    [House Hearing, 106 Congress]
    [From the U.S. Government Publishing Office]

     THE RECENT FIRESTONE TIRE RECALL ACTION, FOCUSING ON THE ACTION AS IT
                       PERTAINS TO RELEVANT FORD VEHICLES

    =======================================================================

                                    HEARINGS

                                   before the

                      SUBCOMMITTEE ON TELECOMMUNICATIONS,
                         TRADE, AND CONSUMER PROTECTION

                                    and the

                  SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                     of the

                             COMMITTEE ON COMMERCE
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED SIXTH CONGRESS

                                 SECOND SESSION

                                   __________

                            SEPTEMBER 6 AND 21, 2000

                                   __________

                               Serial No. 106-165

                                   __________

                Printed for the use of the Committee on Commerce

                        ------------------------------

                        U.S. GOVERNMENT PRINTING OFFICE
    67-111 CC                   WASHINGTON : 2001

                             COMMITTEE ON COMMERCE

                         TOM BLILEY, Virginia, Chairman

    W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
    MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
    MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
    JOE BARTON, Texas                    RALPH M. HALL, Texas
    FRED UPTON, Michigan                 RICK BOUCHER, Virginia
    CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
    PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
      Vice Chairman                      SHERROD BROWN, Ohio
    JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
    CHRISTOPHER COX, California          PETER DEUTSCH, Florida
    NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
    STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
    RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
    BRIAN P. BILBRAY, California         BART STUPAK, Michigan
    ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
    GREG GANSKE, Iowa                    TOM SAWYER, Ohio
    CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
    TOM A. COBURN, Oklahoma              GENE GREEN, Texas
    RICK LAZIO, New York                 KAREN McCARTHY, Missouri
    BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
    JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
    JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
    HEATHER WILSON, New Mexico           BILL LUTHER, Minnesota
    JOHN B. SHADEGG, Arizona             LOIS CAPPS, California
    CHARLES W. ``CHIP'' PICKERING,
    Mississippi
    VITO FOSSELLA, New York
    ROY BLUNT, Missouri
    ED BRYANT, Tennessee
    ROBERT L. EHRLICH, Jr., Maryland

                       James E. Derderian, Chief of Staff

                       James D. Barnette, General Counsel

          Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                     ______

       Subcommittee on Telecommunications, Trade, and Consumer Protection

                   W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

    MICHAEL G. OXLEY, Ohio,              EDWARD J. MARKEY, Massachusetts
      Vice Chairman                      RICK BOUCHER, Virginia
    CLIFF STEARNS, Florida               BART GORDON, Tennessee
    PAUL E. GILLMOR, Ohio                BOBBY L. RUSH, Illinois
    CHRISTOPHER COX, California          ANNA G. ESHOO, California
    NATHAN DEAL, Georgia                 ELIOT L. ENGEL, New York
    STEVE LARGENT, Oklahoma              ALBERT R. WYNN, Maryland
    BARBARA CUBIN, Wyoming               BILL LUTHER, Minnesota
    JAMES E. ROGAN, California           RON KLINK, Pennsylvania
    JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
    HEATHER WILSON, New Mexico           GENE GREEN, Texas
    CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
    Mississippi                          JOHN D. DINGELL, Michigan,
    VITO FOSSELLA, New York                (Ex Officio)
    ROY BLUNT, Missouri
    ROBERT L. EHRLICH, Jr., Maryland
    TOM BLILEY, Virginia,
      (Ex Officio)

                                      (ii)

                  Subcommittee on Oversight and Investigations

                         FRED UPTON, Michigan, Chairman

    JOE BARTON, Texas                    RON KLINK, Pennsylvania
    CHRISTOPHER COX, California          HENRY A. WAXMAN, California
    RICHARD BURR, North Carolina         BART STUPAK, Michigan
      Vice Chairman                      GENE GREEN, Texas
    BRIAN P. BILBRAY, California         KAREN McCARTHY, Missouri
    ED WHITFIELD, Kentucky               TED STRICKLAND, Ohio
    GREG GANSKE, Iowa                    DIANA DeGETTE, Colorado
    ROY BLUNT, Missouri                  JOHN D. DINGELL, Michigan,
    ED BRYANT, Tennessee                   (Ex Officio)
    TOM BLILEY, Virginia,
      (Ex Officio)

                                     (iii)

                                C O N T E N T S

                                   __________
                                                                       Page

    Hearings held:
        September 6, 2000............................................     1
        September 21, 2000...........................................   933
    Testimony of:
        Bailey, Hon. Sue, Administrator, National Highway Traffic
          Safety Administration, U.S. Department of Transportation:
            September 6, 2000........................................    40
            September 21, 2000.......................................  1232
        Brandau, Herman, Associate General Counsel, accompanied by
          Samuel K. Boyden, Associate Research Administrator, State
          Farm Insurance Companies...................................   192
        Ditlow, Clarence, Executive Director, Center for Auto Safety.   195
        Lampe, John T., Executive Vice President, Bridgestone/
          Firestone, Inc.; accompanied by Dan Saurer, Division Vice
          President for Technology, Bridgestone/Firestone, Inc.......  1234
        Nasser, Jacques, President and Chief Executive Officer, Ford
          Motor Company..............................................   140
        Ono, Masatoshi, Chief Executive Officer, Bridgestone/
          Firestone, Inc., Gary B. Crigger, Executive Vice President,
          Business Planning; and Robert J. Byant, Vice President,
          Quality Assurance..........................................    87
        Petrauskas, Helen O., Vice President, Environment and Safety
          Engineering, Ford Motor Company; accompanied by Thomas D.
          Baughman, Engineering Director, Truck Consumer Business
          Group, Ford Motor Company..................................  1238
        Slater, Hon. Rodney E., Secretary of Transportation..........  1393
    Material submitted for the record by:
        Blalack, K. Lee, II, O'Melveny & Myers, letter dated November
          7, 2000, enclosing response for the record.................  1406
        Hester, Theodore M., King & Spalding, letter dated October 4,
          2000, enclosing response for the record....................  1405
        Slaughter, Hon. Louise M., a Representative in Congress from
          the State of New York, prepared statement of...............  1404

                                      (v)

     THE RECENT FIRESTONE TIRE RECALL ACTION, FOCUSING ON THE ACTION AS IT
                       PERTAINS TO RELEVANT FORD VEHICLES

                                  ----------

                          WEDNESDAY, SEPTEMBER 6, 2000

              House of Representatives,
                         Committee on Commerce,
            Subcommittee on Telecommunications, Trade,
                           and Consumer Protection, and the
                  Subcommittee on Oversight and Investigations,
                                                        Washington, DC.
        The subcommittees met, pursuant to notice, at 1:10 p.m., in
    room 2123, Rayburn House Office Building, Hon. W.J. ``Billy''
    Tauzin (chairman, Subcommittee on Telecommunications, Trade,
    and Consumer Protection) presiding.
        Members present Subcommittee on Telecommunications, Trade,
    and Consumer Protection: Representatives Tauzin, Oxley,
    Stearns, Largent, Rogan, Shimkus, Wilson, Pickering, Fossella,
    Blunt, Bliley, (ex officio), Markey, Gordon, Rush, Eshoo, Wynn,
    Luther, Sawyer, Green, McCarthy, and Dingell, (ex officio).
        Members present Subcommittee on Oversight and
    Investigations: Representatives Upton, Barton, Burr, Bilbray,
    Ganske, Bryant, Bliley, (ex officio), Waxman, Stupak, Green,
    McCarthy, DeGette, and Dingell, (ex officio).
        Staff Present: Tom DiLenge, majority counsel; Jan Faiks,
    majority counsel; Joe Greenman, legislative analyst; Anthony
    Habib, legislative clerk; Mark Paoletta, majority counsel;
    Charles Symington, majority counsel; Ann Washington, majority
    counsel; Edith Holleman, minority counsel; Brendan Kelsay,
    minority professional staff member; and Bruce Gwinn, minority
    professional staff member.
        Mr. Tauzin. The committee will please come to order.
        I will ask all of our guests to please take seats. We are
    going to have a video demonstration to begin the hearing that
    will not have great sound quality, and we will ask all of our
    guests to take seats, please, and get real comfortable so that
    we might hear each other in the room.
        Let me welcome all of you to this extraordinarily important
    hearing. Actually, a joint hearing of the Subcommittee on
    Telecommunications, Trade, and Consumer Protection and the
    Oversight and Investigations Subcommittee chaired by my good
    friend, Mr. Fred Upton. The two of us have asked our
    subcommittees to join with us in examining the important issue
    of the Firestone recall and the continuing saga of the many
    issues swirling about that problem.
        Fred and I have agreed on a procedure that I hope will
    accommodate all of the members and will accommodate our
    witnesses. Let me outline the rules of today's hearing.
        The chairman and ranking members of the committee and
    subcommittees will each have an opportunity to make 5-minute
    opening statements; and then, by agreement of the parties, we
    will then reserve 3 minutes for any member of the two
    committees in the order of seniority present here today when
    the gavel fell or upon their appearance at the committee
    meeting as they arrive.
        Following the opening statements, we will begin introducing
    panels of witnesses. All witnesses will be sworn before the
    committee as this is an O&I subcommittee hearing and will give
    testimony under the oath of truthfulness.
        The committee will, however, begin, before opening
    statements, with a demonstration of a video that I think is
    extraordinarily relevant and important to set the stage for
    this hearing. The video is a video prepared and done by a
    television station in Houston, Texas--would someone have the
    call letters for me, please--KHOU in Texas; and this video was
    done pursuant to an investigative report in February of this
    year. This video was the genesis of the original phone calls by
    consumers to NHTSA, which then prompted the preliminary
    investigation that led to the eventual decision to recall the
    Firestone tires in question. This video is of extreme
    importance, because it was, indeed, the catalyst for the recall
    that has, indeed, begun this year and for the investigation
    that continues both at NHTSA and at this committee and on the
    Senate side.
        I will ask that everyone again be extremely quiet and
    comfortable, and I would ask the staff now to dim the lights
    and to run the video.
        [Video shown.]
        Mr. Tauzin. The Chair recognizes himself for 5 minutes.
        Ladies and gentlemen, we are in the midst, I think, of a
    national tragedy. Nearly 90 Americans have already lost their
    lives to accidents attributed to tires that are now subject to
    recall. Only about 1.75 million of those tires have actually
    been replaced. About 4.5 million of those tires are still being
    used in this country on vehicles that are traveling our
    highways. Just this weekend in California, a family who was on
    a 2-week waiting list to get replacement tires suffered an
    horrific accident as the tread separated from their Firestone
    tires and their vehicle had a terrible collision. In Texas, a
    young lad was killed this weekend again, and weekly we hear of
    more and more accidents and deaths and injuries on the highway
    attributed to these tires.
        I think it is important for me to let you know, first of
    all, what our investigation has uncovered. What we have learned
    in this investigation leading up to this hearing is that
    beginning in 1992 when claims for bodily injury and damage
    began being instituted against Firestone, when those claims
    amounted to only 16 in 1992, those claims, nevertheless, began
    to escalate dramatically in 1995 and 1996. They went from 37
    claims to 150 in 1997, to 294 claims in 1998, to 384 claims in
    1999, to 772 claims, 172 have already been registered this
    year, for a total of 1,800 claims for accident or injury,
    resulting in nearly 90 deaths and many hundreds of severe
    injuries. Fourteen hundred plus of these claims are related to
    Ford Explorers and the same Firestone tires that have been
    subject to this recall.
        What we have learned are some other interesting facts. For
    example, the 23575R15 tire, which amounted to only 6 percent of
    Firestone production of these tires, nevertheless were 36
    percent of the total separations in 1 year alone in 1999.
        Much has been made of the Decatur plant issue. Decatur
    produces 17 to 18 percent of the tires in question, and yet 57
    percent of the total separations in the year 1999 came from the
    Decatur plant. The Decatur plant is not alone. Tires are
    separating made from other plants in other parts of this
    country.
        We have also learned that this information was compiled and
    available to Firestone from the year 1992 through the current
    period and that none of this information was shared with NHTSA.
    Nor was it apparently requested by NHTSA from Firestone until
    the investigation began following the video you just saw and
    consumer complaints to NHTSA by telephone.
        We have also learned some other interesting things. We have
    learned that in July 1998 a representative of the largest
    American auto insurer, State Farm Insurance, on his own
    volition sent an e-mail to NHTSA describing 21 incidents of
    failure of these tires, 14 involving Ford Explorers, and urging
    NHTSA to take action on the problem. Our investigators found
    the memo in a file at NHTSA. The memo went unanswered. NHTSA
    apparently did not respond.
        In the year 1999, Mr. Boyden, who will later testify at
    this hearing, apparently also called the agency to update them
    on 10 more incidents that occurred in 1998 and again, on a
    second phone call, on 35 more incidents occurring in 1999.
    Again, the agency apparently did not respond nor take action
    pursuant to that information.
        We have learned that in 1999 some very serious things were
    happening overseas regarding these tires or similar tires
    produced by Firestone and available on Ford Explorers. We
    learned, for example, that in 1998 Ford dealers in Saudi Arabia
    began complaining to Firestone about these tires and their
    failure rates in Saudi Arabia.
        We have, for example, letters we are going to put into the
    record, one dated 1998, in which the gentleman from the Ford
    dealership is writing to the Firestone dealership, and I quote,
    ``As you know, this concern goes back to mid-1997 when we first
    notified you of the concern. I have to state that I believe
    this situation to be a safety concern which could endanger both
    the vehicle and, more importantly, the user of the vehicle, so
    I am asking what is going on. Do we have to have a fatality
    before any action is taken on this subject?'' 1998.
        In 1999, Ford and Firestone, apparently in a dispute over
    who should be responsible for replacing the tires in Saudi
    Arabia, Ford assuming that responsibility, and we find a memo
    produced about discussions with Firestone legal authorities
    indicating, in effect, in that memo, and I quote, ``Firestone
    Legal has some major reservations about the plan to notify
    consumers and offer them an option. First, they feel that the
    U.S. DOT''--the Department of Transportation--''will have to be
    notified of the program since the same product is sold in the
    United States'', evidence that there was a concern in 1999 that
    officials at DOT not know of the problem that was occurring in
    Saudi Arabia, which resulted in Ford replacing, I understand,
    40,000 or more of these Firestone tires on their vehicles in
    Saudi Arabia.
        We have also learned, and we hope to learn a lot more
    today, about the testing procedures on these tires. As you have
    all found from the press on the subject, Ford has recommended
    that these tires be inflated at 26 pounds per square inch on an
    Explorer, and there is great concern as to whether or not
    Firestone ever tested under speed conditions those tires on a
    Ford Explorer at 26 pounds per square inch. Firestone has not
    provided documents to our investigators indicating whether
    those tests occurred. Ford apparently has produced some
    documents indicating that their specs might have required that
    testing. We have yet to find out whether Firestone, and we will
    hear testimony today as to whether Ford, ever conducted testing
    at that inflation rate on these tires.
        So we will learn a great deal today about who knew what and
    when. We will learn a great deal about why this recall is going
    so slowly and why people are still dying on the highways and
    why it took nearly 90 fatalities for us to get serious enough
    to expedite and get this recall going. We have to ask ourselves
    why we are in this mess and what we can do as a panel
    representing the Congress here to make sure this never happens
    again and that this recall be expedited so that fewer of our
    citizens lose their lives or be seriously injured on our
    highways.
        I want to tell you quickly what this hearing is not
    designed to do. It is not a criminal investigation. It is not a
    legal case trying to affix liability or blame. We are here
    today to hear from the principals about their versions of the
    facts and to determine to the best of our ability what went
    wrong, what was known by what parties when, what was done and
    what was not done, and what could have been done to avert this
    national tragedy. From it, I hope that our committees will
    produce a body of evidence from which we and NHTSA and our
    Federal authorities and hopefully the companies can make the
    right decisions not only to get this awful tragedy behind us as
    quickly as possible but to make policy that will ensure that it
    never happens again.
        The Chair yields back the balance of his time.
        I am pleased now to welcome and recognize the ranking
    minority member from the great State of Massachusetts, my
    friend Mr. Markey, for an opening statement.
        Mr. Markey. Thank you, Mr. Chairman, very much and thank
    you for holding this extremely timely hearing.
        The hearing has been prompted by the recent announcement by
    Firestone that it would recall some 6.5 million tires used
    primarily on the Ford Explorer. Firestone was given the
    contract to produce specially designed tires for the Ford
    Explorer and began production in 1990 of such tires. Because of
    the boom in sales of the Ford Explorer over the ensuing years,
    Firestone produced large quantities of these tires,
    particularly the 15-inch tire. A subsequent rise in claims
    against Firestone, specifically instances where the tread and
    one steel belt separated from the other steel belt of the tire,
    began a number of years ago, especially when such data
    indicated to Firestone, to Ford, and the National Highway
    Transportation Safety Administration that a public safety issue
    was at hand and that something needed to be done, is just one
    part of what this hearing will analyze.
        There are, however, still many questions that need to be
    answered today. For example, the relationship between the tires
    themselves and the automobile for which they were designed, a
    sport utility vehicle, needs to be explored. NHTSA and consumer
    safety groups have already noted the proclivity of SUVs to roll
    over in certain situations, and NHTSA has proposed a rollover
    test and reporting requirement. Have SUVs put unanticipated
    stress upon those tires? In other words, if you could
    hypothetically take those tires off a Ford Explorer and instead
    put them on to a Ford Escort, would there still be a problem?
        Now that the recall is under way, will consumers be able to
    replace their tires quickly? Knowing that it costs somewhere
    between $300 and $400 to buy new tires, a fairly significant
    sum for people on fixed incomes, will Firestone rapidly
    reimburse such consumers? Are there sufficient replacement
    tires in all markets to go around? Will there be prolonged
    delays and how can any such delays be dealt with?
        After all, both tire companies and automobile manufacturers
    run the most compelling ads possible: A mother with a child in
    an automobile or an SUV on a rain-slick road at night,
    promising the consumer that if they buy that automobile, that
    SUV or that tire, that that mother and child will be safe in
    the automobile. That is the promise which these industries make
    to families, and there is nothing more heart wrenching than
    seeing the end of that commercial with the child and the mother
    safely able to make it home.
        Well, here we know that there are scores and, ultimately,
    maybe hundreds of families that ultimately will not have that
    mother and child or father make it home. We have to know how
    quickly the industry is going to ensure that every one of these
    vehicles has a set of tires which can guarantee that that
    family can get home.
        And another important question is whether NHTSA, whether
    the Federal agency itself has sufficient financial and
    personnel resources to fully gauge important safety issues as
    they materialize. In this instance, the agency maintains it did
    not have sufficient information to trigger an investigation
    sooner. Would additional staffing and funding for the safety
    agency earlier have helped that agency to notice a problem
    sooner and thus have saved lives? Once a hazard arises are, in
    fact, the resources there to ensure that the families of
    America are going to be protected?
        The funding for this agency has been cut by fully one-third
    since 1980. Let's say that again. Despite the number of
    additional SUVs on the road, all of the additional automobiles
    over the last 20 years, the budget for the safety agency has
    been cut by one-third since 1980.
        There is something fundamentally wrong, when every single
    family in the United States is on the road every single day,
    with the Federal Government cutting by one-third the budget for
    that safety agency. It is our responsibility this year to pass
    legislation which brings full funding to the safety agency so
    that it can guarantee that when any kind of evidence is made
    available that they don't have to put it aside because they
    don't have the full resources to follow up every single lead
    that could potentially jeopardize the safety of families in our
    country.
        Thank you, Mr. Chairman. I yield back the balance of my
    time.
        Mr. Tauzin. The Chair is now pleased to recognize the full
    committee chairman, the gentleman from Richmond, Virginia, Mr.
    Bliley, for an opening statement.
        Chairman Bliley. Thank you, Mr. Chairman. Thank you for
    holding this hearing today, which is of extreme importance to
    the safety of the American driving public.
        While we certainly will not get final answers today to many
    of the troubling questions surrounding this matter, we can at
    least begin the process of determining what we do know, what we
    do not know and, hopefully, what can be done by government and
    industry to help avoid a similar disaster in the future. No one
    seems to dispute that there is something terribly wrong with
    the large number of very similar and often serious accidents
    involving this particular Firestone tire, especially when
    mounted on a Ford Explorer. But even though the cause of this
    problem was and remains unknown, that is no excuse for inaction
    in the face of mounting evidence of real and potential danger
    to American drivers.
        On this score, I believe all of the principal parties here
    today let the American public down. Indeed, it can be fairly
    said, if it were not for a local television report earlier this
    year that we just saw, this recent recall may never have
    happened. More than 2 years ago, one of our witnesses today
    from State Farm Insurance Company identified a suspicious and
    troubling trend in serious accidents involving the now recalled
    tire, mostly when mounted on the Ford Explorer. Yet when State
    Farm, on its own initiative, took the virtually unprecedented
    step of bringing these claims to the attention of NHTSA, the
    Federal Government's highway safety watchdog, that dog
    apparently was asleep. The data was thrown into a file, never
    to be looked at again, until the Firestone media storm broke
    earlier this year.
        Despite the lack of response, State Farm persisted in
    monitoring this trend, which took a sharp upturn in the second
    half of 1998, then skyrocketed in 1999. On two more occasions
    in 1999, State Farm sought to spark interest in this growing
    trend at NHTSA, but despite the jump in claims, despite the
    severity of the accidents, despite the growing death toll, no
    one at NHTSA reacted until a Houston television report on these
    allegations in February of this year prompted NHTSA to open an
    investigation in May which, in turn, prompted the recall action
    by Firestone.
        NHTSA's attempts to justify the lack of earlier action ring
    hollow. Transportation Secretary Slater, when recently
    confronted by the media about the State Farm warnings and its
    own data base of dozens of similar claims, responded that the
    total number of claims were small and did not involve any
    fatalities. I am sure that the American people are glad to know
    that our safety agency waits until someone dies before
    launching an investigation into defective products. But, as the
    committee uncovered from NHTSA's own files, the original State
    Farm referrals to NHTSA did include two fatalities. So not only
    were Secretary Slater's comments insensitive, they were simply
    wrong as well.
        Then there is Firestone, which bears primary responsibility
    in this matter. Its data base of personal injury and property
    damage claims involving this tire is numbered in the thousands.
    While a significant number of claims on such a widely used tire
    is to be expected, Firestone said that it never even bothered
    to analyze this data for unusual trends until this summer after
    NHTSA asked for it. Within a matter of days, this analysis,
    spearheaded more by Ford than Firestone, revealed the shocking
    facts that lead to the recent recall.
        Sadly, we can count the number of lives that probably could
    have been saved had this analysis been done even just 2 years
    ago. Indeed, contrary to Firestone's assertions, there is
    evidence that Firestone was analyzing such data much earlier
    than July of this year.
        Ford Motor Company also is not blameless in this matter.
    Far and away, the Ford Explorer is the most popular sport
    utility vehicle in the United States, carrying millions of
    American families to and from work, day care, school and on
    vacation. Yet, Ford, too, when faced with hundreds of
    complaints of major tire defects on the Explorer, failed to
    respond with a sense of urgency that one would expect when the
    safety of so many people rested on its shoulders. These
    warnings also include the dozens of Ford Explorer accidents and
    deaths in foreign countries allegedly resulting from similar
    tire failures between 1997 and 1999, forcing Ford to begin
    recalling the same or similar tires abroad 1 year ago.
        None of this should obscure the overall excellent safety
    record that both Ford and Firestone have amassed during their
    century of service to the American people. But black marks like
    this episode can actually end up serving the people's interest
    if they force everyone to redouble our efforts to improve the
    safety and increase the safety margin of these inherently
    dangerous, but necessary, products.
        I also hope that this sad chapter in American history may
    prompt increased sharing of information among all parties
    represented here today--government, car and tire makers, and
    the insurance industry. I am confident that had everyone known
    the information that each individual party to this affair had
    in its possession this recall would have occurred far sooner
    and with far fewer loss of lives.
        Thank you, Mr. Chairman.
        Mr. Tauzin. Will the gentleman yield?
        Chairman. Bliley. Yes.
        Mr. Tauzin. I thank the gentleman.
        I simply wanted to put one fact into the record following
    my friend from Massachusetts' statement on funding. We will
    offer later on into the record a document indicating that the
    Defects Investigation Contract Program, which is the program
    within NHTSA that does defects investigation, actually saw a 50
    percent increase in funding over the time period cited by my
    friend from Massachusetts--actually, a 50 percent increase from
    the year 1980 for this current year.
        I thank the gentleman.
        The Chair will now recognize the gentleman from Michigan,
    the ranking minority member of the full Commerce Committee, Mr.
    Dingell, for an opening statement.
        Mr. Dingell. Mr. Chairman, I want to thank and commend you
    and Chairman Upton for holding this hearing. This is precisely
    the kind of matter which the Congress should be looking into.
    We must gather and understand all of the facts so that we can
    assess properly the behavior of all parties to determine
    whether new legislation and/or improved regulation is needed.
    Our basic purpose here is to see to it that the consuming
    public and the motoring public is fully protected.
        The recall of 14.4 million tires by Bridgestone/Firestone
    since August 9 is the second largest tire recall ever. It is
    surpassed only by Firestone's recall of 14.5 million tires in
    1978. The recall in 1978 led to hearings where this committee
    disclosed many of the same problems that are involved with the
    recall today. Then, like now, tread belt separations on
    Firestone tires were involved in accidents causing serious
    injury and deaths. Then, like now, many of Firestone's problems
    related to its plant in Decatur, Illinois.
        The recent recall came about only after Ford Motor Company,
    whose vehicles were equipped with many of the tires, was given
    access to Firestone's claims data in late July and was able to
    link 46 deaths and a large number of claims to accidents
    involving three 15-inch models of Firestone tires--the ATX, ATX
    II and the Wilderness AT. Since August 9, the number of
    fatalities attributed to these tires has grown to 88, according
    to the National Highway Traffic Safety Administration. Time,
    then, is of the essence. I do note that, after my letter of
    August 11, Firestone agreed to speed up its recall by
    reimbursing consumers to replace their tires with those of a
    competitor.
        More is riding on this hearing, however, than the
    reputations of Firestone and Ford. Countless Americans are on
    the road today, picking up their kids, driving to work, and the
    last thing that should worry them is the quality and the
    soundness of their tires. It is unconscionable that so many
    have been placed in this kind of situation.
        Today, almost 1 full month after the recall was announced,
    neither Firestone or NHTSA, the government agency responsible
    for tire safety, has been able to identify why these tires are
    failing and why serious accidents are occurring. Consumers,
    therefore, have justifiably expressed a great deal of concern
    for their safety and for that of their loved ones, as well as a
    lot of frustration about the way this story has unfolded.
        Every day there seems to be some new disclosure, fostering
    apprehension that Firestone may not yet have control of the
    problem. The concern was compounded by a recent full-page ad
    placed by Firestone in major newspapers around the country
    assuring consumers that it acted appropriately but
    acknowledging that it does not know what is causing the tires
    to fail. In order to restore public confidence, Firestone must
    identify the root cause of its tire failure problem quickly and
    fully disclose their findings.
        Consumers can also take little comfort from Firestone's
    explanation of why it took so long to identify the Firestone
    failure problem. According to Firestone, the problem eluded
    them because tire manufacturers never properly analyzed data
    and personal injury claims to identify defects or problems with
    tires. They said the universe of claims data is simply too
    small to analyze. But a staff examination of the records
    revealed that, since 1995, Firestone had reports on more than
    1,600 lawsuits, property claims and personal injury claims
    involving their recalled tires. I must say, I find it curious
    that Firestone did not regard 1,600 claims as significant, when
    it took only 21 claims for State Farm Insurance Company to
    decide that a potential problem existed.
        Records available to the committee also indicate that some
    at Firestone, in apparent contradiction to its statements to
    committee staff and others, analyzed their claims data for
    1998. These Firestone analyses showed that the claims were
    especially high for ATX tires and that the claims were highest
    for tires produced at the Decatur, Illinois, plant. And
    contrary to Firestone's other assertion, at least one other
    American tire company, Goodyear, says it routinely looks at all
    of its customer data, including claims data, to identify defect
    or failure trends with its tires.
        Whatever else we learn at the hearing today, I hope that
    all involved will see the need for more open and detailed
    communication regarding these critical products, and how they
    perform in the field. If it is industry practice not to share
    claims with automakers, then it is time for that practice to
    change, by statute or otherwise. Had the Houston television
    station not run the story that we have seen today, perhaps we
    would still not know about these matters.
        As for NHTSA, we need to know that its resources are
    adequate so that it can effectively perform its important
    safety work. If budget cuts and other restrictions placed on
    that agency prevent it from protecting the public, then this
    committee should seriously look at increasing the budget and
    freeing the agency from constraints. It is also entirely
    appropriate at a time like this to evaluate whether NHTSA
    statutory authority is sufficient, and I trust we will hear
    about this as we go forward.
        Again, Mr. Chairman, I thank you and Chairman Upton for
    holding this hearing, and I look forward to the testimony of
    the witnesses.
        Mr. Tauzin. I thank the gentleman.
        It is now indeed my pleasure to welcome the young gentleman
    from Michigan, the chairman of the Oversight and Investigations
    Subcommittee of our Commerce Committee, Fred Upton.
        Mr. Upton.
        Mr. Upton. Thank you, Mr. Chairman. Good afternoon,
    everyone.
        Made in the USA means something to most Americans. It means
    the highest quality product made by the highest quality work
    force in the world. People who buy an American product demand
    and rightly deserve the best and indeed the safest.
        Today's hearing is very personal to me, because I come from
    Michigan, the auto State, the auto capital of the world.
    Michiganders are ingrained with a special pride about the auto
    industry and its proud industrial tradition which has been a
    linchpin of our Nation's economy since the early 1800's. When
    the integrity of one of our cars is called into question, we in
    Michigan have a burning interest in getting to the bottom of it
    and fixing it to reassure the American people and the rest of
    the world what they have known for over a century, that cars
    from the auto State are the best in the world.
        Tragically, some 88 people have died in accidents involving
    Firestone tires. Our prayers are with those families today.
        We have convened this important hearing today to get to the
    bottom of what is wrong with the Firestone tires and what we
    need to do to fix them so that no family will have to endure
    the same pain as those who have already lost a loved one. We
    need to know why NHTSA, which has officials who are paid to do
    nothing else but monitor accidents, has been asleep at the
    wheel when it had information served up to it on a silver
    platter by State Farm Insurance Company which would suggest
    grave problems with Firestone tires. The taxpayers demand
    better.
        Our committee's investigators have gone to corporate
    headquarters of Firestone in Nashville, Ford in Dearborn, and
    NHTSA headquarters here in Washington to investigate the
    matter, combing literally thousands of documents, examining
    reams of data, and interviewing dozens and dozens of officials
    to try and shed some light on these questions. Under that
    information, it is our job today, this afternoon, to ask tough
    questions of the witnesses to further illuminate what can be
    gleaned from the information with hopes of what we do here
    today can help save lives tomorrow.
        I would like to note that I am not happy to learn that
    Secretary Slater apparently has refused to participate in this
    hearing today, despite him being just down the street. As
    Secretary of Transportation, it is his responsibility to
    oversee NHTSA's role in the life and safety for Americans
    traveling on America's highways. This is the people's business,
    and if he can be with Cokie Roberts on the Sunday talk shows,
    he certainly ought to be here before Republicans and Democrats
    searching for the truth on a workday.
        I want to thank Chairman Tauzin for his efforts in holding
    this joint subcommittee today and Chairman Bliley as well. I
    look forward to the testimony of our witnesses and the answers
    to our questions, and I yield back the balance of my time.
        Mr. Tauzin. Thank you very much.
        The Chair now yields to the designated minority
    representative of the Oversight and Investigations
    Subcommittee, the gentleman from Michigan, Mr. Stupak.
        Mr. Stupak. Thank you, Mr. Chairman. Thank you for holding
    this very important hearing. I hope it is the first of several
    to look into the tire safety issue.
        Twenty-two years ago, this committee held 4 days of
    hearings on the first incident of tread belt separation in
    radial tires. The tire was the Firestone 500, a radial
    developed for passenger vehicles. Although the 500 had a very
    high rate of failure at the time of the hearings, there were 15
    deaths and 16 injuries; ultimately, 41 deaths resulted.
        In contrast, there are already 88 fatalities attributed to
    the tread belt situation in the Firestone ATX series of tires
    we are looking at today, and the number continues to grow. The
    reason: This tire was placed on a sport utility vehicle, a
    vehicle which has a tendency to roll over when a tire fails.
    The tire failure is one of the top three most serious vehicle
    safety defects we have ever seen in this country. It is
    surpassed only by the deaths and injuries that resulted from
    the Ford Pinto remounted gas tank and the GMC pickup externally
    mounted gas tank. Unfortunately, many things have not changed
    since 1978.
        Firestone, then as now, has found no manufacturing or
    design defect, but blames the consumer for every single
    failure. Firestone alleges that consumers drive too fast,
    underinflate their tires, drive in hot climates, overload the
    vehicle, and don't do proper maintenance. Then, as now,
    Firestone Decatur plant showed up as a source of an unusual
    amount of failing tires. Then, as now, Firestone cannot explain
    why other brands of tires do not have the same failure rate.
    Then, as now, the National Highway Transportation Safety
    Administration, NHTSA, standards for tire strength were and are
    grossly inadequate. In fact, they have not changed those
    standards since 1968, long before there were steel-belted
    radials and the popular sport utility vehicles.
        There are a few new wrinkles. This time, the tires are
    found mainly on one company's vehicle, the Ford Explorer SUV
    and light trucks. Firestone has two new factors to blame: hot
    climates, which stresses its tires, and high ozone, which
    degrades its tires. The other change is that Ford, until
    recently, had agreed with Firestone that there was nothing
    wrong with the tires. Ford made these statements despite
    receiving more and more complaints from their dealers who were
    wondering why only Firestone tires failed.
        Mr. Chairman, we are going to hear a lot today about how
    Firestone did not know there was a problem, Ford did not know
    there was a problem, NHTSA did not know, until a Houston
    television station told them there was. The documents the
    committee has received, along with the news reports, indicate
    that all these parties knew a great deal more in 1998 and in
    1999 about tire failures than the Houston television station
    did. They just ignored it.
        We also are going to hear from a number of witnesses that
    the number of failures were so small that no one could have
    been expected to pay attention. Yes, the numbers began small,
    but because of the propensity of the SUVs to roll over when a
    tire fails, the cost in deaths and injuries was inordinately
    high and increasing at an alarming rate. Both Ford and
    Firestone should have known and should have watched this
    particular vehicle more closely. With less than 6,000 vehicles
    in the entire country of Saudi Arabia, there were 18 accidents
    in Saudi Arabia, including 7 fatalities in 1999. The U.S. had
    4, and there was another large group in Venezuela. Despite what
    everyone says about the conditions in all of these countries,
    one fact remained: Other tires under the same conditions did
    not fail. That should have alerted everyone. It alerted the
    State Farm Insurance Company, it alerted the Center for Auto
    Safety. Unfortunately, Ford, Firestone, and NHTSA failed to
    act.
        Mr. Chairman, we cannot depend on Ford and Firestone to
    tell us what happened. American consumers are tired of hearing
    Firestone blame its customers for the problems found in their
    tires. American consumers are tired of hearing Ford blame
    Firestone. Consumers do not go out and buy Ford tires and ask
    the dealer to throw in a vehicle. They buy a vehicle and the
    tires are part of that vehicle.
        Today I am going to ask Firestone and Ford to join with me
    in calling for and cooperating with an independent review of
    these tire failures worldwide to determine the cause of the
    failure and to propose solutions and report back to this
    committee and the public by the end of the year. In the
    meantime, I believe the recall should be widened to include all
    15- and 16-inch Firestone tires, as has been done in Venezuela
    and Saudi Arabia.
        We here in the United States deserve to be treated no
    differently than people in other parts of the world. We deserve
    an answer to the many questions that will be raised here today.
    I am afraid that Firestone, Ford and NHTSA can't find the
    answers. Let's join together to call for and support a fully
    independent review of this situation so that we can find the
    answers. The public deserves an answer. This committee deserves
    an answer, and most of all, the families of the 88 people who
    have lost their lives deserve an answer.
        With that, Mr. Chairman, I yield back the balance of my
    time.
        Mr. Tauzin. I thank the gentleman.
        The Chair is pleased now to welcome the vice chairman of
    the Telecommunications, Trade and Consumer Protection
    Subcommittee, the gentleman from Ohio, Mr. Oxley, for an
    opening statement.
        Mr. Oxley. Thank you, Mr. Chairman.
        We are here for a hearing on the most serious of issues:
    highway safety. Every day, drivers rely on their vehicles and
    tires to carry them to destinations a mile or hundreds of miles
    away. They want to get where they are going and back safely.
    The encouraging fact is that fatality rates have fallen in
    relation to vehicle miles traveled.
        Today we confront something out of the ordinary, which is
    an unfortunately high number of accidents, some of them
    tragically fatal, principally involving Ford Explorers and
    Firestone tires. It is the job of the two subcommittees here
    today to make sure the drivers and their families feel secure.
    My hope is that the Commerce Committee will be able to look at
    the Firestone recall situation in the detail it deserves.
        What caused these accidents? Was there a trend that could
    have been identified much earlier? What needs to be done in
    response? There will be questions about engineering, product
    quality, and data review today. A full view of highway safety
    should eventually take driving behavior into account as well.
    The challenge for these subcommittees is to dig beneath the
    headlines of the last month and the events of the past few
    years, because if the answer is too easy, the question probably
    wasn't good enough.
        I extend a welcome to our witnesses, and I particularly
    note the presence of Ford president Jacques Nasser, and the CEO
    of Bridgestone/Firestone, Mr. Ono. You can't write the history
    of the automotive industry without the names of Ford and
    Firestone, and the advances from the Model T to the cars of the
    new millennium that they have been part of.
        The first thing that I am looking for is assurance that
    every driver is being protected. Suspect tires must be replaced
    now.
        Tire manufacturers are boosting production to help fill the
    current shortfall, and the exchange terms for consumers should
    be hassle free. The replacement program must also be fair
    nationwide. Vehicle owners in States with relatively low
    accident rates like Ohio have the same right to new tires as
    people who live in States with more incidents.
        Experts are already at work trying to determine what caused
    the problem and whether it is a single cause or many. Why, is
    one question. When, is another. Why weren't any tread defects
    detected earlier? I find it remarkable that NHTSA did not
    follow up on findings made by the Nation's largest auto
    insurer, State Farm, all the way back in 1998.
        Recalls of this magnitude inevitably prompt a review of
    regulations and practices. I suspect that there will be
    heightened cooperation within the automotive and tire
    industries from now on. The regulatory question to ask is
    whether agency resources have been put in the right place and
    whether regulators are focusing their attention on the most
    important issues. We should also resolve to do the most good
    for the consumer by putting agendas aside and responding on the
    basis of the facts as they emerge.
        I was disturbed to find a Web site called ``The Firestone
    Tire Recall Legal Information Center,'' which seemed to be more
    devoted to finding cases for trial lawyers than providing
    assistance to consumers.
        There will be some hard questioning today, and properly so.
    The Commerce Committee has a long tradition of oversight in the
    public interest. We must put safety first. I look forward to
    our witnesses and the questioning that will follow, and I yield
    back.
        Mr. Tauzin. The Chair thanks the gentleman.
        And the Chair now yields to the gentleman from Tennessee,
    Mr. Gordon, for an opening statement.
        Mr. Gordon. Let me first give my thanks to Chairmen Tauzin
    and Upton, and Ranking Members Markey and Stupak for holding
    this very timely hearing. I also want to extend my welcome to
    our witnesses today. Following up on Mr. Oxley's remarks, I
    want to also welcome Dr. Sue Bailey who has a very short tenure
    at her agency, yet brings outstanding credentials and a good
    reputation from the Department of Defense as Under Secretary
    there at the Pentagon.
        I suspect that all of our witnesses would rather be doing
    something somewhere else today. But this is an important
    hearing; the American public deserves to know more about what
    is going on, and so I thank you for being here.
        Let me also say that I suspect that a lot of the time today
    is going to be spent trying to place blame and deflect blame. I
    want to take a little different tack. I am more interested in,
    rather than learning about the unfortunate deaths and injuries
    in the past, I want to be able to save lives and injuries in
    the future. So I am going to be asking you about the QS 9000
    quality assurance program, whether you are satisfied with it,
    and whether you think the status quo is adequate or there
    should be some changes. And if you are satisfied with it, then
    I guess we need to learn more about that program, and if you
    are not, what changes should be made. Should that be an
    industry change with I guess potentially judicial oversight, as
    you all are very concerned about now, or should it be a--is
    there a role for Congress or the administration in implementing
    some of that change?
        Those are going to be some of my questions. I am going to
    ask everybody the same thing, so you will know what is coming.
    You have 5 minutes, so it is sort of easy to rope a dope here,
    but I would like to try to get some answers and move forward.
    Thank you.
        Mr. Tauzin. I thank the gentleman.
        The Chair now recognizes the gentleman, Mr. Ganske, for an
    opening statement.
        Mr. Ganske. Thank you, Mr. Chairman. I was walking down the
    street yesterday in Des Moines and I ran into a Ford dealer. I
    asked him how this was impacting his business, and he said that
    he had set aside four employees full-time to replace tires.
    They had replaced 400 tires, and if they had sufficient tires,
    they would have replaced double them. He saw that there might
    be a shortage in September for getting those tires replaced. It
    affects dealerships and people all across this country, not to
    mention the fears that people have for the safety of their
    automobiles.
        I have two questions that I want to ask all of the people
    today. First I want to know from NHTSA, Bridgestone, Firestone
    and Ford what they are doing to ensure that we get an impartial
    determination of the cause of the increased failure rates at
    the Decatur plant. It seems that there isn't controversy on the
    fact that there has been a disproportionate share of failed
    tires from the Decatur plant that were manufactured at the time
    of the strike. Data that is provided in the testimony today
    from Ford shows a tread separation claims rate for Firestone
    15-inch and 16-inch tires from 1995 to 1999 with about a 14
    times higher incident rate--this is claims rate--at the Decatur
    plant for the ATX than other plants, and about the same, 14
    times higher rate for the Wilderness AT at the Decatur plant,
    in comparison to other plants.
        Then, data from a chart that was provided by Mr. Ono from
    Bridgestone/Firestone shows essentially the same thing. Claims
    per million tires produced for the ATX shows at least a twice
    higher rate for the Decatur plant than the next rate from the
    Wilson plant. The same thing goes for the Wilderness AT.
        So my second question that I want to ask and get on the
    record from Mr. Ono and Mr. Nasser is: Do they think there is a
    causal relationship between the Decatur plant strike and the
    tire failures? I hope that at some time in the future, we are
    able to get employees and managers from the Decatur plant here
    to testify. With that, I yield back.
        Mr. Tauzin. The Chair thanks the gentleman.
        I yield now to the gentleman from Ohio, Mr. Sawyer.
        Mr. Sawyer. Thank you, Mr. Chairman. Thank you for this
    hearing. I think it is probably fair to say that coming from
    Akron, Ohio, there is no member here who has felt the stress
    and the burden of the issue that brings us all here today. In
    the course of the last century, Akron, Ohio has built millions
    of tires. They have gone out across the country and around the
    world, and spread an industry that has been transnational in
    its organization and global in its reach, for longer than those
    terms have been used in their current context.
        It is a matter of personal concern to people in Akron, Ohio
    that the lives of consumers be the first priority, and that the
    deaths of 88 people and injuries to at least 254 were linked to
    tread separation on tires, whether they have been built in
    Akron, Ohio or not. We have not built a tire in Akron, a
    passenger car tire in Akron in 28 years. But it remains a
    center point of research and development, technology and
    command and control in this global industry, and the topic that
    brings us here today is of importance to all of us.
        Industry can't build a perfect tire, and in the early days
    of the last century, Model T's carried as many as four tires.
    In the 1940's and 1950's, some cars still carried as many as
    two. And today, cars typically carry one. But the point remains
    that the only backup piece of equipment that comes on a car is
    a spare tire. It is not by accident. Tires are complex
    products. They may all look pretty much the same, but they are
    not a commodity. They are highly engineered products that
    operate in one of the most extraordinarily violent environments
    of any product that we expect to use in our ordinary daily
    lives. A modern car develops hundreds of horsepower, hundreds
    of pound feet of torque; it develops extraordinary cornering
    power; its steering capacity is unsurpassed in the history of
    the automobile, and modern braking systems provide enormous
    stress on a car in bringing thousands of pounds to a halt
    rapidly.
        All of those forces express themselves through four small
    contact patches the size of a man's hand, of a continuously
    rotating tire, and the expectations that we have of fail-safe
    performance from those four contact patches is an extraordinary
    thing. The fact that they perform as well as they do, 700
    revolutions per mile, mile after mile, for 50,000 miles and
    beyond, most frequently without failure, is extraordinary.
    Those are expectations that we have, and in large part, unless
    they are abused or damaged, tires function in that way.
        What is most troubling about the matter that brings us
    together today is that the extremely small failure rate in
    itself may have exacerbated the process of finding that there
    was a problem and trying to identify its source and, more
    importantly, as a number of members have mentioned, its cause.
        I have a longer statement that I am not going to go into
    right now. I hope to bring out some of the points in questions
    and answers. But just let me add in closing that the tire
    industry has been working on updating tire safety regulation
    worldwide through a complex multiyear process. The current
    regulations that make up the Federal Motor Vehicle Safety
    Standards, Section 109, were written in the mid-1960's, when
    bias belt tires still dominated the market. So it comes as no
    surprise to me today that we are likely to be talking about
    bringing tire regulation firmly into the 21st century.
        I know that the industry and regulators have been working
    to develop a harmonized standard for tires based on the best
    global tire safety practices. In doing so, the industry has
    asked for thoughtful contributions of key public interest and
    consumer protection groups here in the U.S. and around the
    world. I hope that this work will continue and that we will set
    a standard for that here today with the new perspective that
    today's hearings bring.
        Several questions have been raised that address this tire
    recall here today. I look forward to hearing from today's
    witnesses, and simply say in conclusion, that in the course of
    the time in which we have worked to look into the root cause
    analysis, I can tell you that there is no one working on this
    in my district in Akron, Ohio who is going to sleep well until
    the cause is found.
        Thank you, Mr. Chairman. I appreciate your flexibility.
        [The prepared statement of Hon. Tom Sawyer follows:]
      Prepared Statement of Hon. Tom Sawyer, a Representative in Congress
                             from the State of Ohio
        In the course of the last century, Akron, Ohio, has built millions
    of tires. They have gone out across the country and around the world
    and spread an industry that has become transnational in its
    organization and global in its reach for longer than those words have
    been used in this context.
        It is a matter of personal concern throughout Akron that lives of
    consumers be the first priority and there is deep concern over the 88
    deaths linked to these tires even though they were not built there.
    Although passenger tires have not been built in Akron for more than 20
    years, Akron remains the center point in research and development,
    technology, and command and control for this global industry. We care
    deeply about safety.
         However, we also recognize that industry cannot build a perfect
    tire. In the early part of the last century, in the days of the Model
    T, cars carried as many as four spare tires. In the 1950's, there were
    cars carrying two spares. Today, cars typically carry only one. But the
    point remains: the only back-up piece of equipment that comes on a car
    is a spare tire, and it is there on purpose.
        Tires are complex products. Although they may look the same, they
    are not a commodity. They are a highly engineered product operating in
    one of the most extraordinarily violent environments of any consumer
    product we use in our ordinary daily lives. Modern cars develop 100's
    of horsepower, 100's of pound-feet of torque, they possess
    extraordinary cornering power and a steering capacity unsurpassed in
    the history of the automobile, as well as modern braking systems
    designed to bring thousands of pounds to halt rapidly. All these forces
    express themselves through four patches, each the size of a human hand.
    The expectations consumers have of fail-safe performance--most often
    met--is in itself an extraordinary thing. That tires perform 700
    revolutions per mile, mile after mile to 50,000 miles and beyond with
    such low rates of failure is extraordinary as well.
        In fact, what is most troubling about the Firestone ATX and
    Wilderness tires case is that their extremely small failure rate itself
    exacerbated the process of finding that there was a problem and trying
    to identify its source. And this raises important issues about how we
    track these troubling accidents.
        What we can expect is that when a problem occurs, it is identified,
    its cause is established, and consumers are adequately protected. By
    voluntarily recalling millions of the ATX and Wilderness AT tires,
    Bridgestone/Firestone and Ford are taking steps to do this. Both
    companies are working to figure out what is causing the tire tread
    separation. After three weeks into the root cause analysis, there are
    no answers, but I can tell you with only a little overstatement that no
    one in working on this in my district in Akron, Ohio, is going to sleep
    until the cause is found.
        I would also like to add that the tire industry has been working on
    updating tire safety regulation worldwide through a complex, multi-year
    process. The current regulations that make up the Federal Motor Vehicle
    Safety Standards (FMVSS) Section 109 were written in the mid1960s, when
    bias tires still dominated the market. So it comes as no surprise to me
    today that we are likely to be talking about bringing tire regulation
    firmly into the 21st century.
        I know that the industry and regulators have been working to
    develop a harmonized standard for tires based on the best global tire
    safety practices. In doing so, the industry has asked for the
    thoughtful contributions of key public interest and consumer protection
    groups here in the U.S. I hope that this work will continue, but with a
    new perspective that today's issue brings.
        Several questions have been raised that address this voluntary tire
    recall. I look forward to hearing from today's witnesses to learn how
    we can do better and just how much better we can do when it comes to
    measuring consumer protection.

