WASHINGTON — On the legislative-regulatory landscape in 2015, there were three 500-pound gorillas throwing their weight around, from the standpoint of the tire industry.
Their names were Mandatory Tire Registration, Duties on Chinese Tires, and Fast-Track Legislation.
President Barack Obama in December signed into law a five-year, $305 billion transportation funding bill. For tire dealers, the far most important — and galling — portion of the 1,300-page bill was a provision calling on the National Highway Traffic Safety Administration (NHTSA) to reinstate mandatory tire registration.
The provision directs NHTSA to require independent tire dealers to register every tire they sell at the point of sale and transmit the data electronically to tire manufacturers.
The Rubber Manufacturers Association (RMA) championed a return to mandatory registration as the best way to ensure that most tire owners can be found in case of a safety recall.
The Tire Industry Association (TIA), however, said the mandatory registration law that was repealed in 1982 is both hopelessly outdated and punitive toward independent dealers, with noncompliance fines of up to $700,000 per incident.
Sending registration information to tire makers, TIA added, would only aid manufacturers' efforts to sell their tires online, bypassing dealerships.
TIA persuaded House-Senate conferees to include language requiring NHTSA to conduct a study on the feasibility of tire makers' including electronic information in their tires. However, further language ordering the agency not to consider a mandatory registration rule until the study was completed was excluded from the bill.
The surface transportation legislation also contained two other provisions supported by the RMA: one directing NHTSA to establish minimum fuel-efficiency and wet-traction standards for tires, the other for the agency to set up a user-friendly tire recall search engine on its website, searchable by tire identification number (TIN).
Other tire-related provisions in the bill included one ordering NHTSA to update its regulations surrounding tire pressure monitoring systems (TPMS) and another extending the recall remedy period for tires to 180 days from 60.
Another important provision in the surface transportation bill, affecting all manufacturers regulated by NHTSA, is the tripling of maximum penalties for violations of NHTSA safety regulations, to $105 million.
Manufacturers and importers of passenger and light truck tires from China found themselves penalized this year when the International Trade Commission voted 3-3 in July to make an affirmative determination of material injury against Chinese tire makers in the petition filed by the United Steelworkers (USW) union.
The next month, the Commerce Department made final countervailing duty findings against Chinese tire makers ranging from 20.73 to 116.33 percent and antidumping duty findings of 14.35 to 87.99 percent.
In the ITC, a 3-3 tie signifies an affirmative vote. With that vote, the ITC agreed with the USW's assertion that an upsurge of Chinese passenger and light truck tire imports had harmed the domestic tire industry.
The upsurge, according to the USW's figures, occurred from 2012 to 2014—just after the end of three years of high duties against Chinese passenger and light truck tires, granted by the Obama administration under Section 421 of the Trade Act.
The union hailed the new duties as a major victory, but was chagrined when Congress approved a bill giving President Obama “fast-track” authority to introduce trade agreements into Congress and receive only an up-or-down vote on the pacts, with no amendments allowed.
The USW remains completely opposed to the Trans-Pacific Partnership (TPP), a trade agreement between the U.S. and 11 other nations. The White House announced a final agreement on the TPP in October. At that time, USW International President Leo W. Gerard said, “At its core the hastily concluded TPP deal will simply continue today's outdated, disastrous approach to trade.”
In December, the USW's International Executive Board issued a formal resolution opposing the TPP and vowed it would lead a concerted effort among USW membership to fight the trade pact in both the U.S. and Canada.
Organizations such as the U.S. Business and Industry Council and the Alliance for American Manufacturing also condemned the TPP, but others such as the National Association of Manufacturers and the National Retail Federation gave it cautious approval.
Other legislative and regulatory concerns returned as hardy perennials in 2015, chief among them the Affordable Care Act (ACA).
Among other ACA-related action in 2015, Congress debated whether to repeal the law's “Cadillac tax”—a 40-percent excise tax on premiums that exceed $10,200 for single coverage or $27,500 for family coverage, set to begin in 2018.
