The Tire Industry Association (TIA) and the Rubber Manufacturers Association (RMA) are in ongoing talks concerning a proposed checkoff program plan devised at the Specialty Equipment Market Association (SEMA) Show meeting in Las Vegas in early November.
Antitrust attorneys representing both associations are scrutinizing the proposal to make sure it contains nothing that will cause it to be challenged in court or anywhere else, according to Roy E. Littlefield III, TIA executive vice president, and Donald B. Shea, RMA president.
Under current law, Congress may approve an industry's plan to assess a small fee based on percentages of sales from its individual businesses for a national consumer education campaign. Such a plan may include efforts in advertising, marketing, public relations, education, re-search, development or training, and the government assists in the collection of the fee.
The U.S. Customs Service would be the agency helping the tire industry to collect the checkoff fees on imported tires, according to Mr. Littlefield. For domestic tires, the fees would be collected at the first point of sale, meaning manufacturers selling tires to either distributors or large retailers.
The RMA and TIA must still hammer out some of the details, such as who will be named to the program's board of directors and how large the fee should be, Mr. Littlefield said. There are also talks pending with large retailers for whom tires are only one part of their business, he added.
The RMA has not officially endorsed the checkoff concept.
Mr. Littlefield hopes the package will be ready to submit to Congress by January. Once it is approved there, it will be submitted to every tire manufacturer and retailer in an industrywide referendum, he said.
Getting unanimous approval for the program is vastly important to its success. For one thing, no individual companies will be allowed to opt out, for competitive reasons. ``That just wouldn't be fair,'' Mr. Littlefield said. Mr. Shea had mentioned the possibility of a voluntary program, but that was before the SEMA show, Mr. Littlefield noted.
Second, and even more importantly, recent federal court decisions have rendered all checkoff programs vulnerable. Groups of cattle ranchers and hog farmers challenged their industries' checkoff programs-the same ones that sponsored the well-known slogans, ``Beef-It's What's For Dinner'' and ``Pork-The Other White Meat.''
Of all the issues remaining to be resolved, legal issues are by far the most important, according to Mr. Shea. ``There have been two cases in which federal appeals courts have ruled long-established (checkoff) programs to be unconstitutional,'' he said. ``We have to find the things within the proposed program that distinguish it from those cases.''
The 6th Circuit Court of Appeals' decision against the National Pork Producers Council came down Oct. 22, only two weeks before the SEMA show. Going into that show, TIA President Larry Morgan said tire industry support for a checkoff program was more or less unanimous.
Just after the proposal was written, however, the board of directors of the Texas Tire Dealers Association voted to oppose it. In a letter to the RMA, the TTDA said it feared the program would be ineffective and turn out to be nothing more than a backdoor method of government control and taxation.
Potential opposition makes the industrywide referendum all the more crucial, Mr. Littlefield said.
``The rulings against existing checkoffs gives us a great opportunity to know what not to do here,'' he said. The pork producers, he added, made some egregious errors in their checkoff efforts that the tire industry can easily avoid. ``They had a referendum on their plan, and it was defeated, but they went ahead with it anyway.''
If the tire industry's proposal is defeated, Mr. Littlefield said, the industry will work to assuage the nay-sayers' doubts, then hold another referendum. ``We're trying to work to ensure that everyone sees the benefits to the industry that we see,'' he said. ``There are so many tangible and intangible benefits to the industry that it's really worth explaining.''