        Mr. Tauzin. The Chair now recognizes the gentleman from
    California, Mr. Bilbray, for an opening statement.
        Mr. Bilbray. Thank you, Mr. Chairman. Mr. Chairman, I would
    like to thank the gentleman from Akron, Ohio for his in-depth
    report on the status of where the rubber meets the road. I
    would have to sort of agree with him that I guess we take so
    much for granted in the American social structure. The fact is,
    as my colleague next to me just pointed out, that you hardly
    know what a flat tire is now unless something hits your
    sidewall, with the introduction of steel-belted tires.
        I understand that there are members here who have community
    economic interest about this issue and the credibility. I mean,
    I think that the gentleman from Michigan can point out that the
    reliability we have in the automobile industry is one thing
    that I think that our grandfathers could only dream up and our
    grandmothers could only cringe at. I guess if my father was
    alive today, he would be attacking me at why my wife drove
    across country in a car without her husband with her. You know,
    you can't allow a woman to go drive all the way across the
    country because it wasn't safe and it was terrible and look at
    all the things that could have happened. I think it is just a
    testimony to the dependability of our transportation system in
    this country in a lot of ways. Granted, my wife got to see more
    of El Paso than they preferred to for a few days, but that is
    another story.
        Mr. Chairman, I would just like to speak from the San Diego
    point of view, seeing everybody is talking about their little
    hunk of this issue in their part of the world. As we talk about
    the industry, as we talk about the automobile industry, the
    tire industry, the people that build these cars and make these
    tires, I think we have to remember too that this issue affects
    everyone in the entire country. It is something that goes
    beyond the people who produce the products; it goes and ends up
    with those who receive the products and pay good money for
    these products and expect them to perform to a reasonable
    standard.
        I would have to tell you that I have a consumer who is a
    lady who drove this summer, as those of us in the West will do,
    thousands of miles on their vacation, from San Diego, by the
    Mexican border, all the way up to northern Idaho with her
    family, with a fully loaded Explorer; ended up getting back,
    even though it was during the heat of the summer, a very hot
    summer this year, unloaded the car, unloaded the family, and
    the next trip just happened to be off to the office, and the
    tire became unlaminated and fell apart, and her comment was,
    Thank God this didn't happen at 70 miles an hour with a fully
    loaded car. It just happened at a certain time, it was the
    safest time to happen.
        I only want to say that because I think we always talk
    about the deaths and the terrible things that happen when these
    things fail. We were lucky in this one case that my constituent
    was able to talk about it now, rather than having her family
    read about her accident in the paper.
        I would just ask us to get back to this issue of the fact
    that there were indications of a problem--we have a problem
    that crosses over two major industries that have major, major
    impacts on some communities in this country, and have influence
    in all of the communities in this country, and that is between
    the automobile industry and the tire manufacturing industry. I
    think that we need to say, where was the breakdown in
    communication? Not just where blame rests and when and where
    and who could have avoided this problem, but also how do we
    avoid it in the future and how do we straighten this out to
    make sure that when a woman wants to drive her family on a
    vacation or a husband wants to send his wife off on a trip, a
    long-distance trip in her car, one of the things we don't have
    to worry about is a faulty tire that falls apart at high speed
    and causes a terrible accident. I think that is our challenge.
        Our challenge is not to protect an industry, not to cover
    our employees and employers' tails at this time; it is to make
    sure that not only do people have a job to go to, but they also
    have a safe car to drive home in. I would ask us to consider
    that as Democrats and Republicans but, most importantly, as
    Americans today. I yield back, Mr. Chairman.
        Mr. Tauzin. I thank my friend.
        The Chair now yields to the gentleman from Texas, Mr.
    Green, for an opening statement.
        Mr. Green. Thank you, Mr. Chairman. I would like to thank
    you and Chairman Upton for calling this joint hearing of both
    the Telecom and Oversight Subcommittees.
        I appreciate the recognition of this serious safety issue
    that will address and make certain that the lives of American
    consumers is not at risk as they drive their children to
    school, themselves to work or take a family vacation, as my
    colleague from California mentioned. I would also like to
    congratulate Channel 11, KHOU, in Houston for their efforts
    into the loss of the life of a competing station's TV reporter
    in a tire separation accident that occurred over 2 years ago.
    And I would also like to recognize my Texas colleague from
    south Texas where just recently there was a death of a 13-year-
    old child in Texas in a rollover incident with a Firestone tire
    that blew out. We need to personalize this because I know in
    manufacturing oftentimes we produce a product and sometimes
    forget that product is so important, whether it is in my
    earlier business as a printer producing a product or someone
    producing tires for automobiles or in my district where we
    produce petrochemicals. We need to realize the impact that it
    can have, even a small percentage failure, on our ultimate
    customers.
        We are going to hear from a lot of witnesses today and
    particularly the National Highway Traffic Safety
    Administration, NHTSA, and I want to welcome all of the
    witnesses here. It is important to find what Bridgestone/
    Firestone and Ford knew when they noticed potential defects in
    the manufacture operation of these tires.
        Additionally, we need to closely examine the role that
    NHTSA played in these events and whether or not we may be
    asking that agency whose budget has been cut approximately one-
    third over the last decade to do more with fewer resources. It
    was noted earlier that the NHTSA section that is responsible
    for tire safety received a 50 percent increase since 1980, but
    that is 20 years and not adjusted for inflation. When you
    realize that we have 41 percent more vehicles on the road
    today, we consider that a cut.
        Just as importantly, we need to live up to the name of one
    of our subcommittees that is hosting this hearing. We need to
    focus on consumer protection, on how we can protect people now
    by speeding the replacement of tires and protecting them in the
    future by ensuring that we have adequate safety rules and
    regulations in place.
        Again, so we all recognize the personal aspects of it, just
    yesterday I was in our district in Houston in 105 degree
    temperatures and happened to have a flat tire. Being away from
    the closest place, I changed the tire myself and went to the
    service station to buy another one and the only tire they had
    to replace the one on my Blazer, an SUV, was a Bridgestone
    tire. And I asked the service station, I want to make sure that
    it is not one of those recalled because I had not heard
    Bridgestone, only Firestone, as having problems. Hopefully, not
    only that tire that I bought but also many of the tires that
    are at retailers around the country or in the inventory in our
    factories are also being checked to make sure that they are
    safe. We need to look to the future to see what we can do to
    correct the problem instead of just worrying about covering our
    own industry or our own agency or our own Members of Congress.
        I want to ensure that when consumers who have these
    recalled tires on their vehicles get them replaced, that they
    have the ability to choose the tires that they want. I also
    want to ensure that the compensation that is going to be
    provided to them by Bridgestone/Firestone and that it fairly
    and accurately reflects the cost of the new tires for the
    consumers on their vehicles, and hope that we can get these and
    other questions answered, Mr. Chairman. I yield back the
    balance of my time.
        Mr. Tauzin. The Chair yields to the gentleman from North
    Carolina, Mr. Burr, for an opening statement.
        Mr. Burr. Mr. Chairman, I would ask unanimous consent that
    my written statement be entered into the record.
        Mr. Tauzin. The Chair asks unanimous consent that all
    members' written statements will be made a part of the record,
    as well as the written statements of all of our witnesses who
    will follow, we hope soon, and without objection that unanimous
    consent is granted.
        Mr. Burr. I thank the Chair for that consent. I would like
    to take my opportunity to more personally address those in
    attendance today who have the power to make decisions and the
    power to implement solutions.
        Mr. Nasser and Mr. Ono, let me say specifically to both of
    you, please put financial and legal concerns aside today and do
    everything possible to make sure that the solutions are
    implemented in a way that the security for every person out
    there is taken care of. You have a responsibility to your
    shareholders, but you also have a responsibility to those who
    purchase your product, and this is an opportunity to prove
    exactly how strong your commitment is to your customers.
        Ms. Bailey, put the excuse aside of not enough resources
    and concentrate on how to work with the Congress and with these
    companies to make sure that NHTSA performs the type of job that
    I believe they are capable of doing and by design they should
    be doing.
        On my way to the airport this morning as I complained with
    coming back from a break and faced with a very difficult
    hearing, I passed on the side of the road an SUV with a
    shredded tire, a fresh reminder of exactly why I was headed
    back. Fortunately enough it had not rolled, but I would ask
    everybody here to concentrate today on the individuals, the
    human faces behind this issue, those who might be family
    members of somebody who was killed, but more importantly the
    14-plus million people who possibly today could get in a car
    that has recalled tires that have not been switched and ask the
    question how far can we go. How long will they last. Can I hold
    out until the replacements come. Trust me when I say that every
    person who falls in that category is stressed today relative to
    their safety and the safety of their families. I would ask all
    of you to focus on that. Let no one leave this hearing today
    without agreeing that a serious problem exists and that it must
    be solved at whatever cost as quickly as we possibly can.
        I thank the Chair for the leniency, and I yield back the
    balance of my time.
        [The prepared statement of Hon. Richard Burr follows:]
        Prepared Statement of Hon. Richard M. Burr, a Representative in
                   Congress from the State of North Carolina
        Mr. Chairman, thank you for holding this important hearing. I would
    also like to thank all of our witnesses for agreeing to testify today.
    I should be very clear--we are not here today to point fingers of
    blame. We are here to find the answers to some very troubling
    questions. The American people deserve answers to their questions--not
    the press releases and television ad campaigns they've been getting.
        Over the course of the last month, over 14 million tires have been
    recalled due to their involvement in accidents that have taken almost
    90 lives. I am troubled by reports that Ford and Firestone may have
    known about flaws in the tire design and manufacturing process for
    years, and that the companies continue to disagree over proper tire
    pressure recommendations. I am also disturbed by the role NHTSA has
    played since it was first alerted to the potential problem, apparently
    over two years ago.
        Mr. Nasser and Mr. Ono, we understand that you have a fiduciary
    responsibility to your shareholders. But you have a responsibility to
    those who buy your products as well. There are serious concerns among
    many in this country, and, I imagine, most members of the committee,
    that your companies have not met that responsibility. I hope you will
    take advantage of this opportunity to address those concerns.
        Dr. Bailey, it is my understanding that you are new to NHTSA. Let
    me apologize in advance for what will clearly be a baptism-by-fire.
    Your agency, however, deserves some serious attention in these
    proceedings as well. Of particular concern to me is an explanation as
    to why reports of 21 tread separation incidents by a large insurer did
    not send up red flags at the agency.
        This hearing will no doubt begin with the basic questions asked at
    every oversight hearing: what did they know, when did they know it, and
    what did they do about it. It will begin that way because serious
    discrepancies remain between the various parties'. Having read our
    witnesses' prepared testimony, it appears those discrepancies remain.
        Based on what I've seen and heard, someone out there knew, they've
    known for awhile, and not a great deal was done about it. This hearing,
    and the likely follow-up hearings, will seek to discover the answers to
    those questions. The sooner that happens, the better for everyone
    involved. Just this morning, on my way to the airport, I passed a Ford
    Explorer parked on the side of the highway. Yes, one of it's tires was
    shredded. That driver, whoever it is, deserves an answer. And that
    driver deserves that answer now.

