular attention to accidents involving fatalities. It may

take fifty or 100 complaints if there aren’t any deaths or injuries,

but very often if there’s one death, two deaths, I would say it’s the

rule, rather than the exception, to open an investigation if you

have multiple complaints with multiple deaths.

Mr. TAUZIN. In fact, in this case, we had multiple deaths.

Mr. DITLOW. In this case, we had multiple deaths and we had far

more than a handful——

Mr. TAUZIN. How can you explain the agency’s inactivity?

Mr. BOYDEN. Mr. Chairman, there’s one area that hasn’t been

discussed. One area that State Farm is extremely sensitive——

Mr. UPTON. This is a new legislative day we’re starting now.

Mr. TAUZIN. Could well be.

Mr. BOYDEN. Extremely sensitive to our policyholders privacy.

We’ve worked with NHTSA for quite some time and they’re very

aware of that. When we share this information in these inquiries,

they are blocked. There are no identifiers to our policyholders from

their VIN number or names. I don’t believe they put it in their

public data base. They have the information with the individual engineers, but I don’t believe it——

Mr. TAUZIN. Could never have made it into the data base?

Mr. BOYDEN. The way it normally works, if it’s information we

share or if it’s only on given investigations that are open, if they

want to take it to the next level, then we make contact again; and

then I contact our claims representatives, who in turn contact our

policyholders——

Mr. TAUZIN. But they never asked you to do that, did they?

Mr. BOYDEN. Not at that point.

Mr. TAUZIN. It just went into some black hole somewhere?

Mr. BOYDEN. I’m not sure about black holes.

Mr. TAUZIN. Let me say, I think if there are any heroes in this

awful saga, it’s the television station in Houston who connected the

dots, Mr. Shimkus. And Mr. Boyden, I put you in the same category. Let me thank you for not only taking the trouble to spot this

trend, but for reporting it when you did.

I just can’t help but imagine what would have happened had you

been taken seriously, had the recall started in 1998 instead of the

year 2000, and how many of those folks who are no longer with us

had had a chance to replace their tires in time.

Mr. BOYDEN. There is one area that—and I spoke with a lady

this week, in fact she called, not a State Farm policyholder, but

after she had read an article that she saw we were looking into 16-

inch vehicle tires also, she called from Tulsa, Oklahoma, I believe

it was; and I explained to her the need to contact NHTSA. And this

is another area that I think we’ve seen, early on that NHTSA

didn’t have the complaints in their data base.

The more people I spoke with are really not aware of the fact

that in their vehicle owner’s manual is a procedure to contact

NHTSA.

203

Mr. TAUZIN. Let me say it again so everybody hears it. There is

in your vehicle owner’s manual, every consumer who owns a vehicle purchased in this country, in the owner’s manual is a section

on how to contact NHTSA if you have one of these safety problems.

What you are saying, Mr. Boyden, is you are hopefully advising

more people to do that, right?

Mr. BOYDEN. Half of the individuals that own these vehicles and

had these losses, no matter how severe, even minor damages, and

they felt as though that was a safety-related problem and had contacted NHTSA, we wouldn’t have to concern ourselves with my email or the news broadcast; NHTSA would have already been made

aware of this.

Mr. TAUZIN. Well, but the fact is, you took the trouble to do it

for them and, unfortunately, I think you were ignored.

The Chair yields to the gentleman from Michigan, Mr. Stupak.

Mr. STUPAK. Thanks, Mr. Chairman.

I think we would all agree, Mr. Boyden, that when you have an

accident like this, the last person on your mind is probably

NHTSA, right?

Mr. BOYDEN. That is true.

Mr. STUPAK. With all due respect, the first thing you do is get

ahold of the manufacturer of your vehicle and the manufacturer of

your tire, because when you go to the vehicle, in this case Ford,

they will tell you we don’t warrant it, you have to get ahold of Firestone, if there is a Firestone in your area.

Mr. BOYDEN. It depends on the size of the accident also.

Mr. STUPAK. Sure.

Mr. BOYDEN. If it is a larger accident, normally they contact

their agent.

Mr. STUPAK. Do you have any idea what NHTSA did with the information you sent them by e-mail in 1998?

Mr. BOYDEN. No, I don’t. Once I sent it, I realized—I didn’t get

a contact back, so I knew they received it.

Mr. STUPAK. The same with 1999, the summer of 1999 and again

in December 1999; do you know what they did with it?

Mr. BOYDEN. As far as I knew, it was being forwarded on to

the——

Mr. STUPAK. Again, you didn’t get any reply back, saying we

didn’t get your e-mail or something like that, right?

Mr. BOYDEN. Right. Like I said, we were working on a number

of different issues at the time.

Mr. STUPAK. Well, let me ask you this. What do you think

NHTSA should have done with the information you provided them

in 1999 and 1998?

Mr. BOYDEN. At that point, what I was really sharing with them

was a trend that we were seeing, a claim trend.

Mr. STUPAK. Sure.

Mr. BOYDEN. The way I would feel is that they had looked into

it and possibly because of the numbers, didn’t feel there was an

issue at that time.

Mr. STUPAK. So you were at least reasonably confident that

someone was at least looking at the information you were sending?

Mr. BOYDEN. Yes. Yes.

Mr. STUPAK. Thanks, and thanks for your testimony.

204

Mr. BOYDEN. Thank you.

Mr. STUPAK. Mr. Ditlow, it was testified by Ford today about

early warning system reporting. What early warning system for

tire safety effects should be in place for the tire manufacturer and

for the automobile manufacturer and NHTSA?

Mr. DITLOW. Well, one requirement should be that if there is an

adjustment rate above 1 percent, that—or a threshold that NHTSA

picks out—that it be reported to the agency. And what we have

seen is the adjustment rates have gone down over the years, but

the consequences have gone up, so you might want to adjust that.

The same thing would go with the automobile manufacturers.

What you need to do when you are dealing with tire defects is you

have to cast a bigger net, because so few consumers actually complain about a single failure. They replace the tire, they go on. Unless they have multiple failures or an accident, a consumer is not

likely to complain, so the agency needs to be more proactive.

In the case of the Firestone 500, the agency actually did a

100,000 vehicle survey to try to get information on respective failure rates, but they no longer have the money to do that.

So my two recommendations are warranty or adjustment rates

and the reporting of product liability lawsuits.

Mr. STUPAK. In 1978, Mr. Ditlow, NHTSA requested money from

Congress to develop a tire inflation warning system because ‘‘a significant percentage of tires’’ in use then were at least 10 pounds

underinflated. NHTSA didn’t get the money. Do you think the situation would have been different if they would have received those

funds?

Mr. DITLOW. I certainly feel that if we had low tire pressure

warning devices on automobiles, we would have had fewer failures,

because people, they look at radial tires, they are not sure. Today

we have far more self-service stations, fewer attendants. The problem is even bigger today than it was then.

Mr. STUPAK. You testified back in 1978 concerning the previous

Firestone problem with the Firestone 500’s, did you not?

Mr. DITLOW. I testified, yes.

Mr. STUPAK. And at that time, you stated that in the 8 years of

monitoring vehicle safety defects, only the Pinto gas tank had

claimed more lives than this tire, meaning the Firestone 500. At

that point, the Firestone 500 was responsible for 16 deaths, 15 injuries. For the AT and the ATX, there are over 80 deaths recorded,

and injuries.

Is this a new record for the worst safety defect?

Mr. DITLOW. Well, unfortunately, it is in the top three. Unfortunately, the records have continued to be broken over the years, and

the GM side-saddle gas tanks is the record now at 150.

Mr. STUPAK. What else do you think should have been done

here? I mean, an early warning system reporting maybe, but what

other recommendations do you think should be done here?

Mr. DITLOW. Well, one—we do need to upgrade Standard 109.

This committee recommended that back in 1978. The situation

with sport utility vehicles, they have a higher center of gravity. A

tire failure today is more likely to result in an accident than a tire

failure would have on a passenger car back in those days. So that

is my next most important recommendation in the tire area.

205

Then finally, for consumers who actually have these tires, let’s

put the tire I.D. number on the outside sidewall so you don’t have

to crawl under it and look to see whether or not you have one of

the vehicles subject to a recall. That tire identification number is

the single most important piece of information on a tire, and yet

it is the hardest to find.

Mr. STUPAK. I had suggested and then I got commitments from

both Firestone and Ford to do an independent review of all that

has happened outside their shops. Do you think that would be

helpful in this case?

Mr. DITLOW. Yes, it would be.

Mr. STUPAK. Thank you, Mr. Chairman. I see my time is up. I

have no further questions.

Mr. TAUZIN. Thank you, Mr. Stupak.

The Chair recognizes the chairman of the O&I subcommittee,

Mr. Upton.

Mr. UPTON. Thank you, Mr. Chairman. I hope not to take my full

5 minutes. I just want to say, Sam—if I can call you Sam—I

thought this story was terrific in Friday’s Journal and I am glad

that your three kids and wife are proud of you, and as a State

Farm policyholder, I am proud of you too.

Mr. BOYDEN. Thank you.

Mr. UPTON. I know you compiled, I think for Mr. Brandau at

least, the documents that were provided to the committee which

are fairly thick, about a half-inch thick of literally, well, I guess

there is about 75 cases here or so, detailing all of these different

instances that you sent on to, I guess Mr. Brandau, formerly sent

on to NHTSA, is that right?

Mr. BOYDEN. I referred those to——

Mr. UPTON. You did the work, but Mr. Brandau did the cover

note to us, I guess.

Mr. BRANDAU. To you, absolutely.

Mr. UPTON. And you didn’t even mention Mr. Boyden in here, I

don’t think. Oh, yeah, there he is. He has a letter in there as well.

I guess it is a letter to us.

But all of this information, seriously now, all of this information

was transmitted to NHTSA, was it not?

Mr. BOYDEN. Right, it was.

Mr. UPTON. Did you detail all of this information to them?

Mr. BOYDEN. With the exception of——

Mr. UPTON. Mr. Brandau’s cover note, but at least you have your

picture in there.

Mr. BOYDEN. I have my picture in the paper.

Mr. UPTON. As I thumb through all of these—I have been in

Michigan, I didn’t come back, really today is my first full day back

as it is virtually every member of the committee—but it is just a

telling document, page by page by page, about all of these failures

that Firestone had.

Mr. BOYDEN. Right.

Mr. UPTON. Now, you sent this on to NHTSA. We know the history of their response or lack of response back to you. Did you ever

think about sending it to Firestone or even to Ford?

206

Mr. BOYDEN. Our claim representatives, on their individual

claims, they more than likely contacted Firestone through subrogation. So I really didn’t have a contact with Firestone to hear that.

Mr. UPTON. So it is a door that is just closed from the beginning.

Well, again, I want to thank you, along with other folks here. I

know that the committee thanks you as well, because if it hadn’t

been for you and Channel 11, we would probably all be home with

our wife and kids tonight instead of here looking at a very serious

situation that obviously governs the attention of this committee in

its entirety. And I welcome this information and thank you very

much for stepping forward and telling your story. Thank you.

Mr. BOYDEN. Thank you for having us here.

Mr. TAUZIN. Thank you, Mr. Upton. We wish perhaps you had

thought to send this information to KHOU in Houston in July

1998. Maybe this thing would have started a little sooner.

The Chair recognizes Mr. Sawyer.

Mr. SAWYER. Thank you, Mr. Chairman.

Thank you both very much for all that you have done. I particularly, I keep hearing you characterized as an automotive enthusiast, and it is nice to see somebody who is an enthusiast who can

find safety not compromised by that enthusiasm, and that they are

compatible with one another.

State Farm participated in 1998 with the review of the Federal

Motor Vehicle Safety Standards in Section 109, along with a number of other participants. Would it be possible for you to share your

recommendations with regard to 109 with this committee?

Mr. BRANDAU. That is the tire standard?

Mr. SAWYER. Yes.

Mr. BRANDAU. We—State Farm I don’t believe actually made a

formal presentation.

Mr. SAWYER. You did not make a formal presentation?

Mr. BRANDAU. On 109.

Mr. SAWYER. The reason I ask you that is that it seems to me

that we ought to have a better way to make use of claims data;

that there is a data stream out there that is getting lost in the blizzard, and it takes a special effort to ferret out the meaningful information within lots of data. And it seems to me that it would be

worthwhile for us to take a look at not only what and how information is collected, but definitions of events and to understand how

they are tabulated. The effort that was made to isolate site of manufacture appears to have a significant role in the events that we

have experienced in the last few years.

The ability to do that, it seems to me, is not a formal part of the

109 standards, but perhaps ought to be, and I would hope that at

some point you could give some thought to that. You encounter

those data in meaningful ways and I think that would be useful.

Mr. Ditlow, you mentioned something that I think is enormously

important, that with the Firestone 500, the numbers were much

larger, the consequences were not so great. The notion of a 1 percent threshold appears to begin to lose its meaning in the light of

the change between what happened in 1977 and 1978 and what

happened in the course of the last couple of years.

It seems to me that we need to figure out how best to quantify

the catastrophic nature of a series of events; that it is not simply

207

enough to speak of those in subjective terms, but that we ought to

be able to measure it, because that simple absolute black-and-white

bright line threshold may not tell us all that we need to know

about the consequences of a series of events.

Could you comment on that?

Mr. DITLOW. That is correct. I mean, in many instances the finding of defects is almost an art, and there are no—and it is very

hard to have a black or white line. But what you certainly need are

mechanisms where the agency can become more prospective in

minding these other data sources. I mean, State Farm Insurance

Company in providing claims information to the agencies is really

exemplary, and other insurers should follow that line. But we have

to ask ourselves, what other data bases are not being tapped?

We heard reference to the Fatal Accident Reporting System here

earlier in these hearings, and the agency traditionally does not look

at the Fatal Accident Reporting System until after an investigation

is opened. And they should look at it beforehand. We have a National Accident Sampling System. So part of the message to the

agency is to figure out what data sources are out there and to

make sure that you utilize what is available, because an underutilized data source is a lot cheaper than developing a new one.

Mr. SAWYER. Coming together and finding ways that we can all

agree and to quantify that.

Mr. DITLOW. Well, if you want to quantify it, what I would do

is any—if you have a death accident, it should be reported. If you

have a death failure involving a tire, that should be reported to the

agency by the company, not just as a safety defect, but just as an

early warning. If the adjustments rates—and what type of adjustments we are looking at. If you have tread separations, those are

more important than wear-out mechanisms or chunks. So you have

to—so I would like to sit down and work with the agency to develop

this type of thing. But until now, the agency hasn’t been focused

on trying to develop that filter.

Mr. SAWYER. Thank you very much, Mr. Chairman.

Mr. TAUZIN. Thank you, Tom.

The Chair recognizes the gentleman from Tennessee, Mr. Bryant.

Mr. BRYANT. Thank you. I thank the panel. I thank especially

the representatives from State Farm as well as your company for

providing this great effort here. I think we are all tired; I think

most of the questions have already been asked and I think there

are probably a few left, but I am going to leave those to my colleagues and yield back my time.

Mr. TAUZIN. Thank you, Mr. Bryant.

The gentleman from North Carolina, Mr. Burr.

Mr. BURR. The gentleman from Tennessee surprised me. I was

sitting here, trying to add up my premiums to State Farm to see

if I paid for the trip I took, and I think clearly you could make the

trip a couple of times, and we are probably indicative of your 1 out

of 5 number on autos as well.

Let me just ask you about that. You just simply, because of the

sheer numbers of automobiles that you insure, could be and probably are a tremendous resource to NHTSA. Would that be an accurate statement?

Mr. BOYDEN. I would say so.

208

Mr. BURR. Would it be safe to assume that State Farm’s relationship with NHTSA is very close?

Mr. BRANDAU. Yes, it is very close, not only in terms of what

Sam does with NHTSA, but we also cooperate with NHTSA on a

number of safety programs. We are working very closely with them

on the airbag safety campaign. So, through the years, we have had

very good relationships with NHTSA. We look to NHTSA as the

primary safety agency on auto safety, and in very many arenas we

work with them. So we try to keep a very positive relationship with

NHTSA.

Mr. BURR. So I would take for granted, Sam, when you contact

them, this is not an unusual thing for you to pass on some tidbit

of information that maybe you pick up from the State Farm data

base with or without identifiers and in most cases I am sure they

are without identifiers, but the raw information. That is not unusual for somebody on the other end to receive a phone call and

an e-mail follow-up from that?

Mr. BOYDEN. That is correct. As I mentioned, we work with them

on 150 or more issues a year, different investigations and evaluations and such.

Mr. BURR. What, if anything, can you conclude from the fact that

we even had a difficult time getting them to acknowledge that

there was an original 1998 correspondence from you?

Mr. BOYDEN. I am speechless. I knew that they had the e-mail.

I had spoken with individuals over time, and they had made me

aware that they had the e-mail. I knew it was just a matter of locating it.

Mr. BURR. Did anybody from NHTSA ever follow back up with

you, unsolicited by yourself, to see any update on the trend that

you had identified?

Mr. BOYDEN. Yes. In April of this year, the investigator—— Mr. BURR. But, clearly, that was once there was a Houston TV

expose, say, and Ford and Firestone and NHTSA began a much

more intensive investigation.

Mr. BOYDEN. There was no initial contact prior to that.

Mr. BURR. When NHTSA made contact with you in April, did you

have to re-create all of the information you had already supplied

for them, or did you just pick up from the April 28—or the December 1999, phone call and give them what you had learned in the

last 3 months?

Mr. BOYDEN. The July e-mail they had in hand at the time, so

it was just updating from there and up to April of 2000.

Mr. BURR. So there was—after the July e-mail and the subsequent conversations that you had with them to update them on the

numbers, that was not reflected in the information that they had

in April of 2000 when they contacted you?

Mr. BOYDEN. I think they were aware that there were more numbers. I am not sure——

Mr. BURR. But nobody had bothered to write that down, to put

that with the July, 1998, e-mail that you had sent them?

Mr. BOYDEN. I am not really sure on that.

Mr. BURR. I may have to go to Mr. Brandau on the—I am not

a lawyer, but I am still trying to figure out the subrogation issue.

Firestone told me earlier that they never made any reimburseVerDate 11-MAY-2000 10:33 Apr 13, 2001 Jkt 010199 PO 00000 Frm 00216 Fmt 6633 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
209

ments to State Farm for claims that you had paid for, your individuals that were insured that had loss, and you went back to Firestone because you thought it was the fault of the tire. Now, am I

laying out the——

Mr. BRANDAU. I am not sure if that is what Firestone said, but

I do know that we—at least in our headquarters, we do have indications of subrogation claims that we did have against Firestone.

We don’t have them all, but we know that we had at least six of

the——

Mr. TAUZIN. Would the gentleman yield on that?

Mr. BURR. Clearly, I must have misunderstood.

Mr. TAUZIN. I think there was confusion in the testimony, and

perhaps we can get it straight. What I understood Firestone to say

was that they had never struck a deal or an agreement with State

Farm on the issue of the——

Mr. BURR. The gentleman is correct.

Mr. TAUZIN. But they did settle individual subrogation claims.

Mr. BURR. I used the word settlement, and I think that that

probably was the buzzword that they didn’t want to agree to.

Mr. TAUZIN. But we have a document indicating a number of

subrogation settlements.

Mr. BRANDAU. Yes, we did have a number of settlements that we

knew of and I am sure somewhere out in the field on individual

cases.

Mr. BURR. From the standpoint of State Farm or any insurer,

when a company agrees to that subrogation, State Farm would

then drop it, am I correct? They are reimbursed?

Mr. BRANDAU. Yes, we are reimbursed.

Mr. BURR. And part of that agreement is that they don’t accept

any blame or liability; they are just paying off the claim?

Mr. BRANDAU. That is usually what it says. But to the best of

our knowledge, also, we had no confidentiality arrangement with

Firestone, at least the ones that we have looked at at State Farm,

so we were free to mention it as we have to this committee. So

when you say we dropped it, we recovered our losses, but we certainly kept it in our central unit at State Farm, and it was something that we certainly used in terms of looking at trends.

Mr. BOYDEN. It is not only returning our losses, it is also returning the policyholder’s deductible. It is a requirement, sir.

Mr. BURR. Mr. Chairman, I would ask if we don’t have the information as far as the number of claims that were subrogated, what

they can legally provide for us I hope that they would.

Mr. TAUZIN. I think we already have that information.

Mr. BRANDAU. I think we have given you at least a summary of

the information.

Mr. TAUZIN. State Farm—I mean Firestone also agreed, as I understood their testimony, to supply us with information as to any

findings by experts on the question of defects that are part of these

claims or lawsuits.

Mr. BURR. I thank the Chair.

Mr. TAUZIN. I thank the gentleman.

The gentleman from Illinois, Mr. Shimkus.

Mr. SHIMKUS. Thank you, Mr. Chairman.

210

My colleagues have done a good job of describing the virtues of

an Illinois company and an Illinois citizen, and one of the reasons

I am staying so long is to make sure that that is done. Illinois is

a great insurance State because we don’t regulate the price. Our

insurance commissioners, they let the market set the price, and

that is why we are a very good insurance State, and we are proud

of companies like State Farm.

On the subrogation issue, I mentioned this to Dr. Bailey and the

whole idea of connecting the dots and more information. That information was never forwarded to NHTSA, though, am I correct?

Mr. BRANDAU. Not the subrogation issue.

Mr. SHIMKUS. Not the subrogation. Had it been, it would still

even make more of a compelling case, Mr. Boyden, don’t you agree,

to NHTSA?

Mr. BOYDEN. I believe so. I can’t swear to it, but I believe when

they open a PE level—I have had contact where they have gotten

copies of our subrogation information, and I think it is on a PE

level, and then the manufacturer forwards that to NHTSA.

Mr. SHIMKUS. I will defer to you.

The last thing I want to ask Mr. Ditlow. Another thing I brought

up earlier was gathering this information, you know, who is the

keeper—NHTSA, a third party interest, public interest group, or an

industry-led—— Mr. DITLOW. Are we talking about the information being provided by the auto and the tire companies?

Mr. SHIMKUS. Right.

Mr. DITLOW. Yes. If it just went to NHTSA, that would be fine;

and it would be collected there at the agency. We would, as a public interest watchdog—— Mr. SHIMKUS. Let me interrupt. If we could be assured that

NHTSA would respond with good intentions, I mean, we just had

a case of information being forwarded and no response.

Mr. DITLOW. Right.

Mr. SHIMKUS. There are people who trust third-party interest

groups more than they trust government, and there are some people who trust government more than they trust corporate America.

So the point is, somewhere, a gathering of more information, a bigger data base, and I am not one—I hope NHTSA could redeem

itself like maybe some entities in corporate America and gather the

trust, but, in this case, they have failed. So I am not ready to give

them the good seal of approval that they should be the stewards

of the information.

Mr. DITLOW. Well, what I would recommend is one of two things.

Either, A, you do, in fact, give it to an independent body as you

suggest; or, B, if you do give it to NHTSA, that you make it available to watchdog outsiders like ourselves. Because worst of all situations is that—and much of the information that goes to NHTSA

today is kept behind closed doors. We can’t get access to it.

A real simple example of that is that we used to be able to get

complete access to consumer complaints at NHTSA, and most tire

complaints in this country don’t have that tire ID number on it. So

we used to call them up when we did the Firestone 500 and say,

what is the tire ID number on this tire? What is the brand? We

can’t do that now because NHTSA keeps it confidential and only

211

gives it to the tire manufacturer or the auto manufacturer to a

check-off box that they have on the complaint. So we have lost the

ability to watchdog the agency on these complaints that they receive.

Mr. SHIMKUS. Mr. Chairman, if I may, on the opening up of the

new tire standards which has been suggested, would that also

bring into account a question of a previous point that I made about

addressing the nylon cap issue?

Mr. DITLOW. I am sorry, I thought you were asking State Farm.

Mr. SHIMKUS. Well, I am just asking the panel.

Mr. DITLOW. Okay. I think at the eleventh hour, I am a little

tired.

Mr. SHIMKUS. I think we all are. The nylon cap was discussed

earlier as far as changing standards. If we opened up, as I understand, 109, which is the 1968 tire standard, that would call industry and would at least raise the issue of whether we wanted to go

or look at using nylon caps to prohibit tire separation. Is that a

good follow-on analysis of what could happen?

Mr. DITLOW. Well, if you opened up 109 and you significantly upgraded it, say, for example x, I would suggest not only running the

test at the recommended air pressure like 26, if that is what it is,

but drop it down to 04 pound to represent actually what happens

out there in the field as part of the test. My judgment is that if

you have tough performance standards the nylon cap would be a

result of that performance standard.

Mr. SHIMKUS. Thank you very much.

Thank you, Mr. Chairman. I yield back.

Mr. TAUZIN. Thank you, Mr. Shimkus.

I think, unless Mr. Rogan has a question—— Mr. ROGAN. I have no questions.

Mr. TAUZIN. That concludes the questioning.

Let me beg your indulgence just for a second. We were just discussing the fact that many of the questions that are being asked

right now, how information collected in organizations such as State

Farm might properly find its way into the right data banks and be

paid enough attention so that it has an impact upon safety decisions made by the agency and recalls, if necessary, of unsafe products—it occurred to us that we are still talking about collecting information about failures that have already occurred. We are still

talking about a system that depends upon people getting hurt and

injured before it gets to anybody’s attention that there is a defect

in a product in the marketplace. I would hope we also turn a lot

of our attention to the question of how we might devise standards

and testing in advance of products going into the marketplace so

that we don’t have to rely upon deaths and injuries to occur in

order to effectuate recalls or other safety actions.

I am harkening way back now to my days at what we call

Nicholls State Harvard on the Bayou in Louisiana, a little university where I went to school, but I remember studying Greek mythology and, if I recall properly, two brothers named Prometheus

and Epimetheus. Prometheus was the one that was punished for

giving fire to man, and the gods punished him I think by tieing

him to a tree where vultures ate out his heart every night, pretty

gruesome stuff.

212

But he was blessed, Prometheus. He and his brother were both

blessed with gifts, as I recall. Prometheus had a marvelous gift. It

was the gift of foresight. He could see into the future. He could see

what was going to happen. And while it is a gift, it is a horrible

gift in some ways, because how many of us would really want to

know what is going to happen tomorrow and the rest of our lives?

But, nevertheless, it is quite a fascinating gift, to be able to see in

advance and, therefore, avoid risk and injury and death.

Epimetheus, on the other hand, was gifted with hindsight. He

could see beautifully what had happened yesterday.

Unfortunately, we are dealing with a lot of hindsight today, and

we have learned a lot, and I think we have all learned a lot about

what happened and in retrospect what could have happened. As

Mr. Nasser himself said, he regrets so horribly that he didn’t ask

the right questions sooner. And I am sure that Firestone regrets

that it didn’t see these trends developing sooner and understand

them; and I am sure NHTSA regrets that it didn’t pay attention

to the information you provided for them, Mr. Boyden, at a critical

time.

But this committee has to move from this position of examining

what happened yesterday to thinking about what should happen

tomorrow, and we have to call upon perhaps the Almighty for some

inspiration here and to each other’s intellect for some guidance. So

I ask you, as I will ask Firestone and Ford and NHTSA and all of

my colleagues, to think this through after this hearing today. This

has been a long but incredibly instructional hearing I know for all

of us and for the American public. The next job is to follow up on

this hearing to make sure we have all of the facts, that nothing is

hidden, that the light shines on what happened yesterday, and

then to learn from it and devise a policy to ensure that it doesn’t

happen tomorrow.

I hope we build a policy built upon preventing products from entering the marketplace that are unsafe because we properly tested

them in the beginning rather than depending upon a system, even

as good as yours, to detect the trends of injury and death that tell

us the product should have never been there in the first place.

I want to particularly thank, as we conclude the hearing, Joe

Greenman, Charles Symington, Tom DiLenge, Mark Paoletta, Jan

Faiks and Ann Washington, and all of the staff of my good friend,

Mr. Upton, of the Oversight and Investigation Subcommittee and

the Commerce Committee for the extraordinary work they did compiling this incredible volume of documents and information that

formed the background of this committee.

To all of you who spent long hours and traveled around the country—indeed, I did not mention the minority staff. I should properly

mention them. I don’t have all of your names, and I apologize, but

it was a combination of majority and minority staff who traveled

around the country gathering this information, and I want to thank

all of you. I apologize for not knowing all of the names of the minority who assisted, but I will make sure that is entered into the

record today.

This is not the end of this investigation, this is just the beginning, and when we conclude it I hope our committee will make

some recommendations not just to NHTSA but to the industries

213

and perhaps even to the full Congress on how we can build a policy

that, as Mr. Rush said, does not see this repeated over and over

again. Thank you very much for your attendance, your patience

and your contributions.

Mr. Upton.

Mr. UPTON. Mr. Chairman, I just might add a 30-second appreciation to the staff as well. These hearings don’t just happen. For

many of us, the issue came to us while we were at home during

the August break; and for this hearing to start literally before Congress came back into session today and finished after 11 o’clock

took a lot of hard time and a lot of terrific staff, both personal staff

as well as committee staff, to get witnesses lined up, help us with

questions, go over some of the testimony. And we couldn’t have

done it without them, obviously.

I want to thank all of my colleagues. A lot of hearings like this,

you don’t see this many members here, particularly lasting 101⁄2

hours, 11 hours now. So I want to thank you, Chairman Tauzin,

for your commitment. This is not the end. It is, sadly, the beginning, but we want to make sure that we don’t have future instances like this ever again.

Thank you.

Mr. TAUZIN. Mr. Upton, before we leave, let me mention the minority staffers—Edith Holleman, Bruce Gwinn and Brandan

Kelsay—for the extraordinary contributions they made. This has

been indeed a bipartisan effort, and it continues to be and will continue to be until we resolve this issue.

Thank you so much for your attendance. The hearing stands adjourned.

[Whereupon, at 11:21 p.m., the subcommittees were adjourned.]

[Additional material submitted for the record follows:]

214

215

216

217

218

219

220

221

222

223

224

225

226

227

228

229

230

231

232

233

234

235

236

237

238

239

240

241

242

243

244

245

246

247

248

249

250

251

252

253

254

255

256

257

258

259

260

261

262

263

264

265

266

267

268

269

270

271

272

273

274

275

276

277

278

279

280

281

282

283

284

285

286

287

288

289

290

291

292

293

294

295

296

297

298

299

300

301

302

303

304

305

306

307

308

309

310

311

312

313

314

315

316

317

318

319

320

321

322

323

324

325

326

327

328

329

330

331

332

333

334

335

336

337

338

339

340

341

342

343

344

345

346

347

348

349

350

351

352

353

354

355

356

357

358

359

360

361

362

363

364

365

366

367

368

369

370

371

372

373

374

375

376

377

378

379

380

381

382

383

384

385

386

387

388

389

390

391

392

393

394

395

396

397

398

399

400

401

402

403

404

405

406

407

408

409

410

411

412

413

414

415

416

417

418

419

420

421

422

423

424

425

426

427

428

429

430

431

432

433

434

435

436

437

438

439

440

441

442

443

444

445

446

447

448

449

450

451

452

453

454

455

456

457

458

459

460

461

462

463

464

465

466

467

468

469

470

471

472

473

474

475

476

477

478

479

480

481

482

483

484

485

486

487

488

489

490

491

492

493

494

495

496

497

498

499

500

501

502

503

504

505

506

507

508

509

510

511

512

513

514

515

516

517

518

519

520

521

522

523

524

525

526

527

528

529

530

531

532

533

534

535

536

537

538

539

540

541

542

543

544

545

546

547

548

549

550

551

552

553

554

555

556

557

558

559

560

561

562

563

564

565

566

567

568

569

570

571

572

573

574

575

576

577

578

579

580

581

582

583

584

585

586

587

588

589

590

591

592

593

594

595

596

597

598

599

600

601

602

603

604

605

606

607

608

609

610

611

612

613

614

615

616

617

618

619

620

621

622

623

624

625

626

627

628

629

630

631

632

633

634

635

636

637

638

639

640

641

642

643

644

645

646

647

648

649

650

651

652

653

654

655

656

657

658

659

660

661

662

663

664

665

666

667

668

669

670

671

672

673

674

675

676

677

678

679

680

681

682

683

684

685

686

687

688

689

690

691

692

693

694

695

696

697

698

699

700

701

702

703

704

705

706

707

708

709

710

711

712

713

714

715

716

717

718

719

720

721

722

723

724

725

726

727

728

729

730

731

732

733

734

735

736

737

738

739

740

741

742

743

744

745

746

747

748

749

750

751

752

753

754

755

756

757

758

759

760

761

762

763

764

765

766

767

768

769

770

771

772

773

774

775

776

777

778

779

780

781

782

783

784

785

786

787

788

789

790

791

792

793

794

795

796

797

798

799

800

801

802

803

804

805

806

807

808

809

810

811

812

813

814

815

816

817

818

819

820

821

822

823

824

825

826

827

828

829

830

831

832

833

834

835

836

837

838

839

840

841

842

843

844

845

846

847

848

849

850

851

852

853

854

855

856

857

858

859

860

861

862

863

864

865

866

867

868

869

870

871

872

873

874

875

876

877

878

879

880

881

882

883

884

885

886

887

888

889

890

891

892

893

894

895

896

897

898

899

900

901

902

903

904

905

906

907

908

909

910

911

912

913

914

915

916

917

918

919

920

921

922

923

924

925

926

927

928

929

930

931

(933)

THE RECENT FIRESTONE TIRE RECALL ACTION, FOCUSING ON THE ACTION AS IT

PERTAINS TO RELEVANT FORD VEHICLES

THURSDAY, SEPTEMBER 21, 2000

HOUSE OF REPRESENTATIVES,

COMMITTEE ON COMMERCE,

SUBCOMMITTEE ON TELECOMMUNICATIONS, TRADE,

AND CONSUMER PROTECTION, AND THE

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,

Washington, DC.

