As the nation's new ``early warning'' law affecting tire, automobile and auto parts manufacturers faces a government review next year, the law is getting wildly mixed reviews from experts on different sides of the issue.
``The bottom line is that millions of data bits are being sent to NHTSA (the National Highway Traffic Safety Administration) worldwide, and there doesn't appear to be a return on that investment so far,'' said Brian Westenberg, an attorney with the Troy, Mich., law firm of Miller, Canfield, Paddock and Stone P.L.C. Mr. Westenberg's firm specializes in auto and transportation law.
But NHTSA and consumer advocates defend the rule.
``Whether the costs of the early warning system outweigh its benefits is something for Congress to decide,'' said an agency spokesman. ``But we are really happy with the way it's working out because we have much quicker access to important data than before.''
Mandated by the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act of October 2000, the early warning rule was issued in July 2002. Essentially, it creates two different categories of motor vehicle and equipment manufacturers, with different reporting requirements for each.
Tire makers and auto manufacturers must provide NHTSA with any information that might indicate a potential product defect, including reports of deaths and injuries, warranty claims and adjustments, consumer complaints, property damage claims and field reports.
The Office of Management and Budget is scheduled to review the early warning rule along with the rest of the TREAD Act next year, and there also are likely to be TREAD Act oversight hearings before the Senate and House Transportation Committees, Mr. Westenberg said.
Since the rule's establishment, there have been a number of cases in which tire and auto makers have ordered ``consumer satisfaction campaigns'' to recall products early when performance data didn't match company expectations. Among these companies were:
* Continental Tire North America Inc., which in August 2002 recalled more than 595,000 Continental- and General-brand tires, most of which were original equipment on 2000 and 2001 Ford Expeditions and Lincoln Navigators; and
* Bridgestone/Firestone, which in February recalled nearly 300,000 Firestone Steeltex Load Range D tires after six accidents involving the tires resulted in five deaths and 20 injuries.
But Conti, BFS and other companies would have initiated the recalls even without the early warning rule, Mr. Westenberg insisted.
``We're not aware of any defect investigation or recall that has derived from that huge database-and this was to be expected,'' he said.
Ongoing review of accident, warranty and claims data has been a regular part of business at every tire and auto company since long before the early warning rule was passed, Mr. Westenberg explained.
``When I talk to my clients, they say, `We're not doing anything differently, except shoehorning everything into the format NHTSA demands at great expense,''' he said.
Mr. Westenberg cited a number from AMR Research Inc., a Boston-based independent research analyst firm, that the early warning rule has cost industry 50 times what NHTSA estimated it would. He did not offer an exact figure.
``The important thing is that some companies are spending more money than they need have done be-cause they didn't step back and think about what the law said and what they needed to do to comply,'' said Marianne Grant, a TREAD Act expert with the El Segundo, Calif.-based consulting firm Syncata Corp. ``They rushed in and did things they didn't need or that didn't accomplish the necessary goals.''
When it issued the early warning rule, NHTSA estimated that 87 companies in the U.S. would have to report data to NHTSA. Actually, Ms. Grant said, the number is approximately 1,000.
She estimated that perhaps 550 companies are now in compliance with NHTSA data reporting requirements. The agency has been sending out reminders to companies-many of which probably didn't know they had to report data-and the warnings are likely to turn sterner very soon, she added.
The Rubber Manufacturers Association (RMA) was very careful to make sure its members, both tire and non-tire, knew about the early warning reporting requirements, according to an RMA spokesman.
``One member of Congress said the early warning database would be the second-largest in the government, after the Department of Defense,'' the spokesman said. ``The early warning system is so complex that NHTSA has increased the amount of time a company has to turn in its data.
``Our members have to report quarterly, and initially they had to turn in their data 30 days after the end of the quarter. That's now been extended to 60 days.''
One person who is skeptical about industry complaints surrounding the early warning system is Clarence M. Ditlow III, executive director of the Center for Auto Safety.
``The litany of industry objections to auto safety laws has always included, `It costs too much,''' Mr. Ditlow said. ``What the industry is really objecting to is the government issuing regulations to protect the public.''