        Mr. Tauzin. I thank the gentleman. The Chair recognizes Mr.
    Rush for an opening statement.
        Mr. Rush. Thank you, Mr. Chairman. Mr. Chairman, I also
    want to commend you and the other chairman for this timely
    hearing. We have a consumer safety crisis on our hands.
    Millions of consumers are driving on highways with tires that
    may separate and cause fatal injuries. There are a few basic
    questions that we must have answered.
        The first is whether this situation is a failure of NHTSA
    to properly carry out its enforcement responsibilities, and the
    second is whether Firestone and Ford refused to address the
    problem which they knew existed for years in order to save
    themselves embarrassment and money. Regardless of who is
    responsible, it is a travesty and it is an American consumer
    problem. American consumers are at risk, are suffering, and are
    dying. The American consumer is relying on us, this committee,
    this Congress, this government, to protect them from incidents
    like this. I hope that at the conclusion of this hearing that
    we will be able to determine the appropriate course of action
    to prevent this problem from ever occurring again.
        Mr. Chairman, I am open to any reasonable conclusion,
    whether it be revisiting or upgrading our tire safety standards
    or whether it be enacting tougher enforcement protocols so that
    NHTSA can act quicker in similar situations or even providing
    for tougher penalties, including sanctions, for those who
    knowingly violate the motor vehicle safety standards.
        Mr. Chairman, the tire is an important and integral part of
    a vehicle, and we owe it to the American people to provide
    reasonable protections where they cannot be expected to protect
    themselves.
        With that in mind, Mr. Chairman, I yield back the balance
    of my time.
        Mr. Tauzin. The Chair thanks the gentleman from Illinois.
    The Chair now recognizes for an opening statement the gentleman
    from Tennessee, Mr. Bryant.
        Mr. Bryant. Thank you, Mr. Chairman, for holding this
    hearing and I want to thank also the witnesses that will be
    here today testifying, especially the chairmen from two great
    companies, Firestone and Ford, for being here today to answer
    our questions. I know that this is a prolonged process for
    everyone here, listening to members give opening statements,
    but this, as a representative form of government, this is one
    of the ways that our constituents, your consumers, can speak
    directly to you. That is through our statements and comments
    about what we hear when we are back in our districts talking to
    our constituents. Like many of the members in this room, I have
    constituents who are, and I believe rightfully so, very
    concerned about the safety of their vehicles.
        It is my hope that today's hearing will help alleviate some
    of those concerns and place this issue of safety in a proper
    context. I do not, like my colleague from Tennessee on the
    other side of the aisle, believe that the focus of today's
    hearing should simply be on blame. That will have to ultimately
    be decided in other venues across this country, as numerous
    lawsuits are being filed as I speak. I believe this hearing,
    though, presents us with two opportunities. First, we need to
    examine whether or not the laws and regulations already on the
    books need to be enhanced to ensure consumer safety. Second, we
    need to determine whether appropriate steps were taken by Ford,
    by Firestone, and by the National Highway Traffic Safety
    Administration to ensure that no more lives are to be lost or
    people injured as a result of accidents associated with the
    recalled tires.
        I have a longer statement, Mr. Chairman, but in the
    interest of time I will submit that to the record. I look
    forward to the testimony of these witnesses and again thank you
    for chairing this very appropriate and timely hearing.
        Mr. Tauzin. I thank my friend. The Chair now recognizes the
    gentleman from Maryland, Mr. Wynn, for an opening statement.
        Mr. Wynn. Thank you, Mr. Chairman. I would also like to
    thank Chairman Upton for calling this important hearing. At
    these hearings we sit on the dais and we are supposed to take a
    dispassionate look at the issue before us; but I have to
    acknowledge it is very difficult because it runs through my
    mind that 88 people are dead and at some point along that
    continuum some of those deaths were preventable. I don't think
    that is an issue, the guilt or innocence, that this committee
    should attempt to resolve. It is properly before the courts in
    individual claims, but it does bring to my mind the seriousness
    of the issue. Some of these deaths were preventable. It is my
    perspective that this hearing is not designed to determine what
    went wrong with the tires. It would be nice if that were the
    outcome, but I think it is probably more likely that we will
    explore what went wrong with the way that we, both government
    and industry, respond to this type of crisis.
        I have several issues that I would like to hear about from
    our witnesses today, the first of which has to do with the,
    ``legal duty to report foreign recalls.'' It seems to me that
    along that continuum a discussion was held about whether or not
    officials in this country ought to be made aware of problems,
    including deaths, from this situation, this product, which
    occurred in other countries. Apparently a conclusion was drawn
    that there was no, ``legal duty to report this information to
    U.S. officials.''
        Second, and this is probably naive on my part, I wonder
    whether anyone considered whether there was a moral duty to
    report this to American officials. I am very interested to hear
    what leaders of these two fine companies have to say on the
    subject about where responsibility lies in responding to this
    particular crisis and this particular problem.
        You know, many of us here would like to talk about industry
    self-regulation, it has almost become a mantra, and government
    reduction rather than government regulation. I think this
    situation has probably laid that to rest and I think this makes
    it abundantly clear that there is a proper role for aggressive
    government regulation, particularly in areas of public safety.
        Second, I am interested in hearing about the role of
    government officials in responding to this crisis, specifically
    at the National Highway Traffic Safety Administration. I think
    it has been stated earlier it has taken an inordinate amount of
    time for the agency to act, even allowing for the lack of
    resources, which is within Congress' bailiwick to correct. From
    1998 to May of 2000 seems to be an inappropriately long period
    of time, particularly when there were reports all around that
    this was a serious problem.
        I am also concerned about a report that files that were
    initially denied from State Farm were later found within the
    materials available and existing at the agency. Some individual
    was not appropriately forthcoming.
        Let me conclude by saying this. We will not attempt to
    assess blame here and we will not attempt to determine guilt or
    innocence, but I hope that we will spur a very broad recall,
    that the cost-benefit analysis will be set to the side and that
    it will have the broadest possible recall and not just confine
    it to Decatur so that as many people as possible will feel the
    maximum degree of safety.
        I hope that this process will happen quickly, that it will
    not have a lengthy delay, protracted analysis of whether we
    ought to expand the recall or not and, as my colleague from
    North Carolina said, we set aside those concerns and consider
    the benefit of the American consuming public.
        I think this is a very good hearing and I look forward to
    the testimony of the witnesses, and I yield back the balance of
    my time.
        Mr. Tauzin. I thank my friend for his excellent statement
    and yield to the gentleman from California, Mr. Rogan, for an
    opening statement.
        Mr. Rogan. Mr. Chairman, I want to echo the sentiments of
    my colleagues who have spoken before me in thanking you for
    calling this hearing. Also I want to thank the excellent staff
    for their work that has gone into the preparation of this
    hearing. I do have an opening statement, but I note that we are
    now more than 1\1/2\ hours into our hearing and we have not
    heard from the first witness yet. To expedite this procedure, I
    will take advantage of general leave and submit my opening
    statement for the record, and I yield back the balance of my
    time.
        [The prepared statement of Hon. James E. Rogan follows:]
    Prepared Statement of Hon. James E. Rogan, a Representative in Congress
                          from the State of California
        I thank the Chairman for his leadership on this issue and for
    calling hearings on this important subject. I also appreciate the
    presence of each witness here today, and regret Secretary Slater's
    decision to refuse to testify at this important hearing.
        The Firestone Tire recall has been on the mind of millions of
    Americans for over a month now. There is hardly a family in America who
    does not either own a Ford SUV with Firestone Tires or know one who
    does. And for many families, and certainly for our Committee, these
    questions must be answered: What information was known by the relevant
    parties, where was the information obtained, and why was no action
    taken sooner to correct a defective product in the marketplace? The
    goal of this Committee is not to affix blame or legal liability. It is
    our goal to expedite answers to these questions fairly and quickly, so
    that policies may be pursued to protect consumers.
        Firestone tires are driven daily by millions of families, including
    families in my home state of California where a large percentage of
    Ford Explorers, Rangers and Mercury Mountaineers with Firestone tires
    currently are in use. Families that own an affected vehicle or tire,
    need not just an explanation as to how this problem grew so severe, but
    they need the assurance that their safety is not in jeopardy.
        As policy makers, we must insure the Department of Transportation,
    National Highway Transportation Safety Administration, and Congress
    take whatever steps are needed to ensure defective products do not make
    it to the market without adequate safety review. This hearing will be
    an important step in that direction.
        Again, I thank the Chairman for holding this urgent hearing.
        I yield back the balance of my time

        Mr. Tauzin. I thank the gentleman and hope other members
    might want to follow suit. The gentlewoman from Colorado, Ms.
    DeGette, is recognized.
        Ms. DeGette. Thank you, Mr. Chairman. I had the unfortunate
    experience when I was a student of having a tire fall apart on
    me as I drove down the highway at 60 miles per hour, and
    luckily I am here today to talk about this but it was a
    terrifying experience and I can only imagine what it would be
    like for Mr. Bilbray's constituent with a car loaded up with
    children and vacation equipment.
        After that experience, I decided I would no longer purchase
    tires that were substandard, and that I would only purchase
    tires that were the standard of the industry. So I can't help
    but reflect what the owners of the vehicles containing the 6.5
    million tires of the Firestone ATX and Wilderness tires that we
    are talking about here today are wondering about as they drive
    their vehicles and they think they too are driving the standard
    of the industry.
        I think it is pretty clear that any entity involved with
    these products must act quickly and decisively to both replace
    the faulty tires, and perhaps more importantly to replace
    public confidence in these products. Regrettably the quick,
    decisive action necessary did not occur with this recall. As
    the story of the recall unfolded, more questions about
    corporate responsibility and culpability arose than were
    answered.
        The Nation's largest auto insurance company claimed it told
    safety regulators at NHTSA 2 years ago of 21 failures of the
    kind of tires Firestone has recalled. This is a high failure
    rate for tires, yet no action was taken to investigate the
    failures either by Firestone or frankly by Federal regulators.
    ATX and Wilderness tires were recalled internationally long
    before any investigation was begun in the U.S., and neither
    Ford nor Firestone informed Federal regulators of the recall.
    The signs were clear, the problem known and yet NHTSA ignored
    warning signs. Firestone was slow to issue a recall, and Ford
    failed to push them to the point. Regrettably, rather than
    taking clear, resolute action to recall the faulty tires as
    soon as the problem emerged, the companies involved with this
    recall appeared to drag their feet, playing Ping-Pong with
    potential blame. And I agree the purpose of this hearing is not
    to assign blame but rather to figure out what can be done
    better and how to restore consumer confidence. I think we are
    left with a lot of questions. I am not sure that I can ask the
    questions in the 5 minutes allotted of the panel. Here are some
    of them.
        Is NHTSA really this hamstrung? What tools does the Federal
    Government have to monitor the safety of vehicles and their
    components? Is the Federal Government forced to rely on
    manufacturers' own determinations about the safety of their
    products? And if so, are the regulations too weak and need to
    be strengthened or does the industry itself have a
    responsibility to increase its self-regulation?
        It is clear that NHTSA was slow to act and, as I said, the
    companies don't fare much better in this. This recall is costly
    because of the immediate expense, but also because of the long-
    term effect of rebuilding consumer confidence. I hope that
    today's witnesses can agree that the main focus of the hearing
    and the main focus of any recall must be consumer safety. I
    also hope we can uncover what mistakes were made in this issue
    and identify what steps can be taken in the future to identify
    the problems sooner and to have a quicker resolution.
        Thank you, Mr. Chairman. I yield back the balance of my
    time.
        [The prepared statement of Hon. Diana DeGette follows:]
    Prepared Statement of Hon. Diana DeGette, a Representative in Congress
                           from the State of Colorado
        Thank you Mr. Chairman.
        My colleagues have clearly identified many of the problems we seek
    to address in this hearing. While I hope that today's witnesses will be
    able to tell this Committee why these tires are failing at ten times
    the normal rate, it seems more research must be done in order to answer
    this question.
        It is clear that the dramatic failure of Firestone ATX and
    Wilderness tires is wholly unacceptable. With 6.5 million of these
    tires on the road, as standard equipment on one of the most popular
    cars in America, it is also clear that any entity involved with these
    products must act quickly and decisively to replace the faulty tires.
        However, the quick, decisive action necessary did not occur with
    this recall. As the story of this recall unfolded, more questions about
    corporate responsibility, and culpability arose than were answered. The
    nation's largest auto insurance company claimed it told safety
    regulators at the National Highway Transportation Safety Administration
    (NHTSA) two years ago of 21 failures of the kind of tires Firestone has
    recalled. This is a high failure rate for tires, yet no action was
    taken to investigate those failures, either by Firestone or Federal
    regulators. ATX and Wilderness tires were recalled internationally long
    before any investigation was begun in the U.S., and neither Ford nor
    Firestone informed Federal regulators of that recall. While the
    international recall has been broadened to include not only the 15-inch
    models under recall here, but also 16-inch models, Firestone and Ford
    refuse to expand the recall here at home. And, perhaps most alarming,
    88 U.S. fatalities, and 250 injuries have been linked to accidents
    involving Firestone tires as of September 1, according to NHTSA. The
    signs were clear, the problem known, yet NHTSA ignored warning signs,
    Firestone was slow to issue a recall, and Ford failed to push them to
    that point.
        Regrettably, rather than taking clear, resolute action to recall
    the faulty tires as soon as a problem emerged, the companies involved
    with this recall appear to have dragged their feet, playing ping pong
    with potential blame. Too much attention appears to have been paid to
    the finger pointing campaign to shift responsibility, while not enough
    attention was given to indications that a recall should have been
    issued long before last month. Owners of Firestone ATX and Wilderness
    tires are demanding to know why the effort expended in the media race
    to take cover and shift blame was not redirected--initially to issue a
    recall earlier, or, once one was issued, to replace their faulty tires
    more quickly. These are questions I hope we can address today.
        The Federal agency charged with ensuring the safety of the driving
    public seemed stagnant too. Massive recalls of Firestone ATX and
    Wilderness tires were issued in the Middle East, South America and
    Asia, yet NHTSA was oblivious to them. The agency has said they do not
    have the authority to require companies to provide them with
    information on international recalls, nor the ability to access data
    that could point to problems like this defect. Is the agency really
    this hamstrung? What tools does the federal government have to monitor
    the safety of vehicles and their components? Is the federal government
    forced to rely on manufacturers' own determinations about the safety of
    their products? If this is the case, regulations are weak indeed and it
    is no wonder that NHTSA was unaware of a major problem with tires that
    are in wide circulation nationwide. The agency was slow to act, and
    should that be the result of weak regulations or the agency's own
    failures, something must change as a result of this recall.
        While I am sure that we will delve deeply into the specific
    problems surrounding this situation, perhaps we should also use this
    hearing to examine the broader issues that surround a recall of any
    product. In this case, Ford and Firestone have an enormous stake in
    avoiding a recall--but this is true of any company.
        A recall is costly, not only due to the immediate expense of
    replacing a product, but also the long-term expense of rebuilding
    consumer confidence in the entire company, as shown by the six percent
    drop in Ford's stock on August 31. How can we ensure that the public's
    best interest is represented when a product must be recalled, not a
    company's bottom line? Was this recall delayed because Firestone or
    Ford feared its financial ramifications? How can we ensure that
    companies will act with safety as their utmost concern to issue recalls
    irregardless of the perception problems that will inevitably emerge
    from that act?
        I hope today's witnesses can agree that the main focus of this, or
    any other recall, should be consumer safety. Additionally, I hope this
    hearing can uncover where mistakes were made in issuing this recall and
    identify what steps should be taken in the future to detect problems
    sooner, to share information better and to act more quickly to remove
    faulty products from the market.

        Mr. Tauzin. The Chair thanks the gentlewoman and recognizes
    the gentleman from Illinois, Mr. Shimkus.
        Mr. Shimkus. Thank you, Mr. Chairman. First, I want to
    welcome Dr. Bailey and let her know that most of us recognize
    that you have been on the job for 3 weeks, so it is a cause by
    fire but we are glad to have you here.
        I also want to welcome Samuel Boyden from Bloomington, that
    is Tom Ewing's congressional district, with State Farm
    insurance company. I think he is going to have compelling
    testimony and I am glad that he is here.
        Most of the comments have been said. I fall back to a lot
    of things in my background, and part of the West Point cadet
    prayer says, ``Teach us to do the harder right over the easier
    wrong and not be content with the half truth when the whole can
    be won,'' and I leave our panelists with that, really echoing
    comments of my colleagues, Mr. Gordon and Mr. Burr, who said
    let's get to the facts and fix the problems and move forward.
        I thank you for holding this hearing, Mr. Chairman.
        Mr. Tauzin. I thank the gentleman. The Chair now yields to
    the gentleman from Minnesota, Mr. Luther.
        Mr. Luther. Thank you, Mr. Chairman, for holding this
    timely hearing. I will be brief. As has been said by others,
    finger pointing is the tendency in Washington. I hope, as
    others do, that we can avoid this tendency at today's hearing.
        To date 88 deaths have been attributed to tread separation
    problems on these tires. That much we know. What we don't know
    is why 88 people and perhaps many more had to die before
    definitive action was taken. Clearly the system failed the
    American consumer. It appears that our consumer safety
    standards are antiquated and must be updated, that Congress
    failed to act back in 1978 when faced with a similar disastrous
    recall, and that the communications structure between the
    private and public sectors and between parties within the
    private sector broke down and failed.
        I think this hearing can be useful in helping all of us
    determine what to do next. It can help us make sure that every
    tire in this country that needs to be recalled is in fact
    recalled immediately, and it can help us repair the systems so
    that tragedies like this never happen again. So I hope we can
    have a constructive, informative hearing that results in real
    protection and real safety for the American consumer.
        Thank you, and I yield back the balance of my time.
        Mr. Tauzin. I thank the gentleman. The Chair now yields to
    the gentlelady from New Mexico, Ms. Wilson, for an opening
    statement.
        Mrs. Wilson. Thank you, Mr. Chairman. I have spent quite a
    bit of time looking at the documents related to the recall, and
    I have a lot of questions for the people who will testify, but
    I think there are some things which are clear to me at this
    point.
        The first is that Firestone knew they had a problem and
    didn't act until it was forced to do so. We have seen claims in
    the last month that they didn't know until July of this year
    and now you are working around the clock to find out what is
    wrong. That is rubbish. You knew you had a problem a long time
    ago. You had recalls in 18 countries. This committee staff has
    uncovered memos going back to 1997. You knew you had a problem
    and you didn't do anything about it. We need tougher rules to
    protect American consumers when multinational corporations make
    recalls in other countries and fail to notify the appropriate
    authorities in the United States and United States consumers.
        The second thing I think we need to focus on has to do with
    NHTSA. Sam Boyden is a State Farm researcher and a car buff,
    and he sent an e-mail to NHTSA in July 1998 about 21 cases, 2
    of which involved fatalities, saying there is a problem here,
    this shouldn't happen with a tire, and contacted NHTSA twice
    more in 1999. But those were ignored and put in a file. So why
    didn't the watchdog bark? We deserve an answer.
        Third, Firestone has launched and conducted a lousy recall
    full of missteps and misinformation. 9 of the 88 fatalities
    have occurred in the State of New Mexico. 9 of 88. That is 10
    percent of the fatalities of this tire in the State of New
    Mexico. The company admits that hot weather and long distances
    and high speeds are factors in these tire failures. Ten percent
    of the fatalities in New Mexico, a state with less than one-
    half of one 1 percent of the population in the United States.
    But I ask you gentlemen, to look at this map. The blue areas
    are where you have prioritized your supply for fixing this
    recall. There is one southern, hot western state that doesn't
    make your list, and I would like to know today why New Mexico
    is being overlooked by your company.
        I would like to enter into the record the correspondence
    between the state attorney general from New Mexico and
    Bridgestone/Firestone giving lip service to the problems in New
    Mexico and the backlog of tires to replace the ones that are
    killing the citizens in my state.
        I yield back the balance of my time.
        Mr. Tauzin. Without objection the gentlelady's request for
    introduction of these documents into the record is agreed to.
        [The following was received for the record:]

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        Mr. Tauzin. The Chair will now recognize the gentleman from
    California, Mr. Waxman, for an opening statement.
        Mr. Waxman. Thank you, Mr. Chairman, for this opportunity
    to say a few words. I want to thank you for holding this
    hearing today. The hearings in the House and Senate are
    important for the airing of what went wrong with the deadly
    combination of Firestone tires and Ford Explorers. The public
    has a right to know what really went wrong, who knew what when.
        I want to focus in on that theme when I get a chance to
    question the witnesses because I think it is important not just
    to have a hearing this one time, but to learn from all of the
    documents what people knew and what evidence there was that
    might have been a signal to the regulators and to the industry
    groups and executives that there was a problem and a signal to
    them that they should have done something to prevent the
    tragedies that have taken place. So having complete information
    is the only way we can move forward and I hope that we will get
    the cooperation of all of the witnesses in ensuring that we are
    fully informed.
        This hearing serves a very important purpose. What follows
    after this hearing and the kind of cooperation that we get from
    the witnesses involved and their counsels will be important in
    getting all of that information that the public has a right to
    know.
        Thank you for recognizing me, and I look forward to the
    testimony.
        Mr. Tauzin. I assure the gentleman that this is just the
    beginning of the investigation process and this committee along
    with the oversight committee intends to remain vigilant until
    all of the facts are known.
        The Chair will now recognize the gentleman from Florida,
    Mr. Stearns, for an opening statement.
        Mr. Stearns. Thank you, Mr. Chairman. I also commend you
    and Mr. Upton for having this hearing.
        Florida is fourth in the number of crashes yet accounts for
    the highest number of fatalities, according to the raw
    complaint data which has been collected by NHTSA. A question
    that I have, and perhaps it is a little different than a
    question that some members have talked about, which I would
    like to address to Dr. Sue Bailey, who is the Administrator of
    the National Highway Traffic Safety Administration, I looked
    over your testimony and I understand your screening process is
    quite involved, and you talk about how many cases come in and
    how many pieces of information cross your desk and so forth,
    but I find it hard to believe that a Federal agency with
    millions of dollars at its disposal and top of the line
    analysts and engineers, was bested by a lone researcher, with a
    part-time interest in cars, a hobbyist who was able to come
    together and identify this statistical analysis and this danger
    and e-mailed it to NHTSA, and I just can't understand, Mr.
    Chairman, how they with all of their millions of dollars
    cannot--why they couldn't find it before this lone researcher,
    part-time person dealing with cars. So I think that is one
    question that we would like to hear from Dr. Bailey.
        Mr. Chairman, I am obviously concerned that the Honorable
    Slater, the Secretary of the Department of Transportation, is
    not here. Even though Dr. Bailey is here, I think he should be
    responsible and should show up here as a courtesy. We sometimes
    ask him to come and it is not often. I think under these
    circumstances he should be here. I think I share most of the
    sentiments my colleagues have already expressed, and I look
    forward to the hearing.
        Mr. Tauzin. I thank the gentleman. I recognize the
    gentleman from New York, Mr. Fossella, for an opening
    statement.
        Mr. Fossella. Thank you, Mr. Chairman. I think today the
    American people are just entitled to the truth. It appears that
    whoever is going to be testifying today, while not questioning
    their motives, I am afraid come to the table with not so clean
    hands. People have died. I think the objective right now is for
    all of you to come to this table, wash your hands clean and let
    us, let the American people know what the truth is, because the
    people I represent, and I am sure like everyone across the
    country, want to know right now if they are putting their kids
    in the back of that car, are they getting into a death trap or
    not. They want to know the truth. And all I ask you is to give
    it to us.
        I yield back the balance of my time.
        Mr. Tauzin. I thank the gentleman. The Chair understands
    that there are no other members seeking recognition for an
    opening statement
        [Additional statements submitted for the record follow:]
        Prepared Statement of Hon. Paul E. Gillmor, a Representative in
                        Congress from the State of Ohio
        Mr. Chairman, I want to thank you for calling this hearing. The
    issues surrounding the tire recalls we will discuss constitute the
    largest public safety addressed during this Congress. I eagerly look
    forward to the testimony that will be presented before us.
        The problems faced by the driving public because of catastrophic
    tire failures are not only serious, but also quite alarming. I am sure
    that many of my colleagues will spend today focusing on the time
    honored Washington question of: ``what did you know and when did you
    know it?'' While I see this as an important question, I, however, wish
    to concentrate my time on some other factors that have emerged within
    the context of these problems. I am not convinced that one person,
    company, or agency is to blame for all the accidents that have
    occurred. Rather, I think there is more than enough places for blame to
    go.
        Where I want to concentrate my thoughts is on design, distribution,
    and testing issues. The Firestone ATX was initially manufactured as a
    passenger tire for use on the Ford Explorer. This would seem to
    indicate to me that both Ford and Firestone were well aware of the type
    of tire that was being placed on the auto. I think it is important to
    understand how much of a collaborative effort existed between the two
    companies.
        Second, I have questions about the actual design of the Explorer
    and how the application of Firestone tires might have caused improper
    and potentially dangerous wearing on the treads.
        Third, many of the accidents occurred in warm weather areas,
    including the Middle East, South America, and the Southwestern United
    States. How did the ATX, ATX II, and Wilderness tires fare in cooler
    climates? Did Firestone's Decatur, Illinois plant only supply these
    warmer areas? If not, how did the Decatur-produced tires fare in other
    areas?
        Fourth, many tire problems show up shortly after the tire has seen
    some wear. The Firestone tires began having problems after a couple
    years of usage. I think it is essential to know if Firestone had tested
    wear and how these tests were conducted. Also, does NHTSA presently
    require tire testing and certification? In conjunction with Firestone,
    had Ford conducted any testing of the ATX or other 15-inch tires on the
    Explorer? If Ford tested other tires, how did they fare?
        Fifth, and finally, I think we need to examine ways in which the
    public's care for their automobile can help prevent serious fatalities.
    One thing that sticks out for me was whether aesthetics and, lower tire
    pressure were encouraged at risks to the consumer's safety. Also, what
    are essential maintenance requirements for these tires that may not
    have been passed along to Explorer owners.?
        Unfortunately, I am skeptical that our witness panels will yield
    any definitive answers to the conundrums vexing us. Certainly, there
    will be some that will conclude that we need to expand the role of the
    National Highway Transportation Safety Administration (NHTSA) over
    sport utility vehicles. I think this is the wrong approach to the
    problem. Not only had Congress given NHTSA all the funding the White
    House requested, but also NHTSA was notified by State Farm Insurance
    Company two years ago that a problem might exist and ignored these
    messages.
        Mr. Chairman, our panel will not look past the problems that have
    precipitated massive backlogs of tire requests at Ford dealers and tire
    outlets. Our duty is to find areas where improvements can be made and
    public safety reassured. And, again, I look forward to hearing from our
    distinguished witnesses to get their opinions. These issues concern not
    only those people who purchase Firestone tires and those who drive Ford
    Explorers, but those of us who share the same road they do and consider
    them part of our communities.
                                     ______