The subcommittees met, pursuant to notice, at 9:15 a.m., in room

2123, Rayburn House Office Building, Hon. W.J. ‘‘Billy’’ Tauzin

(chairman, Subcommittee on Telecommunications, Trade and Consumer Protection) presiding.

Members present, Subcommittee on Telecommunications, Trade,

and Consumer Protection: Representatives Tauzin, Oxley, Stearns,

Gillmor, Cox, Deal, Largent, Cubin, Shimkus, Wilson, Fossella,

Ehrlich, Bliley (ex officio), Markey, Gordon, Rush, Engel, Wynn,

Luther, Sawyer, Green, McCarthy, and Dingell (ex officio).

Members present, Subcommittee on Oversight and Investigations: Representatives Upton, Cox, Burr, Bilbray, Ganske, Bryant,

Bliley (ex officio), Stupak, Green, McCarthy, and Dingell (ex officio).

Staff present: Tom DiLenge, majority counsel; Anthony Habib,

legislative clerk; and Edith Holleman, minority counsel.

Mr. TAUZIN. The subcommittee will please come to order. We will

ask all our guests to take seats and catch the outer doors so we

can have the attention of all the members. Ladies and gentlemen,

the subcommittee today meets again in joint session with the Oversight and Investigations Subcommittee, chaired by my good friend,

Fred Upton, to continue our investigation into the Firestone recall

and to complete the inquiry with reference to the one area that was

unfortunately left blank in our previous hearing. That is the area

of testing.

If you recall in the previous hearing, the witnesses for both Ford

and for Firestone were at that time unprepared to give us documents as to what testing of these tires that are currently subject

to the recall occurred, going back to the preproduction days and

through the production cycle. And since that time, as of Friday, we

had asked both Ford and Firestone to submit to us as much documentation as possible on that testing. I want to report first to the

committee that as of Friday, both Ford and Firestone basically

complied with our requests, although Ford has indicated it is yet

934

unable to find and produce for us documentation of tests that occurred in the time period, I believe, 1995 and 1996, and we are still

obviously waiting for that documentation; and that Firestone has

yet to produce for us some of the audit reports dealing with—I am

told they produced it late last night—the audit reports dealing with

the audit reviews of the tire manufacturer, particularly at the Decatur plant. My understanding is that information has been delivered as of last night.

Obviously for all of our guests and our members, I think we owe

again a debt of thanks to our investigators, both the Democratic

and Republican investigators who are combing through these many

thousands of documents that have been presented to us. But we

have learned something since the last meeting of our two subcommittees that I think we ought to first put on the record.

First of all, we have received a letter from Jack Nasser of the

Ford Motor Company correcting his sworn testimony that was presented to us at our last hearing. In the letter dated September 19,

2000, Mr. Nasser is informing us that contrary to his testimony

where he said that Ford had indeed requested Firestone to conduct

high speed tests at 26 pounds per square inch of tire that is subject

to the recall, I quote his statement today: ‘‘Based on the information available to me at this time, I responded that Ford did request

such tests, as noted in the letter to the subcommittee dated September 15, 2000 from Ford executives Helen Petrauskas and Thomas Baughman and the testing documents which Ford has provided

the subcommittee. That answer appears not to be accurate with respect to the early division of responsibility.’’ In short, Ford, not Firestone, he now says, performed high speed

testing on tires at 26 pounds per square inch at the Arizona proving grounds. So that’s Mr. Nasser’s written letter now which confirms that Ford did not ask Firestone to do testing of Ford Explorers at 26 pounds per square inch.

I would ask this letter be made part of the record in order to correct the earlier testimony of Mr. Nasser.

Second, the letter refers to testing that was supposedly done at

the Arizona Proving Grounds. And we have the affidavit produced

by Ford of James D. Avouris, a retired engineer at Ford who claims

in the affidavit to have performed high speed durability tests in

1989 on a UN-46 Explorer.

I wish to state for the record, and we will allow Ford to explain

this to us today, that our investigators interviewed Mr. Avouris

who has denied, with attorneys present, Ford attorneys present,

that the testing involved an Explorer. He has corrected this affidavit, which he signed, in oral examination by our investigators to

the fact that the tests were not conducted on an Explorer, but rather were conducted on some sort of truck, not an Explorer.

The conclusion we have reached from his correcting his affidavit—and I would like the affidavit to be made a part of the

record at this point, without objection, is that as far as we can tell

to date, no one, not the NHTSA agency, nor Ford, nor Firestone,

ever conducted high speed testing of Explorer automobiles fitted

with Firestone tires subject to this recall and filled to 26 pounds

per square inch—not before these tires were put on sale on Ford

Explorers and, as far as we can tell, not during the production

935

years of the Ford test data that was presented to us until very recently this year.

I wish to also state for the record that this morning I met with

tire dealers who have brought some extraordinary information to

me about the recalled tires that are coming in to their dealerships

and the degree to which those tires are inflated, and they are preparing a written memorandum that they will submit as part of the

record of this committee.

I would like to inform the committee that the evidence they have

orally presented to me indicates that tires are being brought in by

consumers that are filled as low as 15 pounds per square inch; 15,

20, 22, they tell me, is fairly average, which indicates that consumers advised to fill their tires and maintain them at 26 in fact

maintain them at quite a different level.

And finally, I wish to point out that Ford, while in the early days

of this sad and horrendous saga, in responding to KHOU’s television report in which the television station connected the dots and

first saw this tragedy of tire failures on Ford Explorers and reported it to the public, Ford responded it was the consumers’ fault

for not filling their tires and not maintaining their tires properly,

is challenged by documents presented to me last night of depositions taken of one of the Ford chief executives who admitted in the

deposition that he himself had not checked his tires but one time

in 13,000 miles, indicating that it is not likely that consumers do,

in fact, check their tire pressures as often as even Ford recommends.

Let me finally say that we will focus today on the issue of tire

testing. We will focus today on what really occurred during the

early years of production and design of Ford Explorers and production and design of the tires that were spec’d by Ford and produced

by Firestone for those automobiles and other automobiles and

SUV’s. We will focus on activities that occurred in 1996 at the Decatur plant where apparently most of these failures occurred,

where quality control testing indicates a level of failure that we

will discuss this morning that seems to be rather large.

And we understand there is some dispute this morning as to

what was tested. We do know 229 tires were tested in 1996 and

the failure rate on those tires was extraordinary. Whether they

were preproduction tires or production tires we will discuss this

morning. But we understand a large percentage of failures were

tire separation failures, and that Firestone in 1996 obviously was

aware they had a problem with tire separation in the tires being

produced at the Decatur plant especially, and that nevertheless

that information never reached NHTSA and there certainly was

not a decision to recall tires made at the plant under the system.

Second, we will hear this morning and file into the record evidence that Firestone obviously made corrections in the production

of their tires in 1997 and 1998: in 1997, in the wall of thickness,

obviously, to deal with a sidewall problem experienced in this 1996

testing period; and in 1998, some sort of wedge was added to the

tires in question here as well as other tires, which wedge we understand helps prevent or helps with the problem of tire separation.

So we do know from the evidence submitted to this committee,

as we can discern it to this point, that No. 1, neither Firestone nor

936

Ford tested Ford Explorers with Firestone tires subject to this recall at high speed test at 26 pounds per square inch; that, while

testing occurred, it occurred in other vehicles and very often in

other types of conditions.

Second, we learned that quality control testing at the Decatur

plant indicated a high rate of failure in those tests, and much of

that failure was due to tire separation, and in 1998 changes were

made in the design of the tire, which for whatever reason they

were made, did have the effect of helping the tire separation problems.

We also know that several million tires were produced at the Decatur plant in 1996 and again in 1997. The question this committee

would like to have answered from Ford and from Firestone in particular this morning is why weren’t these tires tested under real

conditions of use and recommended expected use by consumers?

And when testing did occur in 1996, indicating high levels of failure, why did Firestone not report those test reports to NHTSA?

Why did those tires in production continue to go into production?

Why did consumers continue to ride on tires which Firestone in

1996 obviously had knowledge could contain defects that could result in the kind of catastrophic failures we have seen?

So we will have a series of very important questions to be answered by our witnesses today. We are pleased that both Ford and

Firestone have sent witnesses prepared to answer those questions,

as well as to recognize and welcome Dr. Bailey again of our highway safety agency, NHTSA, here to continue our discussions of how

this problem occurred and how we might move on.

Finally, Senator McCain opened his hearings the same way we

opened our hearings last week. He opened it by announcing that

while we are on a mission to find out what went wrong so that we

can ensure that it doesn’t happen again, so we can fix the right

problems, we are not about the business of finding liability or fixing blame. Someone else will do that, somewhere else.

Today we will continue that mission of finding out what went

wrong in the testing procedures, what went wrong when tests were

conducted and information apparently did not reach the right eyes

and ears, and what went wrong in the process by which these tires

were allowed to remain on the market and eventually result in the

kind of failure rate that has now, according to NHTSA, Dr. Bailey,

resulted in a potential loss of 103 American lives and hundreds of

serious injuries and over 800 new accounts of incidence of failure

of these tires on the highways in America.

I will ask all members to cooperate with me in this respect. We

will have opening statements by any members desiring to file—desiring to make opening statements. I will ask members, however,

to think about abbreviating those opening statements or even filing

them into the record this morning.

As a quid pro quo, what we will do is by unanimous consent,

which I will make right now, we will change our normal 5-minute

rule to a 10-minute rule on the round of questions, since we have

all our witnesses on the single panel. If you will help me and cooperate with me in moving to questions and presentation of testimony as quickly as we can, I will now ask unanimous consent that

when we move to a round of questions that every member be recogVerDate 11-MAY-2000 10:33 Apr 13, 2001 Jkt 010199 PO 00000 Frm 00944 Fmt 6601 Sfmt 6601 E:\HEARINGS\67111 pfrm08 PsN: 67111
937

nized for 10 minutes for questions. Is there any objection? Then it

is so ordered.

Mr. STUPAK. Mr. Chairman if I may. In your opening statement,

you indicated you had a letter from Mr. Nasser. I figure that’s

going to be part of the record. But in your opening you mentioned

a number of other documents you received last night. I would ask

that before they be made a part of the record, we all get a chance

to see them. I am not sure if you’re offering them in there at this

time or if you plan on offering them later. We would just like to

see them.

Mr. TAUZIN. The gentleman makes a very valid request. And we

have tried our best to share documents before they are entered. We

will continue to do so. We have not entered them in the record yet.

I simply referred to them because that is the report of our bipartisan investigative staff as of this date.

Second, I wish to report that we have received calls about a visit

from Secretary Slater who is scheduled to be here later this morning, and that when he does appear, I will ask the committee to

make accommodations to hear his testimony as he has agreed to

come—I am grateful for that—and agreed to present the Department’s recommendations on legislation which, as you know, we

have announced that at 1 o’clock we will begin the process of marking up the Upton bill to correct the problems that this investigation

has and continues to uncover in this failed process.

The Chair now yields back the balance of its time and recognizes

the gentleman, Mr. Markey, for an opening statement.

Mr. MARKEY. Thank you, Mr. Chairman, very much. And I commend you for holding this very important additional hearing. Obviously, new information continues to flow into this subcommittee.

We are learning more by the day about what the whole history of

this lethal combination of Ford Explorers and Firestone tires has

meant not only for Americans but for people all over the world. We

know that all over this country, tens, if not hundreds of thousands

of families, are going back to their dealerships and asking for an

exchange of tires and being told that those tires are not available.

We know that there are heated arguments which are taking

place in dealerships all across this country with families telling the

dealers to just take the leased vehicle back and let them have the

vehicle that the dealer is driving their family to work with; and in

turn, the dealer could drive their family to work in their Ford Explorer with Firestone tires, in order to fully paradox those Americans who do not wish to run the risk of endangering their own families in riding in these vehicles.

The anecdotes are flowing into the subcommittee and obviously

families across this country are justifiably angry at the danger

which they have been placing their own family members under.

We also know that because of the instability of the Ford Explorer

with the 26 pound per square inch, much less 32 pound per square

inch inflation of Firestone tires, that consumers, family members,

the mothers and fathers, feel the instability in the car. And so it

makes sense that they would continue to deflate their tires, thinking perhaps that that would add more stability to their car. They

would feel that in fact on the turns in some kind of stressful situation on the road that they had more protection for their family,

938

without realizing, of course, that in fact they were creating more

danger for their family, because when these tires are deflated in

combination with the instability of the Ford Explorer on hot pavement that, in fact, they were creating even more danger.

None of this, of course, was told to mothers and fathers as they

purchased these vehicles with the intent of actually creating a

safer environment for their families. So naturally there is a great

deal of anger; I mean real anger across the country. Millions of

Americans, mothers and fathers, have gone out into their driveway

in the last several weeks to check their tires maybe for the first

time, never believing that there was any danger, thus resulting in

something that has touched a nerve in all of America; in the families, in the mothers’ and fathers’ hearts across the country. They

trust their government to ensure that their families are protected.

They trust corporate America not to engage in reckless behavior.

What we are now learning, of course, is that both Ford and Firestone had information long in advance of the point in time that

they told NHTSA that there could be problem. Now, that is very

troubling for this committee. We have a responsibility as a Congress to ensure that we now put in place the kinds of protections

which families will expect us to put in place. We have to have a

rollover standard. We have to have a meaningful rollover standard

that is going to guarantee that we will not see a repetition of this

kind of a problem. We have to give authority and a mandate to

NHTSA to do this job.

We need a new tire standard. We can’t believe here honestly that

we have to go back to 1968 to have a standard which has been put

on the books. It almost defies belief. We have to increase the funding for NHTSA. We have to make sure that the safety agency responsible for protecting every single American family on the road

has the resources they need to conduct any test and every test

which they believe they have to in order to ensure that American

families are protected.

The results of these tests have to be posted in the dealership of

every single car manufacturer in the United States. When someone

goes in to buy a car or an SUV or a minivan, they should be able

to look right there and know what in fact the danger is for their

family. There should be a grade which every one of these vehicles,

in combination with a particular set of tires, has been given; because, in fact, that is why people buy these vehicles: to protect

their families. This little extra edge that they are going to have

over everybody else on the road—in fact, they were giving themselves less of an edge; they were in fact endangering their families,

not making them safer. How ironic is that for a family paying extra

for a vehicle?

So they are angry; they are really angry—and justifiably angry,

mothers and fathers all across this country.

So today, Mr. Chairman, we are undertaking, I think, an historically important markup. And we have a chance now to revisit 20

years, 32 years of inactivity. We have to do the job that ensures

that we have filled in the gaps that have allowed public safety to

be put at risk over this past decade, it turns out. And we have to

make sure that not only the industry but the agency with safety

and responsibility is given all of the power, all of the resources, it

939

will need to be a truly vigilant watchdog of safety, which the public

has always thought it was; although in retrospect, obviously it was

not.

So, Mr. Chairman, I thank you so much for calling this hearing

today. We will be marking up the bill today, obviously, beginning

that process. But in doing so, I would urge all members on both

sides to reserve the right to continue to modify their views as to

what should be included in legislation.

We are obviously at the full committee level still going to have

to make further modifications, because this is a moving story, a

fast-moving story as information becomes available to all members.

And so as we begin today at the subcommittee level, I hope that

all members realize that we still do not know everything that we

are going to know in terms of this legislative process. But we are

constrained by the fact that we are going to adjourn in 3 weeks.

We are going to have to do the very best we can, but be open-minded and flexible in terms of how we are going to amend this legislation on the fly, reflecting on the new information which we are

picking up in order to ensure that we are giving the maximum

amount of comfort to families that want to feel that next year when

they are walking into these showrooms, that their vehicles are safe.

I yield back the balance of my time.

Mr. TAUZIN. I thank the gentleman.

Let me, before I move on, express the thanks from both Mr.

Upton and I to the gentleman from Massachusetts, as well as Mr.

Stupak and Mr. Dingell, for the extraordinary cooperation that we

are receiving in terms of both this inquiry and the process we start

at 1 o’clock this afternoon in actually producing legislation. I hope

everyone understands there is a lot of waiving of time limitations

so we can get about the business of, in the next 3 weeks, completing legislation. And all of the members on both sides are to be

given thanks again for their extraordinary patience and cooperation in moving this process along despite the normal time restrictions.

And before I introduce the chairman of the full committee, Mr.

Bliley, for his opening statement, let me correct the record. We

have gotten Mr. Stupak a copy of that deposition. It is a deposition

of Bob Wyatt of Firestone, not Ford. I apologize. In his deposition,

Bob Wyatt, who testified at our last hearing on September 25,

2000—Bob Wyatt is a VP for Quality Assurance at Firestone—and

the deposition, as I pointed out, points out that even the VP of

Firestone was only checking his tire pressure once in 13,000 miles.

And that deposition will be shared with the minority before it is

entered in to the record.

Let me ask for unanimous consent that the book of documents

that has been reviewed by the minority and the majority, which

contains the documents that will be filed in the record today and

contains the documents I referred to—which the letter of Mr. Nasser is number 18 and the affidavit of James Avouris is number 19

for your reference—I would ask that this book of documents, already reviewed and approved I believe by the minority, be made a

part of the record. Is there any objection?

940

Mr. STUPAK. Mr. Chairman, we have two documents that have

been shared with the majority: One about car engineering and another document. We just ask they be made part of the record.

Mr. TAUZIN. Is there any objection to the unanimous consent

made by the Chair? Hearing none, it is so ordered.

The gentleman, Mr. Stupak, makes unanimous consent request

to add additional documents to the record. And is there any objection? Without objection, it is so ordered.

[The documents referred to follow:]

941

942

943

944

945

946

947

948

949

950

951

952

953

954

955

956

957

958

959

960

961

962

963

964

965

966

967

968

969

970

971

972

973

974

975

976

977

978

979

980

981

982

983

984

985

986

987

988

989

990

991

992

993

994

995

996

997

998

999

1000

1001

1002

1003

1004

1005

1006

1007

1008

1009

1010

1011

1012

1013

1014

1015

1016

1017

1018

1019

1020

1021

1022

1023

1024

1025

1026

1027

1028

1029

1030

1031

1032

1033

1034

1035

1036

1037

1038

1039

1040

1041

1042

1043

1044

1045

1046

1047

1048

1049

1050

1051

1052

1053

1054

1055

1056

1057

1058

1059

1060

1061

1062

1063

1064

1065

1066

1067

1068

1069

1070

1071

1072

1073

1074

1075

1076

1077

1078

1079

1080

1081

1082

1083

1084

1085

1086

1087

1088

1089

1090

1091

1092

1093

1094

1095

1096

1097

1098

1099

1100

1101

1102

1103

1104

1105

1106

1107

1108

1109

1110

1111

1112

1113

1114

1115

1116

1117

1118

1119

1120

1121

1122

1123

1124

1125

1126

1127

1128

1129

1130

1131

1132

1133

1134

1135

1136

1137

1138

1139

1140

1141

1142

1143

1144

1145

1146

1147

1148

1149

1150

1151

1152

1153

1154

1155

1156

1157

1158

1159

1160

1161

1162

1163

1164

1165

1166

1167

1168

1169

1170

1171

1172

1173

1174

1175

1176

1177

1178

1179

1180

1181

1182

1183

1184

1185

1186

1187

1188

1189

1190

1191

1192

1193

1194

1195

1196

1197

1198

1199

1200

1201

1202

1203

1204

1205

1206

1207

1208

1209

1210

1211

1212

1213

1214

1215

1216

1217

Mr. TAUZIN. The chairman is pleased to recognize the chairman

of the full Commerce Committee, the gentleman from Richmond,

Virginia, Mr. Bliley.

Chairman BLILEY. Thank you, Mr. Chairman. And thank you for

holding this second day of hearings on the recent Firestone tire recall which is of grave importance to the safety of the American

driving public. I know most Americans still have many unanswered

questions about this human tragedy. But ones that I hope we can

focus on today are, one, how could this have happened? Where

were the Federal safety regulators who set testing requirements for

these tires before they were allowed on the market? Where were

the company tire experts who are responsible for ensuring the

quality of the tires before they are sold to consumers? And how can

we be sure that other tires on the market today are any safer than

the now recalled tires?

It appears that every one agrees that Federal testing requirements for tires first issued in 1968 are outdated and need to be

more vigorous. The Federal Government currently requires that

new tires sustain speeds of only 85 miles per hour for half an hour

to be certified. While it is true that companies like Firestone go beyond these minimum requirements in certifying their tires, it appears that the differences are one of degree and not of kind. It is

clear both to me as a layman, and to some actual tire experts, that

these tests need to be not only more demanding on the tire, but

that we need to develop ways to test for how a tire in the real

world, after 20- or 30,000 miles on it, will perform under stressful

conditions. It is this scenario that accounts for most of the fatal accidents we are seeing today on these tires. And it is little wonder

that the current tests fail to catch this terrible problem. I believe

that the tests performed on these tires by both Firestone and Ford,

even if up to industry or government standards, were inadequate

to do the job we should expects these tests to do; that is, tell us

whether we can be confident that our tires won’t start to come

apart as we are driving down the highway after only 2 or 3 years

of use.

The high speed tests conducted before the Explorer went on the

road with these Firestone tires, with the exception of a single test

in 1989 conducted by Ford, were not conducted at Ford’s recommended tire pressure level, a key component in tire level performance. Nor were any of these high speeds tests performed on

the Explorer itself.

We need to do better than that to protect American families. We

also need to address the question of vehicle tire margin of safety.

We build cars that can go in excess of 100 miles per hour, yet put

tires on them that are generally speed-rated to only 112 miles per

hour. What consumers do not know is that such a speed rating may

mean that the tire may last only 10 minutes at that speed before

literally coming apart. What does that tell us about tire performance when sustained at high, if admittedly unlawful, speeds? I

hope this tragedy can force all of us in government and industry

to rethink how we test tires before we put them on the road.

Thank you, Mr. Chairman.

Mr. TAUZIN. The Chair thanks the chairman and wants to associate himself with the opening statement of the Chair. The Chair

1218

is focused indeed on a serious question that is not just testing— testing of tires at age and wear normally under normal use.

The Chair recognizes the gentleman from Michigan, the ranking

minority member of the full committee, Mr. Dingell, for an opening

statement.

Mr. DINGELL. Mr. Chairman, I want first of all to express my appreciation to you for holding the hearings. Second of all, I am firmly determined to cooperate with you. I have a splendid statement

here this morning, from which I will excerpt. I would advise all,

however, who wish enlightenment on the matter, to follow the full

statement because it will give them the flavor that they will not

get from the excerpt.

Mr. Chairman, measured against NHTSA’s own standard for taking action earlier this year, agency records demonstrate that

NHTSA should have acted more than 2 years ago. On March 6 of

this year, NHTSA announced that it was beginning an initial evaluation of Firestone tire failures because the agency had received 25

complaints reporting tread separation and blowouts. These 25 complaints did not include complaints that we have heard so much

about NHTSA receiving from State Farm in July 1998. The fact is,

however, that prior to July 1998, NHTSA’s records show that the

agency had already received 26 complaints about recalled Firestone

tires, one more than the 25 complaints that NHTSA cited as the

basis for its own action on March 6, 2000. So if you add in the complaints received from State Farm, NHTSA had as of July 1988— 1998—at least 47 complaints about the recalled Firestone tires, or

almost twice as many complaints as the agency said it had received

and that justified its initial evaluation of the matter.

But there’s more. If 25 complaints were good enough for NHTSA

to act on March 6 of this year, why weren’t the 26 complaints

NHTSA had received prior to July 1998 enough to justify action

then? This is not a hypothetical question that I ask, and I would

demand that the agency account fully for its action and also for its

inaction. Information I received from NHTSA indicates that the

agency did not, as it has claimed, lack sufficient information to act.

NHTSA in fact had the information.

This committee has a special responsibility to determine why

NHTSA failed to act and to make sure that these kind of events

do not happen again. So far, 103 people are believed to have lost

their lives in accidents involving the recalled Firestone tires. One

can only assume that by the delaying of the action for 2 years, as

NHTSA appears to have done, lives were lost that otherwise might

have been saved.

The American public does deserve better from its government

and from government agencies charged with ensuring tire safety.

Mr. Chairman, I look forward to the testimony of the witnesses.

Mr. TAUZIN. Mr. Dingell, I would only add, sir, that the numbers

you cited that were available to NHTSA years ago all should be

augmented by the numbers of fatal accident reports that came from

the FARS system that was also available to NHTSA, as illustrated

in this chart that indicates that through 1999 NHTSA knew, because of these four reports, that 56 fatal accidents had occurred,

with 72 fatalities. That is added to the numbers that Mr. Dingell

has recited.

1219

Mr. DINGELL. Those numbers are interesting. If you look at 1998,

the numbers of accidents began to climb very sharply.

Mr. TAUZIN. The Chair thanks the gentleman for the opening

statement.

The Chair is pleased to recognize the chairman of the Oversight

and Investigations Committee of our Commerce Committee, the

gentleman from Michigan, Mr. Upton. And in doing so, let me

again advise everyone of the extraordinary work that Mr. Upton

and the investigators of that subcommittee have done to augment

the work of these hearings. I personally thank you and your staff

for the extraordinary job done, particularly in giving us the information that they have derived from this extraordinary volume of

documents that has been produced.

Mr. Upton of Michigan.

Mr. UPTON. Thank you very much, my friend, Mr. Tauzin. I too

want to thank our staffs, both personal staff as well as the professional staff on the subcommittee, for really getting an inordinate

amount of work done in a very expeditious way so that we could

have these hearings not only 2 weeks ago but are actually prepared

to go to markup this afternoon.

We have learned a lot since our last hearing about so-called quality control tests conducted by Firestone in 1996 on a random sample of 229 tires from the Decatur plant which resulted in a number

of tread separations. In fact, we think there might have been as

high as a 5 percent failure rate from those tests. This is only the

tip of the iceberg in terms of what Firestone knew for years about

the dangerous defects in its tires. Yet, astoundingly, it was not

until years later that this information was pried from Firestone’s

grip, which brought this all to a recall of 6.5 million tires and,

sadly, at least 103 deaths.

Let’s think about that scene for a second. Let’s think about those

tires being produced at facilities around the country, particularly

the Decatur facility. Tires taken off the assembly line, tested, failing; and the word doesn’t go up the chain of command to the showroom. Families go to those showrooms and they look at the wonderful new cars, spanking new tires, purchase that vehicle, and take

their families on trips, whether they be to work, to church, to soccer or baseball games, you name it. And somehow, tragically, we

see a whole host of accidents around the country, particularly in

the South, with a good number of deaths.

Somebody knew. Somebody knew that those tires were failing

when they were produced, and yet the word did not go down the

line. I am not an engineer, I am not a lawyer. And I don’t believe

that we will today find out precisely what was causing those defects. We may never learn the answers, in fact. But I will tell you

one thinM: There was something rotten in Decatur.

In today’s hearing, we will be asking some tough questions to

find out where we are today. My aim is not to stick a sword in anyone’s eye for its own sake, but, rather, turn those swords from our

hearing into plowshares. We must do this in order to sow the seeds

of reform in our motor vehicle safety laws and help ensure that

American families are as safe as possible when they travel on our

Nation’s roads.

1220

That is why I introduced bipartisan legislation last week which

has been co-sponsored by so many Republican and Democrats on

this panel. Our bill attempts to fix the potholes in our Nation’s

motor vehicle safety laws which have become so evident as a result

of this investigation, and to ensure that this type of bad behavior

is prevented in the future, preventing the innocent loss of life.

This is commonsense legislation that still can be enacted before

the legislative clock expires on the 106th Congress. I commend

Congressman Tauzin for moving forward expeditiously to mark up

this act later today. And with a few legislative days left, we do

have to move with deliberate speed. Thank you, Mr. Chairman.

Mr. TAUZIN. Thank you Mr. Upton.

The Chair will recognize the designated ranking minority member of the O&I Subcommittee, the gentleman from Michigan, Mr.

Stupak, for an opening statement.

Mr. STUPAK. Thank you, Mr. Chairman. Today we are holding

another hearing on this very important auto safety issue. This

hearing is not as easy as the one we held 2 weeks ago when we

were exposing a serious safety problem. The question everyone

wants answered now is: Why did it happen?

But it is not a question that we can answer today. Ford and Firestone’s investigations are not completed, and the committee at this

point is not in a position to take the historical raw data that we

have seen and make definitive statements or judgments about

what that data means.

So a word of caution for us all today, Mr. Chairman. I have reviewed since the last hearing several erroneous press reports, because some reporters thought they could take the data delivered to

this committee and draw conclusions about who knows what and

when they knew it.

Let me refer to one such article in the Washington Post on September 12. The Post said that in 1990, Firestone conducted 26 test

runs on the recalled tires and that 25 experienced tread separations. A little investigative work would have revealed that these

were not production tires but experimental tires on which separations, some of which were not the type that we are looking at here,

but the separations were being induced by a variety of tests.

Then we heard about the four 1996 tires that failed at a high

speed because the shoulder separated. Firestone witnesses will tell

us today that the test was run because of a perceived problem but

not the problem we are focusing on here today, and that a change

was made in the quality control process to eliminate it, without any

actual negative impact.

The result has been a continuation of finger-pointing that doesn’t

get us any closer to the truth but makes great headlines. This

morning there was a headline about some additional test line data,

but no one has yet asked the company what does it mean.

I am not here to defend Ford or Firestone; in fact, probably just

the opposite. But I have spent most of my life doing criminal investigations and other things and before you make statements or

reach conclusions or judgments, we had to have the facts. And I

hope the purpose of these hearings is to get to those facts.

In fact, some people thought my questions last week were too

harsh. I will continue to ask tough questions, but they will be accuVerDate 11-MAY-2000 10:33 Apr 13, 2001 Jkt 010199 PO 00000 Frm 01228 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm08 PsN: 67111
1221

rate questions based upon information we know. What we really

need to be discussing today is whether the tests that the Department of Transportation and the auto and tire manufacturers run

on tires—are they sufficient? Is the entire vehicle package sufficient to protect consumers driving on today’s highways, with today’s speeds, with a 1-, 2-, or 3-year-old.

We should be discussing whether the Office of Defect Investigations at NHTSA, the National Highway Traffic Safety Administration, has the budget to develop, monitor, and enforce the standards

we want, or what exactly are those standards. We should be discussing whether NHTSA should be a more timely independent investigator of vehicle tragedies, like the National Transportation

Safety Board does with airline crashes, as opposed to having to rely

on manufacturers for their investigations.

At our last hearing I received a commitment from Ford and Firestone that they would jointly set up a completely independent

panel, separate from what they are doing, to determine what went

wrong. I recently spoke to Ford and they are moving in that direction, and I look forward to that panel being set up to get to the

facts and not necessarily the headlines.

So with that, Mr. Chairman, with that caution, I look forward to

receiving the information today. I look forward to asking questions,

and I hope we can move forward based on the data and the questions presented therefrom.

Mr. TAUZIN. The Chair thanks the gentleman, and we would like

to point out for the record that the Post report of the 1990 testing

that was in fact erroneous, that information did not come from this

committee; it came from information derived elsewhere. And I

would agree with the gentleman; erroneous reporting and erroneous numbers have not helped. All of us understand that is why

we have the hearing this morning. We want the facts and we want

to make judgment on the facts. I thank the gentleman for pointing

that out.

The Chair would ask unanimous consent that all members’ written statements be made part of the record and, without objection,

it is so ordered. And the Chair will now ask the members if anyone

has the need to make an opening statement and wishes to make

a few brief remarks, if I can have your concurrence in keeping

them brief. I understand; I will give you all a chance, but keep

them brief because we will run short of time to get to the markup

this afternoon.

The vice chairman of the subcommittee, Mr. Oxley, is here and

I want to give him a chance. Mr. Oxley, do you have an opening

statement?

Mr. OXLEY. Thank you, Mr. Chairman. Since the committees’

first hearing on the Firestone tire recall 3 weeks ago, barely a day

has gone by without some sort of story in the news media. It is my

hope that at least every consumer who may need new tires has

now been alerted. Given the daily publicity, I think it also bears

repeating that on the whole, the quality level of the vehicles and

tires that people depend on each day has never been higher.

Those of us on the committee have a dual responsibility. We

must see that the immediate steps are taken to protect the public

safety. And I think everyone—manufacturers, NHTSA, and this

1222

committee—is working together on this. I continue to follow the

progress on the recall and urge all parties to do everything in their

power to provide every consumer with safe tires as soon as possible.

As lawmakers we also have a duty to respond to the situation

with measured responsible public policy that will stand the test of

time. That is the challenge for us right now, because despite intensive investigation and endless conjecture, we still cannot definitely

pinpoint exactly why and where things went wrong.

As for the hearing this morning, one key question we’ll explore

is what kind of testing was done on the tires involved in these accidents. I appreciate the information that has been submitted to the

committee on short notice and look forward to hearing from the experts in the field.

As we know, Federal tire standards have not changed since the

1960’s, although industry practice certainly has. That is one reason

why tires last twice as long as they used to. I think as we listen

to time lines, it will be important to remember that we are dealing

with industries that are constantly changing to account for such

unexpected variables as higher speed limits and the uses consumers put vehicles to. Any wrongdoing should be exposed, but we

again must appreciate the complexities of this situation.

I would cite to the members a recent column in the Wall Street

Journal dated September 13, 2000, Business World, by Homer Jenkins, which talks about—it is titled, ‘‘Yo, America: Get Faster

Tires.’’ And he points out that there has been a huge increase in

speed limits, particularly in a couple of major States, that in many

ways may have contributed to the situation.

These hearings are important because we need accurate information in order to make informed legislative decisions. There are

things that ought to be addressed immediately and there are other

things that may need more thought and discussion. I will go into

more detail on this when the subcommittee moves to markup.

