Current Issue
Published on July 2, 2007

Feds must close recall loopholes



AKRON (July 2, 2007) — It's unclear at this point which company is right or wrong concerning the recent decision by the National Highway Traffic Safety Administration (NHTSA) to order a recall of an estimated 450,000 Chinese-made light truck tires imported into the U.S.

The Chinese manufacturer of the tires, Hangzhou Zhongce Rubber Co. Ltd., reportedly has disputed claims made by its former U.S. importer, Foreign Tire Sales (FTS) Inc., of Union, N.J., that the tires allegedly could contain a safety defect or are noncompliant with one or more federal vehicle safety standards.

So it could be some time before this question is sorted out.

What is more certain is that this recall likely will bring about increased government scrutiny of the tire industry and in particular companies that import tires into the U.S. At the same time, it must not lead to an indictment of all Chinese-made tires.

Already four Democratic U.S. senators have gotten involved in the issue, urging President Bush via NHTSA to expedite the recall.

In addition, the attorney general of Connecticut has announced an investigation into the sale and distribution of the tires including warning tire dealers against selling them. Dealers, the attorney general said, could face stiff state penalties and liability for any accidents arising from the tires' failure.

It's no stretch then to think more Congressional and political leaders won't soon take up this issue.

This case also points out a weakness in the government's tire recall process.

FTS, the manufacturer of record, said in a filing with NHTSA that it does not have the resources to conduct the recall, and the government has no provisions in the National Traffic and Motor Vehicle Safety Act about what to do if a company lacks the financial wherewithal. As a result, any recall by FTS, at least for the moment, is in limbo.

U.S. legislators must take steps to close this loophole. One idea might be to require tire importers to show proof they have sufficient resources in the event of a recall or a tire-related accident.

This case also brings up again the importance of tire retailers making certain the importers they do business with are backed by the manufacturer of the imported tires or can demonstrate adequate coverage.

FTS also stated in its filing that it had received very few tire registration cards from consumer purchasers of the affected tires. This, too, is an issue that needs to be addressed.

Without complete registration data, it's nearly impossible to notify owners promptly to ensure these tires are removed from vehicles and replaced with new ones.

The industry, it appears, is headed for another hot summer under the government spotlight.


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