    Prepared Statement of Hon. Ed Bryant, a Representative in Congress from
                             the State of Tennessee
        Thank you Mr. Chairman, I appreciate your holding this hearing, and
    I want to thank the chairmen of both Firestone and Ford for taking the
    time to answer our questions today. Like many of the Members in this
    room, I have constituents who are, and I believe rightly so, concerned
    about the safety of their vehicles and it is my hope that today's
    hearing will help to alleviate some of those concerns.
        I do not believe that the focus of today's hearing should be on
    blame. That will ultimately have to be decided in the courts as the
    numerous lawsuits already being filed are argued before juries across
    the land. Rather, I believe this hearing presents us with two
    opportunities. First, we need to examine whether or not the laws and
    regulations already on the books need to be enhanced to ensure consumer
    safety. And second, we need to determine whether or not every possible
    step is being taken by Ford, Firestone, and the National Highway
    Traffic Safety Administration to ensure that no more lives are lost due
    to the accidents associated with the recalled tires.
        In order to do this, I think we need to focus on three specific
    areas. First, when did the companies involved become aware of the
    problems associated with the tires. According to the Wall Street
    Journal, Ford has indicated that examples of tire failures on Explorers
    in Venezuela came to its attention in late 1998. The Journal also
    states that Ford began replacing tires in the Middle East last year due
    to similar concerns. Yet, it's not until a year later that a recall is
    issued in the U.S. At what point did the two companies begin to
    investigate tire failures in the U.S., and how much time elapsed
    between concerns about U.S. tires and the August 9 recall? Could this
    recall have occurred earlier if NHTSA had had access to the overseas
    information.
        Second, is the recall broad enough. The August 9th recall has been
    limited to 15-inch tires, however, 16-inch tires are already being
    replaced in Venezuela. And in a consumer advisory, NHTSA has asked that
    the current recall be expanded to include an additional 1.4 million
    tires of various models and sizes. Have Ford and Firestone begun
    investigating whether or not the 16-inch tires have resulted in an
    unusual number of accidents?
        Finally, are Ford and Firestone taking every appropriate step to
    replace the recalled tires. Few families in my district do not rely on
    their vehicles everyday, and it is my hope that Chairman Nasser and
    Chairman Ono will be able to update us on what steps they are currently
    taking and how long they anticipate it will be before all 6.5 million
    tires have been replaced.
        I look forward to your testimony and yield back the balance of my
    time.

        Mr. Tauzin. The Chair will call the first panel. The first
    panel will consist of the Honorable Rodney Slater, Secretary of
    the Department of Transportation, who has been invited to
    attend, accompanied by Dr. Sue Bailey, Administrator of the
    National Highway Traffic Safety Administration. Like my friend
    Mr. Upton, Ms. Bailey, let me express the chairman's
    extraordinary disappointment at your boss' failure to attend
    this hearing. I can't imagine a more important hearing that
    this subcommittee has held in my tenure as chairman, and I
    assume that Mr. Upton is of the same opinion. This is a life or
    death hearing involving safety issues on the highways of
    American and I am astounded that the Secretary of
    Transportation, who is in town today and who was twice
    requested, once by the committee and once by me personally in a
    letter just yesterday and publicly over the airwaves to attend
    this hearing, could not find time to be with us here today to
    help solve some of these issues. I am particularly concerned
    that he has instead invited you to take his place here today
    when you are just new on the job, I think just 3 weeks, and we
    want to welcome you to this incredibly important job, and want
    to welcome your testimony today.
        Before we begin that testimony, as previously announced,
    the chairman will swear all of the witnesses in as they appear,
    and I must take you through the process by which we do this.
        Ms. Bailey, you are aware that this subcommittee is holding
    an investigative hearing, and when doing so has had the
    practice of taking testimony under oath. Do you have any
    objections to testifying under oath?
        Ms. Bailey. No.
        Mr. Tauzin. The Chair advises you that under the rules of
    the House and the rules of the Committee, you are entitled to
    be advised by counsel. Do you desire to be advised by counsel
    during your testimony today?
        Ms. Bailey. No.
        Mr. Tauzin. In that case if you would please rise and raise
    your right hand, I will swear you in.
        [Witness sworn.]
        Mr. Tauzin. I thank you, Ms. Bailey. You are now under oath
    and you are recognized to give a 5-minute summary of your
    written statement.

     TESTIMONY OF HON. SUE BAILEY, ADMINISTRATOR, NATIONAL HIGHWAY
           TRAFFIC SAFETY ADMINISTRATION, U.S. DEPARTMENT OF
                             TRANSPORTATION

        Ms. Bailey. Mr. Chairmen and members of the committee, I am
    pleased to appear before you today to address the investigation
    and the recall of Firestone tires. Secretary Slater refers to
    safety as the North Star of the Department of Transportation
    and under his leadership NHTSA is committed to preventing
    deaths, injuries and motor vehicle crashes. I will give you a
    quick overview of the agency's authority to investigate defects
    and describe the procedures that the agency follows and outline
    the Firestone investigation.
        First our authority: Congress passed the basic motor
    vehicle safety law 34 years ago, in 1966, and amended the law
    in 1974 to establish the current notification and remedy
    provisions. In brief, the law provides that if a manufacturer
    decides that one of its products contains a defect that relates
    to motor vehicle safety, the manufacturer must notify the
    agency and owners and provide a remedy at no cost to the
    owners.
        When the agency screening process identifies a possible
    safety defect, our Office of Defects Investigations takes steps
    to open an investigation as a preliminary evaluation. We inform
    the manufacturer and the public at this time. If our review of
    the information at the end of the preliminary evaluation
    suggests that further evaluation is warranted, we move the
    investigation to a second stage, the engineering analysis (EA),
    and we are in that stage today. At this point we conduct a more
    detailed analysis, including appropriate inspections, tests,
    surveys and additional information from the manufacturer. After
    the EA phase of the investigation, additional steps may
    ultimately lead the Administrator to decide that a defect
    exists and to order the manufacturer to recall. If necessary,
    the agency will then go to court to enforce that order. Our
    investigation of Firestone has reached the EA stage, the
    engineering analysis phase.
        Firestone originally began producing the tires under
    investigation in 1991. By the end of 1999, approximately 47
    million had been produced. By that time NHTSA had received 46
    reports, but they were scattered over 9 years, about incidents
    involving these tires. The tires were on a variety of vehicles,
    primarily, though, on Ford Explorers. In view of the large
    number of tires that have been produced and the variety of
    possible causes of tire failure and the fact that all types of
    tires can fail and do in use, the reports we received did not
    warrant opening a defect investigation at that time.
        Furthermore, the informal submission by State Farm in 1998
    of 21 claims also were over a period of several years, almost 8
    years, and that also did not warrant at that time initiating an
    investigation.
        The situation changed rapidly following the airing of a
    news story by KHOU in Houston. That was on February 7, 2000,
    and that dramatized the question of the tire safety. In
    addition to highlighting two fatalities, the story alluded to a
    number of other crashes and fatalities. Upon learning of the
    KHOU story, we contacted the station to obtain more details.
    They have not given us the information we have requested, but
    the growing publicity generated other reports to us, including
    several provided by other media outlets and by plaintiffs'
    attorneys as well. Over the next few weeks we were able to
    verify many of these reports.
        We opened a preliminary evaluation on May 2. At that time
    the agency was aware of 90 complaints. They had nearly doubled
    in that time, including a report of 33 crashes and 4
    fatalities. Information continued to accumulate rapidly as a
    result of the investigation and attendant publicity. By August
    1, we had 193 complaints alleging tread separations on these
    tires with 21 reported fatalities. In a meeting on August 4, we
    suggested that Firestone recall the tires. On August 9,
    Firestone announced it would recall 14.4 million tires. As of
    August 31, we have had 1,400 complaints with reports of 88
    fatalities and 250 injuries.
        NHTSA is continuing its investigation to determine whether
    additional tires need to be recalled. If we discover
    information that indicates a problem in any other tire we will
    move promptly to urge Firestone to expand the recall. They are
    closely monitoring the recall to ensure that Ford and Firestone
    promptly replace all of the defective tires. Our review of the
    data from Firestone has already disclosed that other tire
    models and sizes of the tires under investigation have rates of
    tread separation as high or higher than the tires that
    Firestone is recalling.
        Therefore, on August 30 I recommended to Firestone that it
    expand its recall to include those tires. When Firestone
    declined to expand the recall, we felt it necessary to issue a
    consumer advisory on September 1 to advise owners of these
    tires so they could take actions to ensure their safety. We now
    know that in September 1999 Ford asked Firestone to replace
    Wilderness tires mounted on Ford Explorers that had been sold
    in states around the Arabian Gulf. Similar actions were taken
    in other countries as well. Ford would have been required to
    notify NHTSA of such an action if it had occurred in the United
    States, but our regulations do not apply to actions taken
    outside of the United States. Ford thus had no obligation to
    advise NHTSA when it took these actions.
        If we find that we need additional legislative authority to
    require manufacturers to provide in the future such
    information, we will seek to obtain it. A number of claims and
    several lawsuits have been filed against Ford and Firestone
    before we became aware of any trend that indicated a potential
    defect. Our current regulations do not require the
    manufacturers to give us information about claims or
    litigation. We are also therefore exploring measures which
    would allow us to track claims and litigation information on a
    routine basis.
        Mr. Chairman, I want to assure you that this investigation
    is the highest priority in NHTSA, and we will remain focused on
    the investigation and closely monitor the recall. Thank you for
    holding this hearing, and I will be glad to answer any
    questions.
        [The prepared statement of Hon. Sue Bailey follows:]
    Prepared Statement of Hon. Sue Bailey, Administrator, National Highway
                         Traffic Safety Administration
        Mr. Chairman and Members of the Committee: I am pleased to appear
    before you this morning to address the investigation and recall of
    Firestone ATX, ATX II and Wilderness AT tires. This is the first
    subject on which I have appeared before Congress as Administrator of
    the National Highway Traffic Safety Administration (NHTSA), and I
    welcome the opportunity to address this important issue.
        The agency's mission is to prevent deaths and injuries in motor
    vehicle crashes. Our program to investigate safety defects is a key
    part of that mission. I will give you a quick overview of the agency's
    authority to investigate safety defects, describe the procedures that
    the agency follows in its investigations, outline the Firestone
    investigation in that context, and share with you some of my
    observations about the investigative process.
                                    overview
        First, our authority: Congress passed the basic motor vehicle
    safety law 34 years ago, in 1966, and amended the law in 1974 to
    establish the current notification and remedy provisions. In brief, the
    law provides that if a manufacturer decides that one of its products
    contains a defect that relates to motor vehicle safety, the
    manufacturer must notify the agency and owners and provide a remedy at
    no cost to the owners. When the defect is in a tire sold as original
    equipment on a new vehicle, the tire manufacturer is the responsible
    manufacturer, as opposed to the vehicle manufacturer, and the remedy
    may either be to repair or replace the tire.
        The law gives us authority to investigate possible defects, to
    decide whether a defect exists, and to order a manufacturer to provide
    a remedy for any defect. If a manufacturer refuses to provide a remedy,
    the law authorizes us to go to court to compel it to do so. This is
    seldom necessary. In all but very rare cases, manufacturers agree to
    remedy the defect without our having to reach a final decision. In a
    typical year, we open between 80 and 100 defect investigations, of
    which more than half result in recalls. In addition, manufacturers
    conduct an average of 200 defect recalls each year that are not
    influenced by NHTSA investigations.
                            investigative procedures
        We receive complaints from a wide variety of sources about possible
    defects in motor vehicles and motor vehicle equipment. The sources
    include our toll-free consumer hotline, our web page, e-mail, phone
    calls, and letters. We enter all complaints into a database which is
    continuously screened by a team of five investigators in the agency's
    Office of Defects Investigation (ODI) to identify potential defect
    trends. In an average year, we receive between 40,000 and 50,000
    complaints from these sources.
        When the screening process identifies a potential problem, ODI
    takes steps to open an investigation as a ``Preliminary Evaluation''
    (PE). We inform the manufacturer and the public at this time, and begin
    the process of gathering information from the manufacturer and other
    appropriate sources. We give the manufacturer an opportunity to present
    its views. Preliminary Evaluations are generally resolved within four
    months from the date of their opening. They may be closed if we
    determine that further information is not warranted, or if the
    manufacturer decides to conduct a recall.
        If our review of information at the end of a PE suggests that
    further investigation is warranted, we move the investigation to a
    second stage, the Engineering Analysis (EA), in which we conduct a more
    detailed and complete analysis of the character and scope of the
    alleged defect. The EA supplements the information collected during the
    preliminary evaluation with appropriate inspections, tests, surveys,
    and additional information from the manufacturer. ODI attempts to
    resolve all EAs within one year from the date they are opened.
        At the conclusion of the EA, we may close an investigation because
    the additional information does not support a finding that a defect
    exists or because the manufacturer decides to conduct a recall. If ODI
    continues to believe that the data indicate a defect, the Associate
    Administrator for Safety Assurance may convene a panel of experts from
    the agency to review the information. The manufacturer is notified that
    a panel is being convened and of the panel's result, and is given an
    opportunity to present new analysis or new data.
        If the panel concurs with ODI, the next step is to send a ``recall
    request letter'' to the manufacturer. If the manufacturer declines to
    conduct a recall in response to this letter, the Associate
    Administrator may issue an ``Initial Decision'' that a safety-related
    defect exists. An Initial Decision is followed by a public meeting, at
    which the manufacturer and interested members of the public can present
    information and arguments on the issue, as well as written materials.
    The entire investigative record is then presented to the NHTSA
    Administrator, who may issue a ``Final Decision'' that a safety defect
    exists and order the manufacturer to conduct a recall. If necessary,
    the agency will then go to court to enforce such an order.
                      the firestone atx/wilderness recall
        With this description of our investigative procedures as context, I
    will turn now to the Firestone investigation.
        Firestone originally began producing the tires under investigation
    in 1991. By the end of 1999, approximately 47 million had been
    produced. By that time, NHTSA had received 46 reports scattered over 9
    years about incidents involving these tires. The tires were on a
    variety of vehicles, primarily on Ford Explorer sport utility vehicles.
    In view of the large number of tires that had been produced, the
    variety of possible causes of tire failure (road hazards, excessive
    wear, etc.), and the fact that all types of tires can fail in use, the
    reports that we received did not indicate a problem that would warrant
    opening a defect investigation regarding these tires. The informal
    submission by State Farm in 1998 of 21 claims over an eight-year period
    also did not provide such an indication.
        The situation changed rapidly following the airing of a news story
    by KHOU in Houston on February 7, 2000, that dramatized the question of
    the tires' safety. In addition to highlighting two fatalities, the KHOU
    story alluded to a number of other crashes and fatalities.
        Upon learning of the KHOU story, we contacted the station to obtain
    more details about the incidents. They have not given us the
    information we requested, but the growing publicity generated other
    reports to us, including several provided by other media outlets and by
    plaintiffs' attorneys. Over the next few weeks, we were able to verify
    many of these reports. We opened a Preliminary Evaluation on May 2. At
    that time, the agency was aware of 90 complaints, including reports of
    33 crashes, and 4 fatalities. On May 8 and 10, we sent Ford and
    Firestone extensive Information Requests asking for information about
    the tires. At that point NHTSA began a constant communication with both
    companies, which continues today.
        Information accumulated rapidly as a result of the investigation
    and attendant publicity. By August 1, we had 193 complaints alleging
    tread separations on these tires, with 21 reported fatalities. In a
    meeting on August 4, we suggested that Firestone consider recalling the
    tires. By August 9, when Firestone announced that it was recalling the
    ATX and ATX II tires, and Wilderness AT tires produced at its Decatur,
    Illinois, plant, we had over 300 complaints, with 46 reported
    fatalities. The number has continued to grow. As of August 31, we have
    1400 complaints with reports of 88 fatalities and 250 injuries.
        Firestone has recalled all of the ATX and ATX II tires of the P235/
    75R15 size manufactured since 1991. It has also recalled Wilderness AT
    tires of that size made at its Decatur, Illinois, plant, for a total of
    14.4 million tires out of the 47 million tires covered by our
    investigation. Firestone estimates that approximately 6.5 million of
    the 14.4 million tires included in the recall are still on the road.
    Ford and Firestone are taking a number of measures to provide
    replacement tires.
        NHTSA is continuing its investigation to ensure that the scope of
    the recall is proper and that all unsafe tires are recalled. At our
    request, Firestone and Ford have given us voluminous information about
    the tires, and we have sent follow-up requests for additional
    information to both companies and to Goodyear Tire and Rubber Company,
    for a peer comparison. We are continuing to monitor the recall to
    ensure that all defective tires are replaced promptly.
        Our review of data from Firestone has already disclosed that other
    tire models and sizes of the tires under investigation have rates of
    tread separation as high or higher than the tires that Firestone is
    recalling. On August 30, we recommended to Firestone that it expand its
    recall to include these tires. When Firestone declined to expand the
    recall, we issued a consumer advisory on September 1 to advise owners
    of these tires to take actions to assure their safety.
                                  observations
        We now know that in September 1999 Ford conducted a campaign
    (referred to by Ford as an ``Owner Notification Program'') to replace
    Wilderness tires mounted on Ford Explorers that had been sold in the
    states around the Arabian Gulf (primarily Saudi Arabia). Similar
    actions were taken in Venezuela in May 2000 and in Columbia, Ecuador,
    Malaysia, and Thailand. Ford would have been required to notify NHTSA
    of such an owner notification program if it had occurred in the United
    States, but our regulations do not apply to actions taken outside the
    United States. Ford thus had no obligation to advise NHTSA when it took
    these actions. If we find that we need additional legislative authority
    to require manufacturers to provide such information, we will seek to
    obtain it.
        A number of claims, and several law suits, had been filed against
    Ford and Firestone before we became aware of any trend that would
    indicate a potential defect. We received no information about those
    events from the companies or from the plaintiffs' attorneys. Our
    current regulations do not require the manufacturers to give us
    information about claims or litigation. The existing law gives us broad
    authority to seek information from vehicle and equipment manufacturers
    during the course of an investigation. We are exploring measures that
    would allow us to track claims and litigation information routinely.
        Mr. Chairman, I want to assure you that this investigation is the
    highest priority in NHTSA. We will remain focused on the investigation,
    closely monitor the current recall campaign, and seek any expansion of
    the campaign that may be necessary.
        Mr. Chairman, I want to conclude by expressing my thanks to you for
    holding this hearing. I will be glad to answer any questions you may
    have.

        Mr. Tauzin. The Chair thanks you, Dr. Bailey, and
    recognizes himself for 5 minutes under our rules.
        Dr. Bailey, who made the decision in July 1998 that the
    report submitted by the State Farm representative, Mr. Boyden,
    did not merit further review?
        Ms. Bailey. That was part of the analysis that was done by
    that individual. Again to put that into context----
        Mr. Tauzin. What individual?
        Ms. Bailey. The individual that received the complaints.
        Mr. Tauzin. Who was that individual?
        Ms. Bailey. I don't have the name. But I do know--we are
    aware of the name, and I can provide that for you.
        Mr. Tauzin. So there was an individual who reviewed the
    memo from State Farm and made a decision that it did not
    warrant further review?
        Ms. Bailey. Correct.
        Mr. Tauzin. And you have the name of that individual but
    you don't have it with you. Does someone else have the name of
    that individual?
        Ms. Bailey. I will see if we can pull the memo right now.
    If not, we will provide it for the record.
        It is Steve Beretsky.
        Mr. Tauzin. I think you probably are going to need to
    supply that name to the clerk so we have it properly spelled.
        Mr. Tauzin. Was a written decision rendered in that matter
    not to further review the report issued by State Farm to your
    office?
        Ms. Bailey. There was a memo at the time, and I think that
    should also be placed in the record. It was filed. It was
    analyzed, and there is a written report.
        Mr. Tauzin. Do we have a copy of that memo and written
    report?
        Ms. Bailey. I believe you do, but we will place it in the
    record.
        Mr. Tauzin. We do not have that report and would request
    that you make it available to us.
        Ms. Bailey. We will provide that.
        Mr. Tauzin. Does the agency have any records of the phone
    calls that Mr. Boyden will testify he placed to the agency in
    1999?
        Ms. Bailey. There is no record of those phone calls.
        Mr. Tauzin. Had the agency decided to do something in
    regards to the memorandum that was sent to you in July 1998,
    what could the agency have done?
        Ms. Bailey. They could have begun an initial assessment. I
    would like to put that into context, however, that over that 6-
    year period the population of tires produced was over 40
    million and so you can see over those years there were 2 or 3
    per year in terms of the complaints.
        Mr. Tauzin. I am not asking whether it was a good decision.
    I will leave that to the judgment of others. Had your agency
    made a decision to proceed to begin seeking information as to
    these claims that Firestone was obviously receiving for these
    tire failures, what could you have done?
        Ms. Bailey. Begun an initial assessment.
        Mr. Tauzin. An initial investigation could have started as
    early as July 1998 based upon that memo had someone in your
    office decided it was worth checking?
        Ms. Bailey. If there were a trend indicated by the data, we
    could have started an initial assessment.
        Mr. Tauzin. So you have the authority to do that today and
    you could have done that in July 1998 had a different decision
    been made about Mr. Boyden's e-mail; is that correct?
        Ms. Bailey. That's correct.
        Mr. Tauzin. I want to turn to the issue of testing. In our
    interviews with your official, apparently George Isadou,
    Division Chief of the Office of Crash Avoidance, we inquired as
    to whether or not NHTSA required testing of tires under speed
    conditions. We were told that there was an endurance test
    ordered at 50 miles per hour for 1,700 miles at 26 pounds per
    square inch, and that another test is the high speed test and
    that is ordered for 70, 75, and 80 miles, but only at 32 pounds
    per square inch.
        Ms. Bailey. That is correct, and at 95 degrees.
        Mr. Tauzin. The agency orders testing at 32 pounds per
    square inch for speed testing, but not at 26 pounds per square
    inch. Why?
        Ms. Bailey. That is----
        Mr. Tauzin. Why, when Ford is instructing its customers to
    inflate its tires at 26, is the agency only ordering testing at
    32?
        Ms. Bailey. That is the current tire standard testing. And
    that is one of the things clearly that we need to review and it
    is being updated at this time. In fact----
        Mr. Tauzin. So that in this case, I want to get it for the
    record, when these tires were produced for this car in 1990,
    there was no instructions, there was no standard, there was no
    requirement by NHTSA for either Ford or Firestone to test these
    tires under speed test conditions at 26 pounds per square inch;
    is that correct?
        Ms. Bailey. There was a standard and in fact they passed an
    endurance and high speed test in 1997. But you are correct
    about the pounds per square inch.
        Mr. Tauzin. But it was 32 pounds per square inch.
        Ms. Bailey. Exactly.
        Mr. Tauzin. So there is not a requirement today by NHTSA on
    these tire or auto manufacturers to test the tires on the
    vehicles under real conditions at the pounds per square inch
    that they in fact were recommending to their customers, 26
    pounds per square inch.
        Ms. Bailey. At this time there is not.
        Mr. Tauzin. Is the agency moving to change that?
        Ms. Bailey. Yes, we are.
        Mr. Tauzin. The Chair's time has expired. The gentleman
    from Massachusetts is recognized for 5 minutes.
        Mr. Markey. Thank you. I begin by asking unanimous consent
    to include in the record two charts. The first outlines NHTSA's
    overall funding and shows that, inflation adjusted, a 35
    percent decrease in their budget since 1980.
        The second chart shows the funding for the defects
    investigation programs of NHTSA which received $2.2 million in
    1980 and even though the request in the year 2000 from the
    administration was 3.7 million this Congress only provided 2.6
    million for that program. Again an adjustment for inflation,
    there has actually been a decrease in that program as well
    notwithstanding the numbers, Mr. Chairman, you earlier
    indicated.
        Mr. Tauzin. The gentleman's charts are admitted into the
    record.
        Mr. Markey. I thank you very much. Again, even looking at
    that area, the area that deals with tires, that particular unit
    of NHTSA may not have uncovered a defect as Firestone has yet
    to identify a defect again, only a high rate of claims against
    its tires. It is the overall agency funding that we should be
    looking at to make sure that they have the resources to look at
    every problem. And let me ask you, Ms. Bailey, the SUVs have
    different variables to bear upon tires than the smaller economy
    tires do. They are advertised as off the road vehicles, driving
    up mountains, through the streams. These ads make these
    vehicles seem as though you can take them anywhere. On highways
    the SUVs have been noted to have a proclivity to roll over. Are
    we testing these tires for the right conditions? Does NHTSA
    need to subject these tires to a different, more rigorous
    standard because they are intended for SUVs and are advertised
    for use beyond that which an ordinary automobile would be used?
        Ms. Bailey. I would agree with that and in fact we have
    begun work on the updating of the tire standards. We are going
    to have a proposal out in the spring, and we have asked for
    suggestions from the manufacturers themselves, which I think
    would address that issue, and they are to be in in October of
    this year.
        Mr. Markey. Have your tire standard tests changed since
    1968?
        Ms. Bailey. The tire standards clearly need updating. They
    originally started 30 years ago, and we have not had an update
    since 1968.
        Mr. Markey. So the test we use today is a 32-year-old test
    even though SUVs are advertised for off the road and when they
    come back on the road may have been subjected to ordinary
    conditions that ordinary tires would not have been?
        Ms. Bailey. Exactly. That is part of the reason why we
    would want to update these standards.
        Mr. Markey. I think the driving public in America deserves
    a new test.
        NHTSA has proposed a rollover test and a reporting
    requirement on rollovers. Do you agree that the results of such
    testing should be made available to consumers so that it is in
    their hands at the showroom?
        Ms. Bailey. I believe that we should have a rollover rating
    system that would be available to consumers, yes.
        Mr. Markey. So the information is available at NHTSA in its
    files with the showroom, but the consumer does not have access
    to it?
        Ms. Bailey. That's correct.
        Mr. Markey. Will NHTSA ensure that from now on consumers
    can see it at the showroom so that they can know what the
    safety record is?
        Ms. Bailey. Currently as part of the budget we are blocked.
    While there is a study of the rollover rating system, I would
    like to see that set aside and be allowed to move ahead with a
    rating system that would be available to the consumer.
        Mr. Markey. I think that every family purchasing one of
    these vehicles should know what the danger is and it should not
    be some hide and seek game with the automobile manufacturer or
    dealer that requires them to be trying to intrude into the
    private dealings of the automobile salesman. At the same time
    they may be trying to get a discount in the price.
        Finally, Ms. Bailey, the Venezuelan Consumer Protection
    Agency has recommended bringing criminal charges against
    Firestone and Ford. Are you in touch with your counterparts in
    Venezuela?
        Ms. Bailey. Could I just back up one moment and be sure
    that we have in the record that the Senate included in its
    version of the fiscal year 2001 DOT appropriation bill language
    that actually prohibits us from establishing a rollover rating
    system. I would appeal to the Senate in the interest of the
    seriousness of the work we are doing here today to set that
    aside so we can do that rating system. I want to be clear about
    that.
        Mr. Markey. I don't think that there is a more important
    public safety issue than reversing what the Senate has already
    done in trying to prohibit you from ensuring that all consumers
    know what the danger is in driving these SUVs.
        On to the Venezuela question.
        Ms. Bailey. We have not been in direct contact with
    Venezuela. We have been in contact with many of the other
    countries through the embassies and through our safety
    counterparts to obtain information about the replacements or
    quote/unquote, recalls that were done in other countries.
        Mr. Markey. Do they have documents from American companies
    which you do not have? Other foreign authorities?
        Ms. Bailey. I am not aware of that.
        Mr. Tauzin. The Chair recognizes the chairman of the
    Subcommittee on Oversight Investigations, Mr. Upton.
        Mr. Upton. Thank you, Mr. Chairman.
        Ms. Bailey, thank you for being with us this afternoon.
        Do you believe that NHTSA has the appropriate authority to
    receive information from the tire manufacturers? Or do you need
    more?
        Ms. Bailey. We have authority to receive information from
    manufacturers, and are doing so as part of our investigation.
    That authority may not extend--does not extend, as you know, to
    incidents that occur in other countries.
        Mr. Upton. But at least for domestic use, you believe that
    you have got--the pipelines are open and you are getting the
    information that you need?
        Ms. Bailey. I would add one other thing. That is clearly if
    we have information about some of the claims that at this point
    we do not have the authority to obtain, that could have been
    beneficial in this case.
        Mr. Upton. I raise that because in your testimony you said
    as of May 2, at that time the agency was aware of 90
    complaints, including the reports of 43 crashes and 4
    fatalities, and yet on the chart Firestone alone in 1999 it is
    not 90 complaints, it is 772 complaints.
        Ms. Bailey. That is because those are claims versus the
    complaints that we get, so that information is what I am
    referring to, and I say that we need to look at our ability to
    collect data from the manufacturer in regard to claims. We
    would be looking through our--expanding our current regulatory
    capability, but if need be we would also be looking at other
    ways in which we can obtain the data that you see there.
        Mr. Upton. In a Washington Post story that ran a couple of
    weeks ago, Ken Weinstein, your Associate Administrator for
    Safety Assurance, says, and this is not in quotes, but the
    story reads as part of its investigation the agency has
    requested information from Goodyear Tire and Rubber on similar
    tires. Have you received that information in the couple of
    weeks that you have asked for it?
        Ms. Bailey. My colleagues tell me it is due September 15. I
    know it has been requested. That is an essential part of our
    investigation to look at comparable or peer material.
        Mr. Upton. Are you looking beyond Goodyear as well?
        Ms. Bailey. The only request that we have at this time is
    for Goodyear.
        Mr. Upton. Would you be able to furnish the committee their
    response when you receive it?
        Ms. Bailey. Yes, sir, we would.
        [The following was received for the record:]
        [GRAPHIC] [TIFF OMITTED]70217.010

