WASHINGTON (Dec. 24, 2003) — The Tire Industry Association—smarting from bad publicity engendered by the Firestone tire recalls of 2000 and subsequent litigation—made an industry checkoff program one of its top priorities in 2003, but not without spurring debate as to whether the concept was just a way for backdoor taxation of tire dealers.
Under current law, an industry may—with congressional approval—collect a checkoff, or a small percentage of its members' earnings to fund informational, education and research programs designed to enhance consumer awareness of the product it sells. Early in 2003, TIA hired an attorney to advise it on the best way to conduct an industrywide public relations campaign without invoking the ire of the Federal Trade Commission, and the attorney advised a checkoff program.
Over the last few months TIA has held discussions with the Rubber Manufacturers Association (RMA), whose leaders have pronounced themselves interested in the checkoff concept, albeit with some reservations. At the Specialty Equipment Market Association/International Tire Expo Nov. 5, TIA and RMA officials agreed to move forward with discussions on the concept.
TIA Immediate Past President Tom Raben is a staunch advocate of a checkoff program, as is new President Larry Morgan, who said more than once during the year that he had yet to hear anyone in the industry speak against a checkoff program.
Unfortunately, TIA's hopes were dealt major blows. In October, the federal appeals court in Cincinnati struck down the National Pork Producers Council's checkoff program—which funded the familiar advertising slogan, “Pork—The Other White Meat”—as unconstitutional after a group of small Missouri hog farmers claimed the program abrogated their First Amendment rights. This followed closely on a similar federal appeals court decision declaring the beef industry's “Beef—It's What's for Dinner” campaign unconstitutional.
Then, in November, the board of directors of the Texas Tire Dealers Association voted to oppose the checkoff idea. In a letter to the RMA, the TTDA said it believed a checkoff program would be ineffective and turn out to be just a method of backdoor taxation and government control.
Since then, attorneys for TIA and the RMA have been scrutinizing preliminary plans for the checkoff program to make sure it meets industry expectations and can't be challenged in court. TIA has said the court decisions and the TTDA opposition actually have been helpful because they underlined the pitfalls the industry must avoid to have a successful program.
In December, TIA proposed a National Tire Safety, Research and Alliance Act, which must be approved by Congress in order for the checkoff program to proceed. If approved, it would be funded by a fee—the amount of which has yet to be determined—assessed on all new replacement highway vehicle tires sold in the U.S. Among other things, TIA stressed, none of the fee would go for advertising, lobbying or the government—only for consumer education, employee safety and training, and research and development.
The program could start only after two-thirds of the industry approved it in a referendum, and a referendum could also terminate it at any time.