My experience is that Congress has rarely made good laws when

it was a purely reactive situation. Now that I am in the majority,

I feel a special responsibility to make sure that our response to an

urgent issue of public safety is sound and results in good legislation for consumers and the companies they deal with; that we will

be able to look back in 5 or 10 years with pride rather than regret.

When legislation is passed in haste—Superfund comes to mind—

many unintended consequences can occur. Let’s make certain we do

the right thing the first time. I yield back.

Mr. TAUZIN. Thank you.

The Chair recognizes the gentleman from Ohio, Mr. Sawyer.

Mr. SAWYER. Thank you Mr. Chairman. I respect your desire to

keep things short, so will only point out two matters that really

weren’t clear in our first hearings.

The first is that while it remains a 30-year-old standard, NHTSA

and the tire industry have been working for the last 3 years to elevate those standards to bring them to the modern era to reflect the

enormous changes that have taken place in the tire design and

manufacturing process in the last 3 decades. It is an important undertaking.

1223

Also, as the gentleman from Ohio suggests, it is complex. It is

complex because a tire is complex. It is a combination of some 200

raw materials, components including natural and synthetic rubbers, metals, fabric, oils, pigments and other chemicals. Their applications are in a wide range of diverse settings. Testing perhaps

ought to reflect that diversity. We have to exercise great care in

putting revisions together.

Another message that was not delivered last week was that with

regard to the changes in section 109, was that the industry itself

that petitioned for those changes. So as we talk about testing today

and talk about revisions to the law, I hope we will remember that

there is a broader range of people we need to hear from. We need

to hear, Mr. Chairman, more broadly from the automotive industry

and from the tire industry and perhaps even from tire testing specialists across this country who have the expertise to understand

the kind of changes in testing that need to take place if we are

going to get to the kinds of answers that you’ve asked for today.

I thank you very much.

Mr. TAUZIN. I thank the gentleman. I will remind him that we

are not finished. This will extend into next year. We intend further

hearings, particularly consumer education hearings, on some of

these safety issues. And I thank the gentleman for that comment.

The Chair recognizes the gentleman from California, Mr. Cox.

Mr. COX. Thank you. I want to congratulate the chairman for

holding these hearings, but I believe we will get to the facts more

quickly if we have fewer speeches from members and more testimony. Thank you.

Mr. TAUZIN. I thank the gentleman. Anyone else wishing to make

an opening statement? Anyone here? Mr. Stearns is recognized

from Florida.

Mr. STEARNS. Thank you Mr. Chairman. As I stated earlier, my

concern is that I am receiving letters from my constituents in Florida where a large number of these fatalities occurred. And I received one recently from a father who lost his son and his future

daughter-in-law when his Ford Explorer crashed as a result of the

tire tread separation. He demanded accountability.

But I think, my colleagues, the reform we are talking about is

necessary, and we need to educate ourselves because the crashes

perhaps are not attributed to one single factor. And so I urge the

chairman to use caution and deliberation here as we move forward.

I notice that he has a markup scheduled for today. A lot of us

are still trying to read through this legislation and perhaps—do we

have the question—the question I pose: Do we have enough information that we can pass legislation with a markup today, with a

certain amount of certitude that what we are doing is accurate and

not creating more litigation? For example, there is more tire information that is coming out about the uniform tire quality grading

system, and within this grading system there is a category for tires’

heat rating. Tires are graded by the manufacturer based upon the

ability to resist and dissipate heat. And there are three grades: A,

B, and C, with A being the most heat resistant, and C being the

minimum standard for heat resistance. I would like to note, Mr.

Chairman, that Firestone ATX and the Wilderness AT tires both

use tires that are rated C. And I understand that this grade is

1224

given under normal operating conditions where the tire is properly

inflated, not loaded down, and running at normal speed; which is

contrary to what happens with a typical family that drives down

a highway at 70 miles an hour for most of the day. It’s hot summer

day, perhaps about 90 degrees, they have a Ford Explorer fully

packed with all the equipment, and they’re riding with these minimum heat resistant tires which are underinflated, carrying extra

weight, and obviously at that high temperature something is going

to happen.

So I know that Ford has also used Goodyear tires on the Explorer that used a better heat rating. So I think it is possible, Mr.

Chairman, that we might caution ourselves about marking up so

quickly this legislation until we have had a better understanding

and a chance to percolate some of this information and to see what

are more of the problems here, because in the end, we have both

a legislative responsibility but we also have a moral responsibility

to come to the bottom of this. And I appreciate, Mr. Chairman,

your hearing.

Mr. TAUZIN. Would the gentleman yield?

Mr. STEARNS. I would be glad to.

Mr. TAUZIN. I would simply point out that the chairman of the

full committee, Mr. Bliley, and myself, we have heard those concerns, Mr. Stearns. We appreciate them coming, about us being

very deliberate in the way we mark up this legislation. I want to

make clear we plan to mark up the bill, to take up the bill, get

opening statements on the bill out of the way, take several noncontroversial amendments to the bill, and then to recess for about

a week. We will probably come back on Wednesday of next week,

so that you and all of our members will have as much time as we

can afford to literally be better prepared for this very serious and

important task of producing reform legislation.

So we are going to balance the need to move as quickly as we

can in order to meet the adjournment deadlines for this Congress

with the concerns, the very real concerns the gentleman has expressed. Thank you for bringing these concerns to our attention.

The Chair would recognize the gentleman from Texas, Mr.

Green.

Mr. GREEN. Thank you, Mr. Chairman. I agree with my colleague, Mr. Cox, that we would learn more by listening instead of

talking, but I want to thank you and your staff and the committee

for their rapid response that we are doing to the problem that we

see. And I’ll just paraphrase and ask unanimous consent for my

full statement to be in the record.

Since our last hearing, when Firestone testified that potential defects weren’t known until 1998 and now we have documentation

that shows the problems were found as early as 1996. Hopefully,

the witnesses will answer that. Also, I would like to continue to

hear from NHTSA about the information they may have had and

why they failed to act sooner to protect the driving public, and how

can we change this with your legislation. And, Mr. Chairman, I

would also like to see hopefully the witnesses address—and I am

interested in hearing about reports that these tires, Firestone tires

on Explorers, were not even tested on Explorers, and my concern

1225

is that they were part of the standard equipment, an integral part

of the vehicle that should be tested. I yield back my time.

Mr. TAUZIN. Thank you Mr. Chairman.

The gentleman, Mr. Bryant, is recognized.

Mr. BRYANT. Thank you, Mr. Chairman. I too will be brief and

file my more complete statement as part of the record.

Two quick points. I’ve been deeply disturbed to learn that some

of the recalled tires are actually finding their way back on to the

highways. In Tennessee, our Attorney General’s Office is investigating reports that some used tire dealers may be selling the recalled tires which would then be traded in for new tires under the

Firestone recall program. Aside from being unethical and illegal,

this actually places more of these tires on the road, which is obviously a threat to public safety.

In response to this problem, I would like to know what steps are

being taken to get these recalled tires out of circulation and I

would also like ask unanimous consent to include our Tennessee

Attorney General’s statement regarding the resale of recalled products into the record, as well as just a brief portion of that I would

like to read, from our attorney general, in terms of what we have

might do legislatively.

Mr. TAUZIN. Let me first ask if there is any objection to the gentleman’s unanimous consent request? Hearing none, the gentleman’s consent request is granted.

[The statement follows:]

1226

1227

1228

1229

Mr. BRYANT. Thank you, Mr. Chairman. This will be a small portion. He writes and says: I want to urge this committee in any legislative action it takes, to tighten the recall laws and expand the

responsibilities, enforcement, and penalty options available to

NHTSA. At the same time, I want to urge the committee to ensure

that any such changes clearly preserve the right of each State attorney general to protect their consumers in State court under

their respective consumer protection acts. Specifically, I would request that any such legislation specifically state that any such law,

regulation, or rule does not limit or restrict the applicability of

State consumer protection laws or unfair or deceptive trade practice statutes, but, rather, shall serve as supplemental authority for

the protection of consumers.

With that, Mr. Chairman, I would yield back the balance of my

time.

Mr. TAUZIN. Thank you.

The chairman would also like to make one public announcement

that I think is equally as important as the attorney general’s work.

One of our members reported to us that in his State, a major rental

company rented a Ford Explorer to an individual with recalled

tires on them and claimed that they were not subject to the recall

because they had not yet experienced 20,000 miles.

There is no such limitation on the recall. All those tires are recalled, regardless of mileage, and any rental company advising any

consumer that recalled tires are okay if they are under 20,000

miles is giving bad information to consumers, and those tires

should be replaced pursuant to the recall.

The Chair thanks the gentleman. Any further requests for opening statements? The gentlelady is recognized, Mrs. Cubin.

Ms. CUBIN. Thank you, Mr. Chairman. This issue is of particular

interest to me since one of our family vehicles in Wyoming is a

1994 Ford Explorer. Like many Ford Explorers, it came with standard Firestone tires. Those tires are no longer on our Explorer, because while my son was driving it on a hot August day at 75 miles

an hour, which is the speed limit in Wyoming, one of the tires blew

out. The tread separated. We immediately took that car and had

all of the tires replaced except for the spare, which we will be doing

as well. I sincerely thank God from the bottom of my heart that

my son is not one of the people that are represented on that chart,

but I also know as I sit here that he very well could be.

So I will try to do what the chairman said. I will try to keep emotions and anger out of this discussion. But I have to tell you, I sympathize with the parents who have lost children, with families who

have lost loved ones when it possibly could have been prevented.

Nobody wants to play the blame game. I generally think blaming

isn’t a productive thing to do. I think generally assessing a situation and deciding how we go from here is the best thing to do. But

we need to have this problem solved. We need to have safe products to begin with.

This committee has the responsibility to the public to look at

ways to ensure that future episodes like this do not happen and

that more episodes like the ones that we are involved with today

don’t happen. I am pleased with the wealth of knowledge that the

chairman has asked to come before us today but I want you to

1230

know there are many tough questions yet to be answered about the

safety, the design, and the testing of Firestone tires. I hope that

you will have the answers that we are looking for.

Finally, I think we need an update on where NHTSA is and Ford

and Firestone are with answering why these events happened in

the first place, and how they intend to apply the knowledge they

have already gained to make sure there won’t be future problems.

The last situation that has come to my attention is with Continental’s tires on Lincoln’s Ford Navigator. I think it should make

everyone sit up and take notice if they haven’t already. I yield back

the balance of my time, Mr. Chairman.

Mr. TAUZIN. Again, I thank the gentlelady.

Further opening statements. The gentleman from California.

Mr. BILBRAY. Thank you, Mr. Chairman. First of all, I would like

to congratulate the vice president from Ford on a sales strategy in

San Diego which obviously has been very successful over the past

few years, because as I was walking precincts in my district this

past weekend, it was extraordinary how many people asked about

this issues because they own Explorers. In San Diego, we probably

have more of your products on line there than even some States do,

and I think it is part of the different cultures, the fact that SUVs

have been modified from a working vehicle to the preferred vehicle

of the suburban mother and parent.

I think because of that I feel very strongly we need to get some

answers. As I was going door to door, they were asking questions

of their Member of Congress, saying, Where do I go, what is the

future? And the questions are great. So many people say, I am

waiting for my new tires. I continue to have to address this issue.

I hope that I am able to get the answers today so we can take

it back to San Diego and tell all of these people, especially the

mothers that use these vehicles as the preferred means of transportation for their families, that we can avoid a problem to where you

don’t have a son, an adult, not only an adult son being in danger,

but all of these children that can’t control what they are going to

drive and the mothers that basically have to address the issue.

Mr. Chairman, I want to thank you for this hearing. I want to

thank you for continuing to get the information out, to find answers so that the citizens of San Diego County and the entire

United States can address this issue, because I think it runs very,

very close to all of our households. I want to thank you and the

ranking members of not only the subcommittees, but of the full

committee, of the cooperative effort between the majority and the

minority on this issue. I appreciate the fact that we are seeing

Democrats and Republicans searching for answers, not just looking

for political advantage or looking to point fingers, and I want to

thank you very much and I want to thank the ranking member for

that kind of cooperative effort.

I think this hearing and this legislation is going to be something

that Americans look to as the ability of Washington to identify a

problem and to address it comprehensively without trying to take

political advantage on the issue.

I yield back the balance of my time.

Mr. TAUZIN. Thank you, Mr. Bilbray.

Further requests for opening statements?

1231

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF HON. PAUL E. GILLMOR, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF OHIO

Mr. Chairman, I want to thank you for calling this important second hearing to

look into the important matter of these unnecessary traffic deaths.

I look forward to hearing from our witnesses and the story they have to tell. Many

times this town is more bent upon finding and laying blame than it is about accepting responsibility and making corrective action. While every accident that occurred

is tragic and costly enough in the way that someone’s father, mother, sibling, or

brother passed away, those deaths will mean nothing if we do not comprehensively

approach this problem and seek out solutions.

This committee has spent much time and attention looking into the integrity of

and the quality control over Firestone’s ATX, ATX II, and Wilderness tires. This is

important as a majority of the accidents involved these tires. However, I believe it

is equally important to look at the vehicles concerned. The vast number of the tires

that failed, and which precipitated the vehicles to rollover, kept occurring in the

same place. This indicates to me that engineering questions as they relate to the

suspension of the Explorer must not be ignored. In addition, the recent press accounts concerning the Lincoln Navigator, a Ford Explorer-type auto, and tire problems; makes me concerned that these road hazards are not just limited to the Firestone and Ford products covered in the first hearing.

Mr. Chairman, the things we do here do make a difference. However, at the end

of the day, our panel will not be known for the speed in which it acted, but the thoroughness and thoughtfulness in which it proceeded. I commend you for moving

quickly to help Americans who drive these products and those who share the road

with them. I would, however, urge caution in presupposing a conclusion in this matter. Our nation’s history is replete with examples of good legislative intentions with

a bad practical outcome.

Again, I am glad we are here for this second hearing and look forward to reaching

a point where consumers can feel safe in purchasing and using these products

again.

PREPARED STATEMENT OF HON. ELIOT L. ENGEL, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF NEW YORK

Mr. Chairman, I want to thank you for calling this hearing and I want to thank

the members of the panel for joining us today. I hope this hearing will be informative and shed light on an issue of great concern to us all.

We certainly cannot go back and fix the problems that have led us here today.

However, we can move forward and work to ensure that this terrible situation is

never repeated again. We all have questions that we hope will be answered today.

We have questions that the American people want answered. Unfortunately we may

not get the answers that we would like.

There is an apparent problem in how tires are tested. It seems that specifications

on tires are not what they appear to be. When a consumer reads a tire specification

label he may read that a tire is rated for a certain speed.

However, the consumer is unaware that the tire was only tested at that speed

for a limited time, when in fact the tire will be operated for a much longer period

of time at that speed. Therefore, there is no way to tell how the tire will react under

extensive use. While these tests may have met or even exceeded the National Highway Transportation and Safety Administration (NHTSA) standards, the question remains, are these standards adequate.

Another area of concern to me is whether or not there is sufficient communication

between the tire manufacturers and the auto manufacturers. For instance, are the

tires adequately tested for the vehicle in which they will be mounted. A tire tested

at a certain speed and weight does not indicate how the tire will behave on a particular vehicle. In this case, it seems that the Firestone ATX tires were never tested

while mounted on a Ford Explorer. That is troubling to me.

Furthermore, all of the tests performed on tires are conducted with tires directly

off of the assembly line. We, therefore, have no idea how a tire will behave after

it has aged and worn. Is current testing adequate? It seems to me that it is not.

I look forward to hearing the testimony of our witnesses and hope we can find the

answers to the many questions before us today.

1232

Mr. TAUZIN. Then the Chair will recognize and introduce the

panel. We are pleased to welcome Dr. Sue Bailey, the Administrator of the National Highway Traffic Safety Administration, together with Mr. John Lampe, Executive Vice President of

Bridgestone/Firestone; Mr. Dan Saurer from the Division of Technology for Bridgestone/Firestone; Ms. Helen Petrauskas, Vice President for Safety and Engineering for the Ford Motor Company; and

Mr. Thomas Baughman, Engineering Director for the Truck Division Business Group of Ford Motor Company.

You will be recognized to summarize in 5 minutes your statements and Members will have 10 minutes to ask questions of you

as we go through this hearing today. So we will begin with Dr. Bailey of the National Highway Traffic Safety Administration. Welcome again, Dr. Bailey. We appreciate your testimony.

Before we do that, this is an O&I hearing, and before you testify,

we swear the witnesses in. Mr. Upton will give the oath.

Mr. UPTON. We have a long history of taking testimony under

oath. Does anybody have objection? If not, does anybody need to be

represented by counsel?

If not, would you stand and raise your right hand?

[Witnesses sworn.]

Mr. UPTON. You are now under oath. Dr. Bailey, we will start

with your testimony.

TESTIMONY OF HON. SUE BAILEY, ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, U.S.

DEPARTMENT OF TRANSPORTATION

Ms. BAILEY. Thank you, Chairman Upton. Mr. Chairman and

members of the committee, I am pleased to appear before you this

morning to address the subject of regulatory actions to improve the

safety of motor vehicle tires. I welcome the opportunity to address

this very important issue.

When I testified before the committee on September 6 concerning

Firestone’s recall of its ATX, ATX II and Wilderness tires, several

members expressed concern about the adequacy of our Federal tire

regulations. I stated at that time that the agency needed to review

the standard and update it. Today I will suggest some directions

in which our review may lead us.

The National Highway Traffic Safety Administration has two

Federal motor vehicle safety standards applicable to tires: Standard No. 109, which applies to passenger car tires, and Standard

No. 119, which applies to tires for vehicles other than passenger

cars. Both of these standards have been on the books for a long

time.

The tire standards call for a tire to pass several performance

tests. The tests which could be the most relevant to the tread separation problem in the Firestone tires are the tests for high speed

performance and endurance. Firestone certified that the ATX and

Wilderness tires met Standard No. 109, the standard to which most

tires used on SUVs are certified. We tested them on more than one

occasion in our standards enforcement program and found that

they all passed the performance tests, including the high speed and

endurance tests that we now use.

1233

When high speeds are combined with low inflation pressure and

heavy loads, the tires are heavily stressed. Add in the effects of

high temperature, and you have a recipe for maximizing stress on

a tire. We will look at both speed and temperature in our review

of the tire standard and we will consider the vehicle loading and

tire inflation practices of the owners themselves.

This inquiry is one of special importance for tires used on SUVs,

compacts, pickup trucks, and other vehicles whose center of gravity

is high in relationship to their track width. If a tire fails suddenly,

causing a driver to lose control, an SUV is more likely than a passenger car to roll over. The growing percentage of SUVs and other

vehicles with high centers of gravity increases the importance of

having tires with adequate margins of safety. Our rulemaking will

examine whether the characteristics of these vehicles warrant the

amendment of other requirements in the standard.

There is also a significant issue of consumer information that

needs to be addressed. We believe the public needs better information about the performance characteristics of the vehicles and the

equipment it purchases. We are pleased to hear that the conferees

on our appropriations bill may modify a provision in the bill so that

it will not delay our consumer information rating system on such

rollovers.

We believe that the information developed through this system

will provide relevant information to those consumers. We will also

review other means of supplying consumer information, such as the

labeling requirements on the tires and the location of tire inflation

pressure information on the tires.

I want to stress that we are already in the process of considering

possible changes to these standards. Updating the standards is vitally important to assure that the American public is safe on their

tires. Mr. Chairman, I want to assure as I have before that the

Firestone investigation is our highest priority at NHTSA. We will

remain focused on the investigation, and closely monitor the current recall campaign. We will also seek any expansion of that campaign that may be necessary.

I want to thank you for holding this very important hearing, and

I will answer any questions that you may have.

[The prepared statement of Hon. Sue Bailey follows:]

PREPARED STATEMENT OF HON. SUE BAILEY, ADMINISTRATOR, NATIONAL HIGHWAY

TRAFFIC SAFETY ADMINISTRATION

Mr. Chairman and members of the Committee: I am pleased to appear before you

this morning to address the subject of regulatory actions to improve the safety of

motor vehicle tires. I welcome the opportunity to address this important issue.

When I testified before the Committee on September 6 concerning Firestone’s re- call of its ATX, ATX II and Wilderness tires, several members expressed concern

about the adequacy of federal tire regulations. I stated at that time that the agency

needed to review the standard and update it. Today I will suggest some directions

in which our review may lead us.

The National Highway Traffic Safety Administration (NHTSA) has two Federal

motor vehicle safety standards applicable to tires: Standard No. 109, which applies

to passenger car tires, and Standard No. 119, which applies to tires for vehicles

other than passenger cars. Both of these standards have been on the books a long

time—Standard No. 109 since 1968 and Standard No. 119 since 1973—without

major changes.

The tire standards call for a tire to pass several performance tests. The tests that

could be the most relevant to the tread separation problem in the Firestone tires

are the tests for high speed performance and endurance. Firestone certified that the

1234

ATX and Wilderness tires met Standard No. 109, the standard to which most tires

used on SUVs are certified. We tested them on more than one occasion in our standards enforcement program and found that they passed all the performance tests, including the high speed and endurance tests.

When high speeds are combined with low inflation pressure and heavy loads, the

tires are heavily stressed. Add in the effects of high temperature, and you have a

recipe for maximizing stress on a tire. We will look at both speed and temperature

in our review of the tire standard, and consider the vehicle loading and tire inflation

practices of vehicle owners.

This inquiry is of special importance for tires used on SUVs, compact pickup

trucks, and other vehicles whose center of gravity is high in relation to their track

width. If a tire fails suddenly, causing a driver to lose control, a SUV is more likely

than a passenger car to roll over. The growing percentage of SUVs and other vehicles with high centers of gravity increases the importance of having tires with adequate margins of safety. Our rulemaking will examine whether the characteristics

of these vehicles warrant the amendment of other requirements in the standard.

There is also a significant issue of consumer information that needs to be addressed. We believe the public needs better information about the performance characteristics of the vehicles and equipment it purchases. We are pleased to hear that

the conferees on our appropriations bill may modify a provision in the bill so that

it will not delay our consumer information rating system on rollover. We believe

that the information developed through this system will provide relevant information to consumers. We will also review other means of supplying consumer information, such as the labeling requirements in the tire and the location of tire inflation

pressure information on the tires.

I want to stress that we are already in the process of considering possible changes

to these standards if they will improve safety. Updating the standards is vitally important to assure the American public of the safety of tires.

Mr. Chairman, I want to assure you, as I have before, that the Firestone investigation is

the highest priority in NHTSA. We will remain focused on the investigation, closely monitor the current recall campaign, and seek any expansion of the campaign

that may be necessary.

Mr. Chairman, I will conclude by expressing my thanks to you for holding this

hearing. I will be glad to answer any questions you may have.

Mr. TAUZIN. Thank you.

We will now hear from Mr. Lampe, the Executive Vice President

of Bridgestone/Firestone.

TESTIMONY OF JOHN T. LAMPE, EXECUTIVE VICE PRESIDENT,

BRIDGESTONE/FIRESTONE, INC.; ACCOMPANIED BY DAN

SAURER, DIVISION VICE PRESIDENT FOR TECHNOLOGY,

BRIDGESTONE/FIRESTONE, INC.

Mr. LAMPE. My name is John Lampe and I am the Executive

Vice President with Bridgestone/Firestone. Mr. Chairman, we are

pleased to be here today to appear before you to discuss some very

important aspects of this recall. Let me repeat at the outset that

our company recognizes that there was a problem with a very

small percentage of our tires. We must and we do take full responsibility for these problems.

Before going into the substance of my remarks, let me tell you

that this recall situation has impacted our company and our 35,000

employees like no other event in our 100-year history. We are a

proud company with a long history and a tradition of customer

service and satisfaction. The fact that our customers are now questioning our commitment to them and our commitment to their safety has shaken us to our core. We are fully committed to concluding

this recall as quickly as possible and to identifying the cause or

causes of the tire problems.

In order to be brief and meet the time limit, I will limit my opening remarks to three subjects: recommended inflation pressures to

1235

be equipped on the Ford Explorer; how tires are tested; and a brief

update on our root cause analysis of the problem with the recalled

tires.

First, air pressure. As is the case with all vehicles, the vehicle

manufacturer sets the air pressure as was done on the Explorer.

Why? Because the vehicle is an integrated system and the tires are

only a part of the system. Air pressure of the tire is interrelated

with many other performance characteristics, including handling,

rollover stability, traction, suspension load and so on. We are not

vehicle experts and cannot know what various impact various pressure settings will have on the vehicle system as a whole. Typically,

if the inflation pressure meets tire and rim load standards at 26

psi and the vehicle manufacturer believes that 26 psi is optimal for

the vehicle’s total performance, we must rely on that judgment.

However, we now know that at 26 psi, there is a very low safety

margin for the Explorer as compared to some other SUVs. Running

an Explorer on low tire pressure, overloaded, in hot climates, appears to be a serious part of the problem that we are now facing.

Since August 9, Ford has stated that an inflation pressure range

between 26 psi and 30 is proper for the P235 75R 15 tires equipped

on the Explorer and, we as the tire manufacturer, have recommended the air pressure on these tires on the Explorer at 30

psi. We believe very strongly that 30 psi provides consumers with

additional safety margins. At 30 psi, the Explorer can handle higher speeds and over 400 pounds greater load than at 26. We feel so

strongly on this that yesterday we wrote a letter to Ford to urge

them to change the specification on these tires on these Explorers

and Mountaineers that are equipped with P235 75R 15 to 30 psi.

Turning to testing, we know how to test tires. Every year we test

thousands of tires for millions of miles at different loads, speeds,

and inflation levels. We subject tires to severe abuse and tests we

have created to run these tires to failure so we can assess the outer

limits of a tire’s ability to perform.

The recalled tires were subjected to a series of exacting tests before they were introduced. First, Ford Motor Company required a

series of tests before the tires could be certified as original equipment on Ford vehicles. Those tests were performed either by Ford

or by Firestone as directed by Ford in its engineering specifications.

Second, Firestone tested the tires in accordance with DOT regulations, which call for high speed, durability, and other tests.

Third, at Ford’s request, starting with the 1995 model year, Firestone tested the tires under standards developed by the Society of

Automotive Engineers for the purpose of speed rating, tests that

are much more severe and extreme than the standard 109 test.

Mr. Chairman, your staff and now the media have expressed concern about high speed endurance testing at Decatur in 1996 as well

as the modification that we made in 1998. We will answer all of

your questions to the best of our ability on all of these subjects. I

am fortunate to have one of my colleagues here today that is very

familiar with both subjects. In addition to the extensive testing,

Firestone’s quality assurance procedures require regular testing of

tires taken right from the production lines to assure the continuing

safety of our tires.

1236

Overall, the testing that Ford and Firestone undertook before introducing these tires was thorough and complete. However, we

pledge our cooperation with the committee and NHTSA in reevaluating tire testing standards and addressing the critical matter of

tire and vehicle interaction in accident causation.

Let me speak a moment about root cause. We are all interested

in that, nobody more so than us. After the recall was announced,

Bridgestone/Firestone management immediately created an investigative team to study and determine the cause of the thread separation phenomena. They were joined by groups of personnel from

the Decatur, Illinois plant, professionals from the Akron Technical

Center and field engineers and technical experts from around the

United States as well as from our parent company, Bridgestone

Corporation, Japan. A team of Ford Motor Company specialists also

participated in the efforts. All of these groups have continued to

work both individually and jointly in search of an answer to this

problem.

No one wants to have an answer more than we do. We have been

and are continuing to relentlessly examine all known facts relevant

to these tires. A comprehensive review of the Decatur production

process has been conducted to determine whether variances in any

production process could have caused or contributed to this problem which appears in a very small percentage of these tires. I want

to make clear and be honest with the committee, we have not come

to a conclusion about the cause or causes of this problem, but we

have identified some areas where we believe additional work can

be fruitful. Specifically, we are looking at the interaction between

the design specification of the P235 15 together and combined with

the potential manufacturing variances, process variances, at the

Decatur plant.

Mr. Chairman and members of the committee, I think it would

be improper on my part to engage in future speculation and theories. We must rely on our experts, including the independent expert that we have brought on, Dr. Sanjay Govindjee, to an unfettered opportunity to investigate and answer this problem which

has been aptly likened to finding a needle in a haystack.

Mr. Chairman, we take full responsibility where there is a problem with our tires. We firmly believe, however, that the tire is only

part of the overall safety problem shown with these accidents. Mr.

Chairman and members of the committee, we believe that all of the

relevant safety issues must be addressed. If we remove every one

of our tires from these vehicles, rollovers and serious accidents will

still continue.

Mr. Chairman, we pledge our cooperation with the committee

and with NHTSA to work to ensure the safety of the motoring public. Thank you for your time and we welcome any questions that

the committee has.

Joining me today here are Dan Saurer, Division Vice President,

Technology Company, and he will address the more technical questions that you may have.

Mr. TAUZIN. Thank you. And my understanding is that Mr.

Saurer will not give an opening statement.

Mr. LAMPE. That was for both of us.

[The prepared statement of John T. Lampe follows:]

1237

PREPARED STATEMENT OF JOHN T. LAMPE, EXECUTIVE VICE PRESIDENT, BRIDGESTONE/FIRESTONE, INC.

Chairman Tauzin, Chairman Upton and members of the House Commerce Committee, Bridgestone/Firestone is pleased to have the opportunity to appear before

you today to discuss some very important issues regarding the tire recall situation.

Let me repeat at the outset that BFS recognizes that there was a problem with

a very small percentage of the recalled tires. That is why we took the action that

we did. Before going into the substance of my remarks, let me tell you that this recall situation has impacted our company as no other event has in our 100 year history. We are a proud company with a century long tradition of customer service and

satisfaction. The fact that our customers are now questioning our commitment to

them and to their safety has shaken us to our core. We are fully committed to concluding this recall as quickly as possible and to identifying the cause or causes of

the tire problems.

I will limit my opening remarks to three subjects—Recommended PSI for tires to

be equipped on the Explorer; how tires are tested; and a brief update on the root

cause analysis of the problems with the recalled tires.

First, air pressure. As is the case with all vehicles, the vehicle manufacturer sets

the air pressure on the Explorer. Why? Because the vehicle is an integrated system

and the tires are only a part of that system. Air pressure of the tire is interrelated

with many performance characteristics, including handling, rollover stability, traction, suspension, and load. We are not vehicle experts and cannot know what impact

various pressure settings will have on the vehicle system as a whole. Typically, from

our perspective, if the inflation level meets Tire and Rim load standards at 26 PSI

and the vehicle manufacturer believes that 26 PSI is optimal for the vehicle’s performance, we must rely on that judgment.

However, we now know that at 26 PSI, there is a low safety margin for the Explorer as compared to other SUV’s. Running an Explorer at low tire pressures, overloaded, particularly in hot climates appears to be a part of the problem we are now

facing. Since August 9, Ford has stated that an inflation pressure range of 26 PSI

to 30 PSI is proper for the P235 75R 15 tires equipped on the Explorer and we, as

the tire manufacturer, have recommended that the air pressure on these tires

equipped on the Explorer be inflated to 30PSI. We believe that 30 PSI provides the

consumer with additional safety margin; at 30 PSI, the Explorer can handle higher

speeds and over 400 lbs. greater load than at 26 PSI.

Turning to testing, Firestone knows how to test tires. Every year we test thousands of tires for millions of miles at different loads, speeds and inflation levels. We

subject test tires to severe abuse and test to create failure, so we can assess the

outer limits of a tire’s ability to perform.

The recalled tires were subjected to a series of exacting tests beforethey were introduced. First, Ford Motor Company required a series of tests before the tires could

be certified as original equipment on Ford vehicles. Those tests were performed either by Ford or by Firestone, as directed by Ford in its engineering specifications.

Second, Firestone tested the tires in accordance with DOT regulations, which call

for high speed, durability, and other tests. Third, at Ford’s request starting with the

1995 model year, Firestone tested the tires under standards developed by the Society of Automotive Engineers for purposes of speed rating the tires. The recalled tires

performed just the way they should on these tests and were ultimately approved by

Ford.

In addition to this extensive testing, Firestone’s quality assurance procedures require regular testing of tires taken from the production lines to assure the continuing safety of tires produced.

Overall, the testing Ford and Firestone undertook before introducing these tires

was thorough and complete. However, we pledge our cooperation with the Committee and with NHTSA in re-evaluating tire testing standards and in addressing

the critical matter of tire and vehicle interaction in accident causation.

Let me speak a moment about root cause. After the recall was announced,

Bridgestone/Firestone management immediately created an investigative team to

study and determine the cause of the tread separation phenomena. They were joined

by groups of personnel from the Decatur, IL plant, professionals from the Akron

Technical Center, and field engineers and technical experts from around the United

States as well as from our parent company Bridgestone Corporation, Japan. A team

of Ford Motor Company specialists has also participated in that effort. All of these

groups have continued to work both individually and jointly in search of an answer

to this problem.

No one wants to have an answer more than we do. We have been and are continuing to relentlessly examine all known facts relevant to these tires. A comprehenVerDate 11-MAY-2000 10:33 Apr 13, 2001 Jkt 010199 PO 00000 Frm 01245 Fmt 6601 Sfmt 6621 E:\HEARINGS\67111 pfrm08 PsN: 67111
1238

sive review of the Decatur production process has been conducted to determine

whether variances in any production process could have caused or contributed to

this problem, which appears in such a small percentage of these tires. We have engaged in an intensive review of our development and design processes to determine

any role they might play in these issues. We are presently examining, dissecting,

and analyzing a large sample of representative tires acquired in the recall in an effort to closely evaluate the condition of tires that have experienced actual service

conditions.