        Mr. Upton. It is my understanding that there is--the FARS,
    the Fatalities Accident Reporting System, that contains all
    vehicle related fatalities as required by law. And at the end
    of 1998 that data base contained 29 fatalities from accidents
    in a Ford Explorer fitted with Firestone ATX, ATX II or
    Wilderness tires. I am a little bit surprised that with all of
    the attention which has been focused on this issue the last
    number of months that the 1999 data base is not yet available.
    It is only through 1998.
        Ms. Bailey. It should be available within the next 2 weeks.
        Mr. Upton. We are almost in fiscal year 2001.
        Ms. Bailey. It should be available within the next 2 weeks.
        Mr. Upton. Do you think that will be helpful in determining
    whether or not there are some problems with the tires?
        Ms. Bailey. I think that information is very helpful, but
    it is more helpful for the purposes of the defects
    investigation that we are--have undertaken--that we look at the
    other ways in which the data base can be expanded.
        Mr. Upton. In looking at some testimony that was before
    this subcommittee back in the seventies with regard to the
    Firestone 500 tire recall----
        Ms. Bailey. Yes.
        Mr. Upton. [continuing] it was noted in that testimony by
    then, I think it was Chairman Moss that, as a part of the
    investigation, had directed a number of inquiries to Firestone,
    Firestone filed objections to releasing that information. In
    fact, in the conclusion, it indicated that NHTSA may exercise
    full subpoena power to obtain and retain documents and
    information that are required to determine whether safety
    defects exist.
        I was not eligible to run for Congress when this happened
    but it was--involved again the Decatur facility. Did--has
    NHTSA, despite all its testimony 20 some years ago, has NHTSA
    had follow-through with the Decatur facility over the last 20
    years at all?
        Ms. Bailey. To my knowledge, it has not been focused on
    Decatur, no.
        Mr. Upton. The last thing I guess before my time expires,
    there's been a real difference between the warranty claims with
    the tires as well as the number of deaths associated with the
    accidents. How is it that we can do a better job at getting
    NHTSA to get both claims and warranty, both accidents as well
    as claims reported routinely to NHTSA as you look at future
    recalls or future instances of problems?
        Ms. Bailey. Well, we feel that we may have within our
    current statutory authority the ability to expand so that we're
    able to obtain the claims that would be helpful. We're going to
    explore that. Obviously, that's a major issue for us.
        Mr. Upton. My time has expired.
        Mr. Tauzin. I thank the gentleman. The Chair now recognizes
    for his 5 minutes the ranking minority member of the full
    committee, Mr. Dingell.
        Mr. Dingell. Mr. Chairman, I thank you. You have been very
    gracious.
        Your statement says that Ford had no obligation to inform
    NHTSA of the recall in Saudi Arabia and other countries last
    year. Am I correct in assuming that NHTSA believes
    manufacturers should be required to notify NHTSA of foreign
    recalls?
        Ms. Bailey. There was no obligation for them to do so in
    the past, but at this time I think it's worth exploring,
    clearly worth exploring what we can do in a global marketplace
    to exchange valuable information about safety.
        Mr. Dingell. Do you plan to request new authority to
    accomplish this purpose?
        Ms. Bailey. I plan to explore what is within our current
    capability and, yes, additional statutory remedy, if need be.
        Mr. Dingell. Now, did NHTSA ever upgrade motor vehicle
    safety standard number 109 as the committee report suggested
    back in 1978?
        Ms. Bailey. The answer is no.
        Mr. Dingell. Could you tell us why NHTSA did not upgrade
    that standard?
        Ms. Bailey. The FMVSS 109 was last amended in July 1999 to
    require a four-digit date code instead of the original three-
    digit date code. The four-digit date code indicates the week of
    the year of the production in the first two digits and the year
    of production in the last two. For example, the date code 4599
    indicates the tires were produced in the 45th week of 1999.
    Several minor amendments such as labelling requirements have
    been made to the standard over the years.
        Mr. Dingell. Now, but why did you not upgrade that
    standard? Could you submit that for----
        Ms. Bailey. I can submit that for the record. I don't have
    an answer, sir.
        Mr. Dingell. All right. Now NHTSA's tire safety standards
    has not been revised since when?
        Ms. Bailey. 1968.
        Mr. Dingell. Can you explain to us whether NHTSA is
    considering upgrading that standard at this time?
        Ms. Bailey. We are clearly considering upgrading the
    standard and have begun the process. We will have a proposal
    out in the spring, but that is where it currently stands. Given
    the situation, I will be looking to expedite that sooner.
        Mr. Dingell. All right. NHTSA is trying to cope with a much
    larger and more complex regulatory burden than it had in 1978,
    but your budget now is approximately one-third of that which
    you had at that time; is that correct?
        Ms. Bailey. That is correct.
        Mr. Dingell. Now, how is that affecting the ability of
    NHTSA to carry out its responsibilities?
        Ms. Bailey. I do not believe it has affected our ability to
    carry out this administration. However, up to this point----
        Mr. Dingell. You are having significant problems, are you
    not, in terms of addressing all of the concerns you might have?
    For example, your able to investigate the matters with regard
    to the Firestone tires at this time. Are you able, however, to
    catch these things early enough? Remember, this thing has been
    going on for approximately 2\1/2\ or 3 years. So am I fair in
    inferring that it has, in fact, impacted the ability of NHTSA
    to address questions of this kind?
        Ms. Bailey. I think the regulatory authority to obtain data
    on a worldwide basis, for instance, or to obtain claims data
    has affected our ability to identify the need for an
    investigation in this case earlier, but it does not necessarily
    the funding.
        Mr. Dingell. And your problems with inadequate funding have
    compounded this problem, have they not?
        Ms. Bailey. Clearly, funding is an issue when you are
    working in an administration with this kind of responsibility.
    We want to be adequately funded, and again, that is why we are
    looking for that million dollars difference between--in this
    year's budget so that we are adequately funded in the office of
    defects investigation.
        Mr. Dingell. Am I fair, then, in inferring that you are
    telling me you have adequate moneys to carry forward all of
    your responsibilities or that you do not?
        Ms. Bailey. Well, there is a proposal before Congress
    today, the President's budget is asking for, again, a million
    dollars above what--an additional million dollars so that we
    can carry out our mission, and so I'm hoping that we would be
    funded at that level.
        Mr. Dingell. Thank you. Thank you, Mr. Chairman.
        Mr. Tauzin. I thank the gentleman. Before I recognize the
    chairman of the full committee, I would ask unanimous consent
    of the committee to have some time out of order to correct the
    record.
        Without objection, Ms. Bailey, in answer to questions I
    asked you relative to the memo--the e-mail that was received by
    your--by NHTSA in July 1998, you indicated that an analysis was
    done and a memo was prepared indicating that it did not deserve
    or require further retention or action. I am told--I think
    you're being informed of it now--that that was an incorrect
    statement. There was no such memo prepared, no written analysis
    done in 1998; that there was something done in August of 2000.
    Would you like to correct the record since you are under oath?
        Ms. Bailey. Exactly. Apparently, and I have read that memo,
    but the memo that I read was created in August of 2000.
        Mr. Tauzin. So the only memo----
        Ms. Bailey. There was an analysis done by that individual
    whose name I gave you but apparently no written report at that
    time.
        Mr. Tauzin. Ms. Bailey, I would ask you to perhaps consult
    with, again, representatives of your office. We received very
    different testimony in interviews with the gentleman in
    question. I will be specific. The gentleman in question
    informed our investigators that he did not recall receiving the
    e-mail nor doing an analysis of it. Is that correct or
    incorrect?
        Ms. Bailey. You're saying that Mr. Beretsky says that he
    did not receive an e-mail?
        Mr. Tauzin. He did not recall receiving an e-mail nor
    recall doing any analysis, no memos on it. Would you consult
    again--I realize you've been on the job for 3 weeks and we've
    got a problem here.
        Ms. Bailey. Apparently, and I've read a memo that discusses
    in detail what the claims said, which is what led me to believe
    that that memo--the internal memo led me to report to you the
    internal memo in which it says it was noticed, and I saw the
    memo and I saw the statistics. So I know it came in the e-mail.
    I have seen the e-mail. Apparently you're correct that Mr.
    Beretsky says he does not recall it and that he is
    reconstructing now--we are reconstructing the series of events.
    I was not aware that he had said he did not recall it. I only
    had the opportunity to read the memo which, again, has the
    statistics that says they noticed the claims.
        Mr. Tauzin. So we have the record correct and complete, the
    information we have is that there was no written memo, no
    written analysis done in 1998 of the State Farm insurance memo
    from Mr. Boyden, that a memo was constructed in August of 2000
    just last month by someone in your agency trying to reconstruct
    the situation. That is the memo you referred to. There is no
    such memo of 1998; is that correct?
        Ms. Bailey. There's not one in 1998. The part that I would
    like to reinvestigate is the memo that I read, which had the
    statistics and reported the complaints. We do have that, but
    apparently this is a reconstruction, too.
        Mr. Tauzin. That is a reconstruction memo. So that, as far
    as we know, the e-mail that was received by your agency was
    placed in a file, and as far as we know and as far as Mr.
    Beretsky could tell us, there was no recollection of even
    receiving it, much less analyzing it; is that correct?
        Ms. Bailey. Yes, sir.
        Mr. Tauzin. I thank the gentlelady. The Chair now
    recognizes the gentleman from Virginia.
        Chairman Bliley. I have no questions at this time.
        Mr. Tauzin. The Chair will then move to--I recognize the
    gentleman from Michigan, Mr. Stupak.
        Mr. Stupak. Thank you, Mr. Chairman.
        Ms. Bailey, NHTSA does not have standards for tire strength
    for steel belted radial tires, correct?
        Ms. Bailey. Who am I talking to?
        Mr. Stupak. Over here. I know there's a lot of us from
    Michigan. You don't have any standards for steel belted radial
    tires, correct?
        Ms. Bailey. There is not a separate standard.
        Mr. Stupak. The last standard was 1968?
        Ms. Bailey. Correct.
        Mr. Stupak. All right. So when you speak of endurance
    tests, high speed tests at 95 degrees, what standard is that
    based upon? Whose standard is that, to give a tire your
    approval?
        Ms. Bailey. That was based on the original testing that
    was--of the standards for testing from 1968.
        Mr. Stupak. So when we do a testing as to the endurance of
    a tire, any tire, it's based upon a 1968 standard; is that what
    you're testifying?
        Ms. Bailey. Exactly. I can tell you what it is. It's
    between 75 and 85 miles an hour. It's at 95 degrees. It's at 32
    pounds per square inch, and it's with a load of 88 percent of
    the maximum load, but yes, it's a 1968 standard and clearly
    needs to be updated.
        Mr. Stupak. But yet in 1978, after a lengthy investigation
    by this committee on tread separations on those Firestone 500
    tires, the committee concluded that the standard for the past
    year's tires was inadequate to protect public safety, the
    standard that was adopted in 1968. As I said, did NHTSA ever
    upgrade this standard as the committee suggested in 1978?
        Ms. Bailey. It is my understanding that there was a
    proposal to upgrade at that time, and that when there were
    cutbacks in the 1980's, that that was withdrawn.
        Mr. Stupak. Okay. In 1978--I'm not trying to beat a dead
    horse--but in 1978, the Society of Automotive Engineers adopt
    ed a paper that concluded that 27 percent of the vehicles they
    studied had tires that were underinflated by 4 to 16 pounds per
    square inch. That was a major safety issue. Is that still true
    today?
        Ms. Bailey. I would need to provide that for the record. I
    am not aware--I could not answer that definitively.
        Mr. Stupak. Okay. In 1978, after receiving that report from
    the Society of Automotive Engineers , NHTSA said it was going
    to require a low pressure--excuse me, require a low pressure
    warning system on vehicles.
        Ms. Bailey. Yes.
        Mr. Stupak. Do you know what happened to that initiative?
        Ms. Bailey. My understanding is that that proposal, again,
    was set aside with the cutbacks in the 1980's.
        Mr. Stupak. Okay. If the recommended tire pressure means
    that the tire will not perform to its tire speed rating, does
    NHTSA or any other government agency have the authority to take
    action, in other words, order a recall?
        Ms. Bailey. In order to order a recall, you need to go
    through--to order one, a mandatory recall, you would need to
    have gone through a complete investigation. It would not be
    from failure of one tire standard test.
        Mr. Stupak. Okay. But if the recommended tire pressure
    means a tire will not perform to tire speed rating, that is the
    standard set, the tire speed rating that they give to this
    tire, if it is not performing to that standard, what authority
    do you have then, NHTSA or any other government agency, to
    recall that tire? What I'm driving at is how do we get these
    things off the road if they're not meeting the standards?
        Ms. Bailey. Well, the answer I gave earlier is the correct
    one, but I think the important thing here is that you're
    absolutely right, the standards are not appropriate, the tire
    testing standards. They are not long enough in endurance,
    they're not at the right pressure per square inch, they are not
    at the right temperature so that we would have identified
    problems with these particular tires because in fact they
    passed in 1997. So we need to update the tire standard itself.
        Mr. Stupak. Okay. In response to a question from Chairman,
    Mr. Tauzin, you said the speed test is at 95 degrees--95
    degrees, 32 pounds per square inch. That is the current
    standard, and that passed the endurance and speed test at 32
    psi, but not the recommended 26 psi. The 26 psi would make it 6
    pounds under your recommended standard. So then going back to
    your automotive safety engineers report, 1978, that would be a
    major, to use their words, a major safety issue, would it not?
        Ms. Bailey. Your question is if they passed the test as it
    was set up?
        Mr. Stupak. At the 32 pounds.
        Ms. Bailey. Right.
        Mr. Stupak. Okay. And then that is what you said in
    response to Mr. Tauzin's questions, it passed the endurance and
    speed test at 32 pounds, not the recommended 26 pounds, that 6-
    pound difference there in a tire, and according to the Society
    of Automotive Engineers paper, which conclude that 27 percent
    of the vehicles they studied had tires that were underinflated
    by 4 to 16 psi's, and that this is a major safety issue. So
    running these tires that were tested at 32 with the
    recommendation it's at 26, do you agree then that that would be
    a safety issue?
        Ms. Bailey. There are two issues here. Yes, it would be a
    safety issue, and that is an education aspect to maintaining
    appropriate psi in your tires.
        The second point would be that the 26 is what is
    recommended, my understanding, of the Ford Explorer, but not
    what the Firestone recommendation is, and we would have been
    testing the tires according to the Firestone recommendation.
        Mr. Stupak. Would you be testing it not at the Firestone,
    but your recommendation which was 32?
        Ms. Bailey. At 32, but you're saying they were at 26 and
    that's the Explorer recommended psi.
        Mr. Stupak. Correct. Correct.
        Mr. Tauzin. The gentleman's time has expired. The
    gentlelady wishes to respond further?
        Ms. Bailey. Can I add one thing?
        Mr. Stupak. Yes.
        Ms. Bailey. Apparently, the endurance test itself is at 26
    and not at 32. So----
        Mr. Tauzin. If the gentleman will yield, the high speed
    test is not at 26. It's at 32.
        Ms. Bailey. Exactly.
        Mr. Tauzin. The gentleman's time has expired. The Chair
    will recognize the gentleman from Ohio, Mr. Oxley, for 5
    minutes.
        Mr. Oxley. Thank you, Mr. Chairman.
        Mrs. Bailey, one of the problems seems to be how
    connections are made, or at least I need to understand that,
    especially when we're dealing with large data bases. How does
    NHTSA frame information requests so that it receives meaningful
    information and doesn't squander time on large amounts of
    information that have no particular bearing on the inquiry? How
    are you able to focus the information given the large data
    base, and apparently the information coming from other
    quarters? How are you able to focus in on your information
    requests so that you really get at the issue at hand? Do you
    have a policy or is that a seat of the pants operation?
        Ms. Bailey. The vast majority of our information comes from
    consumer reports, and there is a form that is filled out. You
    can obtain that on the Web page. It is taken directly through
    our auto hotline. So all the information is filled out in a way
    that is appropriate for our data base.
        Mr. Oxley. In this case, it seems that pieces of the puzzle
    were scattered among industry and agency data bases. Is there
    something wrong in NHTSA's structure and process that
    discourages information sharing? Do we put ourselves in a
    situation so that it's more adversarial than perhaps needs be
    and tends to discourage sharing of that kind of information?
        Ms. Bailey. I do not believe there's an adversarial quality
    to our information obtaining capability.
        Mr. Oxley. But the whole structure----
        Ms. Bailey. What we're missing is, again, global
    information in the worldwide marketplace. We're missing
    information about claims, and those are the two that we're
    going to be very focused on obtaining in the future.
        Mr. Oxley. And what are your plans then to upgrade that
    data base or upgrade your ability to get that information
    sooner rather than later?
        Ms. Bailey. It's really a regulatory question, our ability,
    our authority to expand information, acquisition, for instance,
    outside of the United States.
        Mr. Oxley. Do you have that authority now?
        Ms. Bailey. We feel we have within our regulatory
    capability that authority, but if we--if we indeed need
    statutory remedy, we will seek that .
        Mr. Oxley. And so you're not prepared at this point to say
    whether that needs a statutory remedy or not?
        Ms. Bailey. Not at this time.
        Mr. Oxley. What have NHTSA's priorities been in recent
    years, on the bread and butter auto safety issues or new
    programs? Can you tell me how many new programs NHTSA has
    undertaken over the last few years?
        Ms. Bailey. Well, the mission is to reduce injuries, save
    lives and lower health care and other costs. Clearly I think
    there have been real advances, because we have the safest
    highways we've had ever in the Nation's history. At the same
    time, yes, there are many new programs, some of which you know
    about, our buckle-up program, our reducing drinking and driving
    and a myriad of other programs that we would be happy to
    provide for the record.
        Mr. Oxley. And you don't feel that the emphasis on new
    programs is, in any way, detracted from your ability to deal
    with issues that we're talking about today?
        Ms. Bailey. No, sir, I do not.
        Mr. Oxley. And in your funding request over the years, the
    statistics would indicate that the appropriate part of your
    agency that deals with recalls and the like have been increased
    by some 50 percent; is that correct?
        Ms. Bailey. The funding?
        Mr. Oxley. Yes, for that particular----
        Ms. Bailey. It depends on whether you--that's in real
    dollars or not.
        Mr. Oxley. What is the staff of the division that handles
    the recalls in that particular area?
        Ms. Bailey. Our staff is at about 50--47, in fact.
        Mr. Oxley. Forty-seven people?
        Ms. Bailey. Yeah.
        Mr. Oxley. And do you think--are you in a position to say
    whether, in fact, that number is adequate or inadequate at this
    particular time?
        Ms. Bailey. I think we clearly need to, as we have done
    during this investigation, look at ways that we can increase
    our ability to meet our mission. We have reassigned staff and
    reallocated resources to cope with the intensity of this
    investigation, which is our highest priority in which we're
    looking to expedite. So clearly, funding is an issue for us and
    we're hoping that we will be funded appropriately by the
    Congress.
        Mr. Oxley. So you don't think that 47 people are in a
    position to handle this kind of an issue and deal with a recall
    of this magnitude?
        Ms. Bailey. I think we are at this point, but I believe we
    are going to need additional resources in the future to
    continue to deal with more vehicles on the road, complex
    technology, on issues like the one we are dealing with here
    today.
        Mr. Tauzin. Gentleman's time has expired. The Chair at this
    point would request unanimous consent for the documents
    contained in these two books, book one and book two, which have
    been agreed upon by both sides, would be submitted into the
    record subject to review by staff from both sides for
    confidentiality. Is there any objection? Without objection, so
    ordered.
        Second, before we move on, I wanted, for public
    information, Ms. Bailey, I think we ought to take a moment to
    do this, indicate that at the Ford Web site, consumers can
    obtain information on the tires that are subject to the recall
    that you have encouraged Firestone to conduct and which they're
    currently conducting, and that information not only contains
    information about what is on your tire, but which of the tires
    that are--may be on your vehicle are, in fact, subject to
    recall and therefore replaceable under the recall, and I would
    encourage consumers who are tuning in to this hearing to take
    advantage of both contacts to your office and on the Ford Web
    site--I'm sure the Firestone Web site has similar information.
    If consumers will contact either your office or these Web
    sites, they can obtain this information. This is the
    information I used to go down and look at my Ford Explorer and
    determine that the four tires on my truck are, in fact,
    recallable, and I'm apparently waiting, by the way, to find
    some replacement tires if anybody's listening.
        The Chair will now recognize the gentleman from Tennessee,
    Mr. Gordon.
        Mr. Gordon. Ms. Bailey, welcome to your new position and
    welcome to the committee and welcome to prime time.
        Ms. Bailey. Thank you.
        Mr. Gordon. You had mentioned earlier that your agency has
    established some new programs, like trying to reduce drinking
    and driving and trying to increase people or awareness of
    buckling up. How many lives have you estimated that have saved
    by your efforts, your office's efforts?
        Ms. Bailey. 10,000 last year alone.
        Mr. Gordon. Well, that's to be commended. Let me--I want to
    follow a line of questioning that I mentioned earlier. As I
    understand it, quality assurance used to be sort of hodge podge
    of different approaches between the manufacturer and their
    components or part makers, and basically, it was an end-result
    type of approach, that over the years there was involved
    something called the QS 9,000 quality assistance program which
    changed the focus, so that you would try to control the quality
    through the manufacturing process all along the way.
        And as I understand it, both Ford and Bridgestone/Firestone
    are saying that this is a good program and that there has been
    adequate monitoring of this, and reviewing that, they really
    can't find out what the problem is. Yet over here you have an
    enormous recall. So we've got, you know, somewhere--we have
    sort of a black hole in between. Are you familiar with the QS
    9,000 quality assurance program?
        Ms. Bailey. It is used extensively in the manufacturing
    industry. I'm aware of that.
        Mr. Gordon. Do you have an opinion as to whether it is
    adequate or whether there needs to be changes?
        Ms. Bailey. I would need to look into the program. I think
    there are many manufacturing plants that are certified as QS
    9,000, and I don't have a comparison as to whether that's
    reasonably certified.
        Mr. Gordon. Let me ask you this, too. If there are to be
    changes, do you have an opinion as to whether that should just
    be an industry----
        Ms. Bailey. Yes.
        Mr. Gordon. [continuing] program, that percolates up from
    the industry or whether there needs to be some type of
    coordination with your agency, and if so, at what level?
        Ms. Bailey. Yes, I would agree that I think shared
    responsibility here is what we're talking about today, and so
    yes, I believe that not only should it remain within the
    manufacturing industry, but that clearly there could be
    government involvement as well so that we create the best
    quality assurance program.
        Mr. Gordon. And as we try to look to the future in
    determining how can we avoid these type of problems in the
    future, again, do you have advice as to a role that Congress
    should play in that, if any, and a role that your agency should
    play, and I say expanded from what occurs now?
        Ms. Bailey. Well, I think what we've identified, and I have
    spoken to here is that there are two areas that clearly there
    was information--where there was information not made available
    to NHTSA. So I think that we may need to work with Congress to
    look for that kind of statutory remedy, if we're not able
    within our own regulations to quickly begin to obtain that data
    from around the world or about claims, and there may be other,
    more creative ways that we can continue to obtain data that
    might allow us to identify these problems sooner from garages,
    from fleet--from the fleet industry and from plaintiffs'
    attorneys, you know, wherever we can get information.
        I think it's important to remember that the consumers need
    to communicate with NHTSA. The majority of our complaints come
    from the consumer, and in fact, there was information out there
    in the public domain. Individuals knew they had a problem, and
    they were not necessarily contacting NHTSA. So I would like
    that message out today that we have an 888 number which is
    DASH-2-DOT. We'd like people to communicate with us and we need
    perhaps to inform people better about that because that's where
    we get most of our information. But clearly those other two
    areas are important. In information exchange between the
    government and the manufacturers themselves, there clearly was
    a breakdown in communication here.
        Mr. Tauzin. The gentleman's time has expired. The Chair now
    recognizes the gentleman from Iowa, Mr. Ganske, for 5 minutes.
        Mr. Ganske. Thanks, Mr. Chairman.
        Ms. Bailey, I pointed out in my opening statements that
    charts by both the Ford Motor Company and Bridgestone/Firestone
    indicate that there appears to a statistically significant
    difference in where these defective tires were manufactured and
    that a high percentage of them were manufactured at one plant,
    the Decatur plant. Would you agree with that?
        Ms. Bailey. Yes, sir.
        Mr. Ganske. Can you speculate some of the factors that you
    think might have caused one plant to have manufactured a large
    percentage of the defective tires?
        Ms. Bailey. I wouldn't want to speculate because we are in
    the process of an ongoing investigation, and it would be
    inappropriate for me to do so.
        Mr. Ganske. Well, what are some of the things you would be
    looking for, defective materials?
        Ms. Bailey. Defective materials.
        Mr. Ganske. Over a 2-year period?
        Ms. Bailey. Other manufacturing questions. It's a complex
    process that involves molds, it involves personnel, human
    error. There are a variety of ways in which we would be,
    particularly through the engineering analysis, now trying to
    determine what has happened here if indeed there is a defect
    and to provide that information.
        Mr. Ganske. Are you sending investigators to that plant to
    interview employees and management?
        Ms. Bailey. Not to my knowledge.
        Mr. Ganske. Why not?
        Ms. Bailey. I think that clearly is a question that we
    should consider.
        Mr. Ganske. I can't believe that you haven't thought of
    that. I mean, you know, the way those tires are put together is
    a factor and possible cause of their blowing apart, isn't it?
        Ms. Bailey. For one thing, the phase we're in now is the
    engineering analysis where there would be a mechanism to allow
    us to do that, and we've only been in that phase for a period
    of days. The initial phase is the preliminary evaluation in
    which we obtain information and analyze the data. So it may be
    during the engineering analytic phase that those kinds of
    activities are set, and I would investigate that and get back
    to you about that.
        Mr. Ganske. Okay. Well, let me ask you about the
    engineering phase. Who has the tires that have been recalled?
        Ms. Bailey. Firestone is in--has those tires.
        Mr. Ganske. Do you have a sample, a random sample of those
    tires?
        Ms. Bailey. We would be obtaining, yes, samples of those
    tires.
        Mr. Ganske. Have you obtained samples of those tires?
        Ms. Bailey. Yes, we have.
        Mr. Ganske. How many tires have you obtained?
        Ms. Bailey. I could provide that for you. I don't have a
    number.
        Mr. Ganske. And how do you know that they are a random
    sample?
        Ms. Bailey. I would provide you with details of the
    engineering analysis that would give you that kind of specific
    subject matter.
        Mr. Ganske. Okay. Let's talk about the engineering
    analysis. Are you doing that in-house? Do you have the
    expertise at NHTSA to do in-house analysis?
        Ms. Bailey. Yes.
        Mr. Ganske. So that the analysis that will come out will be
    NHTSA's analysis, not an analysis by Ford and not an analysis
    by Bridgestone?
        Ms. Bailey. Correct.
        Mr. Ganske. When do you think that you will--when do you
    expect to have that analysis completed?
        Ms. Bailey. The engineering and analytic phase generally is
    completed within a year. We have just begun that phase.
    Generally speaking, an entire investigation takes about 16
    months, 4 months for the preliminary evaluation, and then as
    much as 12 months for the engineering analytic phase. I would
    obviously like to see that expedited rapidly, but as we did
    last week, if there's information that tells us that we would
    want to recommend a widened recall, if there are additional
    tires out there that are dangerous, we will take action to
    instigate that recall, and if need be, as we did last week,
    through a consumer advisory, to inform the American public.
        Mr. Ganske. Do you have access to the records of the tires
    that are being replaced and their serial numbers?
        Ms. Bailey. Yes.
        Mr. Ganske. So then when you ask for a sample, do you just
    select certain dates and times of those tires that are being
    replaced so that you know that you get a random sample?
        Ms. Bailey. That's information that has been requested and
    is part of the ongoing investigation now.
        Mr. Tauzin. Gentleman's time has expired. The Chair
    recognizes the gentleman from Ohio, Mr. Sawyer, for a round of
    questions.
        Mr. Sawyer. Thank you very much, Mr. Chairman, and thank
    you, Ms. Bailey. You are being asked to respond from a very,
    very narrow base of actual experience to a very broad base of
    concern that's reflected here on this committee.
        Let me ask you a more general question. When an event like
    a tread separation occurs that precipitates a claim, does that
    qualify as a defect that must be reported?
        Ms. Bailey. When--you would certainly look at the numbers
    of tread separations.
        Mr. Sawyer. I'm trying to get a sense of----
        Ms. Bailey. Yes, that could constitute a defect.
        Mr. Sawyer. [continuing] a claim versus an adjustment, and
    the reason for which the adjustment is being made.
        Ms. Bailey. Let me say that a manufacturer is obligated to
    report a known--a believed defect. There is a law that states
    that within 5 days they would have to report that to NHTSA.
    Determining when that defect--when you have a defect is a more
    complex question.
        Mr. Sawyer. Yes, and that's the reason I am asking, what
    constitutes the point at which a claim or an adjustment
    constitutes a defect per se?
        Ms. Bailey. At times it may be not a large number of
    claims. It may be a smaller number of claims. For instance--and
    now, there's a difference between the manufacturer determining
    that they have a defect and notifying NHTSA and our determining
    that there's a defect. We are investigating and we will go to
    the end of an investigation before we determine for certain
    that there is a defect.
        Mr. Sawyer. I agree that that's a complex question, and
    it's one that goes to the heart of what is a useful, early
    warning system for NHTSA, to be able to respond to a pattern of
    events.
        Ms. Bailey. Let me just say about tires in general, because
    I think it's important that we put it in perspective. Tires do
    fail. If you run your tires for 40,000 miles, there's a certain
    expected failure rate. It's been asked why at times there may
    only be one complaint or several complaints and we initiate an
    investigation. That is because there are aspects of motor
    vehicles which should never fail, such as a seat belt. You may
    know about Chrysler, for instance, in 1996. One failure is too
    many. A child safety seat, there may be one or two failures and
    that's enough to instigate an investigation because that part
    of an automobile should never fail. Tires, on the other hand,
    do fail. So putting this into perspective, there's a certain
    expected rate of failure, so that's part of why----
        Mr. Sawyer. And tires wear out, they age and they come to
    the end of their life.
        Ms. Bailey. Exactly.
        Mr. Sawyer. In the 1988-89 initial investigation, I'm told
    by several manufacturers that there was a threshold established
    at a .5 percent failure rate that was used to trigger an
    expectation of reporting; is that accurate?
        Ms. Bailey. Most of that information is held confidential,
    correct, by manufacturers. Tire failure rate, that's a
    different question.
        Mr. Sawyer. Well, in the end, I returned back to the recall
    that you have initiated this past week, with the Baja 32 by
    11:15 that had a single failure, I assume that given the
    universe that you are dealing in that single failure was a high
    rate, but that it was due to a puncture. I am trying to get at
    the question of whether or not we're getting the kind of
    information that will let us focus in on statistically
    significant numbers, so that we can get at real catastrophic
    risks that may be out there in instead of getting lost in a
    blizzard of data that doesn't lead us particularly anywhere.
        Ms. Bailey. Let me again put it in perspective, that we
    receive 50,000 complaints a year at NHTSA. 500 of them deal
    with tires. Fifty of them deal with Firestone tires per year.
    Only five or so per year; therefore, in the decade preceding
    when this information came in, only about five a year dealt
    with the specific tires that are recalled today. So you can see
    there is a trend that we look for, or a threshold, if you will,
    but the 46 over a decade when there was a population of 47
    million tires did not----
        Mr. Sawyer. It did not rise to a level of that kind of
    concern.
        Ms. Bailey. Correct.
        Mr. Sawyer. Let me ask one further question if I can, Mr.
    Chairman. In an arena in which manufacturers are allied with
    one another, owned by one another and operate in a variety of
    different settings, where manufacture takes place in many
    different continents and where the experience from those
    continents may be useful to us, what kind of obligations to
    report do American affiliates or foreign affiliates of American
    manufacturers have to report those incidents in other
    environments?
        Ms. Bailey. They do not have an obligation to report at
    this time.
        Mr. Sawyer. Should they?
        Ms. Bailey. That is one of the main things we will be
    looking at.
        Mr. Sawyer. It seems to me that the single most undertaking
    in the name of safety that the tire industry and others and the
    automobile industry as well has undertaken is the attempt to
    harmonize environmental and safety expectations of products on
    an international basis. Without that capacity, it seems to me
    that it would be very difficult.
        Mr. Tauzin. Would the gentleman yield to allow me to ask
    one question before we move on. Does NHTSA have any intentions
    at all of instituting an action against Firestone for failure
    to report a known defect?
        Ms. Bailey. That would not be determined until the end of
    the investigation.
        Mr. Tauzin. I thank the gentlelady. The gentleman's time
    has expired. The Chair will now recognize the gentleman from
    California, Mr. Bilbray. The gentleman from Tennessee, Mr.
    Bryant.
        Mr. Bryant. Thank you, Mr. Chairman.
        Ms. Bailey, we've heard a great deal of testimony today, or
    at least questioning, I think, sort of what I would call
    leading questions from folks here about your funding levels,
    and you seem to have responded not maybe the way they want you
    to say, that you're underfunded and that would solve all the
    problems in the world.
        But I understand that State Farm and your administration
    have a cooperative relationship and have worked together over
    the years in situations where there have been problems, and
    that NHTSA frequently makes requests of State Farm to share
    nonconfidential claims material to assist you with pending and
    ongoing investigations. It's extremely rare though that State
    Farm would, on its own, notify you of a potential trend in
    claims data that they're so alarmed about that they come to you
    on their own initiative.
        So my concern on this funding issue, maybe some of my
    colleagues who have raised this question is, if it's
    misevaluated, which apparently this was the case here, all the
    funding in the world is not going to solve that. That's an
    internal issue. You can have triple the budget you have and
    still would have missed this one because it was not analyzed,
    at least in a way that would adequately show there was a
    problem early on.
        Let me also ask you a question--that was more of a comment,
    I suppose--that we on this committee understand that a large
    percentage of the incidents in question occurred when Firestone
    ATX, ATX II and Wilderness tires were mounted on Ford--when
    these types of tires were mounted on Ford Explorers.
    Understanding that these tires were also mounted on several
    other types of vehicles, the NHTSA ODI fatal crash summary
    illustrates that the number of fatalities in Ford Explorers is
    significantly higher than fatalities occurring in other types
    of vehicles with these same Firestone tires. What are your
    thoughts on this seemingly fatal combination of the Ford
    Explorer and these Firestone ATX, ATX II, Wilderness tires, and
    are there any factors that you have identified that explain the
    usually high fatality rate with this combination, or have you
    investigated the situation, and if so, what has your
    investigation shown?
        Mr. Tauzin. I believe the gentleman is referring to
    document No. 6 in the book, and does the gentlelady have it
    before her?
        Ms. Bailey. Yes, I have that, and clearly it shows a high
    incidence of fatalities with the Explorer, much higher than the
    Bronco or the Blazer, for instance. And I think you're right,
    clearly it is a combination of situations here that in this
    case seems to have created a particularly fatal outcome.
    Specifically, I had mentioned earlier that we'd published a
    request for comments on June 1 on the use of a stability factor
    for consumers and consumer information program, and the Senate
    included it in its version of the DOT appropriations bill
    language that prohibits us from establishing a rollover rating.
    I think when you look at these kinds of numbers, you realize
    that I think the consumer deserves to be aware that there
    appears to be a higher possibility of a fatal crash with some
    of these vehicles. I don't think we know which, and I think we
    need more information, and that's why we need a rollover rating
    system.
        Mr. Bryant. But is there an ongoing investigation at NHTSA
    now that has the specific combination?
        Ms. Bailey. We have been prevented from continuing that. We
    had begun that, but at this time we are unable to proceed until
    there is a study done. So we are awaiting that, and I would
    like that restriction removed so that we can do a rollover
    rating system.
        Mr. Bryant. And who has imposed that restriction? I may
    have missed this.
        Ms. Bailey. That is part of the Senate's version of the
    fiscal year 2001 appropriations bill language that is
    prohibiting us from doing this system until a National Academy
    of Science study is performed to assess the validity of the
    measure. I think it's pretty clear it's a valid measure.
        Mr. Bryant. Let me ask you, and it's my last question, and
    this is kind of a follow-up to a comment that was made on the
    other side about the latest recall of Firestone tires. I
    understand that and know for a fact that NHTSA has recommended
    a recall of several other Firestone tires based upon data
    received since the opening of this investigation to date, and
    all the tires, as I understand, the standard is all the tires
    receiving an overall rate of 12.6 or higher are recommended for
    recall, and in reviewing the claims data on these particular
    tires, there are several with an extremely low number of claims
    involved and reported on these tires, so low that it stands
    out.
        For example, a tire that's rated 87.5 and recommended for
    recall only received two claims. Both were listed as blowouts.
    Another tire with a rating of 85.5 received only one claim
    listed as a tire separation. And a third tire with a rating of
    82.2 received two claims, one a road hazard and one a tread
    separation.
        And my question to you, is it really necessary to suggest
    recall on tires when the numbers are so low? And I'll be the
    first to stand up and say----
        Ms. Bailey. When production numbers are low, for instance,
    and the rating therefore is low.
        Mr. Bryant. Right, the number of tires out there on the
    road are low.
        Ms. Bailey. You may assume that, but at the same time if
    you look at that information, you will see that there are
    production numbers of 100,000 and 200,000 where the tread
    separation rate is equal to, or sometimes significantly higher
    than the tires that were already recalled. So it's looking at
    the entire universe of tires, and yes, sometimes it's a low
    production number, but we still feel if there is a high tread
    separation rate, that it should be recalled, and we needed to
    inform the consumers of that and did so.
        Mr. Bryant. And again, I'll be the first to recommend, in
    fact, I talk to people now about this, and say we have to--if
    we're going to err, let's err on the side of safety, but again,
    where there's tire s, where there are only one or two
    incidents, I'm wondering if there's not an overreaction to some
    extent, and those are the ones I cited as examples to you.
        Ms. Bailey. Right. I think--again, we put together the
    population and the tread separation rate, the tread separation
    claims and came up with a rate. I think you're right, we're
    erring on the side of safety.
        Mr. Tauzin. Gentleman's time has expired. The Chair
    recognizes the gentleman from Texas, Mr. Green.
        Mr. Green. Thank you, Mr. Chairman.
        And Ms. Bailey, recognizing you've been on the--in your job
    for such a short time and some of the questions are difficult,
    I think most of us, though, want to make sure that the agency
    itself, not only before you were there but after you're gone,
    just like a lot of us want to make our institutions survive and
    corrects problems that we notice. In reading a lot of the
    briefings, I noticed State Farm, and they will testify later
    today, said that they had talked to NHTSA twice in 1999 about
    the rapid increase in claims they're seeing from these
    particular tires, and by early 2000, it was recorded 45 more
    injuries and four more deaths, and we're told that seeing a
    rapid increase in the complaints and injuries involving a
    single product is a strong indication of problems, and it
    seemed like there wasn't any response from NHTSA until the
    Houston TV station reported it.
        And I know oftentimes, whether it's on our level on the
    legislative branch or on the executive side, sometimes we wait
    until it's called to our attention by the media, and by that
    time it's much too late, particularly when you have--I
    understand State Farm has a cooperative office with NHTSA and
    would share information back and forth.
        Can you tell us why there was not any interest, and if one
    of the largest insurers in the country pointed this out over a
    number of years, it seemed like?
        Ms. Bailey. It's two issues here.
        Mr. Green. Yeah.
        Ms. Bailey. And let me just say that, first of all, this is
    a document that I was referring to which is the memo which
    looks real official, and it's got all of the details, but
    apparently this was reconstructed. So you will have to take
    this with a grain of salt. When I read this, which says the
    unsolicited report, it says, this unsolicited report was
    apparently sent to ODI on July 22, 1998, through the same
    channel that all other reports requested from State Farm come
    through. The e-mail is unremarkable stating we have noticed,
    quote, unquote, 21 failures, inquiries, regarding these
    particular tires, and there were details on this.
        Now, this is apparently, according to my staff, a
    reproduction of that original exchange which now we have
    clarified was not even recalled by the individual that we had
    attributed it to. I think the main issue here is that that was
    an informal arrangement between--and we don't have it with any
    other insurance company, but my question now stepping into this
    job as the new administrator is how could that happen, not that
    it would have instituted an investigation. This was over
    several years, and it was 21 complaints out of 40 million
    tires. It would not have instigated an investigation. So
    missing this in this case did not prevent us from doing our
    job.
        Mr. Green. That's true in 1998, but over a period of years,
    in fact, early this year it was recorded 45 more injuries and
    four more deaths occurred.
        Ms. Bailey. We were not made aware of that through State
    Farm, if that's what you're indicating, but let me just say,
    the important point here is I want us to formalize----
        Mr. Tauzin. Would the gentleman yield for a second.
        Mr. Green. I had the impression you were.
        Mr. Tauzin. Again, we're under oath and we will have
    testimony from a witness later on who says he did inform the
    agency in 1999 about additional injuries and deaths as a
    result. I just want to keep the record straight on that because
    the gentlelady, again, may not be aware of what he is going to
    testify to a little later on today, and apparently no one at
    your agency recalls these phone calls.
        I thank the gentleman. I will give the gentleman additional
    time.
        Ms. Bailey. Thank you, Mr. Chairman. I appreciate that. I'm
    not aware of it and apparently they are not either, but I just
    would still like to make my point that this is clearly
    something I'm going to investigate, should we not have more
    than this voluntary informal arrangement with other insurance
    companies, so that we can pay real attention to anything that
    comes in, whether this one would have instigated an
    investigation or not.
        Mr. Green. And, again, whether it's informal or formal,
    obviously if it were formal, we would have documentation of it.
    But in 1998 if it was told, or 1999, and then earlier this year
    there was additional--it should have raised somebody's flag at
    the agency that there may be a problem we need to look at.
    Frankly, being 3 weeks on the job, it would have made your
    situation a lot easier today, that maybe in February, if
    somebody had said wait a minute, we've had these over the last
    3 years, let's really look at it and see. I think that the
    communication within NHTSA, and maybe your leadership now will
    help that. We need to make sure that there's coordination
    within the agency and someone knows what's going on.
        I know you already answered the question that our ranking
    member mentioned, but did you know that the information that
    has been received, whether formally or informally, already
    represented more deaths on fewer tires than in 1978, Firestone
    500 tires?
        Ms. Bailey. But at the same time, we were receiving 2 and 3
    and 4 complaints, we were receiving hundreds of complaints on
    other tires at that same time. So again, it's keeping it in
    perspective. It does not mean that it is not very serious. It
    is, and I wish this had been--that the information had been
    record appropriately.
        Mr. Green. Another question that comes up, and I know we've
    talked about it from other members that said, if the standard
    was already inadequate for tires installed on the cars in
    1970's and it would even be more inadequate for the heavier and
    sport utility vehicles, and let me tell you, coming from Texas,
    the SUV is our vehicle of choice. I've driven them for 25 years
    now, and it seemed like--and that's granted I don't go off road
    except during hunting season, but in 1978, the Society of
    Automotive Engineers adopted a paper that concluded that 27
    percent of the vehicles they studied had tires that were
    underinflated. That was a major safety issue. Is that still
    true today?
        Ms. Bailey. Well, apparently going off road works better if
    you underinflate the tires. I'm certainly not recommending
    that, particularly the information we have here today, but it
    is something that I think we may want to work into one of our
    public information campaigns.
        Mr. Green. Again, historically, though, in 1978, NHTSA said
    it's going to require low tire pressure warning systems on
    vehicles. Do you know whatever happened to that?
        Ms. Bailey. My understanding, it was tabled during the
    1980's when there was a cutback on funding.
        Mr. Green. Okay. Do you think NHTSA will revisit that issue
    now to make sure that consumers know that if I drive off road I
    may want to lower pressure, which is also common sense for some
    of us who may do it, but that we need to make sure that
    consumers know that when you're on road, you need to inflate
    them to a certain level?
        Ms. Bailey. Yes, sir.
        Mr. Green. Thank you, Mr. Chairman.
        Mr. Tauzin. Gentleman's time has expired. The Chair
    recognizes the gentleman from California, Mr. Rogan--I am
    sorry, the gentleman from North Carolina, Mr. Burr, is next.
    I'm sorry.
        Mr. Burr. I thank the chairman.
        Ms. Bailey, I realize you have only been there for 3 weeks,
    but----
        Ms. Bailey. It seems longer.
        Mr. Burr. It will seem even longer at the end of today, let
    me assure you. Do you believe that the internal process at
    NHTSA is one today were State Farm or any insurance company to
    send an e-mail that looked like the e-mail that was sent
    before, a pattern, 21 specific examples, two deaths, is that
    something that NHTSA today would respond to with at least a
    preliminary investigation?
        Ms. Bailey. I don't know that the 21 would initiate even a
    preliminary evaluation, but I will say we clearly would respond
    differently today.
        Mr. Burr. What triggered the preliminary investigation in
    the spring of this year?
        Ms. Bailey. The history is that over a 10-year period in
    the 1990's we had received 46 complaints. There was one
    fatality in that, but again, that is that each year during
    those years, that was about five complaints a year. So it had
    not triggered an evaluation at that time--investigation.
        Mr. Burr. Did it have anything to do with the Texas history
    and the 25 calls?
        Ms. Bailey. Absolutely, because what that resulted in, we
    began to investigate and tried to obtain information which was
    not forthcoming from KHOU, but it did double the number of
    complaints that we received at NHTSA. So that as that occurred
    over the next couple of months, it became very apparent we did
    have a trend, and we opened the investigation on May 2.
        Mr. Burr. But the 21 that State Farm pointed out got lost
    somewhere. If it hadn't, if 25 then triggered it, wouldn't 21
    have triggered it if somebody had paid attention to the State
    Farm?
        Ms. Bailey. We had revisited that, and remembering that
    tires are treated in a different manner than a seat belt and
    that was over a decade, it still would not, even combining
    those two statistics, would not have triggered an evaluation.
        Mr. Burr. So there's been no change in the internal process
    at NHTSA, since this investigation began, before and after?
        Ms. Bailey. We had a change 2 weeks ago in that we are now
    reviewing partly to prepare for today, but partly because I'm
    reviewing what it is that has occurred in this investigation
    and how it is that NHTSA completes its mission.
        Mr. Burr. NHTSA has a monthly service bulletin, am I
    correct, in the terminology that I use, some type of bulletin?
        Ms. Bailey. We are not sure what you mean, but there is a
    press release that goes out on a regular basis, if that's what
    you're referring to.
        Mr. Burr. What was the date of the first one that
    specifically addressed the concern with these tires?
        Ms. Bailey. I don't think that----
        Mr. Burr. They're two different things?
        Ms. Bailey. They're two different things.
        Mr. Burr. I wouldn't think that a press release--it's my
    understanding there is some type of monthly publication that
    NHTSA puts out. Am I incorrect?
        Ms. Bailey. But it would not include this information. It's
    on recalls, the monthly bulletin you're talking about
    identifies the recalls.
        Mr. Burr. Okay, let me move on. You mentioned earlier if we
    only had a million dollars more we could do this. Where
    specifically were you talking about that million dollars?
        Ms. Bailey. That's for the Office of Defects Investigation.
    It would mean we could hire more investigators. It means we
    could do more testing.
        Mr. Burr. What's your budget this year?
        Ms. Bailey. It means we could do--the budget is
    approximately total for NHTSA, $400 million. It is $395-plus.
        Mr. Burr. It's 362 according to the Transportation
    Committee. Of that, how much of it's the administrator's office
    and staff?
        Ms. Bailey. How much is what?
        Mr. Burr. The administrator's office and staff.
        Ms. Bailey. Administrative staff?
        Mr. Burr. Administrator's office.
        Ms. Bailey. To break it down for you, what's really
    important to know is that if you round it off to about $400
    million just for the sake of ease, about half of it goes to
    grants first of all.
        Mr. Burr. But specifically, the administrator's office is
    about 10 percent of it, right?
        Ms. Bailey. No, it's not 10 percent. We'll give you the
    number in a minute.
        Mr. Burr. That's $35 or $36 million of $366--they're
    shaking their head. I'll go by the numbers that I have got. Why
    short term? Why don't we reprogram within that----
        Ms. Bailey. Reprogram?
        Mr. Burr. Why can't we move money from an area----
        Ms. Bailey. We're doing some of that right now----
        Mr. Burr. [continuing] that is administrative to an area
    that gives us the staffing capabilities or the resource
    capabilities to address hopefully a short-term problem?
        Ms. Bailey. We have done that. In fact, we have reassigned
    staff and reallocated funds because of this investigation.
        Mr. Burr. The one thing that has gone without mention I
    believe today is that Congress 6 years ago started a new
    program that is outside of NHTSA's budget. It is the Hotline.
    The Hotline has increased from an appropriation of about
    $500,000 to $1.2 million or $1.3 million.
        Ms. Bailey. But I understand it has been cut back some this
    year; and we would like to see that fully funded, too, because
    that is where most of our information comes in.
        Mr. Burr. I wait patiently in hopes that we will get
    appropriations bills signed this year, but today I am not too
    optimistic.
        Mr. Tauzin. The gentleman's time has expired.
        Mr. Burr. The chairman has been very generous. I thank Ms.
    Bailey for her testimony, and I yield back.
        Mr. Tauzin. The Chair recognizes the gentleman from
    Maryland, Mr. Wynn, for a round of questions.
        Mr. Wynn. Thank you, Mr. Chairman.
        Dr. Bailey, welcome. I don't envy you with only 3 weeks
    under your belt, so when I use the term ``you'', I am not
    referring to you, I am referring to the agency.
        Several questions. First of all, it says that NHTSA had
    received 46 complaints over 9 years by the end of 1999. Is that
    sufficient to initiate a preliminary investigation?
        Ms. Bailey. No, because that is out of a population of 47
    million tires over several years, and at the same time we were
    receiving approximately 5 per year about Firestone. We had
    hundreds from other tire companies.
        Mr. Wynn. Is there a specific threshold number that is
    utilized to initiate a preliminary investigation?
        Ms. Bailey. There is not a specific number, but it is
    certainly not 5 a year.
        Mr. Wynn. But 5 a year represents an average. But if most
    of them had occurred in the last couple of years, would that
    not have kind of triggered a concern?
        Ms. Bailey. Part of what I am looking at as a new
    administrator is what those thresholds would be, and we are
    doing that right now.
        Mr. Wynn. So there is a review----
        Ms. Bailey. As I say, the difference between a child safety
    restraint device and tires, so it is difficult to come up with
    a formula. But I do believe we should develop a threshold
    model.
        Mr. Wynn. So you are going to do that internally through
    regulation and won't need legislation, is that safe to assume?
        Ms. Bailey. Right, and it clearly wasn't 46 over 9 years,
    but yes, yes, sir, we will.
        Mr. Wynn. Okay. And when you look at that, do you give any
    additional weight to the number of fatalities as opposed to
    just complaints?
        Ms. Bailey. Clearly, catastrophic crashes and fatalities
    would weigh into that formula.
        Mr. Wynn. Did that 46 include the 21 that were reported by
    Firestone?
        Ms. Bailey. That 46 did not. We are still evaluating where
    there may have been some overlap, but it doesn't appear that it
    did overlap.
        Mr. Wynn. Okay. One of the things that concerned me was a
    report contained in the committee--well, a statement contained,
    rather, in the committee report suggesting that when they
    inquired about the 21 the agency was not able to produce any
    evidence or recollection of it, but yet they actually found the
    case summaries of 21 cases in the files of your agency. Is
    that--first of all, is that true?
        Ms. Bailey. Yes. Apparently, the document that I referred
    to is the document that was reconstructed, and it does have
    specific information that was available through NHTSA.
        Mr. Wynn. Okay. So is it fair to assume that someone within
    the agency misspoke about the existence of the 21?
        Ms. Bailey. The existence of the claims--what we are
    differentiating here is that Mr. Beretsky apparently did not
    remember. That is different than it not existing. So we did
    have information. He didn't recall the information.
        Mr. Wynn. Okay, fine.
        Mr. Tauzin. Would the gentleman yield for a second?
        Mr. Wynn. Yes, Mr. Chairman.
        Mr. Tauzin. I thank the gentleman. I will give him
    additional time.
        The point I think the gentleman is making, though, is that
    you received information over these years of incidents of
    failure. You have counted them up. 49?
        Ms. Bailey. Well, this is different. This is the 21----
        Mr. Tauzin. That is my point, and I think that is his
    point. During that same period, you received an e-mail saying
    here is 21. Here is a description of what happened. And somehow
    that got filed away and never even got counted. I think the
    gentleman is asking, what happened here? Why was it ignored in
    the analysis the agency was making as it counted all of these
    incidents as coming into the agency? I thank the gentleman.
        Would the gentlewoman respond?
        Ms. Bailey. There is a difference between a claim and a
    complaint. There should not be, though. I agree with you, that
    clearly, even though these were claims obtained through an
    informal relationship between the one company, the one
    insurance company of them all that does relate to us in that
    fashion, even though that was an informal arrangement, there
    should be a mechanism, and I certainly will put one into place
    and hope to widen our ability to obtain that information to
    other insurance companies so that it does not remain informal
    or separate from our normal process of acquiring a data base.
        Mr. Tauzin. I thank the gentleman and the gentlewoman. The
    Chair will extend the time for the gentleman another minute.
        Mr. Wynn. Thank you, Mr. Chairman.
        Dr. Bailey, do you have any mechanism for getting
    information on recalls that occur in other countries?
        Ms. Bailey. At this time we do not, and they are not--a
    manufacturer is not obligated to provide that, but we will.
        Mr. Wynn. All right. And you were clear--I think in
    response to several of my colleagues you said that you
    definitely want the authority to compel that information?
        Ms. Bailey. Yes, sir.
        Mr. Wynn. Okay. Mr. Ono in his testimony, his written
    statement, says that he met with you on August 8 and reviewed
    what he knew, and then he voluntarily initiated the recall. Was
    that meeting at your invitation, or was that--did they indicate
    they wanted to come in? What were the circumstances of that
    meeting?
        Ms. Bailey. We arranged that meeting and recommended the
    recall on August 8.
        Mr. Wynn. You actively recommended the recall?
        Ms. Bailey. Yes.
        Mr. Wynn. But to your knowledge, had his company taken--I
    am sorry, go ahead.
        Ms. Bailey. Just saying the dates are off. The actual
    meeting was the 4th where we recommended the recall, but that
    sounds wrong to me, too.
        All right. On the 4th was the meeting where we recommended
    the recall. On the 8th, they agreed to do so; and on the 9th,
    they did the recall.
        Mr. Wynn. I just want to clarify who took the
    responsibility here. Because there is a suggestion or
    implication that perhaps they came in and wanted to be good
    corporate citizens, and I want to clarify that it was at your
    request that they came in, and that is what resulted in the
    recall, and absent your request that it perhaps may not have
    happened?
        Ms. Bailey. No, that is exactly how it happened, that we
    initiated the meeting recommending the recall, and that they
    agreed to the recall and did so on the 9th.
        Mr. Wynn. Okay.
        Mr. Tauzin. The gentleman's time has expired.
        Mr. Wynn. Thank you, Mr. Chairman. You have been very
    generous.
        Mr. Tauzin. Thank you, Mr. Wynn.
        The Chair now recognizes the gentleman from California, Mr.
    Rogan.
        Mr. Rogan. Mr. Chairman, thank you.
        Dr. Bailey, although you may not have always felt it over
    the last couple of hours, your presence is welcome here today.
        Ms. Bailey. Thank you very much.
        Mr. Rogan. I echo the appreciation for you coming.
        Something my friend from Maryland just asked triggered a
    question. Is there really a difference in the way NHTSA would
    handle a potential safety problem if the information came to
    them by way of an informal information channel versus a formal
    complaint?
        Ms. Bailey. Unfortunately, in the past, that was the case.
    I don't think it was intended to be. I think there is a human
    error factor here, if you will, or a systems problem, and we
    are going to clearly correct that. That should not be the case.
    Any information that would let us know the possible defect or
    need for an investigation should be part of the data base. At
    this point, there is no real mechanism for claims, because that
    is not something we are routinely obtaining.
        Mr. Rogan. So despite the seriousness and the potential
    safety hazard of information that would come to NHTSA under
    your predecessors, that would never have made it into the data
    base if it had not come in by way of a formal complaint?
        Ms. Bailey. No, it should have and would have by all
    rights. Apparently, this did not happen in this case.
        Mr. Rogan. When the State Farm information was received in
    1998, was it actually received by Mr. Beretsky?
        Ms. Bailey. Apparently, it was another individual who took
    the actual information; and the safety defect specialist was
    Mr. Beretsky who reviewed. But there was another individual who
    actually took the information.
        Mr. Rogan. But Mr. Beretsky would have been the receiving
    official back in 1998; he isn't just a person that
    reconstructed this in a recent memo?
        Ms. Bailey. Correct.
        Mr. Rogan. Under the protocols of 1998, when information
    was received from a single source of 21 problem tire incidents,
    including two fatalities, was it the protocol of NHTSA then to
    enter that into the data base?
        Ms. Bailey. That should have been entered into the data
    base, yes.
        Mr. Rogan. And for some reason, that never happened?
        Ms. Bailey. Apparently, it did not happen.
        Mr. Tauzin. The Chair will extend the time of the gentleman
    for at least 30 seconds.
        Mr. Rogan. Do you have any information in your files from
    1998 to indicate that complaints about these tires had come
    into NHTSA from some source other than the State Farm
    representative?
        Ms. Bailey. Yes. There would have been information as part
    of the complaints that I mentioned that occurred during the
    1990's where we were gathering information and it was in the
    data base.
        Mr. Rogan. As of 1998, how many complaints, or information
    of specific incidents, did NHTSA have in relation to these
    tires?
        Ms. Bailey. I could give you the exact number, but it must
    have been--being we got 246 by the year 2000, it must have been
    in the high 30's, I would imagine.
        Mr. Rogan. Typically, would that be sufficient to trigger a
    preliminary investigation?
        Ms. Bailey. Not with the population of 47 million tires,
    when there were hundreds of complaints about other tires being
    received at the same time that we were receiving per year 3 or
    7 about these particular tires, so it would have not prompted
    an investigation of these tires.
        Mr. Rogan. As to the complaints that you had received by
    the end of 1998, were they generic complaints of all kinds of
    different problems, or did they all appear to be essentially
    the same problem with the same type of vehicle?
        Ms. Bailey. There were different types of problems mixed
    in. They were not all tread separation problems.
        Mr. Rogan. Were the bulk of the complaints received about
    tread separation?
        Ms. Bailey. I believe the majority of them were tread
    separation, is that correct?
        They don't want to say that, so we will provide that for
    the record.
        Mr. Rogan. Okay.
        Ms. Bailey. I know a lot of them were.
        [The following was received for the record:]

