```

[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

 
 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

                    ------------------------------  

                    U.S. GOVERNMENT PRINTING OFFICE
67-111 CC                   WASHINGTON : 2001

                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    TOM SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico           BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona             LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING, 
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland

                   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,              EDWARD J. MARKEY, Massachusetts
  Vice Chairman                      RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               BART GORDON, Tennessee
PAUL E. GILLMOR, Ohio                BOBBY L. RUSH, Illinois
CHRISTOPHER COX, California          ANNA G. ESHOO, California
NATHAN DEAL, Georgia                 ELIOT L. ENGEL, New York
STEVE LARGENT, Oklahoma              ALBERT R. WYNN, Maryland
BARBARA CUBIN, Wyoming               BILL LUTHER, Minnesota
JAMES E. ROGAN, California           RON KLINK, Pennsylvania
JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
HEATHER WILSON, New Mexico           GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
Mississippi                          JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York                (Ex Officio)
ROY BLUNT, Missouri
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
  (Ex Officio)

                                  (ii)

              Subcommittee on Oversight and Investigations

                     FRED UPTON, Michigan, Chairman

JOE BARTON, Texas                    RON KLINK, Pennsylvania
CHRISTOPHER COX, California          HENRY A. WAXMAN, California
RICHARD BURR, North Carolina         BART STUPAK, Michigan
  Vice Chairman                      GENE GREEN, Texas
BRIAN P. BILBRAY, California         KAREN McCARTHY, Missouri
ED WHITFIELD, Kentucky               TED STRICKLAND, Ohio
GREG GANSKE, Iowa                    DIANA DeGETTE, Colorado
ROY BLUNT, Missouri                  JOHN D. DINGELL, Michigan,
ED BRYANT, Tennessee                   (Ex Officio)
TOM BLILEY, Virginia,
  (Ex Officio)

                                 (iii)

                            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)

  

 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.
    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 
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 e-mail 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 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 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 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.
    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.
    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 examination 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.
    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 pickup 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 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.
    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 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 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 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 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 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 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 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 follow-up 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 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 hearings 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, 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 1\1/2\ 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 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 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.
    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, 
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:]

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    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 
part-time 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 
responsible 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.?
    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 highways 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 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 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 investigators 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 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.
    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.
    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 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 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.
    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:]
    [GRAPHIC] [TIFF OMITTED]70217.010
    
    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 follow-through 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. 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 2\1/2\ 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?
    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 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?
    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.
    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?
    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 resources 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.
    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.
    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?
    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?
    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 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. 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----
    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. 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 
represented 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?
    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?
    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 increased 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?
    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?
    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.
    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.
    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 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?
    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----
    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.
    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.
    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, 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.
    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?
    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?
    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 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 
authority 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 information 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.

    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 
certainly 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.

     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.
    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.
    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.
 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 Preliminary 
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.
    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.
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[GRAPHIC] [TIFF OMITTED]70217.013

    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?
    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.
    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.
    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.
    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.
    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 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 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?
    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.
    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:]
    [GRAPHIC] [TIFF OMITTED]70217.014
    
    [GRAPHIC] [TIFF OMITTED]70217.015
    
    [GRAPHIC] [TIFF OMITTED]70217.016
    
    [GRAPHIC] [TIFF OMITTED]70217.017
    
    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.
    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 
materials, 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?
    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.
    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.
    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 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.
    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 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 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.
    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?
    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 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 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 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.
    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.
    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 
investigated 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.
    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 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 
because 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 
understanding 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.
    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 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 pro-business 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 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.
    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.
    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?
    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.
    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 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 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 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.
    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.
    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 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 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.
    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 Decatur-built 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 problems 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.
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    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 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?
    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 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.
    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?
    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.
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    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 in-
depth 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 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 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.
    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 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 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:]
    [GRAPHIC] [TIFF OMITTED]70217.036
    
    [GRAPHIC] [TIFF OMITTED]70217.037
    
    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?
    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 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?
    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 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 would be with 
any other supplier that let us down, is on a day-to-day 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?
    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?
    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?
    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 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 third-party 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.
    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 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 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.
    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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Firestone % of      Firestone settlement      Ford % of total     Ford settlement
                  Approximate date of settlement                     total settlement            amount               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?
    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-
to-day 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 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 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''----
    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.
    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.
    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.
    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.
    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.
    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:]
     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 non-passenger 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?
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 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.
    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 
e-mail?
    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 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. 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.
    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 e-mail 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.
    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.
    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?
    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 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.
    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 
reimbursements 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.
    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 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.
    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 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 10\1/2\ 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:]
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 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 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 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 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 recognized 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, 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 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?
    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:]
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    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 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.
    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.
    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 accurate 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 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.
    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 
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 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:]
    [GRAPHIC] [TIFF OMITTED]70217A1.040
    
    [GRAPHIC] [TIFF OMITTED]70217A1.041
    
    [GRAPHIC] [TIFF OMITTED]70217A1.042
    
    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 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?
    [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.

    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.
    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 recall 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 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 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.
    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:]
    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 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 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 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.
    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. 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 ``J-turn'' 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.
    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.
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    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.
    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 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 conclude 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 someone 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 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 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.
    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 happen 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 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?
    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?
    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.
    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 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 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 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 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.
    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 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:]
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    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 identified 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 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 handling 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 low-budget 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.
    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.
    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?
    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----
    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?
    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 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 reporting, 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 high-speed 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.
    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?
    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 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?
    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?
    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 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 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.
    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 
attorney-client 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 provided 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 attorney-client 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 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?
    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 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 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.
    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?
    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 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 Consumer 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 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 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 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 question; 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 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 February 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 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 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 together 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.
    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 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.
    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.

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