At this time, I want to make it clear that we have not been able to come to any

conclusion about the cause or causes of this rare problem, although we have identified some areas where we believe additional work will be fruitful. Specifically, we

are looking at the interaction between the design of the P235/75R15 and potential

manufacturing variances at the Decatur plant. It would be inappropriate on my part

to engage in further speculation. We must allow our experts, including the independent expert, Dr. Sanjay Govindjee, the unfettered opportunity to investigate and

answer this problem, which has been aptly likened to ‘‘finding a needle in a haystack.’’

Mr. Chairman, we pledge our cooperation with the Committee and with NHTSA

to work to ensure the safety of the motoring public. Thank you for your time and

we welcome any questions the Committee has. Joining me here today are Dan

Saurer, Division Vice President, Technology Company, and Brian Queiser, Project

Engineer, who will address any of the more technical questions you may have.

Mr. TAUZIN. Thank you.

We will now turn to Ford Motor Company, Ms. Helen

Petrauskas.

TESTIMONY OF HELEN O. PETRAUSKAS, VICE PRESIDENT, ENVIRONMENT AND SAFETY ENGINEERING, FORD MOTOR

COMPANY; ACCOMPANIED BY THOMAS D. BAUGHMAN, ENGINEERING DIRECTOR, TRUCK CONSUMER BUSINESS GROUP,

FORD MOTOR COMPANY

Ms. PETRAUSKAS. Thank you, Chairman Tauzin, Chairman

Upton. I am pleased to have the opportunity to be here. Most of

my statement talks about the technical issues, but I was so struck

by what Congresswoman Cubin said. I personally get e-mails and

calls and letters from customers: When are we going to get our

tires replaced? And truly we have a group of people that are literally dedicated to working on that around the clock. That is not

an exaggeration.

Some of the good news is that we paid for some tire manufacturing equipment so that competitive tires could be made available

more quickly, and it looks like there will be another 300,000 tires

every month, by the end of September, so my hope is that will help

at least some of the people who expressed the same sentiments

that you expressed so eloquently and relieve their worry and concern over their family and children.

Ford has provided extensive documentation to the committee,and

that documentation related to two particular questions: First, we

have provided documents on tire testing. Second, we have provided

documents relating to the testing and performance of the Explorer

vehicles with respect to handling and stability.

With respect to tire testing, the documents we provided to your

committee conclusively demonstrate that Ford performed thorough,

complete, and rigorous testing of the subject tires. They will also

show that for the better part of 10 years Firestone agreed and repeatedly supported and certified to the recommended tire pressure

of 26 psi. And then finally, the documents will demonstrate that all

1239

of the requisite testing which needs to be done at the recommended

customer tire pressure was done at the recommended tire pressure.

A great deal of attention has been paid to high speed testing.

Specifically, our test procedure provides that testing should be done

by running the tires for at least 200 miles, at a minimum speed

of 90 miles per hour, with the pressure as recommended to the customer. The test was conducted for the four different 15-inch tires

used on the Explorer since its introduction. Typically this testing

is done on a slave or mule vehicle that is modified to duplicate the

weight distribution of each of the vehicles that will use the tires

being tested, and I have a feeling I am going to get the opportunity

to explain all of that to the committee.

In terms of vehicle handling and stability, the starting point for

Ford Motor Company’s approach to continuous improvement to

safety of all of our products is the Ford safety design guidelines.

These guidelines are continuously updated——

Mr. TAUZIN. Ms. Petrauskas, could I interrupt you?

There is a big bag someone left outside this room. If it is your

bag, please immediately claim it; otherwise the Capitol Police are

going to be obliged to clear this room. So if you have left a bag outside, take care of it quickly, right now. Can I ask the gentleman

that is leaving, is that your bag? You’ll take care of it quickly.

Thank you. Please proceed.

Ms. PETRAUSKAS. The starting point for Ford Motor Company’s

approach to continuous improvement to safety for all products is

Ford’s safety design guidelines. These guidelines are continuously

updated, and they go well beyond government regulations. The

safety guidelines are intended to provide continuous improvement

to enhance the already extensive Ford efforts to provide vehicles

that exhibit a high level of safety. Prominent among the safety

guidelines is Ford’s guideline on resistance to rollover. The objective of this guideline is to design and develop a vehicle that will

remain stable under all operating conditions, including accident

avoidance maneuvers. The guideline states that the vehicle should

respond in a predictable manner and give the driver perceptible

signals that the vehicle is at its limit. Our extensive handling testimony is supplemented by specific testing focusing on vehicle behavior and violent maneuvers.

One of the most extreme tests is the so-called J-turn test, a test

that was performed on the 1991 Explorer. The Explorer met or exceeded all J-turn criteria, not only at the recommended tire pressure of 26 psi, but also at the maximum tire pressure for the ATX

tire of 35 psi. This conclusion was validated by both track testing

and computer simulation. And it continues to be validated by real

world performance. Even including the accidents likely caused by

thread separations, the Explorer continues to perform 27 percent

better than the average passenger car and 17 percent better than

the average compact SUV in serious accidents. It also continues to

perform better than comparable SUVs, and there is a chart up

there that demonstrates that; and fundamentally what it says, in

all serious accidents and in rollover serious accidents, the performance of the Explorer is significantly better than that of the average

SUV.

1240

Finally, contrary to assertions made in the press as recently as

yesterday, an evaluation of single vehicle rollover accidents, that is,

accidents not where two vehicles or more are involved, simply there

is a single vehicle involved in the accident, that same government

data base demonstrates that the Explorer performs better in these

kinds of crashes than the average compact SUV.

Finally, some have asked whether Explorers are more likely to

suffer a rollover after a catastrophic thread separation. The fact is

that the Explorer had the misfortune of being equipped with virtually all of the recall tires that were produced. But even with that

considerable handicap, Federal Government statistics show the Explorer to be one of the safest vehicles on the road, both in single

accidents and in multiple vehicle accidents.

Let me just say in conclusion, we have done our utmost to provide the committee with everything that has been requested. The

submission includes formal sign-off documents, engineering reports,

comprehensive data tabulations, but it also includes engineers’

handwritten notes and their e-mails to one another and vast

amounts of testing done at design levels other than the design level

that ultimately went into production. These documents paint a picture of the day-to-day work of engineers as they develop a product.

They reflect debates among engineers as to alternatives that might

be considered and differences of opinion as to the best approach to

be taken. There are letters to suppliers, including tire suppliers, indicating improvements are needed in one or another characteristic.

But also reflected in all this paper is the constant striving of thousands of Ford Motor Company men and women to make a better

product. Thank you.

[The prepared statement of Helen O. Petrauskas follows:]

PREPARED STATEMENT OF HELEN O. PETRAUSKAS, FORD MOTOR COMPANY

Good morning, Chairman Tauzin, Chairman Upton, and Members of the Committee. I appreciate the opportunity to be here today to provide you with additional

information on the Firestone tire recall. In response to your committee’s request,

Ford has provided extensive documentation related to two testing issues. First, we

have provided documents on the testing done by Ford or by the tire manufacturer

of Firestone ATX, ATX II, Goodyear Wrangler and Firestone Wilderness tires. Second, we have provided documents related to the testing and performance of the Explorer with respect to handling and stability.

Tire Testing

The documents we provided your committee conclusively demonstrate that Ford

performed thorough, complete and rigorous testing of the subject tires. Additionally,

Firestone agreed and has repeatedly supported the recommended tire pressure of 26

psi. Finally, the documents demonstrate that all requisite testing was done at 26

psi, the tire pressure recommended to our customers.

We have provided more than 100,000 pages of documentation to the Committee

(Attachment 1). These documents include detailed descriptions of the governance

process—Design Verification Plan and Report (DVP&R)—that our vehicle teams follow to approve tires for production. The DVP&R, in turn, is supported by specific

test procedures that make up the elements of our sign-off process. These have also

been provided. We have provided as many documents setting forth the specific results of the required tests as we could find.

The tire Design Verification Plan and Report is a combination of supplier and vehicle manufacturer testing. The supplier is responsible for conducting a wide variety

of tests to insure the tire meets Ford’s functional requirements and government regulations. For example, supplier testing is required to confirm acceptable rolling resistance, wet and dry traction, and tire wear. Ford conducts vehicle testing to insure

the tires performance is acceptable in conjunction with other vehicle systems. These

tests address performance characteristics such as handling, traction and stability.

1241

In all, nearly 30 groupings of tests are required as part of Ford’s Design Verification

Plan and Report—a complete list and description of these tests is included in Attachment 2.

One example of Ford’s comprehensive approach to tire testing is the way we determine the speed rating of tires. The standard industry procedure to establish

speed rating—Society of Automotive Engineers (SAE) procedure number J1561 provides that all tires be tested at 38 psi. The Tire and Rim Association requires that

an analytical calculation be used to adjust the speed rating to the tire pressure recommended to customers. Ford’s procedure number ES-XU5A-1508-AA requires that

speed rating be determined by running the test at the actual tire pressure recommended to the customer. In order to provide an additional margin of real world

safety, Ford requires that its tires actually meet a ‘‘higher’’ speed rating, above the

maximum vehicle speed. Thus, the tires that are the subject of this hearing all demonstrated ‘‘passing’’ performance at 26 psi at the ‘‘S’’ level even though the maximum speed of the Explorer is one speed rating category lower.

A great deal of attention has been paid to high speed testing. We want to emphasize what actions were taken. Specifically, our test procedure provides that testing

should be done by running the tires for at least 200 miles at a minimum speed of

90 miles per hour at an ambient temperature between 70 and 90 degrees Fahrenheit with tire pressure as recommended to the customer. This test was conducted

for the four different 15 inch tires used on the Explorer since its introduction—the

Firestone ATX, ATX II, and Wilderness AT and the Goodyear Wrangler. Typically,

this testing is done on a ‘‘slave’’ vehicle that is modified to duplicate the weight distribution of each of the vehicles that will use the tires being tested.

We have been able to find two of the track worksheets used by the engineers who

performed this high speed testing. In the case of the earliest test, performed in

1989, we have not been able to locate the track worksheet. However, we have identified the engineer who performed the testing and have provided an affidavit from

him. And we are continuing to search for the remaining test track worksheet.

Documents we have provided show that the recommended tire pressure of 26 psi

was selected by Ford to provide the optimum balance of many functional characteristics. These include: performance features such as high speed durability, load carrying capacity, fuel economy, customer comfort characteristics, and stability and

handling. This is illustrated in Attachment 3. Numerous other manufacturers of

compact SUVs and pickup trucks also recommend 26 psi in their vehicles. So the

Ford Explorer is hardly unique in that respect.

The documents we have submitted also show that Firestone repeatedly and consistently agreed to and supported the recommended tire pressure of 26 psi.

Vehicle Handling and Stability Testing

The starting point for Ford Motor Company’s approach to continuous improvement to safety for all products is Ford’s Safety Design Guidelines. These guidelines

are updated constantly. They represent the high safety standards that Ford Motor

Company sets for itself and which go well beyond government regulations. The most

recent version of these guidelines is attached (Attachment 4). Safety Design Guidelines are intended to provide continuous improvement to enhance the already extensive Ford efforts to provide vehicles that exhibit a high level of safety.

Prominent among these safety guidelines is Ford’s guideline on resistance to rollover. The objective of this guideline is to design and develop a vehicle that will remain stable under all operational conditions, including accident avoidance maneuvers. The guideline states that the vehicle should respond in a predictable manner

and give the driver perceptible signals that the vehicle is at its limit.

Ford Safety Design Guidelines are supported by specific engineering test procedures relating to all aspects of vehicle handling. Each of these procedures requires

that tire pressure be checked and adjusted to recommended levels, so that the testing accurately reflects what our customers are likely to experience.

As to the vehicle itself, Ford Motor Company conducts various ride and handling

tests. For example, lane changes, slalom events, a handling course circuit, various

understeer tests, braking tests and steering evaluations are all performed at various

speeds and vehicle loading conditions. These procedures ensure that Ford’s vehicles

have appropriate steering and handling characteristics and a wide margin of safety.

The extensive handling testing is supplemented by specific testing focusing on vehicle behavior in violent maneuvers. One of the most extreme tests is called the ‘‘Jturn’’ test, a test that was performed on the 1991 Explorer. The Explorer met or

exceeded all J-turn test critieria not only at the recommended tire pressure of 26

psi, but also at the maximum tire pressure for the ATX tire of 35 psi. This conclusion was validated by both track testing and computer simulation.

1242

In providing information to the Committee, Ford included all testing results that

we were able to collect in the time permitted. This means that we even included

test results for prototype configurations that were not representative of the vehicle

as finally produced. What is significant is that even these early prototypes met the

severe J-turn test at the recommended tire pressure of 26 psi and at 35 psi. The

documents show that the performance of the production version of the Explorer was

better than the early prototype level. This same type of information has been provided for model year Explorers produced after 1991.

All of these rigorous tests are aimed at providing a superior margin of safety for

our customer. The ultimate proof of the robust design of the Explorer and its strong

stability performance is in the way it has performed in the hands of customers for

more than ten years. Our analysis of real world data shows that the effect of bad

tires can now be seen. Attachment 5 is a comparison of Explorer’s performance with

15’’ Firestone tires and 15’’ Goodyear tires respectively. This chart shows the rate

(reports per million tires produced) at which tires are noted in government fatal accident statistics as a contributing factor in rollover accidents, separated by brand

of tire used as original equipment on the Explorer. These data clearly show tires

are called out at a higher rate for the recalled Firestone tires, compared to the rates

for Goodyear tires on Explorers.

Even including the accidents likely caused by tread separations the Explorer continued to perform 27 percent better than the average passenger car and 17 percent

better than the average compact SUV (Attachment 6). Contrary to assertions made

in the press as recently as today, an evaluation of single vehicle rollover accidents

shows that the Explorer performs better in these kinds of crashes than the average

compact SUV (Attachment 7).

Finally, some have asked whether Explorers are more likely to suffer a rollover

after a catastrophic tread separation. The fact is that the Explorer had the misfortune of being equipped with virtually all of the recalled tires that were produced.

But even with that considerable handicap, federal government statistics show the

Explorer to be one of the safest vehicles on the road, in both single and multiple

vehicle accidents.

Recall Update

Since we last appeared before your committee on September 6, we have replaced

more than one million additional tires and have more than 40 percent completion

of the recall. Work towards completion of this recall has progressed more quickly

than any recall in history. However, we remain very concerned that there are defective tires on some of our vehicles and we will not rest until every bad tire is replaced. Last week the first newly purchased tire mold came on stream. By the end

of September, an additional 300,000 tires per month will become available to customers.

As Jac Nasser, Ford’s President and CEO, recently committed to your Committee

and to the Senate Commerce Committee, Ford is working with the tire industry to

develop an ‘‘early warning reporting system.’’ This system will provide information

on the real world performance of tires. Since our announcement, we have already

started meeting with our tire suppliers and are actively developing this system.

In fact, this system is already starting to address issues. You may be aware of

the recently announced Continental tire replacement program, which impacts the

Lincoln Navigator. Our preliminary discussions with Continental on the ‘‘early

warning’’ system allowed us to work together to quickly address the issue.

Finally, our product development experts are investigating a dashboard indicator

for future models which would alert the driver to a potential tire problem.

Conclusion

We have done our utmost to provide the committee with everything that has been

requested. The submission includes formal signoff documents, engineering reports,

and comprehensive data tabulations. It also includes engineers’ handwritten notes,

e-mail messages to one another and vast amounts of testing done at design levels

other than the design level that ultimately went into production. These documents

paint a picture of the day-to-day work of engineers as they develop a product.

They reflect debates among engineers as to alternatives that might be considered,

and differences of opinion as to the best approach to be taken. There are letters to

suppliers, including tire suppliers, indicating improvements needed in one or another tire characteristic. And reflected is the constant striving by thousands of Ford

Motor Company employees as to how we can make this product even better.

The story these documents portray is one of extremely high standards being set

for a product and thorough testing and evaluation and striving for continuous improvement in all characteristics important to customers.

1243

1244

1245

1246

1247

1248

1249

1250

1251

1252

1253

1254

1255

1256

1257

1258

1259

1260

1261

1262

1263

1264

1265

1266

1267

1268

1269

1270

1271

Mr. TAUZIN. Thank you very much, Ms. Petrauskas.

Mr. Baughman, do you have an opening statement?

Mr. BAUGHMAN. No.

Mr. TAUZIN. The Chair recognizes himself for 10 minutes.

Let me reconstruct the information that we have. Dr. Bailey, the

information we have is that the agency requires both speed and durability testing, and durability testing currently required might be

done at 26 psi. But speed testing is not. Speed testing by agency

requirement is at 32 psi?

Ms. BAILEY. That’s correct.

Mr. TAUZIN. So the agency does not currently have, until we

make changes, regulations that require either one of these two parties to test the Ford Explorer under these heat conditions with

loads at 26 pounds per square inch at speed test; is that right?

Ms. BAILEY. That is correct, but only the high speed testing is

done at 32. Everything else is done at 26 psi, but not the high

speed testing.

Mr. TAUZIN. Second, there are no regulations right now requiring

either testing of tires for aging and normal wear conditions; is that

correct?

Ms. BAILEY. There are endurance tests and they are done at 88

percent maximum load at 95 degrees and at the speeds that we

normally travel in America. But that is essentially correct.

Mr. TAUZIN. That is for 1,700 miles wear, so that under current

regulations, there is not a lot of attention paid or required to testing tires that have normal 2, 3 years of age and wear; is that correct?

Ms. BAILEY. Exactly.

Mr. TAUZIN. That may be a topic that we want to discuss in

terms of new regulations?

Ms. BAILEY. Yes, it is.

Mr. TAUZIN. Thank you, Dr. Bailey.

Let me turn to the tests that were done as opposed to what was

required. Let me start with Ford. Correct me if I’m wrong, first of

all we have an affidavit that says in 1989 you ran one test at high

speed—and I quote—on the UN-46 Explorer. And I quote again,

that the high speed durability tests run on the UN-46 Explorer

were conducted at maximum rear gross axle weight, et cetera.

The affidavit we have leads this committee to believe, as did the

testimony 2 weeks ago, that Ford at least ran one test on a Ford

Explorer at 26 pounds per square inch in speed tests at these proving grounds. We now learn that those tests were run on a slave or

mule vehicle, a truck, not a Ford Explorer. Was this affidavit intentionally misleading?

Ms. PETRAUSKAS. Absolutely not, Mr. Chairman.

Mr. TAUZIN. What happened?

Ms. PETRAUSKAS. The tests that we run for high speed durability

are done using something that we call a slave or mule vehicle.

Mr. TAUZIN. Why did you call it a Ford Explorer in the affidavit?

Ms. PETRAUSKAS. I have not talked to Mr. Avouris. He is a tire

tester. I am sure in his mind when he took that mule and put it

in an Explorer-type configuration through weight, to him that was

an Explorer. Mr. Chairman, there is nothing devious here.

1272

Mr. TAUZIN. I hope not, Ms. Petrauskas, but obviously it looks

suspicious.

Second, this slave/mule vehicle is not a Ford Explorer?

Ms. PETRAUSKAS. No, sir.

Mr. TAUZIN. Does it have the same axle design and axle spread?

Does it have any of those characteristics, center of gravity characteristics of a Ford Explorer?

Ms. PETRAUSKAS. What it has is a weight distribution.

Mr. TAUZIN. A weight distribution similar, that is all?

Ms. PETRAUSKAS. May I take a couple seconds just to put this

into context?

Mr. TAUZIN. Please.

Ms. PETRAUSKAS. Fundamentally, for truck testing we have three

different mules. One mule is used to test all of the 14-inch tires,

and that mule for years has been a Ford Ranger, which is a small

pickup.

Second, we have an F-150 which is a standard size pickup, and

that mule is—— Mr. TAUZIN. So the tests were done with a Ford pickup truck, a

F-150; is that accurate?

Ms. PETRAUSKAS. I want to be clear. It was a pickup truck that

was modified to reflect the weight distribution that an Explorer

would have. And so the tires that are on that truck for all they

know, they are on a Ford Explorer and they are run for the 200

miles at the high speed.

Mr. TAUZIN. Is the axle wider or longer than the Ford Explorer?

Ms. PETRAUSKAS. We can give you the details.

Mr. TAUZIN. I think the answer is yes. That is what we were told

last night; that the axle width and the length of the drive system

are very different than a Ford Explorer. So I think the information

that we got last night is accurate. Correct it in the record if we are

wrong.

Let me run through the rest of this quickly. Here is the information that we have. That Ford ran a single test in 1989 before putting these vehicles with these tires on them into production and

sale at 26 psi at high speed; but on this mule/slave truck, not a

Ford Explorer. But again in 1994, Ford ran some tests, again using

an F-150, and we have the records of those tests.

Ms. PETRAUSKAS. Right.

Mr. TAUZIN. In 1995 you ran some tests, but you don’t have those

records and can’t produce them.

Ms. PETRAUSKAS. We are still looking for them.

Mr. TAUZIN. In 1998 you made the decision to turn the testing

obligation over to Firestone. Until 1998 it was your responsibility?

Ms. PETRAUSKAS. What we did about 1998 was we actually

changed the procedure from using slave vehicles, where you physically jiggled the weight around in order to simulate the particular

vehicle to which the tire is applied, to using something called a tire

dynamometer, and that is like an exercise machine for the tire.

Mr. TAUZIN. Am I correct in 1998 Ford turned the responsibility

over to testing to Firestone, in 1998?

Ms. PETRAUSKAS. I believe that is correct.

Mr. TAUZIN. That is the information we have. If that is accurate,

it also says before 1998 Ford assumed, as Mr. Nasser’s corrective

1273

letter tells us, Ford had the obligation of testing these tires on the

Ford Explorer?

Ms. PETRAUSKAS. That is correct. We used the high speed testing.

The process we used was the one that I have described to you using

the mule vehicles. I will talk real fast because I have to——

Mr. TAUZIN. Please, because I have to move quickly.

Ms. PETRAUSKAS. One of the things we have attached to our written testimony is sort of the Bible of tire testing. What that does

is it lists some 20-odd steps.

Mr. TAUZIN. We have that.

Ms. PETRAUSKAS. In each of those it tells you whether a slave vehicle is used or whether——

Mr. TAUZIN. A machine?

Ms. PETRAUSKAS. Either a slave vehicle or this tire exercise machine; or where it says EP, it is an engineering protocol or a mechanical protocol. In those cases, those are Explorer vehicles.

Mr. TAUZIN. Exactly. In July 2000, Ford made a special request

of Firestone to test some tires. Our information is that the tests

were run on tires that were produced not at the Decatur plant but

at the Wilson plant, and those tires are not even recalled tires; is

that accurate?

Ms. PETRAUSKAS. What is the date?

Mr. TAUZIN. July 2000. Ford made a special request of Firestone

to test tires. They were run on Wilderness, not ATX tires.

Ms. PETRAUSKAS. Mr. Chairman, is that in the book here so I can

look at it?

Mr. TAUZIN. Yes, number 20 I am told. And that these tests,

these tires passed at 106 but failed at 112 miles per hour; is that

accurate?

Ms. PETRAUSKAS. I am going to have to take a minute to review

that.

Mr. TAUZIN. Let me go to Firestone.

You did the test. Our understanding is that at Ford’s request you

tested, in the year 2000, in July, Wilderness tires manufactured at

the Wilson plant, and that those tires passed at 106 miles per

hour, but failed at 10 minutes at 112; is that correct?

Mr. SAURER. I don’t know the details that they failed at.

Mr. TAUZIN. If you would respond in writing.

I want to turn now to Decatur. I want you to tell us what happened at Decatur in 1996. Here is the information that we have;

correct me if I’m wrong. The information we have is that quality

control at Decatur randomly selected 239 tires for high speed tests,

and those tests were run at Decatur in 1996. Our information is

110 were preproduction tires, and 125 were production tires. That

is 54 percent of the total. That of the 129 production tires that

were tested, our information is that 15 failed. Your information is

11.

Let’s assume that a dozen or so failed. Our information is also

that the majority of that dozen failed because of tire separation.

Our information is that in 1996 in these high speed tests conducted

for quality control at Decatur, that about 10 percent, 1 out of 10

of the production tires, failed. I don’t think that is an insignificant

number. Anyone who looks at that objectively, I think, would conVerDate 11-MAY-2000 12:38 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01281 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1274

clude that you have a horrible, flawed process in place in 1996 producing a 10 percent failure rate in the test.

And the question is if those numbers are accurate, why would

Firestone not report that to headquarters? You are making several

million tires that year and selling them to the public, tires that are

now subject to recall. Members of the public will be riding on tires

that your own tests in 1996 say are going to fail 10 percent of the

time potentially. How could you possibly have not known in 1996

that you had an obligation to recall those tires, to notify NHTSA,

to notify headquarters, not only to stop production of them, but to

recall those that you put in the hands of American consumers

whose safety is now at risk? How could you assume that a 1 out

of 10 failure rate was insignificant? Or not significant enough for

you to issue immediately a recall to save lives? Please respond.

Mr. LAMPE. If I can comment briefly about the test and Mr.

Saurer will talk about more the results. We are talking about a

test that is a test that we agreed to do, that we do on our own.

This is a Society of Automotive Engineer test. It is not a required

test to do.

Mr. TAUZIN. We know that.

Mr. LAMPE. It is a very, very severe test. It is a high speed test.

It is designed to take tires right up to their limits.

Mr. Tauzin, if we don’t have tires that fail tests, then those

tests—what value are they? It takes them up to their limits. We

expect to see some tire failures in the tests.

Mr. TAUZIN. But they are supposed to make that limit. They are

supposed to survive at that limit. They failed you in 10 percent of

the cases. I want to know what happened inside Decatur. What is

in the mind of the people at Decatur when they see these results

and fail to notify headquarters, when that information is kept in

Decatur instead of headquarters and not transmitted to Dr. Bailey’s agency? When there is not an immediate advisory to Americans that we are experiencing a 10 percent failure rate on tires

that are expected to meet that limit? What is happening in the

minds of the men and women in charge at Decatur when you see

these results and decide not to advise Americans that they are

riding on tires that have not met the limits that they should be

meeting?

Mr. SAURER. Mr. Chairman, first of all, we need to understand,

as Mr. Lampe said, this is not a basic test of safety. This is a high

speed rating test. The DOT 109 requirements of high speed and endurance which is run at 26 psi were fully met in these tires and

far exceeded the standard. We don’t view this as a safety issue at

all.

Mr. TAUZIN. Let me stop you there.

Ms. PETRAUSKAS. Mr. Chairman, would you yield to me?

Mr. TAUZIN. I will yield to you in a second. I want to correct the

record. The requirement of the agency was not to test these tires

at 26 psi at high speed. The requirement of the agency was 32. All

I am saying is that you went beyond that. You did some testing on

your own. Whether you are required to or not is irrelevant. The

bottom line is that you did the testing. The tires failed.

And I simply would love you to respond to that central question

that I know is burning with all of us: Why did you not notify someVerDate 11-MAY-2000 12:38 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01282 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1275

one at headquarters that you had a major production problem? You

were producing bad tires. You don’t know today what went wrong.

You certainly couldn’t say what was wrong then. All you knew was

something was badly wrong and you told no one about it. That is

what is burning before us today, and if we are going to correct the

situation with legislation, we need to know how and why. How can

that happen at a plant in America?

Mr. STUPAK. Which document are you referring to?

Mr. TAUZIN. I will let staff identify it in a moment.

Mr. SAURER. Our data, and we looked at this last night when we

heard the press report, we see 6 tires that failed from a belt separation during that timeframe. The majority of those tires, 17, were

qualification tires in process and never went into manufacturing.

This particular test, as has already been said, is a very severe

test. We run it to its limits. We have a process when there is a failure that the plant goes through to recheck. If they continue to have

a problem, the plant is shut down and requalified and corrections

made.

Mr. TAUZIN. What about all of the tires that you have produced

and sold?

Mr. SAURER. I don’t think that this test by itself represents a

safety problem.

Mr. TAUZIN. Let me yield to the gentlelady.

Mrs. WILSON. Thank you, Mr. Chairman. I will pick up this line

of questioning during my time.

Mr. TAUZIN. The Chair recognizes the gentleman from Massachusetts.

Mr. MARKEY. Thank you, Mr. Chairman, very much.

I want to continue along this vein of tire testing. As I understand

it, these tires are tested at 85 miles an hour, 95, 100 miles an hour

and more, but for very brief periods of time. For example, it is my

understanding that in order to pass initial production qualifications, a tire must only survive 6 minutes at 95 miles an hour. Six

minutes. Ford has its own high speed test that requires the tire to

maintain 106 miles an hour, but only for 10 minutes. That is all

the stress that this tire is exposed to.

NHTSA in its high speed performance tests runs tires at 75

miles an hour, 85 miles an hour, but for half an hour. That is what

this tire is tested for. Half an hour, 10 minutes, 6 minutes. And

the test is only performed at 88 percent of the tire load capacity,

not 100 percent; 88 percent of the tire load capacity, and at a tire

pressure of 32 pounds per square inch.

The testing at the increased higher pressure above the recommended 26 psi is done because purportedly for any high speed

driving, Americans are supposed to inflate their tires. So in other

words, people know that they are going to travel 500 miles or 1,000

miles for a vacation, and Americans are assumed by NHTSA, by

Ford and Firestone, that they are all going to go to the gas station

and make sure that they get the right tire pressure. That is not

the way that the world works.

People have trusted you, NHTSA, Ford, Firestone, to protect

them in advance of that. So my question revolves around these

tests. In recent years, many States have lifted their speed limit

above 55 miles an hour. In many States in some areas of their

1276

State it is 65 miles an hour, it is 75 miles per hour, and we all

know that when the speed limit goes up to 75 miles an hour, people

start driving 10 to 15 miles an hour faster than that. And they are

not doing it for just 6 minutes or 10 minutes, they are doing it for

hundreds of miles. But there is no testing for that. No testing.

My question to you is this: How can any of you justify not testing

these tires after 2 years of use? And I want to hear each of you

justify to American families that you haven’t put in place a testing

system that ensures—and let’s be honest, those are the tires that

people are riding on. They are riding on 2- or 3-year-old tires, not

brand new tires, in a special test for 6 minutes, but a 2-year-old

tire on a road going 1,000 miles at 75 miles an hour perhaps, with

two kids strapped into the back seat. How can you justify that you

have not performed tests that tell these families, who assume that

you have done these tests, that their families are safe?

Mr. SAURER. Let me try to respond. We do, as we have indicated,

many more tests beyond the DOT requirements as well as the Ford

requirements in this particular case or any other vehicle manufacturer’s requirement. We have outdoor test facilities where we run

40 million miles annually. We have laboratories and research facilities where we are looking at the development of compounds

and——

Mr. MARKEY. Do you do tests at 2 years of age on these tires?

Mr. SAURER. We artificially age our tires.

Mr. MARKEY. Do you take 2-year-old tires that have been on actual vehicles and test them? Not artificial; real world tires that

have been on the road in Arizona in 100-degree temperature for

half of the time that they have been on the vehicle and bring them

in and test them?

Mr. SAURER. We don’t do that specifically, no, because we cannot

control. When we do a test like that, we have no idea what the

usage conditions—— Mr. MARKEY. You do have an ability to control that, Mr. Saurer,

you can give those tires to your employees and you can ensure that

those employees have told you exactly what they have used them

for. That is what happens at Converse Rubber with their sneakers.

They give them to their own employees. Converse Rubber was

three blocks from my house, and they used to give our high school

basketball team a pair of sneakers each year, and we gave them

back at the end of the year. We had a promise that we wouldn’t

take them home, so they knew how many hours and how many

games we practiced on them. At the end, they took them back. Why

can’t you do that for your own employees?

Let me say I think that you have disserved the public, Mr.

Saurer, by not taking the most stringent precautions to protect

American families. There is no reason that you can’t take real

world tires and test them.

Mr. SAURER. We do take real world tires and test them. Our employees have run our tires. We have analyzed those tires. We go

out in the field and examine——

Mr. MARKEY. You just told me that you can’t construct a test——

Mr. SAURER. You asked a different question. Let me explain. We

go out into the field and we look at tires that are returned in the

field through normal warranty adjustments and we examine those

1277

tires. They have been tested in the real world. We look for any particular weaknesses in those tires. That is one of the key bases for

which we develop new technology to improve the product as we go

forward.

Ms. BAILEY. Congressman Markey, our testing is clearly outdated, and this winter we are going to update that test. There is

no justification for that. At the same time, I should——

Mr. MARKEY. No justification for what?

Ms. BAILEY. For tire testing standards to be based on standards

that were set 30 years ago, and we are intent on——

Mr. MARKEY. Meaning testing for only 6 minutes or 10 minutes

or half an hour?

Ms. BAILEY. Our endurance test goes for 34 hours, so we are testing for long enough, but that is not good enough. But you are right,

they are not old tires. I should say if any of the tires that we test

fail at all, they are not to be sold and there is a recall. But that

test, I agree, is not where it should be.

Mr. MARKEY. Do you test 2-year-old tires for 34 hours? Do you

test 5-year-old tires for 34 hours? There are many Americans driving 34 hours.

Ms. BAILEY. And there are many people driving on tires which

have been at it for 20,000 miles and 30,000 miles. We are looking

for legislative support so we can make changes like the one that

you are talking about. We need to be looking at the psi, the temperature that we run them at, and they need to be older tires so

it has a real world import.

Mr. MARKEY. I think, to be honest with you, that it is not a big

request to Ford, to Firestone, to NHTSA, to have one test per year

with tires that are 1 year old, 2 year old, 3 year old, 4 year old,

5 year old, knowing that the danger of families being in danger as

each year goes by as the thread is thinning out and they are trying

to squeeze the last few thousand miles out of their vehicle because

they are working class families; but they are still assuming, because there is no warning that comes from the Federal Government

or the manufacturers. That their families are in fact now more and

more endangered.