        A global search of NHTSA's Office of Defects Investigation's (ODI)
    general database (DIMSII) for all complaints on Firestone tires from
    January 1, 1990, to December 31, 1998, reveals a total of 356 records,
    which in turn, when duplicate records are eliminated, represent 336
    distinct consumer complaints. Of these, 14 mention the words ``. . .
    tread separat . . .'' in the text of the complaint. This would include
    ``tread separated'', ``tread separating'', ``tread separation'', etc.
        A more focused search in DIMSII for complaints about Firestone ATX,
    ATX II, and Wilderness A/T tires for the same time period reveals 14
    records, one of which mentions ``tread separation.'' This is the number
    of complaints that would have been seen by a screener looking at the
    DIMSII consumer complaint data for these tires at the end of 1998.
        During the spring of 2000, as part of her preparation for the
    formal opening of the Firestone investigation, the ODI investigator
    searched DIMSII using a broader definition for all reports relating to
    Firestone tires and tires regardless of make on Ford Explorers. She
    then reviewed each complaint summary to identify those that seemed to
    be within the scope of the anticipated investigation. This effort
    yielded 32 reports received by NHTSA by the end of 1998,11 of which
    mentioned ``tread separation'' on the original document. After the
    formal opening of the investigation, an additional four reports were
    identified to have involved tread separation, so of these 32 reports,
    15 are now known to have involved tread separation.

