HILTON HEAD ISLAND, S.C.—Smart tire manufacturers will learn as much about legislative and regulatory processes as they can, get to know the legislators and agency officials with authority over them, and participate as much as possible in the crafting of legislation and regulations that affect their industry.
This was the message Michael Wischhusen, technical director-litigation for Michelin North America Inc., had for attendees of the Clemson University Tire Industry Conference.
“It's not like we're a drug maker, but we're a regulated industry and it affects what we do and how we do it,” Mr. Wischhusen said as leader of a pre-conference workshop April 23. “This is not necessarily a topic I love, but it's one we've got to deal with, because regulations are part of our lives. “The industry will not serve itself well by ignoring regulatory issues. That doesn't mean we have to lead the charge, but we can't complain about the regulatory process if we don't participate.”
The events leading up to the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act were a lesson few tire or auto industry executives could ever forget, Mr. Wischhusen said.
But the recent General Motors Co. recall of 2.6 million vehicles, tied with the news that GM officials ignored the ignition switch problem for years while 13 motorists were killed, means the industry is in for yet another hard time on the regulatory front, he said.
“The TREAD Act is not going to be a once-in-a-lifetime experience,” he said. “We're still waiting on regulations that were prepared and put in place in 2001 and 2002, and I suspect we will have more opportunities here. If you think the TREAD Act process was like a pig going through a python, I think we're going to swallow a cow this time.”
The biggest problem with the TREAD Act—which is likely also to be the biggest problem with any legislation or regulation arising from the GM recall—was submission of data, according to Mr. Wischhusen.
Much of the information the tire industry submits to the National Highway Traffic Safety Administration (NHTSA) is not made public because it reflects too strongly on competitive issues within the industry, he said, with warranty returns and common green tire data topping this list.
However, consumer advocates and trial attorneys will always clamor to have all defect and recall data made public, and any regulations based on the GM recall will give them yet another opportunity to do so, Mr. Wischhusen said.
“Making this information public would be like handing our competitors something on a silver platter,” he said. “If we don't participate, it doesn't mean the decision won't be made.
This is not a position the industry can afford.” Furthermore, the TREAD Act and other safety regulations are just the tip of the regulatory iceberg, according to Mr. Wischhusen. Tire manufacturers also have to pay close attention to the Toxic Substances Control Act (TSCA) from the Environmental Protection Agency; the Regulation on Regulation, Evaluation, Authorisation and Restriction of Chemicals (REACH) from the European Union; and various state and local laws involving the collection, processing and use of scrap tires, he said. Mr. Wischhusen described the process of petitioning agencies for rulemaking and commenting on proposed rules to agency dockets. In submitting documents to agencies, he said, tire makers need to remember these things in particular:
1. Determine your objectives in submitting the document;
2. Understand the regulatory process before you submit;
3. Understand the other stakeholders in the rulemaking, including those opposing you;
4. Evaluate your options and make a plan of action;
5. Execute the plan; and
6. Follow up on your actions.
“Do you simply want to be aware of what's coming?” Mr. Wisch-husen asked. “Do you want to comment on or contribute to the rulemaking? Do you want to initiate rulemaking?” Initiating rulemaking—or even making persuasive comments on rulemaking—is not a simple process.
“As technical people, we like to think anything can be reduced to an equation,” he said. “This can't.” Industry professionals should learn to anticipate the reactions of other stakeholders to their proposals and to form a Plan B if possible, Mr. Wischhusen said. “There's no shame in preparing for Plan B,” he said. “Someone else in the process might teach you something. Be open-minded; being closed-minded is almost as bad as not participating at all.”
One of the most important things tire executives can do to understand the scope and process of federal regulation is to look at the Federal Register as often as they can, according to Mr. Wischhusen. “The business of the U.S. government is published in the Federal Register,” he said. “It's the defining document that tells you what your government is doing, including the agencies you want to work with.” Tire executives need to remember that the agencies they deal with are stakeholders in their own rulemaking, Mr. Wischhusen said.
“They have their own agendas, and they're not just there to do what we tell them to do. “It is important to understand that anything you propose is going to impact others, and they are going to weigh in.
They may be with you or against you; they may have goals that are diametrically opposed to yours,” he advised. Mr. Wischhusen added that “knowing a little about the other stakeholders may help you realize why they're saying what they're saying, and it may avoid some unintended consequences.”
To reach this reporter: [email protected] crain.com.