Mr. LAMPE. We agree. We all agree. We agree with NHTSA as

a company. We agree as the tire industry that we must work together to develop more accurate, more robust, more real world type

testing, and we support that and we will work to those ends.

Mr. MARKEY. We have fuel gauges, we have oil gauges, we have

temperature gauges. There was no standard for a rear-view mirror

or defroster, but we put that on the books over the years. Would

you oppose a mandate that every automobile manufactured or sold

in the United States has a tire pressure gauge on the dashboard

that parents can see and know whether or not their children are

being put in danger? Would you object to that?

Ms. PETRAUSKAS. As our president testified when this committee

held its last hearing, we are actually investigating that kind of——

Mr. MARKEY. Would you object if we mandate it?

Ms. PETRAUSKAS. No. The one thing is that we urge all of us

when we look at a requirement like that is to think about what is

it that we want.

1278

Mr. MARKEY. We will work with you to make sure that is done

in cooperation with the industry, but would you object to it?

Ms. PETRAUSKAS. No, of course not.

Mr. LAMPE. Mr. Markey, we have been a proponent of that for

years and years. We are very much in favor of that. If we can have

a gauge that tells us when our windshield washer fluid is half

empty, we can certainly have an indicator that tells us when our

air pressure has gone down.

Mr. MARKEY. Dr. Bailey, do you think that is a good idea?

Ms. BAILEY. NHTSA sets performance standards. In this case obviously, the performance was not there. That usually means that

there are design changes, and I would certainly endorse those

kinds of design changes.

Mr. TAUZIN. Just to follow-up on the gentleman quickly, isn’t it

true that Ford is putting those indicators on new model years in

the Middle East?

Ms. PETRAUSKAS. We are actually looking at them. One of the

things that we really need to look at is what else do we want this

system to monitor; and one of the really intriguing things is if you

can get it to monitor temperature as well as pressure and use that

to give an indication to the customer. So the work is underway,

how we might be able to have a reliable system like that.

Mr. TAUZIN. Why only in the Middle East?

Ms. BAILEY. Congressman Markey, I might just add that the Toyota Sienna van has that already in place.

Mr. TAUZIN. Why are you only doing this on new models in the

Middle East?

Ms. PETRAUSKAS. No, we indicated in our testimony that we are

looking at this as something that we go across the board with.

Mr. TAUZIN. Here is the status. We have a vote on the floor. Mr.

Upton is returning from that vote and I will be able to hand the

chair to him. I yield now to—— Mr. MARKEY. Just to clarify. Dr. Bailey, did you say that you

would support mandating a tire gauge standard? Yes or no?

Ms. BAILEY. I would support—yes, I support that.

Mr. MARKEY. Okay. Thank you, Doctor.

Mr. UPTON [presiding]. Okay. Thank you again for your testimony. I guess, Dr. Bailey, particularly I want to thank you for your

help in the meetings that we have had the last couple of weeks as

we’ve tried to design legislation that in fact will fix the problem

from happening again, as we did not see after the Firestone 500

recall back in the seventies.

And I guess I just want to expand on a couple of things that

Chairman Tauzin indicated, particularly as we look at the legislation that yesterday was adopted in the Senate in the full committee, John McCain’s Committee on Commerce, and I would expect action here in the House as well as we look to mark up in the

subcommittee this afternoon and conclude hopefully next week, and

going on a pretty fast track here.

One of the items that was, I believe, in the McCain bill and is

in our bill is, of course, the requirement to you—to NHTSA—to in

fact revise the tire safety standards that have not really been revised since 1968. I know that you mentioned that briefly in your

testimony a couple weeks ago, and as we look at—as this will hapVerDate 11-MAY-2000 12:38 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01286 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1279

pen one way or the other, I think that it is very important that

particularly you look at label requirements. We’ve seen documents

inserted in the record today in terms of what consumers actually

do when they look at their tires, whether it be on the sidewall,

whether it be on the door, whether it be on the owners manual.

But we really try to have NHTSA look at the whole range of testing—a variety of different psi, a variety of different loads, and to

make sure that in fact we have a ‘‘Good Housekeeping Seal of Approval’’ by NHTSA on all tires and where it can be adequately reviewed to make sure that the maintenance is there by all consumers. And I think that that’s exactly where you’re headed; is

that correct?

Ms. BAILEY. That’s exactly where we’re headed.

Mr. UPTON. The FARS data that became available last week

from 1999 indicated—and I think that that is where the additional

death came from, the tires; is that correct? In the hearing 2 weeks

ago there were 88 deaths attributed to Firestone tires.

Ms. BAILEY. No, sir, that is not where the data came from; the

data that you’ve heard today, that we’re to 101.

Mr. UPTON. 103.

Ms. BAILEY. I need to correct that. And what you’re hearing is

that—this is a data entry change I need to make here—that we

had received a report that was taken by a young college student

who was doing data entry for us and it said there were two fatalities, but on the second page it indicated that those two fatalities

were indeed pets, and so we had to change the record and it is now

101 fatalities. That is accurate.

Mr. UPTON. Did that come from the FARS data?

Ms. BAILEY. No, sir; it did not. That comes from our system of

complaints that are received by NHTSA and the review of those

complaints and tallying of that data.

Mr. UPTON. Has anyone actually analyzed the FARS data for

1999? I know it is now available. Has anyone actually looked at the

data and seen what conclusions they may bring?

Ms. BAILEY. Yes, sir, they certainly have. But you are right in

assuming that or suggesting that we have not integrated our FARS

data as well as we might. At the same time, you need to understand that the FARS data is coming in from all over the country

from law enforcement. It does not include complete information

that lets us on a regular basis know exactly what happened in any

particular crash or fatality. At the same time, we need to mine that

data. We need to integrate our data bases so that we have all the

information at our disposal at all times.

Mr. UPTON. Thank you.

Mr. Lampe, at our hearing 2 weeks ago, Firestone testified before

Ford testified. And Ford shared with us a document that I think

I have here, on the stand over here, with regard to the instances

of failures or claims rate, specifically at the Decatur plant, and it

relates it to other facilities that Firestone owns and operates.

As I look at my own plants—and I went through a number of

plant tours this last week when I was in Michigan—one of the

things I routinely ask is: What is the percent that doesn’t make the

grade and the quality assurances that are given up the line? And

one of the things that Mr. Tauzin focused on, and a number of us

1280

in our opening statements as well, was that at the Decatur plant

there were early indications that in fact the quality of these tires,

they were not meeting the test. It should have been an early signal

to Firestone that there were problems with that test.

When you look at the data here that Ford was able to get from

Firestone, it really jumps off the page. What did you do with this

information, and at what stage did you put it all together? Because

in your statement today that just yesterday you asked—you sent

a letter to Ford, asking that they increase the psi from 26 to 30

on these tires—is years too late when you’ve got data like this

which shows that there were serious problems of tire failures at

that particular facility.

Mr. LAMPE. Mr. Chairman, the data that you’re referring to is

claims data, and I’ll come back to that and I’ll try to be very brief.

The normal measurements, the proven measurements that we have

used and the industry have used over years has been field surveys,

testing that we’ve talked about, and adjustments data, when a customer walks back in and has a tire that he has a warranty claim

on. We’ve used those. All of those measures, even the testing,

which we will explain, said that those tires were good tires. It

wasn’t until that we looked at the claims data, and I will say with

great assistance from Ford, from a statistical and analytical ability

to look at the claims data, that we saw the overrepresentation in

claims data in Decatur. Let me explain real quick when I say

claims data because it is very confusing——

Mr. UPTON. Before you finish. The claims data, from what I understand, you knew this claims data in 1997.

Mr. LAMPE. We’ve had access, yes, sir. We’ve used and had access

to that claims data for a number of years. We’ve never used it as

a performance measure.

Mr. UPTON. But if you had that data in 1997 and if you knew

that these tires were failing in terms of randomly taking them off

the line and testing them at 6 minutes at 110 miles an hour, and

testing them where you thought they might fail, and knowing that

tires made in other facilities in fact were passing the test, why

wasn’t that a signal to send up the line, whether it be to the Ford

showrooms or to the consumers, or certainly to your quality control

people at headquarters, that there was a problem?

Mr. LAMPE. From the testing standpoint, Mr. Chairman, I’ll go

back to the test that we ran; was a test that is much more severe,

much more abusive than is the 109 test.

Mr. UPTON. I understand that.

Mr. LAMPE. When tires fail on that test, Mr. Chairman, we don’t

turn our backs or close our eyes to it. We have a procedure that

we go through to retest multiple tires, multiple tires, to ensure that

those tires pass. We don’t just let the test go. We retest in every

situation. As far as the claims data, we’ve said, Mr. Chairman, we

wish—we all wish that we would have done a better job or used

that claims data differently than we used it for.

Mr. UPTON. There were some changes made to the tire later on;

is that not right? Redesigned with some wedges and thicknesses of

the sidewall. There was some new standards that were adopted for

the production of that tire, were there not?

1281

Mr. LAMPE. Sir, we’ll talk about those two specific changes, but

we make changes all the time in our manufacturing process in our

construction of our tires.

Mr. UPTON. Did those changes come about because of the failures

of the tests in Decatur?

Mr. LAMPE. No, sir.

Mr. UPTON. When you tested those—are these tires only made at

Decatur, the tires?

Mr. LAMPE. Which tires are you referring to, the Wilderness

tires, sir?

Mr. UPTON. Correct.

Mr. LAMPE. No, the Wilderness Tires are made at a number of

plants, including Decatur—were made in Decatur; they’re not made

in Decatur anymore.

Mr. UPTON. But did those tires when they failed the test in Decatur, when you randomly took them off the line—whether it was 5

or 10 percent, it is still a significant number of failures—did you

have that same type of incidents at other facilities where you made

the Wilderness tires.

Mr. LAMPE. Sir, the tests we’re referring to, if I’m not mistaken,

my understanding is the majority of the tests on tires were ATX

tires, I believe, and the ATX tire was being produced at Decatur

at a much, much, much greater level, production level, than in the

plants. And if that data is not correct, I’ll get you the correct production data and I’ll supply it to the committee. I’m sorry.

Mr. UPTON. My question is, you knew in Decatur that the tires

were failing in terms of the tests that were conducted on those

tires at a fairly significant rate, somewhere between 5 and 10 percent of the tires that you took off in a random way. Did those same

tires produced in other Firestone facilities have the same type of

failure rate that they had in Decatur?

Mr. SAURER. Mr. Chairman, I am not sure of the failure rate, but

it’s not uncommon to have these failures. Let me correct something—before I forget—for the record that John said. The sidewall

gauge change that we made at Decatur was in correct response to

the SA high speed. The wedge change is a totally different issue

of continuous improvement. And when we made that change in the

lower sidewall of the tire, this is a minor gauge change of rubber

to control the thickness. It’s a specification that went across all

plants for just additional control.

Ms. BAILEY. Congressman Upton.

Mr. UPTON. Yes.

Ms. BAILEY. We are concerned about the Decatur situation because the wilderness tires that were part of the recall were only

from the Decatur plant. We are sending an investigator out there

in about a week to work together with the manufacturers to try

and understand what has happened at Decatur, whether there is

something significant in that plant.

Mr. UPTON. I yield to my colleague and friend from Michigan,

Mr. Stupak.

Mr. STUPAK. Thank you, Mr. Chairman.

Dr. Bailey, NHTSA really doesn’t have standards for steelbelted

radial tires, correct?

1282

Ms. BAILEY. I would not go that far, but the fact that these same

tires passed our test in 1997 certainly alerts me to the fact that

our 30-some-year-old standard apparently is not providing us with

the security we’d like for tire safety.

Mr. STUPAK. You said they passed your standard in 1997, but

that standard is based on 30 years ago.

Ms. BAILEY. Yes, sir.

Mr. STUPAK. So 30 years ago we didn’t have steelbelted radial

tires.

Ms. BAILEY. Actually it was in 1968, and there were radial tires

at that time. But you’re correct, that basically at the time we had

the bias two-ply tires.

Mr. STUPAK. So if you have a bias two-ply standard over here

and you’re dealing with a steelbelted tire over here, how can you

say that they pass the standard when you’re talking really about

apples and oranges?

Ms. BAILEY. Well, I should also say we require tire manufacturers to certify tires to dynamic laboratory tests, and they are similar

to the compliance procedures around the world. It does not change

the fact that you’re right. This is an old standard, 30-year-old, and

we are looking to change it this year.

Mr. STUPAK. Well it’s a little after the fact. And I know you’ve

just been there and I know you just got there a couple months ago.

But the fact is that the standards that you speak of at NHTSA is

really something that is not comparable to today’s tire. So, No. 1,

we have to establish before we can say pass or fail, we have to say

this is the standard, and the standard has to be brought to today’s

tire, correct?

Ms. BAILEY. We are analyzing the engineering data now to determine whether there is something inherent about the test that is inappropriate. If you recall, much of it is appropriate. It may be, as

we heard from Congressman Markey, that it is the fact that we are

not using old tires, that we’re not going far enough with our testing, because in fact it’s at 95 degrees; it’s at 75 to 80 miles an hour.

Mr. STUPAK. And 112 miles an hour. I know all that.

Ms. BAILEY. And at 30 and 26 psi. So I guess what I’m saying

is I completely agree with you. We need to update the test, but

we’re evaluating now the nature of that update.

Mr. STUPAK. Before you can test anything, you have to have a

standard. The standard has to be current with the tire you’re testing, right? So really, if we’re going to change things and there’s

going to be a markup later today in one of the subcommittees and

talk about what should be done, isn’t the place to start is to have

a standard for today’s tires, not a standard that was set back in

1968 for two-ply tires? Wouldn’t that be the place to start?

Ms. BAILEY. Yes, sir. That’s why we have a proposal that would

come out this winter to make that change. I would appreciate your

support on that.

Mr. STUPAK. We have to have some standards and I think we

should start there with some standards. When you say about the

testing, the American public understands that’s based on a 1968

radial tire ply. You called it right; a two-ply tire, not steelbelted

tires, correct.

1283

Ms. BAILEY. It’s not entirely based on that tire versus today’s

tire. I can’t say that from an engineering point of view, but it is

outdated and needs to be changed.

Mr. STUPAK. So we need current tire standards, No. 1.

Ms. BAILEY. Yes.

Mr. STUPAK. No. 2, I think we agreed that we are going to have

tire pressure, you agreed with Mr. Markey that was a good idea,

like we would have on the dash. The markup is at 1 o’clock today.

What else would you recommend we have? Mr. Upton has some

legislation. What else would you recommend?

Ms. BAILEY. The two main points in the legislation—and I appreciate he’s not here, Congressman Upton’s working on that with us,

at least meeting with us about that. First, is the additional authority to obtain the data that you just heard about. That claims data

that you saw on the bar graph would have been invaluable to us.

We need that claims data. We also need the authority to receive

data about recalls around the world. Also, we need to have appropriate funding in order to provide the regulations that will ensure

the safety of Americans.

Mr. STUPAK. Third was authority to get the data you need.

Fourth was recall around the world you need to be made notice of.

Fifth was what now?

Ms. BAILEY. Claims and warranty information domestically, authority to receive information about defects and recalls outside of

the United States.

Mr. STUPAK. That was No. 4. Fifth was budget.

Ms. BAILEY. Budget. And we could get real specific. There are

several other things, including extending the recall period from 3

to 5 years for tires and 8 to 10 years for vehicles, and removing

the cap so that our civil penalties actually promote safer production.

Mr. STUPAK. Are you recommending any criminal penalties?

Ms. BAILEY. We have the ability at this time to make a referral

to Justice for criminal actions if there are egregious violations of

the law. At this point, whether or not there would be criminal penalties has not been determined, but I think we can all understand

that that may allow us greater enforcement capability.

Mr. STUPAK. So you’re not asking for that then?

Ms. BAILEY. That is one of the things we’re looking at in a multitiered approach for enforcement.

Mr. STUPAK. Okay. But you don’t think the committee should

bring that up or that should be something—that’s something you’re

not seeking today? Because we have the markup today. You’re not

seeking that, correct?

Ms. BAILEY. Actually the Secretary will be testifying to that

later.

Mr. STUPAK. So you have about 7 or 8 things. Anyone else on the

panel think NHTSA should do something different or some other

standards? Mr. Lampe.

Mr. LAMPE. Sir, we agree with those revisions and those things

we need to do differently. We support those. We would also support

any kind of standard or testing that can better identify the interaction between a tire and the vehicle and what happens in an accident causation. I am not sure that would be something that

1284

NHTSA would do from a standard or regulatory, but we certainly

support what Dr. Bailey mentioned in the other one as well.

Mr. STUPAK. Much along the lines Mr. Markey was talking

about, real world circumstances, some kind of testing there.

Mr. LAMPE. Yes.

Mr. STUPAK. Anything from Ford. Go ahead, Mr. Saurer.

Mr. SAURER. I think we would want to be careful about throwing

away all the current standards. There should be some consideration of raising the minimum. We have a lot of test background

and a lot of test data with the current tests, and certainly we’ll

work and support along those lines but I think another consideration could be looking at the minimum requirements being raised

as opposed to trying to create some new unusual test that may

take a long time to develop and have understanding of its importance.

And the other thing, because I think these standards have served

us well for passenger car tires over the years, but in this class of

SUVs and light trucks particularly, and it’s growing, it’s a very

booming market, I think that’s where the major issue is. And so

we will also certainly promote more than an air pressure gauge on

the dash. We would like to see air pressure monitoring systems,

particularly in SUVs. Their technology is growing and I think that

that’s realistic to think about it in the future, and we might even

do it like other—if we want to get really high-tech, is when pressure gets too low, the speed is restricted by a computer in the vehicle is the ultimate goal.

Mr. STUPAK. Anyone else?

Ms. PETRAUSKAS. I want to add that. I think when our president

testified, Jack Nasser laid out pretty much our position on these

various issues. I think to us, the driver, is it really going to improve real world safety? And if it is going to make that improvement, then we should do it and we should do it quickly. And we

only hope we’re given the opportunity to participate in the development of those.

Mr. STUPAK. Mr. Nasser mentioned two things: the early warning system and recall around the world. We’ve had about eight of

them now put forth on the table, as a general rule, for it.

Ms. PETRAUSKAS. Actually we were asked—maybe I am getting

my hearings mixed up between the House and the Senate—but I

think we were asked about the various elements. We supported increasing the level of civil penalties. We supported improvements to

the brake standards. We started work to try to develop a rollover

standard. And then finally we indicated response to a question

whether we could conceive of truly egregious, unusual circumstances where there is a clear potential to do harm to another

person; whether we would agree that criminal penalty might be appropriate in that sense, and our position was yes. In those kind of

circumstances, I might hasten to add that I haven’t seen all of the

provisions, but I’ve seen a couple of them, but I’m not sure that’s

the situation they describe.

Mr. STUPAK. Let me ask one more question, if I may. The chairman asked some questions about Decatur, and that 10 percent of

the tires failed at Decatur and Firestone headquarters was not notified. And in talking with the chairman, the basis of that came

1285

from these documents that have been received by the committee

from Firestone. Do you have any reason to dispute the chairman’s

conclusions of the 10 percent failure in failing to report from Decatur on up to Bridgestone headquarters, Firestone?

Mr. LAMPE. I think the chairman pointed out himself in the

opening remarks, that when we look at what we talked about, tire

failures, tires not meeting the testing requirement, there were a

significant number, more than half I believe, Mr. Chairman, of

tires that were not production tires. They were prototype tires.

They were tires that we test to see if we can put them into production.

The number that I don’t know that we agree on, the number that

I don’t know that we agree on or not, is we had—I believe I recall

six cases of all the tests we’ve done in Decatur, we had six cases

where we had a tread separation indication. They were all at the

very last step—I’m sorry, at the very last step of the high speed

SAE tests, not the normal 109.

Mr. TAUZIN. Would the gentleman yield a second?

Mr. STUPAK. Yes.

Mr. TAUZIN. I want to make sure this is very clear. In the 10 percent numbers I used, we discounted all of the preproduction tires.

Let me go through them because this is extrapolated from the information you provided us. There were 239 tires tested. Of that, 46

percent were preproduction tires; 54 percent were production tires.

The majority were production tires. Looking only at the production

tires tested, our numbers are 15 failures out of 129. Your numbers

are 11. We have a little dispute as to how we count them. But even

giving you the benefit of the doubt at 11, we’re talking about nearly

10 percent failure rate on the 129 production tires, not

preproduction. I yield back to the gentleman.

Mr. STUPAK. So you would not dispute those numbers.

Mr. LAMPE. No, I would not dispute. The only number I would

clarify is that out of the 11 or 14, whatever we could agree upon,

only 6 of those had a failure mode of tread separation that we’re

seeing here.

Mr. STUPAK. But even if you use your 6 percent or 6, excuse me,

6, that’s still 5 percent that’s more than was acceptable, wasn’t it?

Mr. LAMPE. Again, that’s a very abusive test. It is a high speed

test run at very high speeds and under a loaded condition.

Mr. STUPAK. My question is, that is more than what you would

expect.

Mr. LAMPE. Mr. Stupak, let me clarify one more thing, please; I

am not trying to avoid the question. This test is done in a closed

room, in a concentric drum, on a curved drum. It is much more of

a duress test than you would get if you ran the same speed on a

highway. Because the fact that it is closed——

Mr. STUPAK. But that test is only 6 minutes at 112 miles an

hour. And if someone runs that speed on the highway, it will be

more than 6 minutes. It’s going to last longer, and you would expect the tires to blow apart, would you not?

Mr. LAMPE. Tires could possibly fail if someone ran at those

speeds for that extended amount of time; yes, sir.

Mr. STUPAK. And you do it for 6 minutes. But if it happens in

the real world it will be more than 6 minutes. Now, that’s higher

1286

than what you would expect, isn’t it? Use your number, 6 of them,

that’s 5 percent. Five percent is higher than what you would expect. Why didn’t you report it to anyone?

Mr. LAMPE. Sir, in every case we retested the tires again. We

didn’t close our eyes, didn’t walk away from a problem we had in

the test. We retested the tire. The procedure is to test multiple

tires to make sure if that tire failed for a testing deviation or what.

We test. We don’t simply ignore the fact that we have a tire that

didn’t make the final step.

Mr. TAUZIN. The gentleman’s time is expired. The Chair recognizes the gentleman from Tennessee, Mr. Bryant, for 10 minutes.

Mr. BRYANT. Thank you, Mr. Chairman. We’ve done a lot of preparation for these hearings and learned more about tires than we

could ever imagine. And I know as a person who drives a lot each

year, in looking at some of the concerns, I have failed to have proper inflation, and speed, loads, and these kinds of things. As an average driver, I think I have failed to appreciate what good tires I

have had over the years and not to have suffered this type of damage.

I know there are different numbers out there. I was looking at

something here regarding tire wear factors, speed, tires that run

up to 35 degrees hotter and wear up to 30 percent faster when operated at 65 miles per hour rather than 55. Underinflation—tires

run up to 75 percent hotter and wear up to 50 percent faster when

underinflated by 30 percent. Overloading—tires wear up to 30 percent faster when overloaded by 20 percent; as well as the length

of the run, the amount of the length of our trips, and how we drive

under these conditions where we’re overloaded and drive faster

than 55 and don’t have properly inflated tires.

These are things, again, I think have been pointed out by this

committee, that all of us take for granted every day as American

drivers, and we have to be concerned with some of the testing, and

I’m looking toward NHTSA primarily. And I appreciate the attitude

that you’ve brought in both hearings and that you’re willing to look

at updating these standards or the testing standards and so forth.

Because 27 years ago, no one knew what an SUV was, much less

envisioned what we would be doing today.

But that said, we do hold an obligation to our consumers that we

anticipate these and put safe products on the road. Again, I think

the majority of—obviously, the clear majority of these tires are safe

products, but we have some situations that are developing here

with not only Firestone, but with another company now, and with

Ford and different vehicles there.

One of the concerns I had—I was home over the weekend and

spoke at a breakfast Sunday morning, and had a man there who

had an Explorer with Firestone tires that weren’t subject to this

particular recall. And we went out and I looked at it, and he

opened the door and inside the door panel is the recommended inflation. It was 26 psi. And I recall I thought that was Ford’s recommendation, but here again I saw it there.

And I do know that we’ve got Firestone, on the other hand,

which I think asserts the position that it should be inflated to 30

psi, and you’ve got this conflict between an allegation of instability

1287

versus if you run it at a lower psi, then your tire is under more

pressure and could cause damage.

So I’m wondering how the two of you squared that in relationship when you first started putting Firestone tires on the Explorer,

when one recommended 30 and the other recommended 26. Because you’ve got the problem—you have rough looking tires, but everyone wants them to drive like highway tires. I know you’re trying

to create a hybrid situation here, but how did you square that relationship between the two companies as to what the psi should be?

Ms. PETRAUSKAS. If I might, Congressman, the documents that

we submitted in response to the question from this committee over

and over and over and over again, demonstrate that over almost

a 10-year period, both Ford and Firestone was supporting the 26

psi. And, you know, if you stop and think about it, the Explorer

performs just fine on Goodyear tires that are a 26. The Explorer

performs just fine on Wilderness tires that are not built in Decatur

and aren’t a 26.

Mr. BRYANT. What about the Continental tires on the Ford Navigator? I don’t think we can point fingers at one point here.

Ms. PETRAUSKAS. If I may take just a minute to talk about that.

Finding that was a direct result of the sort of early warning system

that we’re working on with other companies. In that particular

case, we’re talking about more of a chunking of the tire. There have

been no injuries. I’m sorry, there was one. Somebody bumped

themselves on the head, but there were no accidents, no fatalities,

no injuries. So that is a completely different kind of situation. The

only connection is that some of the things that this experience with

the Firestone recall has caused us to do actually helped us identify

a different kind of problem, not a safety problem, but nonetheless

gave us that identification early that we otherwise might not have

had.

Mr. BRYANT. Thank you. I might also add that there have been

no rollovers on the Navigator.

Ms. PETRAUSKAS. No, sir, there have not.

Mr. BRYANT. Firestone, Mr. Lampe or Mr. Saurer, would you like

to respond again to how you squared this relationship when you

put the tires on initially, to what the proper psi should be?

Mr. LAMPE. Congressman Bryant, as we said in our opening remarks, it is true that the vehicle manufacturer establishes the

pressure, because they know more about what that inflation will do

with the interaction of the vehicle. But, sir, yes, we agreed with

that inflation pressure. It’s now in hindsight that we look back— let me explain.

If a Ford Explorer, if any vehicle was to be run at their minimum

amount of air pressure—which that the 26 pounds is the minimum,

it would always be at 26 pounds, it would never go below 26

pounds, the vehicle would never be overloaded—we wouldn’t have

an objection, we wouldn’t have a concern. The problem is when

you’re down at the minimum to begin with—and we know you’ve

heard testimony about not taking care of our tires, not looking at

our tires and so forth—when that pressure goes down, it can go

down as little as 7 pounds, and you’re at a critical part of the loading on a Ford Explorer 4 by 4. So we just think that minimum was

not enough and would like to see it at 30.

1288

Ms. PETRAUSKAS. If I could just clarify, Mr. Chairman, the tires

we’re talking about have a Tire and Rim Association range from 20

to 35. They do today, they always have. The 26 is not the minimum.

Mr. LAMPE. Twenty-six is the minimum for a speed-rated tire,

Congressman. Twenty-six is the minimum for a speed-rated tire.

Mr. BRYANT. I wonder, and I had a question that was sent to me

anonymously about all these factors I alluded to and how we as a

driver—I guess I’m guilty of, quote, abuse, unquote, because I don’t

check my tires every time I drive somewhere, check the air inflation, and I don’t weigh my car, and I drive over 55 miles an hour

and those kind of things. But we’ve almost got to anticipate those

things are going to occur, and if you set out the level at 26, it’s

going to be lower. And if you’re driving a car around for a year or

2 and you’re running at 22 psi, and you’re driving fast, you know,

I’m thankful that there haven’t been more examples of this.

Mr. LAMPE. In fact, there’s been a couple of studies, Congressman, that says tires will lose close to 1 psi, 1 pound a month just

from normal causation, I mean, not especially a nail or anything

like that. So you’re correct; inflation is very, very critical.

Mr. BRYANT. I think over all, it speaks to the quality of the tires

that not only Firestone but other companies have made consistently over the years, and again that there haven’t been more examples of this. We’ve got a problem here. I’m not making anything

small of this. Let me go into this, because this is one of the things

that I referenced—did you have a comment real quickly?

Mr. LAMPE. No, I was going to address what I believe you’re

going to approach now.

Mr. BRYANT. The recall? Now I understand from the first hearing

that Firestone is very aggressive about trying to replace the tires

and even had an offer to pay $100 to your competitors to replace

the tires. My concern is apparently in Tennessee and perhaps

across the country, there are always people out there trying to take

advantage of a bad situation, somehow coming into possession of

these recalled tires and then selling them and people can go get

new tires. What is your control over these tires after you get those

back from your Firestone dealers, and what is your controlling

process in securing custody of those tires when someone goes to

Goodyear and Michelin to replace those? How can you account

those to make sure they’re not falling into the hands of these people that will try to resell them?

Mr. LAMPE. I will try to make this brief because it is complicated.

There are two situations someone could get ahold of recalled tires

and sell them. We’re outraged that that happened but we know it

probably has. We have investigators out, trying to identify when it

happens. But the two situations are, one, a used tire dealer that

starts with used tires in his inventory and his scrap pile that are

recallable tires, so he hasn’t got them from somebody in order to

resell them. He had them to start with and then he tries to take

advantage of the situation. He sells them for $10 apiece. A customer puts them on his car and goes in and changes them for

brand new tires. It’s an outrageous thing.

Our requirements for our dealers and our stores is when recalled

tires are brought into them, either on a person’s vehicle, or if the

1289

person buys from a competitor, he is still required to bring in the

recalled tires to us. So we give him a receipt for it. We disable the

tire right there on the spot either by drilling a 1-inch hole by the

DOT number or by taking the sidewall and cutting it at least 10

inches. We disable it right there.

And the second thing we need to do is dispose of them properly,

and we have procedures in place to make sure these tires are disposed of in an environmentally friendly way. In fact, we just got

praise or a citation from the EPA on some of the things we’re doing

with the recalled tires.

Did I address your problem? It is a terrible situation. People will

try to take advantage of the situation, but we’re out to try to stop

it as much as we can.

Mr. BRYANT. Thank you. I yield back.

Mr. TAUZIN. The gentleman yields back. The Chair recognizes

the ranking minority member of the full committee, Mr. Dingell,

for a round of question.

Mr. DINGELL. Mr. Chairman, I thank you. Dr. Bailey, in a letter

to me dated September 6, 2000—which I ask unanimous consent

be inserted in the record.

Mr. TAUZIN. Without objection, it is so ordered.

Mr. DINGELL. You said that before the NHTSA ever received the

21 State Farm complaints about Firestone tire failures, in 1998 the

agency received, ‘‘26 complaints that were relevant to this investigation.’’ I also ask, Mr. Chairman, that a number of other items

of correspondence between me and NHTSA be—— Mr. TAUZIN. Without objection, it is so ordered.

[The information referred to follows:]

1290

1291

1292

1293

1294

1295

1296

1297

1298

1299

1300

1301

1302

1303

1304

1305

1306

1307

1308

1309

1310

1311

1312

1313

1314

1315

1316

1317

1318

1319

1320

1321

1322

1323

1324

1325

1326

1327

1328

1329

1330

1331

1332

1333

1334

1335

1336

1337

1338

1339

1340

1341

1342

1343

1344

1345

1346

1347

1348

1349

1350

1351

1352

1353

1354

1355

1356

1357

1358

1359

1360

1361

1362

1363

1364

1365

1366

Mr. DINGELL. Now, Dr. Bailey, if 25 complaints were enough for

NHTSA to decide to open an initial investigation on March 6 this

year, why weren’t 26 complaints NHTSA received prior to July

1998 enough to justify NHTSA taking action then?

Ms. BAILEY. Each investigation is based on a variety of variables.

In this case you mention the 25. It is my understanding that that

25 is a subset of the 46 that we had looked at over a period of 10

years.

Mr. DINGELL. So you’ve got 25, 26, but, in fact, you also got an

additional 21 complaints from State Farm which were sent to you,

which brings the total of complaints to 47. How could 47 complaints in July 1998 not be enough for NHTSA to—when NHTSA

said that only 25 complaints were needed to open an initial evaluation in March of this year?

Ms. BAILEY. Because there are 50,000 complaints we receive in

a year. There are approximately 500 complaints that we receive

about tires. That’s all tires. There are about 50 that related to Firestone and only about 5 per year that were relating specifically to

these tires. So even combined with the 21 from State Farm, which

was over a period of 6 years, in fact that would still not have been

enough per year to instigate an investigation, and it did not do so.

Mr. DINGELL. Twenty-five, you said, were a sufficient number.

And why is 25 sufficient and 26 or 21 is not, or a total of 47 not?

Ms. BAILEY. That is the addition. After the KHOU program in

February of this year, the number we had that we had received

over a decade doubled within a period of a couple of months. That

was enough for us to begin the investigation on May 2.

Mr. DINGELL. Are you prepared to sit there and tell me that the

number 25 was not a good warning that NHTSA should be looking

at it, or that the additional 21 received from State Farm were not

a good number? After all, we’ve now had a large number of people

who have been injured, hurt, killed, and a large number of tire failures and vehicle accidents.

Ms. BAILEY. There are 240,000 rollovers a year and there are

10,000 people that die in rollovers in a year. There are certainly

situations where tires fail. That’s why we receive hundreds of complaints on a regular basis per year about tires. It is trying to determine when you need an investigation, putting it in perspective

with all of that.