        Mr. Rogan. Mr. Chairman, thank you. I yield back.
        Mr. Tauzin. I thank the gentleman.
        The Chair recognizes the gentleman from Minnesota, Mr.
    Luther.
        Mr. Luther. Thank you, Mr. Chairman.
        First of all, before I ask any questions, as I understand
    it, you have issued an advisory recommending the recall of an
    additional 1.4 million. So my question is, what kind of a
    danger is posed, in your view, by those additional tires?
        Ms. Bailey. Let me, first of all, say that I think that was
    excellent work on the part of the NHTSA staff. It shows that,
    even during an investigation, they are acquiring data at a
    rapid rate; they are analyzing the data; and when they see a
    serious safety problem like was apparent in the high tread
    separation rates of those additional almost 1.5 million tires,
    they were alert enough to make me aware of that. We were able
    then to recommend a recall, but, more importantly, let the
    American public know about the danger.
        Mr. Luther. Thank you. And where does that stand as of this
    time? You recommended it, and where does the recall of those
    additional tires stand?
        Ms. Bailey. We are not able to direct a mandatory recall
    until we finish the complete investigation, which was why it
    was important that we do the consumer advisory, because that
    could be theoretically as long as a year, though I want to see
    this completed within 6 months.
        Mr. Luther. Have you received any response as of this time
    to your recommendation?
        Ms. Bailey. From the manufacturer?
        Mr. Luther. Right.
        Ms. Bailey. Firestone did not choose to recall those tires
    at that time, and I am sure you can--they could make a
    statement to that effect as to the reasoning.
        Mr. Luther. Now I would like to go back to the discussion--
    --
        Ms. Bailey. Let me just add, it was a short timeframe. We
    determined on the 30th that we had a serious problem, and on
    the 31st they determined they didn't want to make a recall. As
    you know, that was going into the Labor Day weekend; and we did
    not feel we could withhold that information from the American
    public about 1.4 million tires.
        Mr. Luther. Sure.
        Back to the information you received 2 years ago from State
    Farm. The question that comes to my mind is whether or not the
    individuals within the agency had the necessary statutory and
    regulatory authority and tools, if you will, to act upon that
    information. You have already indicated, I believe, if I
    understand it, that recalls outside the country are not
    something you could--you are entitled to get information on.
    Does that also extend to any activities outside the country--
    and I believe you have also indicated that you were not
    entitled to get information on claims. I assume that applies to
    both outside the country and within the United States.
        I would like you to verify, if you could, my understanding
    on those two points, and are there other constraints because
    your agency would not have the appropriate statutory and
    regulatory authority so that they would be limited when put on
    notice of a possible problem?
        Ms. Bailey. First, we would have to have the authority to
    obtain the information, and then we could use that information
    in order to deal with the particular manufacturer in the same
    way we are in this investigation.
        Mr. Luther. And that is why I asked the question. What I
    would like to know is, in what areas do you not have necessary
    statutory or regulatory authority in order to get the job done
    for the American consumer? You have indicated a couple already.
    Claims information, you would like to have that authority, as I
    understand it.
        Second, you would like to have authority to get any kind of
    information necessary, I assume, from outside the United
    States, not just recall information but claims information and
    presumably other information. What else, in addition to that?
        Ms. Bailey. Well, those are the two main issues here. If
    the claims information that we now know of were made available,
    it would have changed the course of events here. If we had
    known about the foreign recall or replacements, that also could
    have changed the course of events. So those are two areas that
    are high on my priority list to look at in terms of our
    authority and being certain that, in the future, we are able to
    obtain that data.
        Mr. Luther. So basically what you are saying is that in
    1998 your employee did not have the authority to go to a
    manufacturer and say, please tell us if you have had complaints
    or problems; is that correct?
        Ms. Bailey. We could go to a manufacturer and request that
    information. We couldn't--there was no obligation of the
    manufacturer to provide information from outside the United
    States.
        Mr. Tauzin. Would the gentleman yield for a second?
        Mr. Luther. I will yield, Mr. Chairman.
        Mr. Tauzin. The staff has asked me to clarify this, Mr.
    Luther, and I will yield additional time, if you don't mind.
        Our understanding is that you do have the authority to
    request of a company like Firestone or Ford information
    referenced to recalls or replacements in other countries. You
    could request that at any time. And the question is, if you did
    hear about an action in Venezuela or Saudi Arabia, if that came
    to your attention, doesn't your agency today have the authority
    to say, tell us about what is going on in Saudi Arabia or
    Venezuela? And if you do, what would be the obligation of the
    company to whom you sent such a request?
        Ms. Bailey. They are not obligated to provide us with
    information about defects or recalls in other countries.
        Mr. Tauzin. They could refuse to answer the questions you
    asked them?
        Ms. Bailey. I guess what you are asking is, if we make the
    request of information, would they give that to us, versus them
    being obligated to provide it.
        Mr. Tauzin. Without a request.
        Ms. Bailey. Yes. If we were aware of it and made the
    request, they would provide that.
        Mr. Tauzin. So that what you are saying is that, absent a
    request from NHTSA, they don't have a legal obligation to
    voluntarily provide you the information.
        Ms. Bailey. Exactly.
        Mr. Tauzin. But you always had and have today the capacity
    to request that information, in which case you would receive
    it, would you not?
        Ms. Bailey. Yes.
        Mr. Tauzin. Mr. Luther, I yield back.
        Mr. Luther. Thank you, Mr. Chairman.
        So you are saying that, if you make a request, there is an
    obligation then to respond to that request, even if it includes
    information from outside the country?
        Ms. Bailey. Yes.
        Mr. Luther. And would that be true of claims also, whether
    outside or inside? In other words, could you make a request?
        Ms. Bailey. Made a request----
        Mr. Luther. If you made a request for claim information,
    what claims have been filed outside and inside the United
    States, would they be under an obligation to provide that?
        Ms. Bailey. If we made the request, yes.
        Mr. Luther. Finally then, let me, before I wrap up, on that
    current advisory recommending 1.4 million more tires, how
    serious a danger is that currently to the American public, in
    your view?
        Ms. Bailey. I felt it was serious enough to do the first
    consumer advisory during an investigation that has ever been
    done by NHTSA. The point being is that I looked at the data.
    There were tread separation rates in the tires that were
    proposed. Again, sometimes it was a small population, but
    sometimes it was 100,000 produced or 200,000 produced, and
    those tread separations were significantly higher, sometimes
    several times higher than the tread separation rate of the
    tires that were already recalled.
        Mr. Luther. So if I understand what you are saying, then
    that recommendation for another 1.5 million tires in your view
    is presenting a very serious safety hazard to the American
    public as of this time?
        Ms. Bailey. Serious enough where I would still recommend a
    recall of those tires.
        Mr. Luther. Okay. Thank you.
        Mr. Tauzin. I thank the gentleman.
        The Chair recognizes the gentleman from Illinois, Mr.
    Shimkus.
        Mr. Shimkus. Thank you, Mr. Chairman. We have gone over
    this before, but, for myself, defects get reported, claims do
    not?
        Ms. Bailey. The obligation to report? Yes. If you know of a
    defect, if a manufacturer knows of a defect, they are obligated
    to report that to NHTSA.
        Mr. Shimkus. But if there is a claim, that doesn't mean
    that a defect reporting has been done?
        Ms. Bailey. Correct.
        Mr. Shimkus. And if there is an industry-to-industry--say
    that there is a blowout and the insurance company pays out to
    the claimant. The insurance company then goes to Firestone and
    says, okay, this is a faulty tire; pay me what I had to pay in
    the claim. That is not reported?
        Ms. Bailey. That is not reported either.
        Mr. Shimkus. And I think those are things that we need to
    probably have added to your tools----
        Ms. Bailey. Exactly.
        Mr. Shimkus. [continuing] so that we can connect the dots
    better than having a TV station do it for us, would you agree?
        Ms. Bailey. Right.
        Mr. Shimkus. What would also help connect the dots is if we
    knew and if industry knew that they were making recalls
    overseas that that was reported back to you?
        Ms. Bailey. Right.
        Mr. Shimkus. Mr. Chairman, that is all the questions I
    have. I yield back.
        Mr. Tauzin. The Chair recognizes the gentlewoman from
    Missouri, Ms. McCarthy.
        Ms. McCarthy. Thank you very much, Mr. Chairman.
        Dr. Bailey, thank you very much for your testimony here
    today.
        I wanted to spend a moment with you on an item that was in
    the Wall Street Journal today from a column by Timothy April on
    Firestone, who has been here before, where it talks about in
    the wake of the 1978 recall there were a flurry of proposals--
    probably by members of this committee more senior than I; this
    is only my third term here--for regulatory changes aimed at
    tightening----
        Ms. Bailey. It is only my third week. I just thought I
    would share that with you.
        Ms. McCarthy. So I am speaking with someone even more
    junior.
        All these notes were dropped or sharply watered down after
    the Reagan administration came into office and proclaimed one
    of its goals to be lightning the regulatory burden on
    businesses. And the article goes on to talk about a number of
    proposals, one to require the auto and tire industry to come up
    with a system for warning drivers when pressure in their tires
    have dropped, other proposals about under-inflation and so
    forth, requiring tire makers to print identification numbers on
    the exterior. I think some of these have been mentioned by
    other members in questioning earlier today.
        But the article goes on to point out that most tire makers,
    including Bridgestone and Firestone, say they favor updating
    regulation; and in a panel much later today Clarence Ditlow
    from the Center for Auto Safety is going to talk about some of
    the standards that do need to be upgraded and that have not
    been acted on by your administration. So I wonder if I could
    just ask you a question or two about some of these suggested
    changes; and if you have thoughts on other standards that you
    intend to address and haven't shared with the committee, I
    would be glad to have you share those at this time.
        Do we now need standards on rollover protection, including
    stronger standards on roof strength for rollover protection?
        Ms. Bailey. Yes.
        Ms. McCarthy. Okay. And what about tire recalls and
    replacement policy? In 1978, tires didn't last as long as they
    do now. Radial tires now last 55,000 miles or more. I was
    flying here today on the plane sitting next to a gentleman
    reading these articles, and we got to talking about it. And he
    had tires on a different vehicle than Ford go out and he had
    had the car for less than a year--or just over a year. So the
    warranty had expired, but the same problem existed on his
    tires, and he managed to get them replaced. But the
    manufacturer has no obligation to replace a tire for free if it
    is more than 3 years old on some vehicles, 1 year on others.
        Shouldn't replacement policy be looked at and maybe have
    Congress remedy it by providing for reimbursement in the
    statutes or something to make sure that consumers are
    protected?
        Ms. Bailey. You mean in a recall situation or a warranty
    situation?
        Ms. McCarthy. Warranty situations where, in fact, a tire
    goes bad because of a problem like this or another serious
    problem not anticipated following the warranty expiration.
        Ms. Bailey. If it is a problem like this and it is a recall
    situation, we do have an amendment that is at this time to
    extend the recall period by several years.
        Ms. McCarthy. What about if it is just a guy sitting next
    to you on a plane today whose tires went out. He wasn't hurt,
    and it just happened, and he had to fight with lawyers and
    others to get them replaced? Should the Congress take a look at
    recommending this, or can you do that?
        Ms. Bailey. That sounds like a warranty issue for the
    manufacturer.
        Ms. McCarthy. Exactly. That is what people at the Center
    for Auto Safety are saying. Some of these things need to be
    rethought. Tires last longer now, or the warranties have
    changed, and maybe we need to take a look at that.
        Ms. Bailey. Well, again, I think that is part of our
    amendment that extends the recall time. But I think, of what
    you have mentioned, I think the serious issues are the
    possibility of developing a system so that most of us who would
    not be aware when our tire pressure is incorrect would be
    alerted to that, a mechanism for that. And our rollover rating
    system also I think is a real safety issue. So those I clearly
    would support.
        Mr. Stupak. Would the gentlewoman yield?
        Ms. McCarthy. Of course.
        Mr. Stupak. I want to follow up on one of the first
    questions you asked.
        Dr. Bailey, in this whole situation today, you have
    indicated you only had a few reports about these tires, but we
    talked a lot about 1978 and the Firestone 500. So when I am
    driving down the road and if I have a blowout, with all due
    respect I don't think of NHTSA. I go back to where I bought my
    tire and where I bought my car, and that is what the American
    people do. We don't really think of calling you to report this.
        In 1978, though, you said that Firestone 500--you had lots
    of complaints, and that is how you learned about it. That is
    what started this situation for the recall of the Firestone
    500. We don't have that situation here today in 2000. What
    happened in that 20-year period? Why was the agency able to act
    quickly or more quickly based upon numerous complaints in 1978
    but not as quickly as we would like to see here in 2000? What
    was the difference? Were there policy changes? I think Ms.
    McCarthy hit on part of it in her first question. What
    happened?
        Mr. Tauzin. The gentlewoman's time has expired, but the
    gentlewoman may respond.
        Ms. Bailey. I would need to have the numbers to look at how
    quickly they responded and to what number, but I think it
    brings up the question of a threshold, and I think we do need
    to develop a formula so that we have a clear threshold that
    takes into account a variety of factors, including the stats
    and numbers of----
        Mr. Tauzin. The gentlewoman's time has expired.
        The chairman must move to recognize another member, unless
    we get a unanimous consent request.
        Ms. McCarthy. Mr. Chairman, I would request unanimous
    consent for an additional minute.
        Mr. Tauzin. Without objection, so ordered.
        Ms. McCarthy. I yield to the gentleman from Michigan.
        Mr. Stupak. I think you will find, in 1978, NHTSA back then
    had a good working relationship with garages, with tire
    garages, repaired tires and things like that. In 1978, the
    information that was gleaned that came through your agency was
    because we had people back then, and as Ms. McCarthy said in
    her first statement or her first question, there have been a
    number of budget cuts.
        I know there has been a lot of talk about getting more
    money and more money here where those budget cuts really hurt
    and American consumers no longer have protection, is we don't
    have the eye and ears in the field like we did back there 1978.
    Now we have to rely on the American people to alert us when
    something is going on.
        With all due respect, I just don't think of NHTSA when my
    tire goes out. You had people checking with the garages, and
    they would see a pattern. Because a manufacturer does not have
    to report a tire or an automobile manufacturer does not have to
    report unless they consider it a defect. And if you do not
    consider it a defect, there is no duty to report to you.
    Therefore, there is no knowledge on your part of a defect that
    is occurring.
        With that, I yield back.
        Mr. Tauzin. Before he yields back, I think it is important
    to point out that our investigators queried your personnel on
    that very issue and we got a different answer. We were told
    that this formal program was eliminated in the 1980's, but
    NHTSA continues the informal contacts. The liaison office for
    NHTSA informed our investigators that the formal program back
    in the 1980's was thought to be fairly useless. Is that
    accurate?
        Ms. Bailey. Which formal program?
        Mr. Tauzin. The formal program of having people in the
    garage shops reporting to NHTSA?
        Ms. Bailey. We do still communicate with garages, yes.
        Mr. Tauzin. You still do that today.
        Ms. Bailey. With garages, yes.
        Mr. Stupak. But it is not a required formality like it was
    in the 1970's where you actually had people going out there and
    doing it, not relying on people to contact you. You actually
    took the initiative, and you didn't need to wait and react,
    like we are here today.
        Ms. Bailey. Okay.
        Mr. Tauzin. I think the information was just sent in in
    those days; and you still maintain those informal contacts, do
    you not?
        Ms. Bailey. There are still contacts made with garages.
        Mr. Tauzin. I thank the gentlewoman.
        The gentlewoman's time has expired.
        The gentlewoman from New Mexico is recognized.
        Mrs. Wilson. Thank you, Mr. Chairman.
        I appreciate you being here, and I appreciate your
    endurance as well.
        In your testimony, I would like to get back to the State
    Farm claim report in 1998 which you testified did not provide
    an indication that would justify opening a defect
    investigation. Yet, I have from the staff investigation of the
    NHTSA documents, in 1994, NHTSA opened a preliminary evaluation
    on Michelin tires----
        Mr. Tauzin. Document number 2, page 13, if people wish to
    refer to it.
        Ms. Bailey. In this book?
        Mr. Tauzin. Document number 2, page 13.
        Mrs. Wilson. It is a NHTSA decision document on opening a
    preliminary evaluation on tread separation on a Michelin tire
    based on five complaints which resulted in no injuries and no
    fatalities. Was there a change in the guidance for your
    employees between 1994 and 1998 as to what justified opening a
    preliminary investigation?
        Ms. Bailey. There at this time is not a formula that
    dictates what the threshold is that would warrant initiating an
    investigation. Clearly, there needs to be, and that is one of
    the things I think we will be identifying, whether or not--what
    is the criteria for an investigation.
        Mrs. Wilson. So is it now really just one guy's call? Is it
    just one person's call within your agency as to whether they
    start this paperwork?
        Ms. Bailey. No, it is not one individual, but it is clearly
    within the NHTSA staff, and it may not be an individual, but at
    the same time, I don't think it is a clear enough process. I
    don't think we have defined the mechanism well enough.
        Mrs. Wilson. Looking back on it now, do you think that
    decision to say this doesn't meet the threshold for opening a
    preliminary evaluation, do you think that was the right call?
        Ms. Bailey. You mean from the 21?
        Mrs. Wilson. From the State Farm report in 1998 of 21
    claims and two fatalities?
        Ms. Bailey. Before I would determine what that threshold
    is, I would want to analyze an appropriate formula for
    determination. I am not sure that 21 over 8 years still
    necessarily reaches that threshold, but I don't understand
    three being the threshold either. So I think we need to
    determine what is an appropriate threshold when millions of
    tires are being produced.
        Mr. Tauzin. Would the gentlewoman yield for a second?
        Mrs. Wilson. I yield to the chairman.
        Mr. Tauzin. I wish to correct the record. The 21 incidents
    reported we are told is over a 6-year period, not an 8-year and
    not a decade but over a 6-year period.
        I thank the gentlewoman.
        Mrs. Wilson. Is it unusual for a company that is approached
    by NHTSA to refuse to recall these other tires, these 1.4
    million tires you issued the warning on? When NHTSA goes to a
    company and says we think you have a bigger problem here, is it
    unusual for a company to refuse?
        Ms. Bailey. As you know, my tenure is short at this point,
    but my review of this and what has been provided to me about
    the institutional memory, if you will, or the historical
    pattern is that, generally speaking, when we recommend a recall
    and have statistics to support that, that, generally speaking,
    that is voluntarily accomplished with the manufacturer.
        Mrs. Wilson. Now, this happened just before this last
    holiday weekend. Were you surprised by Firestone refusing to
    expand the recall?
        Ms. Bailey. Yes, I was surprised.
        Mrs. Wilson. How did you react?
        Ms. Bailey. By saying then, we need to determine how we
    best inform the American public about this problem, and we
    determined that that was an advisory, and----
        Mrs. Wilson. Were you told by Ford Motor Company about the
    Saudi Arabia problem or about Venezuela?
        Ms. Bailey. We were not told until after we had already
    opened the investigation--on May 2.
        Mrs. Wilson. So there was no voluntary information provided
    by Ford America that they had a problem overseas?
        Ms. Bailey. No.
        Mrs. Wilson. For your employees, when they are deciding
    whether to open a preliminary evaluation, are there guidelines?
    Is there a criteria that they used that is formalized in any
    way within your department?
        Ms. Bailey. For a preliminary evaluation, there is an
    initial assessment done previously in which we obtain data,
    review data, analyze data, before doing the first phase of an
    investigation, which is the preliminary evaluation. So there is
    an assessment of the data that has been presented or obtained
    prior to opening the investigation that is done methodically.
        Mrs. Wilson. What I am asking is, is there a policy and
    procedures manual? Is there training that is done that tells
    your employees, here are the criteria, here are the things that
    you should take into account when you get consumer complaints
    or e-mails in from insurance companies on how you are supposed
    to evaluate this? What criteria you should use in deciding
    whether to start a preliminary investigation, or to take that
    e-mail and put it in your circular file?
        Ms. Bailey. Well, apparently, with an e-mail, in that
    informal arrangement, that was either not spelled out or not
    clearly enough spelled out as to what to do with that form of a
    warning.
        Mr. Tauzin. The gentlewoman's time has expired.
        The Chair recognizes the gentleman from New York, Mr.
    Fossella.
        Mr. Fossella. Thank you, Mr. Chairman.
        In an effort just to solidify the truth, I just want to
    make sure, Dr. Bailey--there was an article in the Washington
    Post dated August 25 with Secretary Slater who said that
    regulators launched an investigation into the problem of tires
    as soon as they received complaints linking the tires to
    fatalities. Have I heard you correctly today? You said that did
    not occur, right?
        Ms. Bailey. Clarify for me what your question is.
        Mr. Fossella. Well, regarding the State Farm e-mail in
    1998, presumably, the agency was notified 2 years ago, and you
    are claiming that nothing happened, right?
        Ms. Bailey. It is important that--yes, there was one crash
    with two fatalities in that group; and so, apparently, the
    Secretary was not aware of that. But, at the same time, he did
    not necessarily misspeak, because he was talking about the
    complaints, and that is different than the claims. I don't mean
    to--that should be----
        Mr. Fossella. I just want to set the record straight. Just
    so the Congress knows and the American people know, nothing
    happened when the agency was first notified, right? Regulators
    did not launch an investigation 2 years ago, correct?
        Ms. Bailey. Correct.
        Mr. Fossella. So you are correct, and this is incorrect?
        Ms. Bailey. I believe----
        Mr. Fossella. You can't both be right.
        Ms. Bailey. Absolutely, and that is incorrect, but I think
    the information he had at the time is what created the
    confusion.
        Mr. Fossella. Okay. And if I heard you correctly before
    with respect to the protocols, the claim in 1998, the e-mail
    should have been logged, so this debate about funding is moot,
    because I think you used the words it was a ``human error?''
        Ms. Bailey. If you are asking did I think the funding
    created that problem, it did not create the problem.
        Mr. Fossella. It did not. So the conversations centered on
    funding had nothing to do with the fact that this e-mail was
    not logged in 1998, right?
        Ms. Bailey. Right.
        Mr. Fossella. And is it safe to assume then that if that
    had been logged adequately that it perhaps would have launched
    an investigation or it would have caused NHTSA to open an
    investigation about a year earlier?
        Ms. Bailey. My trend analysts tell me that, even combined,
    given the population of tires and the years, 6 years for the
    State Farm data and the 1991 to 2000 data of the 46 complaints,
    that that would not still have triggered an investigation. But
    I think what we recognize here is that we need to review
    whether or not we have an appropriate threshold formula.
        Mr. Fossella. Okay. Regarding some of these, aside from
    this review that is ongoing, you mentioned before about the
    standards and the tests, and there is some debate as to Ford
    recommending whether the high speed tests between 75 and 85
    miles per hour, 32 pounds per square inch, Ford recommends 26.
    When did you begin--when did the agency begin to reevaluate the
    standards inasmuch as it hasn't happened I guess in 22 years?
        Ms. Bailey. Apparently not soon enough. I mean that
    seriously.
        Mr. Fossella. Is that what NHTSA has said, that we need to
    change this?
        Ms. Bailey. I think there has been ongoing work, but I
    think it was not the highest priority in that, prior to the
    previous recall, there had not been--you know, of the two major
    recalls, I think that it was not a high enough priority.
        Mr. Fossella. But you mentioned before I think that this is
    going to be changed. There isn't a date in the near distant
    past that someone said we have to change this?
        Ms. Bailey. We are definitely updating at this time; and we
    have a proposal coming in in the spring, which is still not
    soon enough, given what----
        Mr. Fossella. I am just curious as to, if you think that is
    that vital, why wouldn't you do it tomorrow?
        Ms. Bailey. What I am saying to you here is that this is
    where we are today. And in the last 3 weeks I have reviewed
    these issues and that is one that I believe we need to
    expedite. We are, by the way, looking to manufacturers for
    comments on that as well.
        Mr. Fossella. Okay. Fair enough. The notion that this
    foreign recall and you can't trigger an internal investigation
    until you are notified, is there any proactive end of NHTSA to
    say, you know what, folks, there is a recall in Saudi Arabia;
    there is a recall in Venezuela; perhaps we should dive into
    this on our own.
        Ms. Bailey. Well, that is the point we were just making.
    Had we had some sense that we should be regularly obtaining
    that information, requesting that information, that may have
    come to light.
        I still don't think that is the best method. I think,
    instead, we should have authority to require that any recalls
    or replacements or serious problems outside of the United
    States with products that affect Americans should be reported
    to NHTSA. We need the authority to do that.
        Mr. Fossella. The last question, Doctor, is that you
    mentioned before a lot of the regulatory reforms that I guess
    were talked about in the 1970's, and I believe if I heard you
    correctly, you said they were not implemented because of the
    cuts in the 1980's. Have there been any of these regulatory
    changes that were proposed in the 1970's done in the last, say,
    7 or 8 years?
        Ms. Bailey. Of the ones we mentioned, no.
        Mr. Fossella. So it wasn't anybody's fault. Again, I am not
    trying to point fingers here. They were proposed in the 1970's;
    you said they weren't implemented in the 1980's. Presumably,
    you would have had the power--not you personally but the
    agency--in the last 4 to 7 years, and that wasn't done, right?
        Ms. Bailey. That was not done.
        Mr. Fossella. Thank you very much.
        Mr. Tauzin. The Chair recognizes the gentleman from
    Illinois, Mr. Rush.
        Mr. Rush. Thank you, Mr. Chairman.
        I know that you have been here for probably longer than you
    would have liked to have been, and hopefully this will be very
    brief.
        My first question to you is, why has NHTSA allowed Ford to
    sell tires that can be filled to PSI beyond the Federal testing
    standards? If that is the case, then why is that the case?
        Ms. Bailey. You mean Ford's recommendation to set it at 26
    pounds per square inch rather than above 30?
        Mr. Rush. Right.
        Ms. Bailey. There is not, to my knowledge, a mechanism in
    place that would allow us to interfere with that kind of a
    recommendation, but I think it is a valid point and something I
    would like to review.
        Mr. Rush. Do you think that there is possibly some type of
    regulatory initiatives that you would be able to undertake?
        Ms. Bailey. There may be, but I think the question is
    really one for Firestone, too. They produced the tires and
    recommended that they be inflated at a higher rate, so that is
    where perhaps the question--the answer would lie.
        Mr. Rush. Okay. If you had known in 1997 or 1998 about the
    Middle East and the recall in the Middle East and also
    Venezuela, can you comment on what you think that your agency
    might have done had you had that information?
        Ms. Bailey. I would have initiated an investigation.
        Mr. Rush. Do you think--what do you recommend that this
    Congress do to assist you in terms of giving you more statutory
    authority or regulatory authority to ensure that this problem
    doesn't reoccur in the future?
        Ms. Bailey. I hope to very quickly determine what our
    regulatory authority is, and if we don't have enough, I would
    want to work with Congress to get a statutory remedy for that.
        Mr. Rush. Thank you, Mr. Chairman. I yield back.
        Mr. Tauzin. I thank the gentleman.
        The Chair recognizes the gentleman from Oklahoma, Mr.
    Largent.
        Mr. Largent. Thank you, Mr. Chairman.
        Dr. Bailey, welcome to Washington. I hope you brought a
    dog. This is kind of baptism by fire, I think. My colleague
    from Illinois said that you have probably been here longer than
    you had hoped. I would say just the opposite. I wish you had
    been at NHTSA longer than you have and that your organization
    would have sent somebody that actually had been in place that
    we could ask questions of here today.
        Why would the National Highway Traffic Safety
    Administration send somebody that has only been there for 3
    weeks?
        Ms. Bailey. I hope because they have confidence not so much
    in me but in the wonderful staff at NHTSA who work diligently
    to provide safer highways for Americans.
        Mr. Largent. Well, unfortunately, we don't get to question
    staff, we just get to question you, and I think that it was a
    poor decision by NHTSA to send somebody that has only been
    there for 3 weeks, so I apologize to you for kind of throwing
    you into this. But I do have some questions based upon your
    testimony that you submitted to this committee.
        Earlier, one of my colleagues asked you about a data base
    that you received called FARS, Fatality Accident Reporting
    System. My question to you, in your testimony it said on page
    4, we opened a preliminary evaluation on May 2, 2000. At that
    time, the agency was aware of 90 complaints, including reports
    of 33 crashes and four fatalities. Those figures, 90
    complaints, 33 crashes, four fatalities that initiated the
    preliminary evaluation on May 2, were some of those statistics
    derived from this data base called FARS?
        Ms. Bailey. No. They were all complaints that were received
    in the normal fashion. No. To my knowledge, they were not part
    of the FARS data, that that is information that was obtained in
    the usual fashion.
        Mr. Largent. Okay. Then that leads me to this question. It
    seems to me some of my colleagues have alluded to the problem
    that at NHTSA really was that you did not have enough
    information. I would suggest that maybe you had too much
    information. Because my question then goes back to this FARS,
    Fatality Accident Reporting System, that contains all vehicle-
    related fatalities reported to NHTSA by law enforcement.
        Mr. Tauzin. The committee will please be in order. There is
    a buzz.
        Would the gentleman restate his question?
        Mr. Largent. What the heck do you guys do with this data
    base that is reported to you by statute from all of the law
    enforcement agencies around the country? What do you do with
    this? Because in, let's see, it says from 1998, from the end of
    1998, you had information in that data base given to the
    National Highway Traffic Safety Administration that there were
    29 fatalities from accidents in a Ford Explorer fitted with
    Firestone ATX, ATX II, or Wilderness tires. What is the problem
    there? You have all of this information from 1998, and yet it
    takes--you either ignore this or don't look at it, or what
    happens to this information?
        Ms. Bailey. The 1998 data you are referring to is the State
    Farm data?
        Mr. Largent. No, I am not. I am referring to the FARS,
    Fatality Accident Reporting System, that you had access to at
    the end of 1999 that reported 29 fatalities from accidents in a
    Ford Explorer fitted with Firestone ATX, ATX II, or Wilderness
    tires that the agency had access to. What is going on with that
    data base? What are you doing with it?
        Ms. Bailey. I assume that is included in the information of
    the 46. I will provide that for the record and ascertain the
    answer to your question.
        Mr. Largent. Do you understand what I am saying? In other
    words, you had this information a year ago.
        Ms. Bailey. I think that is part of the data base.
        Mr. Tauzin. Would the gentleman yield for a second?
        Mr. Largent. Sure.
        Mr. Tauzin. The 46 instances that you keep referring to are
    complaints from consumers who called in and reported incidents
    to you, correct?
        Ms. Bailey. Correct.
        Mr. Tauzin. What Mr. Largent is referring to is a law
    enforcement reporting system that reported to you, separate of
    any constituents or consumers' reporting, 29 deaths related to
    Ford Explorers fitted with these Firestone tires, and that
    information was available to you as early as--when was that?
        Mr. Largent. In 1999.
        Mr. Tauzin. In 1999. It was a 1998 statistic. The question
    he is asking is, why didn't that trigger action by the agency?
        Ms. Bailey. If, in fact, that information is totally
    separate from the data that we received in that year, 1997,
    which did include the information I referred to in that decade,
    then I would want to know why that information was not combined
    in the data base. But there is the possibility that it is. I
    will take that for the record and ascertain exactly what
    happened to that information and whether or not it overlaps
    with the----
        [The following was received for the record:]