Also, among the myriad efforts to kill the ACA outright—the Republican-led House of Representatives voted more than 50 times to put a stake in the law's heart—the Supreme Court received a petition in October claiming the law is unconstitutional because it is a revenue-raising measure that began in the Senate, rather than the House, which holds “the power of the purse.”
More than 40 House Republicans have filed briefs in lower courts in support of this petition.
The Department of Transportation's Office of Inspector General criticized NHTSA in June for allegedly lax early warning system oversight, and the tire industry is still waiting for the labeling and consumer information portions of the tire fuel-efficiency final rule—provisions that are expected in 2017.
Nevertheless, NHTSA made several important rulings in 2015.
For tire makers, an important new rule came in April, when NHTSA revised the format of the TIN system the agency uses to identify tire factories—moving to a three-digit and/or letter system—and tire production dates.
The revised format allows more plant codes to be issued, a necessity with the proliferation of new tire facilities, NHTSA said. Standardizing the length of TINs to 13 characters for new tires and seven for retreads eliminates confusion caused by the variable lengths of previous TINS, according to the agency.
In June, NHTSA also issued a final rule requiring electronic stability control (ESC) systems on heavy trucks and large buses.
The agency said it expected the truck-bus ESC rule to save 49 lives, prevent 1,759 crashes and provide net economic benefits of more than $300 million annually.
NHTSA also issued two key proposals in September. One was to create new procedures for assessing civil penalties against tire, auto and auto parts manufacturers that violate federal safety regulations, and establish new guidelines for interpreting the amount of a civil penalty or compromise decision.
The other notice was a request for comments on a proposed Enforcement Guidance Bulletin that would allow courts to disclose important vehicle safety information to NHTSA, even if the information is available only from sealed settlement agreements in private litigation.
NHTSA also assessed a record $70 million in penalties against two companies: Takata Corp., for selling defective airbags, and Fiat Chrysler Automobiles, for failing to report deaths and injuries caused in accidents involving its vehicles.
The U.S. Environmental Protection Agency (EPA) also had its hands full this year, most prominently in fighting Volkswagen Group in the auto maker's alleged use of illegal software in its diesel-powered vehicles that hid emissions levels higher than those the EPA allows.
More than 10,000 diesel-powered VW Group vehicles in the U.S. alone had the illegal software, the EPA said Nov. 2. Some estimates for the worldwide population of those vehicles range as high as 11 million.
VW in turn said it used the software because it was impossible to meet the new U.S. standards for nitrogen oxide emissions.
In January, the EPA scored a victory when it persuaded eight automotive original equipment and aftermarket industry groups to agree to reduce the use of copper and other toxic substances in brake pads.
Signatories to the agreement were the Auto Care Association, the Motor & Equipment Manufacturers Association, the Automotive Aftermarket Suppliers Association, the Brake Manufacturers Council, the Heavy Duty Manufacturers Association, the Alliance of Automobile Manufacturers, the Association of Global Automakers Inc. and the Engine Manufacturers Association.
However, the EPA was dealt a blow in June when the U.S. Supreme Court voted 5-4 to strike down the agency's final rule limiting toxic emissions from power plants.
The court majority ruled that the EPA erred in not initially considering the compliance costs to power plants. The minority, however, said the agency did consider costs later in the rulemaking process.
In July, the EPA issued a final regulation strengthening federal underground storage tank requirements to improve prevention and detection of petroleum leaks.
The new rule affected not only gasoline stations and auto repair shops, but also convenience stores and non-retail facilities that service taxis, trucks, buses, limousines, boats, vans and heavy equipment, the EPA said.
The Federal Trade Commission also acted on issues important to the automotive aftermarket. In October, the ACA, TIA and other organizations praised the FTC's final consent decree against the Mini Division of BMW of North America L.L.C. for violations of the Magnuson-Moss Warranty Act.
The FTC accused the auto maker's Mini Division of telling car buyers that their warranties would be void if they serviced their cars at non-Mini repair shops or used parts that weren't OE to Mini.
Under the consent agreement, Mini may not make those requirements in the future unless it can back them with reliable, competent scientific evidence.
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