Mr. DINGELL. Now, NHTSA’s cover letter to the copies of 26 complaints that were received before July 1998 is dated September 19,

2000. In that letter, Mr. Kenneth Weinstein, Associate NHTSA Administer for Safety Assurance, says these complaints were identiVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01374 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1367

fied by the NHTSA staff in April of this year. Doesn’t this mean

that the NHTSA staff could not have been aware of these 26 complaints when the agency received the 21 complaints from State

Farm in July 1998?

Ms. BAILEY. Well, we’re still talking about numbers that are significantly lower than anybody’s from other tire companies and concerns of failures about other tires. Let me explain what is going on,

if that was the question, between March and May. We do an initial

assessment; then we do a preliminary evaluation, which we began

on May 2. But in the intervening time, there was a search of the

Office of Defects Investigation’s data base when we looked at all

tire complaints. The searches were refined to identify tire, name,

brand, and size and to identify the tire complaints that were associated with the Explorer vehicles. The hard copy of every Firestone

tire failure complaint was pulled and read for additional detail. The

majority of the complainants were called to ascertain the failure

mode, whether it was tread separation or not, and to include the

missing data of which there were extensive amounts, such as

model, tire, tire size, mileage, vehicle model, et cetera.

NHTSA’s Data Center was also requested to perform a FARS

search on the Ford Explorers. There were a variety of activities

going on. We also searched for court cases and attempted to get information from KHOU, which was not forthcoming until after we

began the investigation; in fact, only in recent weeks.

Mr. DINGELL. Are you telling me that your ability to process information, your ability to procure information, was in this case deficient?

Ms. BAILEY. In this case I think what occurred between March

6 when we got the information and had to validate information

from an investigative reporter source, and could not do so, we, as

you know, had difficulty obtaining claims information and began to

scour our own data bases. I think that action was appropriate for

the time with the information that we were given.

But I will say that I think we need to do intensive analysis of

our ability to integrate the data we do have.

Mr. DINGELL. It appears to have been highly deficient. I wonder

if this is budget related.

Ms. BAILEY. That is clearly a budget issue for us and one that

we are hoping that legislation will support. We are looking at over

$1 million needed in order for us to update that data base.

Mr. DINGELL. I want to hear your recommendations as to what

you need in the way of budget. And I would appreciate that that

be submitted for the record, Mr. Chairman, and I hope that I will

have unanimous consent to see that that is inserted in the record

at the appropriate place.

Ms. BAILEY. Yes, sir.

[The following was received for the record:]

NHTSA has conducted a thorough assessment of the funds needed to carry out

an effective Defects Investigation Program, and concluded that an additional $9 million is required in fiscal year 2001 to strengthen the program. The resources will

be used in the following manner: provide enhanced testing at the Vehicle Research

and Test Center and other facilities; modernize and enhance the Office of Defects

Investigation’s (ODI) database to incorporate analytical intelligence, integrate optical image retrievals and hardware; provide easy Internet access to ODI public files;

enhance and improve procedures for tire testing; ensure adequate travel resources

1368

and staffing to improve the timeliness of ODI’s processing of large amounts of information; and develop a media campaign (print, direct mail, and TV) to emphasize

the importance of reporting complaint information.

Mr. DINGELL. Now, I understand that 20 of the 25 complaints

NHTSA cited as a basis for its initial evaluation all came in in a

2-week period following a Houston television station’s broadcast.

Are we to assume that unless NHTSA receives an unusual number

of complaints over a short period of time, such as occurred in the

case following the Houston television report, we shouldn’t expect

NHTSA to open an initial or preliminary evaluation of the possible

defects of tires or other motor vehicle equipment?

Ms. BAILEY. If we can validate that information. And that’s why

we need an overhaul of our ability to work with a system that, by

the way, is over 10 years old.

Mr. DINGELL. Wouldn’t you, and shouldn’t we, expect NHTSA’s

staff today to open at least an initial evaluation if they were presented once again with 47 complaints of tread separation or blowouts involving a particular line of tires, as NHTSA staff received

back in July 1998?

Ms. BAILEY. Those numbers were over a period of time. There

was one fatality. And at the same time, we were receiving hundreds of complaints about other tire companies. So that alone

would not have initiated a full investigation.

Mr. DINGELL. A lot of lives would have been saved if you had initiated that investigation. Doesn’t that tell you you ought to have

then reviewed the matter?

Ms. BAILEY. Could you repeat the question?

Mr. DINGELL. A lot of lives would have been saved had you commenced that kind of review in this matter in 1998, July.

Ms. BAILEY. Yes, sir, that’s true. That’s why we’re seeking legislation so we can obtain information about the claims data we could

not get, did not have the authority to receive, or the recall information from around the world. That would have definitely have given

us the appropriate information so that we would have instigated an

investigation sooner.

Mr. DINGELL. What changes are you going to make at NHTSA

to make sure that it has both the ability and the requirement that

it search its files to identify related complaints as happened in this

case? I’m told computers can do that very well for you.

Ms. BAILEY. That’s true.

Mr. DINGELL. But you do not have such mechanisms available to

you at this time.

Ms. BAILEY. I could outline exactly what we intend to go through,

sir, or provide it for the record.

Mr. DINGELL. I think that would be better provided for the

record, because I think it is important, but I think it is something

we don’t have time for.

[The following was received for the record:]

NHTSA plans to undertake several activities to improve its ability to identify potential safety defects. Although our decisions regarding the specific actions to be

taken will await the completion of our ongoing review of the Office of Defects Investigation (ODI) processes, as specified in section 15 of the TREAD Act, we can identify some general areas for improvement.

With some of the additional funds authorized by the TREAD Act and by the FY

2001 DOT Appropriations Act, ODI intends to substantially improve its data hanVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01376 Fmt 6601 Sfmt 6621 E:\HEARINGS\67111 pfrm02 PsN: 67111
1369

dling and retrieval abilities. The existing ODI database, which includes consumer

complaints, service bulletin summaries, and investigation and recall information,

was developed approximately ten years ago, with only minor enhancements since

that time, and it does not reflect state-of-the-art technology. It was a relatively lowbudget system, and, among other limitations, it does not contain complete images

of the information submitted by consumers and other complainants. In order to review an actual complaint, the document has to be identified through a broad computer search, then individually retrieved. While the database has been a valuable

resource in identifying potential safety problems, as the volume of information contained in it has increased exponentially, it has become increasingly more time-consuming to retrieve individual complaints to verify and supplement information

about particular potential problems.

Our planned modernization will include the incorporation of analytical intelligence and will integrate the consumer complaint database with the optical image

retrieval system, allowing expedited information search capabilities. Our overhaul

will also afford the agency the opportunity to effectively incorporate the warranty,

claims, and other relevant information that we will obtain from manufacturers of

motor vehicles and motor vehicle equipment pursuant to the regulations to be adopted under section 3 of the TREAD Act. We also plan to explore possible ways of integrating the information in other NHTSA databases, which were originally developed

for other purposes, into ODI’s defect identification processes. We anticipate that

these initiatives will allow the agency to be aware of potential safety problems earlier than under our current limited system.

Mr. DINGELL. Has NHTSA ever requested criminal penalties to

be added to the Safety Act?

Ms. BAILEY. We have not up to this time.

Mr. DINGELL. Did the legislation NHTSA recently proposed include criminal penalties?

Ms. BAILEY. It is part of our multitiered approach to enforcement; yes, sir.

Mr. DINGELL. I’m sorry?

Ms. BAILEY. It is part of our approach for enforcement.

Mr. DINGELL. Was it in the legislation that you’ve submitted?

Ms. BAILEY. It is not in the legislation.

Mr. DINGELL. It is my recollection that both in 1966 and 1985

when the issue of criminal penalties came up, NHTSA was opposed. Is that your understanding?

Ms. BAILEY. That is my understanding, and I believe the thinking was that it impaired our ability to engage in a meaningful investigation given the possibility of criminal action.

Mr. DINGELL. I’m not quite sure I know what you’re saying.

Ms. BAILEY. It is my understanding that the concern has always

been that it may impair our ability to investigate. There is a certain amount of give-and-take required. If we are unable to obtain

information because people are concerned about criminal investigations and penalties——

Mr. DINGELL. What you’re saying is that a person who is then

under investigation functions as if he’s under a criminal investigation, it tends to inhibit cooperation with you because of that fact;

is that what you’re telling me?

Ms. BAILEY. I’m explaining what my understanding is of the determinations earlier on not to pursue that. I can tell you that the

Secretary will be here today and can testify more to that, but I

know that we now feel that that will allow us greater ability to

function.

Mr. DINGELL. That it would impair your ability to function.

Ms. BAILEY. Yes.

Mr. DINGELL. Thank you very much.

1370

Mr. TAUZIN. Before the gentleman completes, and I thank the

gentleman, I want to point out for the record that in addition to

the 26 consumer complaints the gentleman has cited that was

available to you by 1998, there were the 21 instances reported by

State Farm, and over the 18 months there were 45 additional cases

reported, according to the State Farm testimony orally to the agency by phone call. And in addition, there was the FARS report indicating as many as, in 1999 alone, 43 fatalities added to the 15 in

1998. So that is in addition to all of the information that Mr. Dingell has pointed out was indeed available to the agency in 1998, in

the months immediately post the July 1998 State Farm filing, for

the record.

Ms. BAILEY. There is some duplication in those numbers, but

you’re exactly correct. We need better ability to integrate our data.

Mr. TAUZIN. The Chair recognizes the vice chairman of the O&I

Committee, Mr. Burr, for a round of questions.

Mr. BURR. I thank the chairman and welcome our panel of witnesses. Mr. Lampe, either yourself or Mr. Saurer, let me just ask

you this: Does Firestone have a defect in the recalled tires?

Mr. LAMPE. Sir, we believe yes, that there are, in a very limited

numbers of those tires, a possible manufacturing defect.

Mr. BURR. Is Firestone currently looking at the potential of defects in any tires that are not currently under recall?

Mr. LAMPE. We continue, sir, to examine all of the tire lines and

all the sizes, again using the data we’ve got. We are a data-driven

company, using the claims data that we’ve recently used to identify

this recall. Yes, sir, we continue to do that.

Mr. BURR. Does Firestone possess any information today that

would indicate there is additional tread separation that’s happening in the marketplace outside of the current group of recalled

tires?

Mr. LAMPE. Sir, we’ve testified on a number of occasions that

tread separations are not an abnormal effect, result, in the marketplace; not only our tires, anybody’s tire. Dr. Bailey has testified a

number of times that the best tire can fail for a number reasons,

and one of the common failure modes is a tread separation.

Mr. BURR. Is there any tread separation that specifically resembles that tread separation that’s being experienced under the recalled tires that Firestone sees on non-recalled tires today.

Mr. LAMPE. Based on the representation of the claims and adjustments, sir, we do not see any data that would indicate that we

have any problem, or any problem with other tires, other than the

ones we identified in the recall. We believe that the recall was

overinclusive, if anything.

Mr. BURR. Ms. Bailey, correct me if I’m wrong. NHTSA has suggested a larger recall; am I correct?

Ms. BAILEY. Yes. On September 1 we, in fact, requested that the

recall be widened.

Mr. BURR. It was widened for what reason?

Ms. BAILEY. It was indeed not widened at that time. So we did

a consumer advisory so we could alert the American public to the

danger, and subsequently the company has agreed that they will

provide remuneration for those tires.

Mr. BURR. But they’re not recalled.

1371

Ms. BAILEY. They’re not officially recalled.

Mr. BURR. So the company has agreed to replace those tires.

Ms. BAILEY. And I should say that we are monitoring and investigating as to whether or not there should indeed be a safety recall.

Mr. BURR. But they’re not being recalled.

Ms. BAILEY. But they’re not recalled at this time.

Mr. BURR. You would agree that if Firestone had recalled their

tires in Saudi Arabia, that NHTSA might have been forced to react

to a potential problem in the U.S. faster.

Ms. BAILEY. Absolutely.

Mr. BURR. And yet for this larger grouping of tires, we’re not

going to require a recall. We’re going to allow a replacement process.

Ms. BAILEY. Not ‘‘allow.’’ I would not use that word. In fact, as

a regulatory body at this point, we are monitoring and investigating whether or not we should direct an investigation. At this

point we are still in that initial assessment phase.

Mr. BURR. Tell me what specifically has changed at NHTSA

since we began this investigation that would assure these members

that, were State Farm or any insurer that regularly supplies information about potential trends that they feel are alarming, if they

supplied 21 of those claims to NHTSA, what has changed at

NHTSA today that would prevent those from falling through a

crack and, as Mr. Dingell said, would bring to as high a prominence that trend that that claims adjustor saw as you getting 25

additional that all of sudden caused an investigation?

Ms. BAILEY. Initially we have realigned both personnel and resources so that we can conduct one of the, I think, fastest investigations we’ve ever done. This sometimes takes a year or 2 more.

We’re hoping to complete this in under 6 months. At the same

time, I am not comfortable with the informal arrangement that we

have had in the past with State Farm. We have asked, therefore,

for legislative support—and you will be hearing more about that

today—so that we can officially obtain claims data and that we can

have a more official arrangement with not only State Farm but

other insurance companies.

Mr. BURR. Reminding all members that you have not been in this

position very long, and certainly were not there through much of

the history that we’re here to investigate, is it comfortable for every

member to believe that if 21 claims from State Farm, with the severity of those 21 claims, that that would be something that

NHTSA would investigate today?

Ms. BAILEY. It was analyzed at the time, and I’ve read the memo

and researched that, but that is beside the point.

Mr. TAUZIN. May I interrupt a second? If Mr. Burr would yield

a second.

Mr. BURR. We would be happy to.

Mr. TAUZIN. We went through this very carefully 2 weeks ago.

The gentleman has testified to our investigators that, upon receipt

of the State Farm information, he does not recall analyzing it, that

the analyzing that was done was done just recently by your agency

and a memo was prepared pursuant to that analysis. Is that correct?

1372

Ms. BAILEY. That is correct, but he does not have recall of the

particular exchange.

But I should correct the record that in our last testimony I had

said also that I had seen the original memo that had come across,

and that that was confused in that testimony with the reconstruction. And in fact I have seen the original memo and that—— Mr. TAUZIN. Let’s—— Ms. BAILEY. [continuing] I agree with you that he does not

recall—— Mr. TAUZIN. Wait a minute. Is there a memo that was prepared

by the gentleman upon receipt of the State Farm? We have not received a copy of any such memo.

Ms. BAILEY. Yes.

Mr. TAUZIN. Is there such a memo?

Ms. BAILEY. There is a memo.

Mr. TAUZIN. May we have the memo?

Ms. BAILEY. Yes, sir. We will provide it.

Mr. TAUZIN. Where is it?

Ms. BAILEY. It is an e-mail, not a memo.

Mr. TAUZIN. There is an e-mail from State Farm to your office.

Is there any document prepared by the gentleman who received the

State Farm e-mail in your possession?

Ms. BAILEY. No, there was not one prepared—— Mr. TAUZIN. So there was no memo prepared by the gentleman

then. There was no analysis that he can recall conducted then. All

you have is a memo prepared after the analysis was done very recently, I think in August.

Ms. BAILEY. That is the reconstruction—— Mr. TAUZIN. That is a reconstruction?

Ms. BAILEY. [continuing] of what happened when that e-mail was

received.

Mr. TAUZIN. Right. And as we have reconstructed what occurred

when the e-mail was received, the gentleman has testified, to our

investigators, that he does not recall ever analyzing that e-mail,

and the State Farm representative who testified that he never

heard from that gentleman by e-mail, by phone, by fax, by any

means. Is that correct?

Ms. BAILEY. Yes.

Mr. TAUZIN. The Chair yields back to Mr. Burr.

Mr. BURR. I thank the Chair.

Ms. BAILEY. I would like to answer your question, though. I recall your concern that the 21 would not have instigated an investigation. Even if that 21 were recorded as it should have been and

analyzed as it should have been at the time, even that over 6

years, being a few a year, it would not have initiated an investigation. But I can assure the committees that, in fact, if we had all

the information we should have had at the time and that we are

seeking legislation to now have the authority to obtain, we would

have started an investigation much sooner. That is claims domestically, that is the information about the overseas recalls, it is the

information from insurance companies that we should have a way

to receive and the FARS data. All of that should have been integrated and should be integrated in the future with the legislation

we are hoping to receive——

1373

Mr. BURR. Dr. Bailey, hindsight is a wonderful tool to tell us

what to do in the future. There is no substitute for a process where

an individual can’t disregard information that might be pertinent

to a trend that clearly displayed the loss of human life. So I hope

that you can, with a great degree of confidence, tell us that that

can’t happen in the future. That there is not only a process, there

is a checks and balance system that exists on information and the

evaluation of the information and the coordination of that with

other data available in the market place.

Ms. BAILEY. I assure you of that.

Mr. BURR. Let me move on to Miss Petrauskas. Miss Petrauskas,

unfortunately, Ford is currently in a new recall in Saudi Arabia

pertaining to some Navigators, am I correct?

Ms. PETRAUSKAS. Continental has announced that they are going

to do a recall.

Mr. BURR. Continental is going to do a recall on the Navigator.

Ms. PETRAUSKAS. Around the world, yes, sir.

Mr. BURR. Tell me when Ford was aware of a problem with that

tire for the first time.

Ms. PETRAUSKAS. I think the first report we received was in

April—I want to say April 1999 was the first time we got a report

from the field of an issue with that particular tire.

Mr. BURR. Were you aware that there was a problem—potential

problem with that tire, you personally?

Ms. PETRAUSKAS. At that time?

Mr. BURR. Yes, ma’am.

Ms. PETRAUSKAS. No, sir.

Mr. BURR. When did you become personally aware?

Ms. PETRAUSKAS. Actually, almost literally within the last week

or so.

Mr. BURR. Within the last week or so.

Mr. Baughman, how about yourself?

Mr. BAUGHMAN. Actually, it is Baughman. But I first became

aware of any issues on Continental tires on Navigator vehicles at

the first hearing when a letter was produced saying that there was

a report of a tread separation issue in the Saudi Arabia area.

Mr. BURR. I got to the hearing late, so I am not exactly sure of

what the two of you are responsible for, but you just shared with

me that in April 1998——

Ms. PETRAUSKAS. 1999.

Mr. BURR. —Ford became aware of a potential problem. What

caused a year and some time to go by before the two of you learned

that somebody at Ford was looking into a potential problem?

Ms. PETRAUSKAS. I have been cautioned not to talk for a long

time, so I will make this real fast and compact. But in the April

1999 data I refer to is the first field report we got with respect to

those tires. Over a period of time, we got a handful of additional

reports. At the hearing, the committee brought up one of the reports we had gotten before. It turned out that particular tire had

a puncture in it. I think this was a Saudi Arabian tire. When we

got back to our offices after the hearing one of the things we

learned is that the group that is supposed to monitor——

Mr. BURR. The CCRG group?

1374

Ms. PETRAUSKAS. Yes, sir, the Critical Program Review Group

actually—— Mr. BURR. Didn’t they, in fact, meet in August?

Ms. PETRAUSKAS. I learned subsequently that they did when I

got back from this hearing.

Mr. BURR. Share with me who in the hierarchy of Ford should

know that the CCRG is currently looking at a potential tire problem. Because, in fact, I asked your chairman specifically in that

hearing was he aware of any additional vehicles where tire problems existed, and he emphatically said he had no personal knowledge of that.

Ms. PETRAUSKAS. And I am sure that was the case. I mean, I

work in that area, and I had no knowledge that the team was

working on it.

Mr. BURR. I have gone through a time-intensive thing with Dr.

Bailey, who wasn’t even here then, trying to stress the fact that the

chain of communication did not exist such that NHTSA could function in the role that they were there to do. I would ask—— Ms. PETRAUSKAS. But if I may, Congressman, it did function.

And one of the—as it happens, the group that you refer to that met

are Critical Concern—I always forget what the acronym stands

for—Critical Problem Review Group. This is a technical group.

They meet once a week, and the people who come to that meeting

are engineering supervisors. And what they are asked to do is

every week sweep up all the problems you have heard about, bring

them to the meeting and we are going to talk about them. And so

that is exactly what this group did.

Well, then, when they realized that we were having these meetings with individual tire companies to talk about how this early

warning system might work, they brought it to us.

Mr. BURR. The chairman is about to pull the hook on me. Let me

just make this statement for the record, Mr. Chairman.

In this particular case, we moved from the first organized review

at Ford, the CCRG, of the potential Continental tire problem in

late August of this year to this date, September 21; and we have

already gone through a Continental recall, less than 3 weeks. And

from this member’s standpoint, I don’t know if the speed with

which you have gone through this is a response to the current interest that Congress has and the concern that the American people

have or in fact whether the CCRG works that quick. And if it does

it certainly broke down as it related to any involvement they might

have had in the Firestone Explorer issue.

Mr. TAUZIN. The gentleman’s time has expired. I will allow the

gentlelady a quick response.

Ms. PETRAUSKAS. Just very quickly.

The one thing that I was struck by on the part of the Continental

folks, I think within 48 hours they had all of the information—all

this claims information, all warranty information, all the manufacturing data—so it was easy to make decisions because they came

to us and shared all this information.

Mr. TAUZIN. I thank the gentlelady.

The Chair recognizes the gentleman from Ohio, Mr. Sawyer.

Mr. SAWYER. Than you very much, Mr. Chairman. Ten minutes

sounded so long when we started, and it is sounding so short in its

1375

execution, particularly when we realize that this afternoon we are

going to begin the process of marking up legislation that could have

long-standing consequences in terms of the work that everyone at

the table is doing.

Let me suggest that there are some concepts that are slowly coming to the surface. The first of these is that there is a complexity

of cause when there is a tire failure. But the one that we seem to

be most concerned about is the notion of when those tire failures

are a product of a defect. Can you tell me, Dr. Bailey, what is a

defect?

Ms. BAILEY. First of all, it takes us an average of 16 months to

determine exactly that. And without spending a lot of time at it,

we go through an initial assessment, a preliminary evaluation; and

we are now in the Firestone case involved in the engineering analysis phase. There are many steps to take after that. We are going

to, as this is our highest priority, speed this up and complete this

in record time. But, generally speaking, it takes about 16 months

to determine if there is a defect that is causing a vehicle or component to fail.

Mr. SAWYER. Can you tell me about the kind of help you are getting from the tire industry in trying to identify not only the specific

cause in the circumstances that we have been talking about here,

but, more broadly, what constitutes a defect and where standards

ought to be set?

Ms. BAILEY. Firestone and Ford have been very forthcoming in

responding to our information requests. I think where our communication has broken down and where we have none of us served the

American public as we should have is in, again, our ability to exchange the data that would let us make the right decisions. In even

the case of the Continental decision, that was all based on claims

and warranty. We have no authority at this time to obtain that. I

am hoping things will change, given the legislation we will be talking about later today.

Furthermore, it is not a recall with Continental. They are doing

a customer satisfaction campaign. NHTSA and its good people are

doing their work to make sure that we are now going to determine

if that is sufficient or not, as we did this summer when, in fact,

we tried to widen the recall with Firestone and could not achieve

that quickly, so we did a consumer advisory. I think we are all

moving much quicker but not as quickly as we can.

Mr. SAWYER. Let me ask you, can you describe briefly the level

of cooperation that you need and receive from a tire industry in

doing that sort of work?

Ms. BAILEY. When they suspect that they have a safety problem

or they have claims or warranty issues that indicate there is a

problem, they need to communicate with us sooner.

Mr. SAWYER. Let me ask you a follow-up on a question that Mr.

Dingell asked earlier. I know we are not dealing with the Senate

bill, but there is some suggestion in the Senate bill that, in fact,

the distribution of a defective tire might in fact be a criminalized

act. There are many different kinds of behavior that might be sanctioned as a product of legislation. I personally think that concealment of information that has been requested, or fraudulent reportVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01383 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1376

ing, could comfortably fall into anything that might receive a high

sanction.

Ms. BAILEY. Perhaps and perhaps not. Because we have an existing criminal statute that already addresses falsification and concealment or cover-up. But that is with civil penalties. So we are at

this point, as you know. The consideration is whether or not that

is enough.

Mr. SAWYER. Well, and I understand that, and I fully appreciate

the notion that criminal rather than civil concerns are involved

there. But I become deeply concerned if, in fact, we are talking

about criminalizing a product itself; and it causes great concern not

only as applies to tires but virtually any of the components that

might go into a complex product like an automobile. Can you comment on that?

Ms. BAILEY. I can comment by saying, in fact, if there is a willful

violation of the law or intentional violations, then there is need

perhaps—there is need for more vigorous enforcement.

Mr. SAWYER. Indeed, but if that violation is tied to the notion of

what is a defective product and we are having difficulty deciding

what is a defect, then it seems to me we are basing a severe sanction on a very uncertain base.

I won’t take that any further. I hope that we can appreciate the

problems involved when we deal with this.

One of the other things that we have seen slowly emerge is the

complexity of the testing protocols that are part of the development

and the use of a tire in the course of its life. We have talked about

the 109 tests, the whole range of SAE tests, the different environments in which the tests are conducted, tire dynamometers and actual vehicles to which they will be applied as well as to mules

which replicate the performance. Let me ask you quickly, is wheel

base or track of a significant difference when using mules to test

a tire? We have heard the wheel base made a big difference, and

the track made a difference.

Mr. BAUGHMAN. Not in my engineering opinion. I don’t think it

is. The tires need to be tested at configurations such as if it is a

rear wheel drive vehicle it needs to be a rear wheel drive vehicle.

The suspension was a twin I-beam, which was used generically on

all Ford truck products at that point in time. All of the axles were

solid rear axles which were used generically on all Ford products

at that period of time.

Mr. SAWYER. So the actual dimensions of the wheel base——

Mr. BAUGHMAN. The actual dimension of the wheel base might

have been half a dozen inches longer, and the width of the vehicle

might have been two or three inches wider, but the way in which

the tire interfaced with the road, which is the purpose of the highspeed tests and why we run it at Arizona proving grounds on test

track surfaces that are in excess of 120 degrees when the tire test

is run——

Mr. SAWYER. Dr. Bailey, what are the dimensions of a tire’s performance that ought to be the subject of testing that is reported to

you?

Ms. BAILEY. What we are testing for is strength, endurance, durability under a variety of different conditions.

1377

Mr. SAWYER. In establishing those tests, are you attempting to

replicate every circumstance that a tire might be used in or are you

attempting to draw base lines from which projections of performance can be made?

Ms. BAILEY. I think it is a base line standard but, again, in many

ways does replicate much of the driving that would be done, at

least in terms of temperatures and the pounds per square inch of

inflation and the loading. Where I think it lets us down is in terms

of the endurance, and I think we have all recognized that is one

of the changes we would like to make and again are making in the

winter of this year.

Mr. SAWYER. In the whole range of testing that goes on, is it fair

to say that both automobile manufacturers and tire manufacturers

do their own tests that go substantially beyond those that are required by 109?

Ms. BAILEY. Correct.

Mr. SAWYER. In doing those, do you have reporting requirements

from those tests?

Ms. BAILEY. No, we do not.

Mr. SAWYER. Should you?

Ms. BAILEY. I think that is one of the things we could look at.

I don’t think we need the same type of authority to achieve that.

I would hope that is something that we could do between the private and the public sector.

Mr. SAWYER. Let me ask you, as the only representatives we

have here today of the tire industry and the automotive industry,

is that the kind of reporting that you would find beneficial to you

without imperiling trade secrets?

Mr. SAURER. If I understand your question, Congressman, you

are asking reporting of our internal test development data.

Mr. SAWYER. Results of SAE testing and so forth.

Mr. SAURER. I don’t personally think that would be appropriate.

We are constantly changing tests, trying to invent new things. I

think divulgence of that information gets involved with trade secrets. I would be concerned about that to some extent. We would

like to cooperate, but I think we have to be careful there saying

that any testing we did, because the testing protocols——

Mr. SAWYER. I don’t want to discourage testing. I understand.

Mr. SAURER. The testing protocol itself is sometimes confidential.

Mr. LAMPE. But, Congressman, certainly on tests such as SAE

that we do on normal production tires there is no reason that we

wouldn’t make that information available to the agency. If we are

doing experimental testing or prototype testing, that is something

else, but normal production testing, yes.

Mr. SAWYER. There is so much I want to ask, but let me come

back to one final question I want to ask Dr. Bailey.

Mr. Dingell talked about your capacity to analyze data. I am

really concerned that we may stipulate so much data that this

turns into a data dump and that you have more than you can make

use of. Can you give us some assurance, No. 1, that you have the

capacity to perform the kind of sophisticated analysis that huge

amount of data would require? And, if not, could you get back to

us on what you will need, No. 1?

1378

No. 2, the engineering capacity. We are talking about extraordinarily sophisticated products all across the automotive spectrum,

and the engineering capacity within NHTSA simply to evaluate the

meaning of data when it comes in once it has gotten to the point

of being able to identify problem areas remains a concern of mine.

Could you respond to us with regard to that?

Ms. BAILEY. Yes, sir.

First of all, we can, as you know, seek, as we do, outside testing

through independent laboratories; and we do that. So I feel we can

draw on what is best in America in terms of engineering expertise.

As far as the data base goes, it is 10 years old. I am reviewing

now whether our Defect Information Management System (DIMS

II), which is what we are operating under, really has what is required. We are already looking at DIMS III which is going to, I

think, provide us the expertise and the integrative analytic capability to use our data more effectively. We need an upgrade of everything—our software, our hardware.

Mr. SAWYER. Personnel.

Ms. BAILEY. Everything that goes into analyzing the volume of

data that we are getting and that we hope to get in the future.

Mr. SAWYER. Thank you very much, Mr. Chairman.

Mr. TAUZIN. The Chair thanks the gentleman; and the Chair recognizes the gentlelady, Ms. Cubin, for a round of questions.

Mrs. CUBIN. Thank you, Mr. Chairman.

I would like to being my question with Ms. Petrauskas. I would

like to know, on my son’s accident, the left rear tire is the one that

lost the tread and blew out, so I want to know why on the—why

that tire seems to have a higher rate of failure than the other tires

do on the Ford Explorer. Is it possible that there is a design problem that makes the Explorer predisposed to having failure in the

left rear tire?

Ms. PETRAUSKAS. The short answer to your question, Congresswoman, is we don’t know. The interesting thing we found, though,

is across the board in tread separation cases involving any kind of

vehicle for whatever reason there has been a predominance of it occurring on the left side. Our engineers have spent a lot of time sort

of brainstorming that idea or some of those brainstorming ideas, as

has the press, I might add. But we do not really have a good explanation for that.

Mrs. CUBIN. Are you conducting any sort of tests on the Ford Explorer to see if that is a possibility, that the gas tank is on the left

side, the drive shaft is——

Ms. PETRAUSKAS. Actually, part of the work that we are doing in

terms of trying to determine what the root cause of the defect of

the tire is involves testing of not just tires on Ford vehicles but

those same tires on other vehicles to look at their performance. So

our hope is once we understand the root cause of the tread separation then we will be able to answer a lot of questions.

Mrs. CUBIN. But it has to pique your curiosity at least that this

is happening more on Ford Explorers than any other vehicle.

Ms. PETRAUSKAS. Well, fundamentally, 90 percent of these recalled tires that were produced went on Ford Explorers, so one of

the—I mean, it happened to Ford Explorers. You know, the bad

1379

tires are on Ford Explorers. Ford Explorers have the bad tires. So

that is the explanation there.

But, again—— Mrs. CUBIN. It is my understanding that the Ford Explorer body

is built on the old Bronco II chassis, is that correct?

Ms. PETRAUSKAS. No, it is not.

Mrs. CUBIN. So was the chassis for the Ford Explorer designed

specifically for the Ford Explorer?

Ms. PETRAUSKAS. Absolutely.

Mrs. CUBIN. Next, I would like to go to Mr. Lampe.

Talking about the testing of the tires, you talked about how severe the conditions are when you test 6 minutes at 112 miles an

hour. I believe that is what you said, is that correct?

Mr. LAMPE. I don’t believe I said that, the length of time. I think

it is a 10-minute test at 112.

Mrs. CUBIN. How would that compare on stress to the tire with

a trip that was 4 hours of driving at 75 to 80 miles an hour on an

interstate?

Mr. LAMPE. Congresswoman Cubin, I can’t answer that. I don’t

know how to compare the two.

Mrs. CUBIN. But, listen, you need to know how to compare the

two. Because that is exactly what happens in real life, and 10 minutes at 112 in a cylinder isn’t what happens in real life.

Mr. LAMPE. Yes, ma’am, I know. We need to do something different to get more closer to real life, and we have said that we will

work with NHTSA, and we will do that.

The differences I wanted to point out to you is that the test we

do inside is done inside. It is in a closed room. If you are going

down the highway at 75 miles per hour, you have the wind and air

coming toward you. That will cool your car down, cool your radiator

down. When you are doing the test in the closed room, you don’t

have that effect. All I am saying is it is very hard to compare the

high speed test, the SAE test, on an indoor drum, curved drum

versus driving a car at 75 miles an hour.

Mrs. CUBIN. You know what? I don’t care how hard it is to compare.

Mr. LAMPE. I know you don’t.

Mrs. CUBIN. Another thing, in Wyoming—my husband is very

type A personality. We rotate the tires on our cars every 4,999

miles, and we change the oil every 2,999 miles. He checks the air

pressure on a very regular basis in the tires. And since I was a

young girl I always knew that, with the extreme temperature

changes in Wyoming, whenever there are—whenever new seasons

come you make sure—because, as we know, air expands in heat,

and it contracts in cold, and we have extreme conditions in Wyoming. Is there any kind of testing done on any Firestone tires,

these or any, to account for or accommodate that difference in temperature in the real world?

Mr. SAURER. Let me answer that, Congresswoman. We do most

of our testing in high heat, because it is heat which really destroys

the tire over time. Of course, we do winter testing, but that is primarily for snow traction. We don’t view cold weather as a durability issue like the heat.

Mr. TAUZIN. Would the gentlelady yield for a second?

1380

Mrs. CUBIN. Yes, sir.

Mr. TAUZIN. Only to point out that in real life Arizona, western

conditions, New Mexico conditions, we are told that, even though

the ambient air temperature may be 101, 105, the surface temperature of the road on which Americans are really driving is about 125

or more. And the question is, you do the testing with ambient air

temperatures up to 90 and 100 in your plant. Do you heat up the

surface to 125 or more?

Mr. SAURER. Well, the drum itself will heat up from the tire

heat.

Mr. TAUZIN. That is the point. The point is the drums are heating up, but in real life conditions Ms. Cubin is talking about in the

States that she and others on this panel represent, the real life

temperatures of the highway can exceed 125 degrees; and my understanding is that is not replicated in the in-plant test and could

make some significant difference.

I only point that out, Ms. Cubin, because, as we move toward

regulation, we need to take those into account.

Mr. SAURER. Mr. Chairman, I would quickly add that that is one

of the reasons that we have the outdoor proving grounds in the

Southwest of this country where we are seeing those kind of temperatures. And we run some, as I said earlier, 40 million miles of

testing on very heavy loaded—actually, on this size tire on loads

that an Explorer can’t see, around a track on high heat. We have

those kind of tests. Those tests are designed to produce failures in

tires so that we can understand the high stresses they are undergoing and so we can make changes to improve them on a continuous, evolutionary——

Mrs. CUBIN. Thank you, Mr. Chairman.

I realize that the greatest amount of wear will take place in high

temperature conditions. However, when you get to 40 below, which

it gets in Wyoming sometimes, that has an effect on rubber. Rubber tends to crack, which makes a tire much unsafer to drive on.

Are any tests done in that regard?

Mr. SAURER. We——

Mrs. CUBIN. Just yes or no.

Mr. SAURER. Yes, there is chemistry work that is done. I am not

a chemist.

Mrs. CUBIN. No, no, no. I am a chemist. I am talking about are

there any tests in the laboratory or on the highway that are done

at temperatures like 40 below zero on those tires? On the tires, not

on the rubber.

Mr. SAURER. On the current tires today, we do not do that. We

used to do that on fiberglass belted tires called cold box testing, because fiberglass was subject to being brittle when cold. But we

don’t see that as an issue on today’s radial tires.

Mr. LAMPE. But it is something we need to look at, Congresswoman Cubin.

Mrs. CUBIN. Thank you very much.

While I am at it, I would like to go back to Ms Petrauskas. Are

you now or will you be studying the engineering of Ford Explorers

to see if there is a reason that the left rear tire seems to be the

one with the biggest problem on Ford Explorers?

1381

Ms. PETRAUSKAS. Again, as I indicated earlier, that is something

that seems to be true for all vehicles.

Mrs. CUBIN. I really do not care. I am asking yes or no, please.

Ms. PETRAUSKAS. We will certainly do that as part of the root

cause work we are doing on the tires.

Mrs. CUBIN. If you want to sell Ford Explorers ever again—and,

frankly, I would just park mine along the side of the road and not

even mess with it anymore—in today’s environment I should think

you would want to change today’s environment and get the American public some reassurance that it is a safe vehicle and that they

don’t have to worry about their families.

Ms. PETRAUSKAS. Congresswoman, absolutely. We recognize that

is something we have to do every single day. What gives us courage

in all this is we know that in the real world that Explorer has been

one of the safest SUVs we have.

Mrs. CUBIN. Well, I don’t necessarily know if that is because the

Explorer’s design is excellent. I would think you have to look at the

demographics of people who drive Ford Explorers. It is soccer

moms. They drive slower. They don’t have the kind of wear and

tear and I am going to use the word ‘‘reckless’’ drivers, if you will,

that other vehicles might have.

Ms. PETRAUSKAS. There is no question that demographics plays

a role in all of these. When we make the comparison we make the

comparison to light vehicles. In the comparison group is the Mercedes M class. So what we try to do is that—make sure they are

fair comparisons. And in that context the vehicle has really been

a star in terms of safety. But I agree 100 percent with what you

said. That is something that we have to earn every single day.

Mrs. CUBIN. This is a quick question of Mr. Lampe. Is the 30 PSI

level a new standard now? Is that new from the 26?

Mr. LAMPE. The 30 PSI that we have recommended?

Mrs. CUBIN. That is correct. Is that a new standard?

Mr. LAMPE. No, I can’t say it is a standard. It is what we recommend people put in their tires.

Mrs. CUBIN. So you have stopped recommending the 26.

Mr. LAMPE. We are recommending 30 PSI in the Explorer and

the Mountaineer, yes, ma’am.

Mrs. CUBIN. How can you be sure that is safe? Is it just in experience of what is happening on the highways?

Mr. LAMPE. No, we worked with Ford on this. Again, as I said

in the opening remarks, we are very concerned about doing something with the tire that would change the overall interaction of the

vehicle and the overall performance of the vehicle. The manufacturer has got to make sure that whatever we do works well with

everything else in the vehicle. Ford did look at and approve a range

from 26 to 30 PSI on the Explorer and the Mountaineer. We are

only saying we recommend—from the tire standpoint we recommended the high of the range, the 30 PSI.

Mr. TAUZIN. The gentlelady’s time has expired.

Mrs. CUBIN. Could I ask one more question?

Mr. TAUZIN. Yes, ma’am.

Mrs. CUBIN. Regardless of the reasons, it is very troublesome to

me that these tires were recalled in the Middle East and recalled

in South America and yet nothing was done either by NHTSA or

1382

by Firestone to even see if there was a problem in the United

States. That is very troublesome to me. It is my understanding

that there are two dozen other tire sizes and models that have

similar or greater claims rates, according to Firestone data. I realize it is a smaller number and not adequate for reasonable scientific conclusions. Are those going to be recalled?

Mr. LAMPE. Congresswoman, we’re still working with NHTSA

and some of that’s our fault. We had a meeting with them last Friday that we had to cancel, and there was one this week. We’ll continue to work with NHTSA on that. We wanted, it was mentioned

earlier, we wanted to take the consumer out of the middle of this

completely and we did announce to the consumer and to the public

that if a person had these tires on their car, came into one of our

locations, that we would replace these tires at no charge. And if we

don’t have a replacement tire—many of these tires haven’t been

produced for 5 or 6 years—if we don’t have a replacement tire we’ll

establish a reimbursement program for the consumers.

Mr. TAUZIN. And those tires are identified on your Web site?

Mr. LAMPE. I don’t want to tell the chairman something that I’m

not sure of. I don’t know if they are or not.

Mr. TAUZIN. Let us make a request that you will do so. If you’re

going to tell the American public to get these replaced, then at

least identify them on your Web site so that folks can know which

tires we’re talking about.

Mr. LAMPE. We certainly will do that.

Mrs. CUBIN. Dr. Bailey, I have questions that I will be submitting to you that time doesn’t permit me to ask.

Mr. TAUZIN. The Chair recognize the gentleman from Minnesota

Mr. Luther for a round of questions.

Mr. LUTHER. Thank you, Mr. Chairman. First of all, just a couple

kind of administrative questions. Both Firestone and Ford have

submitted documents to us now, and as I understand it, there are

25 lawsuits against Ford and I believe 52 against Firestone, is that

correct, as of now?

Mr. LAMPE. Congressman, I believe that number was accurate as

of the end of May when we made our initial submission to NHTSA.

That number is undoubtedly probably higher now.

Mr. LUTHER. And Ford.

Ms. PETRAUSKAS. I’m confirming the number right now, momentarily. Again as of the time we have made this submission to

NHTSA, the number you said, Congressman, is correct. It’s 25.

There has been lawsuits filed subsequent to then.

Mr. LUTHER. Are you both going to be providing us, then, with

the documents on the lawsuits that have occurred since then?

Ms. PETRAUSKAS. We can do that.

Mr. LUTHER. And Firestone.

Mr. LAMPE. Yes, sir.

Mr. LUTHER. Has it already included all of the documents in the

lawsuit, and will it include all the documents? And by that, I mean

the pleadings, summons and complaint, and the expert opinions

and the internal memos.

Mr. LAMPE. We can provide those and I believe we have. There

was much discussion about confidentiality on these court cases and

stuff, and I believe we pointed out in prior testimony that the only

1383

thing that’s ever been confidential about these lawsuits was the

settlement, and that was agreed upon by both parties; and trade

secret information that was issued; a court order was issued by the

judge and the judge ruled. But we have even committed to make

that information available.

Mr. TAUZIN. Would the gentleman yield briefly?

Mr. LUTHER. Yes.

Mr. TAUZIN. The investigators for both sides are working on protocols with reference to obtaining some of those internal informations, at the same time respecting confidentiality.

Mr. LUTHER. Thank you, Mr. Chairman. And for Ford would the

response be the same, then?

Ms. PETRAUSKAS. We have made available to the committee information, I should say documents from litigation; and, you know,

we’ve indicated that we’re going to cooperate in any way we can.

Mr. LUTHER. The point that I’m making is that if you are not disclosing any particular document, you will advise us of that document or the portion of that document so that we will be aware that

it exists; is that as I understand it?

Ms. PETRAUSKAS. I believe that’s what we’ve been doing right

along.

Mr. LUTHER. Is that true for Firestone also?

Mr. LAMPE. Yes.

Mr. LUTHER. Are there insurance companies involved in any of

these cases?

Mr. TAUZIN. Could I interrupt again for a second? Our understanding is that Ford has not yet produced a list of documents that

are being withheld so far, as we’re working out these protocols. It

might be helpful for you to do so.

Ms. PETRAUSKAS. My understanding is that there are folks talking to the staff about this. I’m sorry, I haven’t been involved in it.

Mr. TAUZIN. Thank you.

Mr. Luther.

Mr. LUTHER. Are there insurance companies involved as well

from Firestone’s standpoint and from Ford’s? Do you have insurance carriers on any of these claims?

Mr. LAMPE. Not from a first dollar standpoint we don’t.

Mr. LUTHER. Are there some carriers involved that would have

been involved in any of this litigation?

Mr. LAMPE. There is excess insurance on our part, and I’m sure

there would have been some of the carriers involved from the plaintiff’s side.

Mr. LUTHER. Is that true of Ford as well?

Ms. PETRAUSKAS. I believe so.

Mr. LUTHER. Would you be willing to instruct those companies,

then, to provide us documents as well?

Ms. PETRAUSKAS. I’m sorry?

Mr. LUTHER. Would both of you be willing to instruct those companies to provide us with the documents?

Ms. PETRAUSKAS. I’m sorry; the documents, meaning?

Mr. LUTHER. Related to——

Ms. PETRAUSKAS. Litigation materials?

Mr. LUTHER. That’s right.

1384

Ms. PETRAUSKAS. I don’t know of any reason why we wouldn’t.

We’ve provided everything else to the committee.

Mr. LUTHER. Would that be true of Firestone?

Mr. LAMPE. We’ll work with the committee on that also.

Mr. LUTHER. In your companies, then, do you also have internal

memos between management and either in-house counsel or outside counsel or your insurance companies relating to these claims?

There would be memos?

Ms. PETRAUSKAS. I would assume that there are attorney-client

communications going on all the time.

Mr. LUTHER. Are you willing to provide that documentation to

the committee?

Ms. PETRAUSKAS. My understanding is that we’re working with

the staff of the committee to try to figure out how we give the information that you all want to see without waiving attorney-client

privilege. And I understand those efforts are underway.

Mr. LUTHER. And as I understand, you’re agreeable to doing that,

then; to providing those memos?

Ms. PETRAUSKAS. Again I will tell you what I know about it Congressman, and that is we’re working with the staff to try to find

a way to give you the information you want, but at the same time

still retain an attorney-client privilege. And people are working on

that.

Mr. LUTHER. So basically now you are standing by the attorneyclient privilege on those kinds of documents.

Ms. PETRAUSKAS. What we would like to do is we want to find

a way to give the committee the information it wants without

waiving something as basic as attorney-client privilege.

Mr. TAUZIN. Would the gentleman yield again? Only to point out,

so I can understand what’s going on here, that in the courtrooms

of America there is such a thing as attorney-client privilege. That

does not apply to an investigative committee of Congress. Congress

has the right to demand production of these documents if we so

choose, and we reserve the right to do, of course. The problem is

how to do it in a protocol that respects the trade secrets and other

sensitive matters that are not relevant to our investigation. And

our staffs are trying to work that out, but so far it has not yet

worked out. I want that on the record. I thank the gentleman.

Mr. LUTHER. Thank you, Mr. Chairman. I will proceed on. Then

I take it there are expert opinions that have been rendered regarding the cause of this problem with these tires, and you have reviewed those?

Ms. PETRAUSKAS. I don’t know of the expert opinions in any sort

of final sense with regard to the issue with these particular tires

and, as I think we’ve indicated to the committee, there’s lots of people working on trying to identify the root cause. If you’re back to

the litigation question, I believe we made all of these expert studies

available.

Mr. TAUZIN. Would the gentleman yield once again?

Mr. LUTHER. Sure.

Mr. TAUZIN. I think for the record again, we need to point out

that we have a good example of how attorney-client privilege was

asserted initially and then properly withdrawn, and that has to do

with the Middle East memo in Saudi Arabia. Ford initially proVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01392 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1385

vided us with a document which gave the first-page information

with reference to Firestone’s concerns, but redacted the second

page under attorney-client privilege. They later, upon our request,

provided us with the second page, which then provided the information that Ford had concerns, quote, similar to Firestone’s. Had

we not insisted on Ford providing us that in spite of the attorneyclient privilege, we would not have known that. That’s why it’s important that we indeed process this protocol as rapidly as possible.

Mr. LUTHER. Thank you, Mr. Chairman. And then I’ll wait for

the outcome, then, of your work. I take it, then, there have been— you’re both aware of some opinions that have been rendered as of

this date on what the problem is with these tires. If Firestone could

respond? You have seen some opinions that have been offered by

experts.

Mr. LAMPE. I believe, sir, that we have provided all of that information to the committee. We have one outside independent investigator who just started a couple days ago and obviously has not rendered an opinion. That information will be made available to the

committee.

Mr. LUTHER. I’m talking about outside parties and that would be

directed at both of you. There have been outside parties that have

rendered opinions as to a defect in these tires.

Mr. LAMPE. You say outside third parties in litigation?

Mr. LUTHER. Right.

Mr. LAMPE. That has been provided is my understanding.

Mr. LUTHER. And you have provided all of that to the committee?

Mr. LAMPE. That’s my understanding.

Mr. LUTHER. Thank you, I appreciate that. And settlement

amounts, is that something you are keeping confidential?

Mr. LAMPE. Settlement amounts in the past have been confidential. We have agreed already to supply that to the committee, and

the only cases I must ‘‘quotation mark’’ that for is when we have

a plaintiff that has agreed to a settled amount, we must get his

permission. We feel we must get his permission to release that, but

we will provide that to you.

Mr. LUTHER. The reason I asked the questions and the reason I

focused on the claims is there has been a lot of talk about how

these tires were manufactured, and we can all find fault in that

and the tests. But I think equally as important is how the company

handled this matter when you were put on notice by various means

of what was going on.

Now, as I understand it, you were admitting today that there is

a defect in these tires? When you testified earlier you used the

word ‘‘possible’’ defect. Is there a defect?

Mr. LAMPE. We believe there is a defect in a very small percentage of these tires, sir.

Mr. LUTHER. What is it within the corporate culture here—and

organizations have cultures as well as corporations—but what was

it within the corporate culture here that did not allow this information to permeate the management?

Mr. LAMPE. Sir, in the case of the tires, as we’ve talked earlier,

the proven methods that we used up till now to determine whether

we had a safety issue problem, all those methods were fine. We did

not see anything. It was when we went to looking at data that we

1386

had never used before to look at a safety issue that the overrepresentation of a certain type of tire on a certain vehicle and a certain

manufacturer at a certain plant came up. We obviously will change

the way we looked at our data. We must.

Mr. LUTHER. The interesting thing about your testimony today is

that when we were talking about test failures, you were making

the point that some of those test failures were not particularly significant because there weren’t tire failures. So in other words,

when the chairman was here and was doing a very good job of

questioning you about the 10 percent failure rate or whatever, why

wouldn’t that put you on notice, you testified that that wasn’t particularly important because you didn’t view it as a safety issue. It

wasn’t important because there weren’t tires failing. Then when

tires start failing, what do you do? The information gets sent to the

accounting department.

So you had it both ways. On the one hand, you don’t pay attention to the test, and then when the information comes in, you don’t

pay attention to the information on failures. Now, what created

that kind of an environment or a culture where that would occur?

Mr. LAMPE. Sir, I didn’t mean to give the impression that we do

not pay attention to the test.

Mr. LUTHER. No, but the point you made is that it wasn’t particularly significant. You made that point a number of times because tire failures would be significant. These were very strenuous

tests was the point that you were making. So 10 percent, why be

concerned about 10 percent failure on strenuous tests when there

aren’t tire failures? That’s the point you were making.

Now, when we look at the tire failures and the mounting information coming in, it gets sent to the accounting department. Tell

us about the inside of the company and how it could handle things

this way when you’re talking about the safety of Americans.

Mr. TAUZIN. The gentleman’s time has expired but I’m desperate

to hear your answer to that, sir.

Mr. LAMPE. Thank you, Mr. Chairman. We obviously in light of

what’s happened, we’ve relooked at the way we’ve normally looked

at claims data and early warning indicators. We are very very supportive of improving the early warning system as well with NHTSA

and through the governmental agencies.

My point on the tests, sir, were these are high speed tests. They

are to qualify tires for high speed operations. We don’t take them

lightly. If we have a failure in the test, we don’t stop. We retest

multiple tires to make sure that the tire construction qualification

is suitable and we will pass the test. I’m sorry if I gave the impression that it is incidental to us. It’s certainly not.

Mr. TAUZIN. There were tire failures in the test.

Mr. LAMPE. Yes, sir, there were.

Mr. TAUZIN. I thank the gentleman. The Chair recognizes the

gentlelady from New Mexico, Mrs. Wilson.

Mrs. WILSON. Thank you, Mr. Chairman. In the first hearing we

had, I asked Firestone about its prioritization of States for the recall and the reason that New Mexico was not in that prioritization.

Has Firestone changed its distribution pattern at all as a result of

any kind of internal discussions following the last hearing?

1387

Mr. LAMPE. Congresswoman Wilson, I don’t know what was communicated completely at the last hearing, but let me give you—try

to summarize what we’ve done. When we first announced the recall, we announced it as a phased program. Believe me, that was

never intended to not replace tires in every State. We started from

day one—— Mrs. WILSON. Mr. Lampe, I am well aware of that and that you

abandoned that silly idea early on. The reality is that you are still

short of supply and that you have since corresponded with the New

Mexico Attorney General that you were prioritizing your supply

based on the number of accidents per State. Your executives admitted that you weren’t looking at the number of accidents per capita

or even the number of accidents per vehicle. And I just want to

know if, after our hearing 2 weeks ago, Firestone has done anything.

Mr. LAMPE. Congresswoman, I know that you talked about the

per capita and I believe we are, I believe we are looking at that

on a registered vehicle basis by the State. I cannot tell you today

if we have changed our distribution process based on that per capita evaluation. I’m sorry. I don’t know the answer.

Mrs. WILSON. The fact that you do not know the answer tells me

that you probably haven’t done anything. Is that a fair assumption?

Mr. LAMPE. No, ma’am, I don’t think that is a fair assumption.

Mrs. WILSON. Is there anyone from Firestone here who knows

whether you took back to your headquarters the information that

we discovered in our last hearing and did anything?

Mr. LAMPE. Mrs. Wilson, I promise you that I will get you that

answer immediately.

Mrs. WILSON. Will everyone in the room representing Firestone

please raise your hands?

Is there anyone here from Firestone that brought that information back and did anything with it ?

Mr. LAMPE. Ma’am, if your question is were your concerns communicated, yes, they certainly were.

Mrs. WILSON. I’m not asking whether you’re communicating; I’m

asking whether you’re acting.

Mr. LAMPE. I don’t know the answer to that but I will get the

Congresswoman the answer.

Mrs. WILSON. Thank you.

I wanted to thank Ford Motor Company because they did act.

Last week they shipped 6,000 tires from one of your competitors to

the State of New Mexico. I wanted to thank Ford Motor Company

for being responsive and concerned about consumer safety. I am

very disappointed in your answer, sir.

I have some other questions. In the information that we’ve been

provided here on testing in 1996, Decatur tires from the Decatur

plant failed to meet that 10-minute test that we’ve been talking

about at 112 miles an hour. And then in March 1998, there was

a design change that, according to the documents we’ve received,

was intended to help prevent separations with a wedge. Firestone

has said this is not in response to knowledge of any problem. What

knowledge or engineering science was it based on?

Mr. SAURER. Let me answer that, if I may, Congresswoman. The

wedge change is part of a continuous improvement program that

1388

we do every day. If you make a change in a product and assume

that what you had was bad and now you’re making it good, what

a shame it would be. Every product in this country goes through

evolutionary and improvement changes, just like cars, or whatever.

We made that change in March 1998 for over 100 lines of tires

involving 17 sizes in large P-metric tires when we realized that this

market was growing and growing. We’re talking about programs

we’re working on now for 2003 and beyond. A large P-metric tire

going on really what is called light trucks and SUV’s. We made

that change because while our adjustment rates have been at historical lows for belt separation, this was a feature that we had

started to use in our light truck tires and we knew we would be

directionally right. This feature is actually in the recalled Decatur

tires from 1998 on. It had nothing to do with the P235 and the recall situation. It’s part of our ongoing philosophy. Just like our—— Mrs. WILSON. I—— Mr. SAURER. Excuse me if I may. Just like our founder said, Mr.

Firestone, many years ago, ‘‘Best today and still better today.’’ And

I hope that this committee understands and appreciates that we

will continue to make change in our product as we find new technologies to make them better. If we’re going to be afraid to make

change in our product because someone is going to accuse you of

that which preceded it was bad, then shame on us.

Mrs. WILSON. I wish you would answer my question because I

wasn’t accusing you of anything, sir. I asked you what engineering

science told you that this would be an improvement.

Mr. SAURER. This was an application, as I just said, on light

truck tires, and in addition we do some FEA analysis. This was

based on FEA analysis, trying to reduce belt edge sheer strain between the belts.

Mr. LAMPE. Mrs. Wilson, we had a belt wedge in the tires. What

we did was increase it, the change, and we increased it because we

felt it would give a better resistance to separations.

Mrs. WILSON. And did you have testing data that would show

you that this would yield an improvement in performance?

Mr. SAURER. Our testing, as I said, was based on what we had

previously developed in light truck tires, and since these P-metric

tires are being used in the truck, we applied it in that manner. In

addition, our scientists and engineers working on FEA modeling

also determined through modeling that this is a reduction in sheer

strain which is a common practice in laminate structures.

Mrs. WILSON. How do you decide what your quality tests will be?

Mr. SAURER. Are you referring to in the plant or overall?

Mrs. WILSON. I’m specifically referring to this question of what

does the government require.

Mr. SAURER. I think——

Mrs. WILSON. Excuse me. If you could, I am specifically referring

to the question of what the government requires as opposed to

what you as a company think is adequate to ensure the quality of

your product. How do you decide what quality tests you use?

Mr. SAURER. We do three basic things. We do a lot of laboratory

and internal development testing. We test on outdoor facilities. We

watch our adjustment rates and we also bring tires back from the

field as a return for warranty adjustments and analyze them. The

1389

tests have been developed over years and years of experience. We

run a large battery of tests and determine those types of tests

which produce failures, products that we replace. We constantly try

to move forward in a positive way.

Mrs. WILSON. I’m not asking what the tests are. I’m asking you,

how do you develop, how do you decide what you should do for

tests, because you described a series of tests, 10 minutes at 112

miles an hour. Your colleague differs as to what the government requires. I want to know how internally you go about deciding what

should your standard be for consumer safety.

Mr. LAMPE. Mrs. Wilson, we obviously comply with all the required tests, the governmental tests.

Mrs. WILSON. Is that your only standard?

Mr. LAMPE. No, ma’am.

Mrs. WILSON. All right.

Mr. LAMPE. We also self-impose other tests, recognized structured tests like the SAE. That is not a required government test,

but we adopted it. And we’ve developed many more tests in our

proving grounds, in our laboratories and so forth, based upon just

evolution in our experience of what we need to be looking at. We

do much more beyond what is required.

Mrs. WILSON. My point is—and this will probably be my last line

of questioning—there has been lot of discussion here about what

those tests are and whether those—if they are appropriate in real

world conditions or how the product is going to be used. It seems

to me there are scant tests at the recommended tire pressure for

the company that produces the vehicle. At the same time, you are

testing at 10 minutes at 112 miles an hour. Why is that the standard? And the question not of what the test is, but how you develop

what your test should be in any company focused on quality is critical, and it sounds to me as though there are gaps here and you

need to go back to some fundamentals of how do we decide as a

company what our quality test should be. I yield the balance of my

time, Mr. Chairman.

Mr. TAUZIN. I thank the gentlelady. Let me tell you where we

are: Mr. Rush will be next. Mr. Upton is returning from the vote

and will take over. We will try to wrap up the round of questions

with this panel.

Secretary Slater is available and wishes to give us a report from

the Department of Transportation which we want to receive. We’ll

simply take his testimony and then we’ll adjourn and move to

begin our markup process.

So, Mr. Rush is recognized at this time. Mr. Upton will be back

in just a minute. Mr. Rush.

Mr. RUSH. Thank you, Mr. Chairman. Dr. Bailey, I would like to

get back to the question as to how many complaints it takes for

NHTSA to open a formal investigation. In earlier testimony, you

told Mr. Dingell that 26 complaints that NHTSA had in 1998 was

not enough; is that correct?

Ms. BAILEY. The 26 he commented on I believe is a subset of the

46 we had which occurred over almost a decade.

Mr. RUSH. And you said that was not enough.

1390

Ms. BAILEY. That would not be enough because it would be several a year, while we received hundreds of complaints from other

tire companies about other tires.

Mr. RUSH. I have before me a NHTSA report which shows your

agency opening an investigation on Michelin tires in 1994 with

only five complaints. Can you explain that?

Ms. BAILEY. Yes, sir. That was a request from the Office of the

Attorney General of the State of Kentucky, and that therefore was

an unusual circumstance. Often if we’re petitioned by a State official, we may instigate an investigation, and we did so in that case.

The investigation, by the way, was closed and there was no recall.

Mr. RUSH. And so there are instances where NHTSA will open

up an informal investigation without an extraordinary amount of

complaints, number of complaints; is that right?

Ms. BAILEY. We look at all the variables, yes. We look at a number of complaints, but in this case it was also the fact that the Office of the Attorney General was involved. I should also say that,

again, tires do fail, but we can sometimes open an investigation

with only one or two complaints if it’s a component of a car that

should never fail, like a seatbelt or a child seat.

Mr. RUSH. Can you explain to me if you look at the chart, where

would you have started an investigation on that chart?

Ms. BAILEY. I don’t understand what you’re asking about that

particular bar graph. I can tell you about what it is that we use

to determine, but you’ll have to rephrase the question for me.

Mr. RUSH. Those are complaints there, right?

Ms. BAILEY. Right.

Mr. RUSH. Where would—— Ms. BAILEY. No, those are fatalities related to tire failure, and

I’m trying to determine where that is—— Mr. TAUZIN. It comes from police—— Ms. BAILEY. That’s FARS data?

Mr. TAUZIN. This is FARS data.

Ms. PETRAUSKAS. In the few times the tire box is checked.

Ms. BAILEY. Thank you.

Mr. RUSH. Where would you start initiating a NHTSA investigation based on the chart there?

Ms. BAILEY. Well, first of all, the FARS data is used separately.

It is used for a variety of reasons, not necessarily applied the way

that I think we all know now we should be applying it. So if you

look there at that data, the data come in from law enforcement

agencies around the country. It is incomplete data. Sometimes it

will say it was tire failure. It will not have a vehicle. We don’t have

a VIN number. We can’t validate the numbers. So it is not data

that is used in the same way as the complaint data base, but it is

one of the things that I am committed to reviewing so that we can

begin to apply that data base more effectively.

Mr. RUSH. Can you explain the action of your agency as it relates

to the ATX recall? I understand that you have that, you have—first

of all, did you have enough information with only one failure—

there were 24 brands, 1.4 million failures, that affected 24 brands;

is that right?

Ms. BAILEY. I would have to check that number. You mean in the

total recall of August 9?

1391

Mr. RUSH. In the advisory that you put out.

Ms. BAILEY. In the advisory, there is 1.4 million in that advisory

that we put out on September 1.

Mr. RUSH. And I understand what you included in that advisory

was the ATX brand; is that right?

Ms. BAILEY. There were several brands included in that advisory.

In fact, it had a long list which included a lot of Firestone ATX,

yes.

Mr. RUSH. Were there any instances where there was one failure

that you included on that advisory?

Ms. BAILEY. If you’re referring to the fact that sometimes there

was a low tread separation or failure rate, you have to also look

at the production number, if there was a production number that

was very low. But if they only produced, say, three of them, and

one of them failed, yes, that would probably be a concern. But you

need to know that in that list of information, there were sometimes

production numbers of 200,000, 100,000, and the tread separation

rates in that list indicated by the consumer advisory were twice or

three times or more as high as the tread separation in the original

recall. So it was a very serious concern on our part.

Mr. RUSH. I would like to ask Mr. Lampe, Mr. Lampe, what was

the labor environment for Firestone in 1996?

Mr. LAMPE. Congressman Rush, 1994, July 1994, we had a strike

by our United Steelworker employees. At that time they were

United Rubber Workers. They came—we hired replacement workers, temporary workers, and in about May 1995 the unionized

workers that had been out on strike that had not already come

back to work, crossed over. They started coming back, and by 1996

over half of our work force in the Decatur plant was unionized

workers that had gone on strike and come back, and less than half

were then replacement or temporary workers.

Mr. RUSH. How many workers was that in total? First of all, how

many workers originally were at the Decatur plant, normally are

at the Decatur plant? How many employees do you have there?

Mr. LAMPE. We have about 2,000 employees today, sir. I think

back then it was less. We’ve increased our production there. It’s

probably about 1,400, but that’s an estimate.

Mr. RUSH. How many workers were affected by the strike, all

2,000?

Mr. LAMPE. At that time the smaller number, yes, sir; all, with

the exception of a very small handful, did go out on strike.

Mr. RUSH. So you had how many replacement workers there?

Mr. LAMPE. By 1996, I believe the question was around a little

less than half of the work force, probably around 6- or 700.

Mr. RUSH. Have you determined, was there any causal relationship that existed between the replacement workers and the recalled tires that we’re discussing today?

Mr. LAMPE. Sir, that’s something we’ve looked at and discussed

many times. It will probably be very easy for us to say yeah, that’s

the problem, and go on with it. We don’t think that that was the

cause of the problem; however, it’s not something we’ve taken off

the table. It’s something we continue to look at as a possible factor.

Mr. RUSH. Dr. Bailey, let me ask you another question. Under

the circumstances created by the legislation that our agency would

1392

share—under the circumstances created by the legislation, your

agency would share confidential proprietary information with a foreign government when a recall involved both the U.S. And a foreign government. Once in the possession of the confidential proprietary information, the foreign government could share this information with the public or with its domestic manufacturers. The foreign government could, in the process, damage the economic stability of the U.S. Company whose information was released. If this

chain of events were to occur, what recourse with would the U.S.

Government have against a foreign government?

Ms. BAILEY. I would need to get legal counsel to determine the

answer. But I can tell you we’re actively working to obtain greater

communication with those foreign governments and companies that

have subsidiaries here or companies that have subsidiaries outside

of the country.

Mr. TAUZIN. The gentleman’s time has expired. I can assure the

gentleman that it is on our list of concerns. We will address that

and get some legal opinions for the gentleman.

Mr. RUSH. Thank you.

Mr. TAUZIN. Thank the gentleman. I’m going to return the chair

to Mr. Upton who will have some final things to do, and then we

will dismiss this panel. In closing. Let me thank you again for coming.

Let me point out a couple things for the record. The FARS data

are about tire failures. These are single car rollovers that produce

accidents and deaths and result from the initiation of the tire failure. So it’s important information that was coming into the agency,

and it’s critical in the future we need to pay attention to it.

Second, Dr. Bailey, you mentioned again today that you did not

have the authority to obtain information on claims data warranty

and foreign recalls. You testified 2 weeks ago you had the authority

to request it, and if you requested it you would get it. What you’re

seeking now is the automatic transfer of that information to you by

legislation; is that correct?

Ms. BAILEY. Yes, sir.

Mr. TAUZIN. Again, let me thank you. Mr. Upton, the Chair.

Mr. UPTON [presiding]. Again I want to thank all of you for your

testimony in advance. As you know, we are trying—we have identified a serious problem, and as always when that happens, particularly in my role as Chairman of the Oversight and Investigations

Subcommittee, once that is done the next step is then to correct the

problem to make sure it does not happen again.

Senator McCain, to his credit, and the Senate, to its credit, have

in fact moved legislation that passed yesterday on a unanimous

voice vote. That bill at some point will be pending, I hope, on the

Senate floor. We are moving as well. The legislation that I introduced last week, H.R. 5164, has been cosponsored by a good number of Republicans and Democrats, many of them on the panel this

morning. We are—when Mr. Tauzin returns, they are going to

begin the markup stage which will continue into next week. And

as you may know, as we are working with the Senate, we’re trying

to preconference, I guess you could say, a number of items. But

there are a number of amendments that would be offered before

this subcommittee and before the Telecommunications and ConVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01400 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1393

sumer Protection Subcommittee and perhaps then before the full

committee when that process resumes later this afternoon and

again into next week.

One of the things that I would like to put on the table with you

all—so we don’t have the language yet or the number of those

amendments we’ll be seeing in the next couple of days, but that

language will likely be shared with your respective groups. And I

might ask that we get a quick turnaround in terms of suggestions,

constructive changes, how it may work, how it may not work, from

each of you as those questions are submitted, whether they be later

today, tomorrow, over the weekend, Monday and Tuesday next

week. Does that sound like a fair question?

Ms. BAILEY. Yes, sir.

Mr. UPTON. And I know we have questions of the criminal penalties that Mr. Sawyer and Mr. Dingell queried this morning. I

know Mr. Markey is working on an SUV standard. I know there

are a number of specific amendments that we want to improve the

process and not make it linger. And with that, again I thank you

for your testimony. And, Dr. Bailey, I think we’re asking you to

stay a little bit longer, but the others, you are excused. Thank you

for being with us this morning.

Our next panelist is the Secretary of Transportation, Mr. Rodney

Slater.

I guess we will get started.

Mr. Slater, we appreciate you waiting patiently to finish with our

first panel. We’re delighted you’re here. We’re delighted you’ve

taken the opportunity to talk to a number of us in the last couple

of weeks as well on a number of fronts. And the format that we

are going to proceed on now, the vote is—even though 15 minutes

have expired, members will be coming back, and your testimony

has been made part of the record in its entirety.

I am going to swear you in and you can give your statement at

that point. We will probably do a couple of questions, but not long,

because this is likely the last vote on the House floor today, and

as soon as we’re done, the markup is expected to convene. If you

would rise and raise your right hand.

[Witness sworn.]

Mr. UPTON. You are now sworn in. I neglected to ask if you

would like to be represented by counsel but I know your answer.

The next 5 minutes is yours. Welcome before the committee.

TESTIMONY OF HON. RODNEY E. SLATER, SECRETARY OF

TRANSPORTATION

Mr. SLATER. Thank you, Mr. Chairman. I’m looking forward to

the dialog between you and members of the committee and Dr. Bailey and myself.

And we thank you for this opportunity to come before you to discuss important legislation to improve the Federal law on motor vehicle safety. Again, I am pleased to be joined by Dr. Bailey and

members of our NHTSA and U.S. Department of Transportation

team. They are at U.S. the Department of Transportation. We wish

to note that we view transportation safety as our top transportation priority. We speak of it as the North Star by which we are

guided and willing to be judged, and so we very much appreciate

1394

this opportunity to come before you, Mr. Chairman, and members

of the committee, because we know that you share the same high

standard for transportation safety.

Mr. Chairman, almost 4 years ago, I had the opportunity to come

before the Congress and to pledge, if afforded the opportunity to be

confirmed, that I and the 100,000 members of the U.S. Department

of Transportation would continue to make safety and security the

highest priority and a matter of utmost importance at the Department. I am pleased that I’ve able to work with the Congress and

our many stakeholders along with our team to do just that.

Clearly on all fronts, we have the safest transportation system

in the Nation’s history. Highway death and injury rates, all-time

lows. Seatbelt and child safety seat use, all-time highs. Alcohol-related highway fatalities, all-time lows as well.

The same can be said as relates to highway/rail grade crossings,

deaths and injuries on our waterways, and also the fact that we

have the safest aviation system in the world.

But having said that, any sober and somber reflection on the

challenge at hand clearly makes it evident that our system is not

safe enough and we cannot rest where we now stand. It must be

made safer, and we are committed to working with this Congress

to that end.

In that regard as it relates to the specific matter before us, the Firestone recall, we have already reallocated $1.8 million to expedite our own investigation of this matter. We are also moving forward as relates to lessons learned and offering comprehensive legislation to the Congress that will strengthen the powers and the

authority of NHTSA to ensure that nothing like this happens

again. In this regard, we appreciate the action recently by the Senate Commerce Committee as relates to Senate bill 3059, and then

we also acknowledge our appreciation for the opportunity afforded

today by this committee and by you in particular, Mr. Chairman,

and other members of the committee as you are poised to shortly

act on a counterpart measure here in the House, House bill 5164.

In addressing you today, I want to acknowledge that we have

been serious and forthright in dealing with the investigation, and

Dr. Bailey and her team have done a tremendous job in that regard. As you know, we provided recent updates as relates to information which brought the total to 101 fatalities and more than 400

injuries resulting from the tires in question. Our investigation continues on an urgent basis, and I have again directed the agency to

use all means available to conclude the investigation as soon as

possible. The challenge before us is to investigate this issue vigorously, to find the facts, and to use the lessons learned again to ensure that this or similar incidences of this nature will not occur.

I would also like to underscore that the Continental and General

Tire action also reflects the importance of some of the authority

that we request dealing with warranty and claims information, because their action is based on that type of information. And again

this is the kind of information that we would like to have to initiate our actions on a more expeditious basis.

In March of this year, Mr. Chairman, we submitted a bill to the

Congress to strengthen our legislative framework for our vehicle

safety programs. The bill would have increased civil penalties. It

1395

would extend the period within which manufacturers must provide

no-cost remedy to consumers and require manufacturers to test

their products before certifying their compliance. In moving forward in our response to the Firestone investigation, we also reiterated in a more comprehensive proposal those things that were included in our March proposal, but we included some other information as well.

And, Mr. Chairman, Chairman Tauzin, it’s a pleasure seeing you

as well. The new authority we seek under the more comprehensive

proposal that was submitted on September 11 would seek to close

certain gaps in our current authority that hinder our ability to detect problems that led to the Firestone recall. Example: Authority

to get foreign recall information, clear authority to get warranty

and claims information; also again some loopholes that could be

fixed, and enhanced authority as it relates to our ability to work

with our international partners. We’ll probably talk a bit more

about this over the course of the discussion. But the bill represents

our best thinking of what needs to be done, and we look forward

to working with the two of you and your colleagues, all of you, the

entire committee, as we deal with the resolution that will come before the House momentarily.

Our bill also addresses a number of concerns raised by what is

clearly becoming the globalization of the motor vehicle industry.

We believe that the provision dealing with international cooperation included in our bill will provide the kind of early warning devices networks, if you will, that members of this committee have

said they favor and we believe is necessary to ensure that issues

raised in the Firestone investigation again will not occur.

Our bill would strengthen NHTSA’s information gathering powers in several vital respects. It would clarify the agency’s authority

to obtain information about vehicles and equipment used abroad

that is relevant to vehicles and equipment in the United States,

and put us on the same statutory footing as it relates to our authority when it comes to obtaining information concerning these vehicles in this country.

Again House Resolution 5164 addresses the need for NHTSA to

get timely information about safety recalls and campaigns that

occur in foreign countries. We strongly recommend that it not be

limited, though, to information about vehicles and equipment that

are, quote, ‘‘also offered for sale in the United States,’’ close quote.

This limitation might excuse a manufacturer if the foreign vehicle

or equipment is not identical to that which is sold in this country

even though it may share common design and construction elements. So we look forward to working with the committee on this

issue.

Also the House proposal addresses the issue of NHTSA tire safety standards. And here NHTSA has already moved ahead on a

process for addressing possible changes to these standards, but we

look forward to working with the committee to do so as quickly as

possible.

Last, I would mention that as relates to our original proposal, we

did request additional resources. I mentioned the $1.8 million that

we’ve already reallocated, but we also requested an additional $9

million, and we can talk about the details or the specifics as to how

1396

we would use those resources. I would note, though, that the action

taken by the Senate to up the authorization by about $18 million,

which is consistent with the President’s mark, would provide clearly the authorization we would need to get the resources that we

would need.

In closing, Mr. Chairman, there are two matters that have come

up in discussions that were not a part of our original submission,

and I would like to touch on that quickly in concluding my remarks, because I know that the matter came up this morning as

well; and, Congressman Upton, you and I talked about it just yesterday. And this deals with the issue of the appropriate penalty,

civil and/or criminal, when a company or companies fail to comply

with the provisions that will be offered in the bills as we go forward.

As we address the question, let me acknowledge that some have

raised concerns that criminal penalties could adversely affect the

ability of NHTSA or the Department to investigate and to gather

information. And we acknowledge that sentiment. But as I said last

week during the Senate committee hearing and I would like to reiterate this now, the administration supports a three-tiered approach

to the enforcement of health and safety statutes: administrative

civil penalties, which we are seeking; judicially enforced civil penalties, which the NHTSA statute already provides; and then in the

case of egregious circumstances, a criminal penalty for those who

knowingly and willfully violate the law. And clearly that discussion

is underway again and I know we can talk a bit more about that.

Let me also say there are a number of agencies within the U.S.

Department of Transportation that have criminal penalty authority, and we can get into the details of that. But I had mentioned

that, because we are concerned about having the ability to work

collaboratively with industry to gather information, but we do have

examples of where even with criminal penalty authority appropriately placed, that we have been able to work with the industry

and others to gather the kind of information that we need.

The last thing I would mention, and it deals also with the question of bringing a matter to closure, and it concerns a lack of authority. That is the case with NHTSA as relates to comparable regulatory agencies. And here again I think our discussions may

unveil more, but there is one in particular that we’re concerned

about; and that is, unlike other agencies, NHTSA must try its defects and standards compliance cases de novo in court if a manufacturer refuses to remedy the defect or noncompliance. The law

should be changed, we believe, to allow the agency to seek enforcement of its orders with the burden being placed on the manufacturer to show that the action ordered by the agency is unwarranted. The point to be made is that we will do a thorough investigation, move forward on an order, but if that order is challenged

and we go to court, then we have to try the matter over again. This

is not the case with other regulatory agencies, and we would ask

if the committee would consider this.

In summary, again we have worked very closely together. Our

desire is to increase the no-charge remedy period of tires from 3 to

5 years, and vehicles from 8 to 10; to raise the maximum penalty,

actually to remove the ceiling on it, and we can discuss that quesVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01404 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1397

tion; to require manufacturers to test products before certifying

them; to require used car dealers and school bus operators to fix

recalls before selling or operating the vehicles in question.

In September, we reiterated these points but we also then added

the final four points that I would like to make, and that is a request for authority to get foreign recall information, clear authority

to get warranty and claims information and again the Continental

case speaks to that point as well as the Firestone case. Also, enhance our ability to work internationally with foreign governments.

And finally, the provision deals with fixing certain loopholes, and

just one example would be requiring equipment manufacturers

such as brake manufacturers to report defects to us.

Mr. Chairman, members of the committee, again we appreciate

the opportunity to come before you. This is a serious matter. We

take it seriously. We appreciate this occasion to work with the committee and your colleagues across the Congress to ensure that before we leave we have addressed this issue appropriately before the

American people.

[The prepared statement of Hon. Rodney E. Slater follows:]

PREPARED STATEMENT OF HON. RODNEY E. SLATER, SECRETARY, UNITED STATES

DEPARTMENT OF TRANSPORTATION

Mr. Chairman and Members of the Committee: Thank you for holding this hearing on legislation to improve the federal law on motor vehicle safety. To begin, I

want to emphasize the importance of safety to the Department of Transportation.

It is our top transportation priority. It is the North Star by which we are guided

and willing to be judged. I want to commend you for your leadership on this issue,

Mr. Chairman, and that of other committee members.

Mr. Chairman, almost four years ago when I began my service as Secretary of

Transportation, I pledged that I would continue to make safety and security of the

highest importance. I promised to strive to raise our current levels of safety to even

greater heights, and I believe that we are accomplishing this goal on many key

fronts: aviation, maritime, highway, transit, and rail. In the Clinton-Gore Administration, we have worked in partnership in a collaborative way across the transportation spectrum to achieve specific and measurable safety goals—with the States,

industry, labor and management, local communities, safety advocates, and individual citizens—and the results speak for themselves.

• Highway death and injury rates have fallen to all-time lows.

• Seat belt and child safety seat use rates are at all-time highs.

• Alcohol-related highway fatalities are lower than ever before.

On the whole, we have the safest transportation system in the history of the

United States. But any careful evaluation shows us that its safety can still be improved. We have a challenge before us. We must work together to meet it.

In addressing you today, I want to acknowledge the outstanding effort that

NHTSA, under the leadership of its Administrator, Dr. Sue Bailey, is making to address the investigation and recall of Firestone ATX, ATX II, and Wilderness AT

tires. The investigation is continuing on an urgent basis. I have directed the agency

to use every means available to conclude the investigation as soon as possible. The

challenge before us is to investigate vigorously, find the facts, and use the lessons

we learn to avoid such incidents in the future.

Mr. Chairman, the Department has taken the initiative this year to strengthen

the legislative framework for our vehicle safety programs. In March of this year we

submitted a bill to Congress to increase civil penalties for defective and noncomplying products, extend the period within which the manufacturers must provide a

remedy at no cost to consumers, and require manufacturers to test their products

as a basis for their certification of compliance.

As the Firestone investigation unfolded, we again took the initiative, by submitting further comprehensive legislation on September 11 that would fix the gaps in

our current authority that hindered our ability to detect the problems that led to

the Firestone recall. This bill represents our best thinking on what needs to be done

and I encourage you to consider incorporating its provisions into H.R. 5164, the bill

introduced by Chairman Upton with bipartisan committee support, and with your

1398

sponsorship, Mr. Chairman. We ask you and the Congress to join with us, in a bipartisan effort, to enact effective legislation before this Congress goes out of session.

We firmly believe that all representatives of our safety-conscious industries will join

us in supporting this important effort.

Our bill addresses a number of the concerns raised by what is clearly the

globalization of the motor vehicle industry. We believe that the provision on international cooperation included in our bill would provide the kind of early warning

network that members of the committee have said they favor, and is necessary to

ensure that the issues raised in the Firestone investigation do not recur. The provision would cover not only information about safety defects, but would include a

great deal of other vehicle safety information as well.

Our bill would strengthen NHTSA’s information-gathering powers in vital respects. It would clarify the agency’s authority to obtain information about foreign

information relevant to vehicles and equipment in the United States and put it on

the same statutory footing as its authority to obtain information concerning vehicles

in this country. It would affirm NHTSA’s information-gathering authority in other

respects, and would require manufacturers to review information about crashes that

may indicate a defect and advise DOT if there is a reason to believe a defect or noncompliance may exist.

H.R. 5164 addresses the need for NHTSA to get timely information about safety

recalls and safety campaigns that occur in foreign countries. We strongly recommend that it not be limited to information about vehicles and equipment that are

‘‘also offered for sale in the United States,’’ a limitation that might excuse a manufacturer if the foreign vehicle or equipment is not identical to that sold in this country, even though it may share common design or construction elements. This provision would be useful, Mr. Chairman, but we believe it must go further, as our bill

does.

H.R. 5164 includes some of the provisions from legislation that the Department

submitted earlier, including an increase in civil penalties for a violation, from

$1,000 to $5,000 for each vehicle or item or equipment, and an increase in the ceiling for a related series of violations, from $800,000 to $4,000,000. It would also extend the period—from the current three years to five—within which the purchaser

of a tire can obtain a no-cost remedy for any defect or noncompliance. These are

important provisions and I welcome their inclusion in the bill. I would encourage

you to take the further step of removing the ceiling on penalties altogether, as our

new bill proposes.

Our bill includes other provisions that we believe should be incorporated into H.R.

5164 as committee deliberations take place. In addition to extending the period for

a no-cost remedy for defective and noncomplying tires, we encourage you to consider

a similar extension for motor vehicles, from the current 8-year period to 10 years.

Today’s motor vehicles remain in service much longer than the vehicles of 25 years

ago, when the no-cost remedy was first adopted. The period for a no-cost remedy

should be extended accordingly.

H.R. 5164 would require tire manufacturers to report information about claims

submitted for personal injury and property damage. We believe this would help to

avoid the situation that occurred in the Firestone case, but we would also encourage

you to expand the requirement to apply to manufacturers of motor vehicles and

motor vehicle equipment, as is currently included in our bill.

H.R. 5164 would be enhanced by the inclusion of another provision that we believe is important, particularly in the context of the Firestone investigation. Our

March bill included a requirement that manufacturers test their products before certifying them as complying with motor vehicle safety standards. We believe this is

a reasonable requirement that would facilitate NHTSA’s enforcement program and

that would not be burdensome to responsible manufacturers.

H.R. 5164 also addresses the issue of NHTSA’s tire safety standards. NHTSA is

already in the process of studying and considering possible changes to these standards if they improve safety.

Mr. Chairman, I believe the circumstances call not only for a bill that focuses its

efforts on the tire industry, as H.R. 5164 does, but one that provides a comprehensive renovation of NHTSA’s safety authority to secure the remedy of defective motor

vehicles and motor vehicle equipment.

Finally, Mr. Chairman, we seek additional funding for NHTSA’s safety enforcement program. The Office of Defects Investigation (ODI) needs to have additional

resources, both in funding and in people, and we ask Congress to provide for these

measures. We will immediately reallocate $1.8 million to the Firestone investigation

from other NHTSA activities. We are seeking an increased authorization of $9 million to expand ODI’s activities, increase public access to ODI’s public files, and provide resources for updating our tire safety standards. We submitted a bill in FebVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01406 Fmt 6601 Sfmt 6621 E:\HEARINGS\67111 pfrm02 PsN: 67111
1399

ruary of this year to increase the authorized levels for NHTSA’s motor vehicle safety

programs, including ODI, in fiscal year 2001 by $17,640,000. We urge you to consider including a $9 million authorization for NHTSA in the bill now before the committee.

Mr. Chairman, I pledge that as long as I am Secretary, we will do everything in

our power to use the new authority we seek, and our existing authority, vigorously.

The Department of Transportation is made up of 100,000 visionary and vigilant employees, and I can think of no clearer case in which this message must be heard:

we must look to the future and guard against any repetition of tragedies caused by

defective vehicles or equipment to the American people.

Mr. Chairman, this concludes my testimony. Dr. Bailey and I will be glad to answer your questions.

Mr. TAUZIN. Mr. Secretary, let me personally thank you for coming today. It is important that America sees how seriously the Department of Transportation takes its responsibility here and, as I

told you personally, NHTSA has been one of my favorite agencies

personally. It’s saved a lot of lives over the years. And if it has any

failings in this recent incident, we want to correct it and make sure

it never happens again.

That is the purpose of our very critical questions. We should all

have that sort of capacity to look at ourselves critically and see

where we’re missing something that we can improve. And that is

true of our legislation. I’ve said publicly we need to accept our responsibility as legislators. The laws aren’t adequate here. And we

need to give America a better set of laws, and your agency probably

needs to give them a better set of regulations.

To that end, let me ask something of you. We are going to in just

a minute end this hearing process and take a recess, and then reconvene as a committee to begin the process of considering the legislation, the ideas that you and others have presented to us in the

Upton bill. I have announced to all the members that we will take

only opening statements today and a few noncontroversial amendments perhaps, and then we will recess until next Wednesday to

give all of us a chance to interact: Chairman Bliley’s staff, our

staffs, the staffs of the minority, and hopefully designated staffers,

if you and Dr. Bailey can do so, to work with us in a collaborative

fashion. We are obviously looking for truly a bipartisan and an

American solution to this problem and we need all of your help as

we need the help of all the members here.

So that by Wednesday next, we would appreciate if in that interactive process we could have some good discussions organized

through our staffs and Chairman Bliley’s staffs with you to make

sure that we have all the relevant information, the proper language, the right drafts of the very technical amendments that

ought to go on this bill.

We begin action today as much as a demonstration as anything

else that we will take this matter up and move it. We have 3 weeks

to do it in. And by taking it up today, putting it on the table before

the committee, it puts everybody on notice to get busy. We’ve got

just 6 or 7 days to put this bill in good shape and move it to the

full committee. Chairman Bliley is committed to work with us in

that effort and to hopefully take it up to the full committee. Both

Mr. Upton and I have discussed with Mr. McCain his legislation.

We’re going to try to get the two bills as close as possible so that

we can get a compromise House and Senate version together. And

then we will ask you to do the final, most important thing, and

1400

that is to prevail upon the White House for a signature before we

leave here.

Again, Secretary Slater, we thank you for your appearance today,

and again we appreciate the seriousness with which the Department of Transportation is approaching this matter and hopefully

will help us find the right solutions as we go forward. Thank you

very much.

Mr. ENGEL. Mr. Chairman.

Mr. TAUZIN. Yes.

Mr. ENGEL. I would just like to ask the Secretary—I listened to

your testimony, I certainly agree with everything you’ve said. And

the bill before us, I certainly agree with that bill as well. It seems

to me that you’re proposing something much more comprehensive

than the bill before us, and in light of what the chairman said— and I couldn’t agree with him more, with the week that we have

perhaps to get things together. I just would like to understand up

until now what has been the interaction between your agency and

the legislature, because it seems what you’re proposing is much

more comprehensive than what we have. And while I certainly

have no objection to what we’re doing, I think it’s a positive step

forward, I would like to see something much more comprehensive

come out of this along the lines that you’ve mentioned.

Mr. SLATER. Congressman, a very good question. We have been

working with the Congress very closely from day one. Now, early

on, most of the focus was on what happened when, who knew it,

and the investigative process. And that’s where most of the focus

was. But during that time, internally we were also looking at our

particular needs as a Department, as an agency, and we reflected

on the fact that in March of this year we had presented a proposal

designed to actually strengthen our agency in much the same way

that we are doing now; but with the Firestone recall, certain other

matters were disclosed to us.

We recognize some of our limitations, especially as it relates to

foreign recalls and having manufacturers understand that there is

a responsibility to provide that information to us. There is not that

authority in the current law. And so we started to work probably

a little earlier maybe with the Senate on that question, because

last week the Senate was taking up the matter and looking at legislation for going forward. But even as we started to work with the

Senate, we started to work with the House, and now that we have

concluded that work with the Senate, clearly we are focused more

on the specifics of our work with the House. The bill that is currently before the committee, though it has been altered a bit of

late, focuses primarily on just the tire question. Ours is more comprehensive than that. You’ve heard me mention used car dealers

and school buses and manufacturers to a greater extent. And at the

end of the day, I think our continued cooperative and collaborative

working relationship will get us the kind of comprehensive bill that

I think we would all want.

Mr. TAUZIN. Thank you, Mr. Secretary. Let me point out to my

friend that Mr. Upton’s bill was filed even before the Senate bill

was filed. It represented a knowledge of the facts and potential solutions at that time. Since that time, Mr. Upton in the meeting

with staff and Mr. Chairman’s staff and others, have identified at

1401

least 10 to 15 points where the bill can be improved, and hopefully

we hope to have legislative language circulated between members

which will indeed make it a more comprehensive bill. And the contributions of the Secretary and his staff has not only been requested today, but I know will be part of that process.

Mr. ENGEL. Let me just say, Mr. Chairman, I think that it’s very

good news because I don’t think there is any controversy here. I

think there are things that need to be done, and the more comprehensive we are the better. I think that dealing with the tire industry is fine, but I think we need to go beyond that, along the

lines the Secretary has proposed.

Mr. TAUZIN. The only caveat I make is that we have to get this

bill done before we leave. And we are not going to complicate it

with controversial matters that may bog it down, because this is

too critical for American safety. I hope the gentleman will work

with us in that regard.

Mr. ENGEL. Yes. I would like to say I think there is enough on

which we can all agree that would not be controversial, that we

could pass something more comprehensive.

Mr. TAUZIN. The gentleman is correct. Again I thank you, Mr.

Secretary. We appreciate your testimony and your continued assistance in this matter.

Mr. Luther.

Mr. LUTHER. Mr. Chairman, thank you. I appreciate your point.

If I can just add to the point that was made. I think one thing in

your consideration, I think one thing that probably troubles every

member of the committee, is how we can still have a situation

where people are out driving with those tires and having their families being subjected to that kind of risk in this country. And so

anything that we can do in this process to improve the procedures

in such a way that when this kind of determination has been made

and an admission here of a defect and things are moving forward,

anything we can do to make sure that we can get those tires off

the road right now for the safety of the people of this country, I

think that view would be shared, in any discussions. Anyway, in

talking to other members of committee, it’s a real frustrating point

to think that people are still being put at risk, so I just wanted to

add that.

Mr. TAUZIN. I thank the gentleman. In fact, one of the amendments that will be circulated has to do with recall procedures, and

it focuses on the question of whether or not when a replacement

recall is voluntarily executed and mandated, that if in fact the

manufacturer does not have replacements available, that automatically consumers should have the right to seek comparable and appropriate replacements from other manufacturers. We are going to

discuss that at the markup that we complete on Wednesday.

The gentleman from California Mr. Cox.

Mr. COX. I just have a quick question with the chairman’s indulgence. Secretary Slater, thank you for being here. Did you, prior to

my arrival, express a view on the merits of the criminal provision

in the McCain proposal?

Mr. SLATER. I did, Congressman. And basically in summary what

I said was, while it is true that criminal provisions can sometimes

have an adverse effect when it comes to the parties working toVerDate 11-MAY-2000 13:27 Apr 24, 2001 Jkt 010199 PO 00000 Frm 01409 Fmt 6601 Sfmt 6602 E:\HEARINGS\67111 pfrm02 PsN: 67111
1402

gether to volunteer information, that we have agencies within the

Department that actually have criminal penalty authority.

In fact, the way to approach it is really the three-tier approach

that we would propose: One, administrative civil penalties, which

we request; judicially imposed civil penalties which are currently in

law; and then for egregious situations where there is knowing and

intentional, willful, violation, then a criminal provision would be

appropriate. And we would welcome the opportunity to work with

the Congress to properly structure that so as to not again adversely

impact the very collaborative process that really results in the unearthing of most of the challenges we face.

Mr. UPTON. Would the gentleman yield?

Mr. COX. I would be pleased to yield.

Mr. UPTON. I would like to clarify as well that as I understand

that within the Department of Transportation’s jurisdiction pipeline safety, some other important areas that you govern, in fact

there are criminal sanctions for exactly the same type of malfeasance; is that not correct?

Mr. SLATER. That’s correct. Also with the recently established

Federal Motor Carrier Safety Administration, there is the provision

for criminal penalties, and that was just acted on by the Congress

last year.

Mr. UPTON. I thank the gentleman for yielding.

Mr. TAUZIN. If the gentleman would yield once more, I want to

point out that that is also one of those 10 to 15 items that we are

beginning to circulate, and we will seek your advice and counsel on

that. Because in the end, I think we want a provision in that section that creates safe harbor for voluntary reporters of defects. And

we want to make that language careful. I believe Mr. Cox wants

to ensure we get voluntary reporting of information.

The gentleman, Mr. Cox.

Mr. COX. I thank the chairman for the time. I wanted to clarify

that point, particularly in light of the fact it was discussed earlier.

I appreciate your going over it again, and I have to agree entirely

with the description that you just made of this problem. The teeth

that are provided for enforcement by criminal provisions are much

to be desired, but the fact is that the criminal liability will sometimes set people within a firm at odds with what we’re trying to

obtain, which is full disclosure, which is something we have to do

very carefully. Have you expressed a preference for entity liability

versus individual liability on the criminal side?

Mr. SLATER. We haven’t. And over the course of the discussion

here, let’s just commit to work together on that point.

Mr. COX. It seems to me, Mr. Chairman, that entity liability is

easier to deal with because you would hate the prospect of having

a manager in a company being confronted with information about

safety problems calling in his personal lawyer at that point, saying

that in his personal interest he doesn’t want to see any of these

things.

Mr. TAUZIN. Yes, that’s exactly the nature of this debate and the

gentleman from Michigan and I have had some conversations about

this. He has pledged to work with us as well. Mr. Dingell is recognized.

1403

Mr. DINGELL. Thank you Mr. Chairman. Mr. Slater, in most circumstances, ordinary civil penalties work as an enforcement tool,

do they not?

Mr. SLATER. In most cases; that is correct. Actually that is what

we rely on most.

Mr. DINGELL. And they generally work?

Mr. SLATER. Yes, definitely.

Mr. DINGELL. In addition to that, the sanctions of going to court

and seeking injunctions works very well, too, does it not?

Mr. SLATER. That’s correct.

Mr. DINGELL. Now, would you say that criminal sanctions are

something that is needed for general enforcement work?

Mr. SLATER. Not for general enforcement work. Clearly it’s a result that you seek only when—in limited cases, when you have

egregious activity; knowing, willful violation.

Mr. DINGELL. And on serious matters.

Mr. SLATER. Serious matters; that’s correct.

Mr. DINGELL. Now, criminal enforcement creates certain problems, does it not; i.e.,the resort of the individual to his protections

under the fifth amendment against self-incrimination.

Mr. SLATER. That’s correct.

Mr. DINGELL. And it also imposes on anybody who might have

reason to feel the criminal sanctions were there, that he would

have to use and resort to his rights under the fifth amendment to

assure that he was not undertaking risk of criminal prosecution; is

that right?

Mr. SLATER. That is the approach that many would take, yes.

Mr. DINGELL. So the practical result of that would be that it

would tend to slow down the enforcement by a significant amount

because you would then lose the cooperation of persons who were— who might feel that they were under investigation; is that not so?

Mr. SLATER. That’s true, and that’s why, Congressman, it should

be limited again to major issues; knowing, willful activity.

Mr. DINGELL. Okay. And the other thing, of course, would be that

immediately if a company or an individual were to feel he would

be confronting that, he wouldn’t do anything at all to be of assistance simply because of potential for a criminal prosecution of himself or the company; is that right?

Mr. SLATER. That is highly likely, yes.

Mr. DINGELL. It means you then would be dealing with a phalanx of lawyers and a thicket of legal writs; is that right?

Mr. SLATER. Most likely, yes.

Mr. DINGELL. Thank you, Mr. Chairman.

Mr. TAUZIN. The gentleman’s time has expired. In fact, if we’re

going to begin our process, we need to thank you, Mr. Secretary.

Mr. Markey has one question. He promises me he will limit himself to one question.

Mr. MARKEY. That’s, Mr. Secretary, on the early warning provision. Could you tell us about the early warning provision and your

support for it, please?

Mr. SLATER. Yes. Clearly if we have access to information dealing

with warranty, claims investigations, that sort of thing, then we

have the ability to get information much earlier in the process. Actually the Continental tire issue or situation is a case in point. Had

1404

we had a firm requirement that they’d provide us that information

and were it not voluntary, then, as relates to Firestone, we probably would have gotten that information much earlier, would have

started the investigation and would have clearly been on top of this

issue a lot earlier in the process.

Mr. MARKEY. So in the bill that you sent us—— Mr. TAUZIN. Mr. Markey, that’s No. 2. Go ahead.

Mr. MARKEY. You do believe it should be an affirmative obligation on manufacturers whenever they gain access to information

that they have to provide it to you.

Mr. SLATER. That is correct. And then when you have recalls and

service complaints in foreign countries, we believe that that information should be provided to us as well.

Mr. MARKEY. Very good. Excellent. Thank you.

Mr. TAUZIN. Thank you, Mr. Markey. I thank you, Mr. Secretary,

and the panel is dismissed.

With that, the Chair asks that all members have unanimous consent to submit opening statements and questions for the record.

Without objection it is so ordered. The record of this proceeding

will stay open 30 days. And by the way, I want to invite any parties who have been tuning in to us who have information or would

like to submit something for our record, you certainly have that

right to do so within the next 30 days.

We appreciate it very much, Mr. Secretary. The hearing stands

adjourned. We will break for about 5 or 10 minutes for the staff

to organize a markup session and we’ll be back in session in just

a minute. Thank you.

[Whereupon, at 1:50 p.m., the subcommittees proceeded to other

business.]

[Additional material submitted for the record follows:]

PREPARED STATEMENT OF HON. LOUISE M. SLAUGHTER, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF NEW YORK

Mr. Chairman, I am grateful for the opportunity to participate in these proceedings. My family has a history with Firestone Tire recalls. In 1978, we had to

replace seven out of eight Firestone radial 500 tires. We are grateful to be alive.

During the 1978 Firestone tire recall, 8.7 million tires were replaced, at a cost of

$150 million, after tax write-offs.

I found it utter foolishness that then President Reagan slashed the budget of the

agency charged with oversight of automobile safety by 50 percent within the first

three years of his administration and canceled the recommendation of National

Highway Traffic Safety Administration (NHTSA) regarding the recall as an example

of over regulation. The budget and authority of the NHTSA has never recovered.

In the Fiscal Year 1999 Department of Transportation budget, NHTSA’s budget is

36% lower than their 1980 budget in real dollars—despite the fact that there are

40% more registered vehicles since 1980, and 21% more registered drivers.

It is unfortunate that it has taken the recent recall of 6.5 million Firestone tires

and over 100 deaths to highlight the need for NHTSA to have more authority. Public safety was compromised needlessly.

Therefore, I am pleased to be a cosponsor of H.R. 5164, the Transportation Reporting Enhancement, Accountability and Documentation (TREAD) Act, which is

aimed at improving auto and tire safety. The TREAD Act will increase NHTSA’s

authority to collect information about possibly defective products and expand its

budget for investigations. Specifically, the TREAD Act requires auto and tire manufacturers to report any defects on American tires or automobiles sold in foreign

countries, requires tire manufacturers to periodically report claims data to NHTSA,

increases the time under which tire manufacturers must make free repairs on faulty

products, increases penalties for violations, directs NHTSA to update its tire safety

standard, and authorizes an additional $500,000 for NHTSA investigators to handle

the increased work load.

1405

H.R. 5164 is a small but necessary change to instill public confidence in NHTSA’s

ability to ensure public safety. I thank you for this opportunity to express my support for consumer safety and look forward to working with this committee in passing the TREAD Act.

1406

1407

1408