        Yes, the there are two separate data bases. However, the
    FARS database did not, and does not, indicate the manufacturer,
    brand, or model of tire that was on any of the vehicles
    involved in a fatal crash. Thus, there is no way to search FARS
    to see if any particular brand or model of tire is over
    represented in fatal crashes.
        After the Office of Defects Investigation (ODI) decided to
    open its investigation into Firestone tires, and after the
    agency became aware that most Ford Explorers were originally
    equipped with the tires under investigation, ODI worked with
    the staff of NHTSA's National Center for Statistics and
    Analysis (NCSA) to identify fatal crashes in FARS involving
    Ford Explorers in which the item ``tires'' was listed as a
    related factor. This was done because ODI wished to ascertain
    whether the tires on those vehicles were covered by the
    investigation. That effort is ongoing.
        The questions raised by the Committee suggest a need to
    consider linking the FARS data base and the consumer complaint
    data base, if such a linkage would improve NHTSA's ability to
    detect safety-related defects. A related question is whether
    changes in either data base could increase the benefits of such
    a linkage.

        Mr. Tauzin. Steve, if you will yield again, I want you to
    get a picture of our frustration with this system. Here we have
    an agency that is receiving independently by 1998, by your
    testimony, about 30 complaints of tire failures, most of them
    separations leading to serious injuries or accidents, what have
    you. You have a State Farm report that is filed to your office
    with another 21 incidents, two fatalities. You have a FARS
    report coming in from the law enforcement agency saying 29
    fatalities. You are getting an awful lot of information. Mr.
    Largent is pointing out that you are getting a heck of a lot of
    information that something is terribly wrong out there. People
    are dying in Ford Explorers outfitted with these Firestone
    tires. Nothing happens until a station in Houston, Texas, runs
    an expose on it in 2000.
        The frustration we all have with this is the argument your
    agency is making that you weren't getting enough information.
    You were getting information by people dying on the highways
    constantly from State Farm, from FARS, from individual
    complaints to your agency, and nothing happens. And the concern
    we all have is, why didn't that trigger something happening?
    Why was five complaints without a fatality in 1994 enough to
    trigger an investigation, but all of this information was not?
        There is something--there is a disconnect here that I don't
    understand, and I can't for the life of me understand why
    anybody in America could understand it today. And if we are
    going to move from this place to a place where it doesn't
    happen again, we have to understand what broke down. Why did
    this e-mail get filed away? Why did this FARS report get
    ignored? Why wasn't there somebody at the agency looking at all
    of this information together and understanding that there was
    something awfully wrong on the highways of America and that
    something ought to be done about it?
        I know you can't answer that. That is what frustrates us,
    that we don't have a good answer to that.
        I thank you, Steve. I am sorry, I got a little excited. But
    we are talking about, again, life and death, and I don't know
    how many people--Mr. Wynn said it--how many people died
    unnecessarily because the recall didn't come until 2000, when
    it could have come in 1998 if somebody had been awake and not
    asleep at the switch somewhere. Thank you, Steve.
        Mr. Largent. Do I have any time left, Mr. Chairman?
        Mr. Tauzin. The Chair will extend the gentleman's time.
        Mr. Largent. Thank you very much.
        Let me say that, in conclusion, I would just like to say
    that I appreciate where we are today. My chief of staff has a
    Mercury Explorer-like car with these tires on it, just got them
    taken off. Has a little baby that is just turning a year old,
    so I am glad where we are at now. The question is why we
    couldn't have been there sooner and if, in fact, as the
    chairman mentioned, we could have avoided some of the tragedies
    that have occurred over the last 12 months.
        My question, Dr. Bailey, would be, what, if anything, will
    the National Highway Traffic Safety Administration do
    differently as a result of this experience?
        Ms. Bailey. We will be answering some of the questions that
    are asked here today. I am asking those same questions. I will
    certainly look into the FARS data as to whether or not there is
    an overlap between our data base and that information. As I
    have indicated, we clearly need in a global marketplace to have
    information from around the world. We are seeking to do that.
    We will find a remedy for that, and we will find a way to
    obtain claims information that would have let us have the
    knowledge that would have initiated an investigation sooner.
        Mr. Largent. Thank you, Mr. Chairman. I yield back.
        Mr. Tauzin. I thank the gentleman.
        If there are no further requests for time, Dr. Bailey, let
    me again thank you. I know this was hard on you for only 3
    weeks on the job. You have, in my opinion, done a very
    remarkable job considering those circumstances.
        Please tell your boss hello for us. I wish he had come
    today.
        You are dismissed.
        Ms. Bailey. Thank you.
        Mr. Tauzin. The Chair will now call the second panel.
        Before I do, let me make an announcement. There will be
    votes at 6 o'clock, ladies and gentlemen. There will be a
    series of three votes on the House floor. We will get
    interrupted for that vote, and then we will come back and
    continue the hearings until we complete them. I apologize for
    the length of the hearings to all witnesses, but this is again
    awfully serious business.
        We will call the second panel, which consists of Mr.
    Masatoshi Ono, Chief Executive Officer of Bridgestone/
    Firestone, Incorporated; accompanied by Mr. Gary Crigger,
    Executive Vice President for Business Planning; and Mr. Robert
    Wyant, Vice President of Quality Assurance.
        Before we begin the testimony, I will recognize the
    gentleman from Michigan to administer the oath. I believe you
    have to stand up to do it. I failed to do that.
        Mr. Upton is recognized to administer the oath of
    truthfulness.
        Mr. Upton. Gentlemen, as you understood from the first
    panel, we have a long-standing tradition of taking testimony
    under oath. Do you have any objection to that?
        Mr. Ono. No.
        Mr. Upton. The committee rules also allow you to have
    counsel if you want, counsel to help represent you. Do you
    desire to have counsel represent you?
        Mr. Crigger. We are advised by----
        Mr. Upton. If you could just announce his name for the
    record.
        Mr. Smith. I am Colin Smith of the law firm of Holland &
    Knight.
        Mr. Upton. Okay. If you would raise your right hands.
        [Witnesses sworn.]
        Mr. Tauzin. Thank you, Mr. Upton.
        Mr. Ono, you are recognized to give your statement, sir.
    Your written statement is a part of the record, and you have 5
    minutes to summarize that statement at this time.

         TESTIMONY OF MASATOSHI ONO, CHIEF EXECUTIVE OFFICER,
     BRIDGESTONE/FIRESTONE, INC.; GARY B. CRIGGER, EXECUTIVE VICE
        PRESIDENT, BUSINESS PLANNING; AND ROBERT J. WYANT, VICE
                      PRESIDENT, QUALITY ASSURANCE

        Mr. Ono. Chairman Tauzin, Mr. Upton and members of the
    committee, thank you for providing me with this opportunity to
    appear before you here today. I have practiced my speech so
    that I may deliver it in English. However, I must use the
    translator and two of my senior executives to respond to
    questions. I am 63 years old, and I have never made a public
    appearance like this before, so I am more than a little bit
    nervous.
        As Chief Executive Officer, I come before you and apologize
    to you and the American people, especially for the family they
    have lost, loved ones, in these terrible rollover accidents.
    Also, I come to accept full and personal responsibility on
    behalf of Bridgestone/Firestone for the events that led to this
    hearing. Whenever people are hurt or fatally injured in
    automobile accidents, it is a tragedy. Whenever people are
    injured while riding on Firestone tires, it is cause for great
    concern among Bridgestone/Firestone management and our 35,000
    American employees.
        On August 8, we met with the National Highway Traffic
    Safety Administration. We reviewed what we knew at that time
    about the performance of the tires which are associated with
    tread separations and accidents primarily on the Ford Explorer
    vehicle.
        On the following day, August 9, Bridgestone/Firestone
    announced a voluntary safety recall of 6.5 million tires.
        Since that time, our highest priorities have been to
    complete the recall as quickly as possible and to determine the
    root cause of the tire failures.
        At this time, we have replaced nearly 2 million of the
    recalled tires. We have maximized worldwide production of
    replacements for tires that have been recalled. To speed up the
    process, we are using our competitors' tires and airlifting
    additional replacement tires; and these shipments will continue
    as long as necessary.
        We have a team working around the clock using all our
    available resources to try and determine the root causes for
    the tire problem. We are reviewing every aspect of our
    manufacturing and quality control processes. This includes
    microscopic examination of many recalled tires. In addition, we
    are working with Ford Motor Company and experts to thoroughly
    examine every possible cause.
        Unfortunately, I am not able to give you a conclusive cause
    at this time. However, you have my word that we will continue
    until we find the cause.
        While we search for the root cause, we are also undertaking
    the following actions:
        First, we will appoint an outside independent investigator
    to assist in tire analysis and determine the root cause of the
    tire problem we have experienced. We are taking this action to
    help assure you and the public that Firestone tires are
    reliable in the future.
        Second, we will fully cooperate with this committee about
    the safety as well as problems that have occurred with our
    tires. We will release data and information in order to assure
    consumer safety with our products.
        Third, we are accelerating the rollout of a nationwide
    consumer education program. The program will be run through
    more than 7,000 company stores and Firestone dealers. It will
    provide consumers with information on proper tire maintenance
    through the use of in-store videos, showroom displays,
    brochures, windshield tags, and tire pressure gauges.
        Fourth, we pledge to continue working with NHTSA toward
    developing early understandings and complete reporting of
    accidents and developing approaches that make it easier for
    drivers to determine tire pressure.
        In closing, I would like to ask two of my senior executives
    to join me so that we can more efficiently respond to your
    questions. Mr. Gary Crigger is Executive Vice President of
    Business Planning, and Mr. Bob Wyant is a Vice President of
    Quality Assurance.
        Thank you, Mr. Chairman.
        [The prepared statement of Masatoshi Ono follows:]
         Prepared Statement of Masatoshi Ono, Chief Executive Officer,
                          Bridgestone/Firestone, Inc.
        On August 9, 2000, Bridgestone/Firestone, Inc. (``Firestone'')
    voluntarily recalled an estimated 6.5 million tires manufactured by
    Firestone in North America in the 1990s. Firestone undertook this
    massive effort in the interest of public safety and in cooperation with
    Ford Motor Company and the NHTSA.
        The recalled tires, all P235/75R15 Firestone Radial ATX and ATXII
    tires manufactured in North America and P235/75R15 Firestone Wilderness
    AT tires manufactured at its Decatur, Illinois plant, have been used
    for most of the last decade as original equipment on light trucks and
    sport utility vehicles, including the popular Ford Explorer.
        Because of the safety issues involved, Firestone chose not to limit
    the recall to a particular manufacturing period or to tires sold only
    in the last few years. Instead, Firestone is replacing its customers'
    tires or reimbursing customers who purchase competitors' tires, no
    matter how old and high mileage their recalled Firestone tires might
    be.
        A small percentage of recalled tires have experienced tread belt
    separations in a number of serious accidents. It should be kept in mind
    that all steel belted radial tires will ultimately experience tread
    belt separation if pushed to their limits. Tread belt separations are
    usually caused by damage to the tires, improper repairs, overload,
    underinflation, or simply by using tires with excessive wear. However,
    such separations can also be caused by defects. We are searching hard
    to determine whether there was a design or manufacturing cause of these
    tread belt separations. We believe the vast majority of the recalled
    tires are safe, but the incidents and injuries involving these tires
    led to the recall.
        Since the recall was announced, there has been strong public
    reaction, most of it negative. Firestone has received substantial
    criticism, including claims of shoddy manufacturing processes and
    attacks on the quality of our workforce. Class action lawsuits have
    been filed asking courts to order changes in the scope or timing of the
    recall. Interest groups aligned with parties adverse to the tire
    industry have urged that Firestone recall up to 34 million additional
    tires, despite a lack of any basis for such a massive recall.
        The facts are that Firestone's actions in early August were both
    timely and adequate. Indeed, a more limited recall of tires would have
    been justified, but Firestone broadened the recall to assure safety and
    consumer confidence.
        Firestone vigilantly monitors data on the in-service performance of
    its tire lines. We do product testing; we study warranty adjustment
    data; and, where possible, we analyze failed tires returned from the
    field. All these indicators showed satisfactory performance on the part
    of these tires. The ATX, ATXII and Wilderness AT tires passed design,
    development and Federal Motor Vehicle Safety Standard testing, as well
    as Ford's development and test track requirements. Our warranty returns
    and adjustment data place these tire lines roughly in the middle of all
    our lines. And, our analysis of failed tires has shown that failures
    were caused by external damage, by improper maintenance, or by
    operating with tire pressure significantly below the 26 psi level
    recommended for the Explorer by Ford.
        Historically, Firestone has not used property damage and personal
    injury claim data as a reliable indicator of tire performance. There
    are generally not a sufficient number of claims from which to draw
    meaningful conclusions. However, because of the growing number of
    failure reports this summer and the lack of any indication of problems
    using the traditional methods of assessing performance, Firestone
    analyzed the claims data in a joint effort with Ford, and the analysis
    showed a substantial number of claims in the P235/75R15 size and an
    overrepresentation of tires produced in the Decatur plant. That
    analysis, coupled with reports of serious accidents involving tread
    belt separations on Ford Explorers especially in hot climate states led
    Firestone to decide on August 8, 2000, to conduct a voluntary recall
    for customer safety reasons.
        To reiterate, Firestone has not historically relied upon property
    damage and personal injury claims data in analyzing our tires'
    performance. Property damage claims do not involve injuries or death.
    They are claims people make, usually for vehicle damage, and most of
    them never become lawsuits.
        Firestone certainly knew there had been accidents and injuries
    involving tread belt separations of our tires on Ford Explorers.
    Company and outside experts had examined tires involved in a number of
    those accidents. Again, those analyses did not suggest any problem with
    the tires. It was only when we focused on the property damage and other
    accident claims data that we saw the potential problem with the tires
    we ultimately decided to recall.
        Working together with Ford, Firestone has taken extraordinary
    measures to speed up the recall by urging other tire manufacturers to
    ramp up production, by airlifting tires from Japan, and by
    significantly increasing the output of American plants. Firestone is
    also reimbursing customers who replace recalled tires with competitors'
    brands.
         Firestone welcomes the opportunity to set the record straight in
    its testimony before the Committee. To that end, Firestone has given
    the Committee the documents produced to the NHTSA and the Company's
    responses to questions asked by the Committee's investigative staff.
    This testimony also provides further background information regarding
    the manufacture and use of tires and the reasons for and status of the
    recall.
            i. steel belted radial tires and tread belt separations
        Since its introduction in the 1970s the steel belted radial tire
    has become the predominant tire used on American vehicles, including
    passenger cars, light trucks and sport utility vehicles. The term
    ``steel belted radial'' refers to a tire that includes within the body
    of the tire multiple steel belts that provide support for the tread and
    stability to the tire. Steel belted radial tires are manufactured in
    layers encased in ``skim stock,'' or rubber compound. Once the layers
    are assembled in the tire manufacturing plant, the tire is ``cured,'' a
    process involving the application of heat and pressure to the raw or
    ``green'' tire. What emerges from the curing mold is the finished tire,
    which is fully inspected before it leaves the factory.
        The manufacture of steel belted radial tires is a complex procedure
    utilizing a host of raw materials, assembly procedures, and other
    processes. Steel belted radial tires have provided the American driving
    public with literally hundreds of trillions of miles of safe service.
    However, unlike most of the components of a vehicle, tires are
    subjected to continuous severe operating conditions because they are
    always in contact with the road. Tires fail and tires wear out. This is
    why vehicles are sold with spare tires and why in 1999 alone more than
    270 million tires removed from service were disposed of the United
    States.
        If a steel belted radial tire is damaged or improperly maintained,
    the inner components of the tire may begin to separate, particularly
    when there is excessive heat build-up within the tire, which is most
    commonly caused by underinflation. The causes of underinflation are
    numerous, and include punctures, road hazards, improper repairs, and
    simple lack of maintenance. A steel belted radial tire operated in a
    chronically underinflated state will tend to show inner component
    breakdown, eventually leading to a tread belt separation.
        Tread belt separations do not often lead to accidents. In most
    situations, drivers are able to bring their vehicles to a safe stop on
    the side of the road. In some tread belt separations and other tire
    disablements, drivers do lose control, and accidents, including vehicle
    rollovers, can occur. If the driver in this situation has taken the all
    important, and in most states mandatory, precaution of fastening the
    safety belt, even vehicle rollovers are less likely to cause serious
    injury or death.
     ii. the performance and safety record of p235/75r15 firestone radial
                  atx, atxii and firestone wilderness at tires
    A. General Production Numbers and Usage of ATX and Wilderness Tires
        Firestone manufactured the P235/75R15 Radial ATX tires from the
    mid-1980s until this year. This tire type was approved as original
    equipment on the initial Ford Explorer. The approved application was
    designed and manufactured to performance specifications provided and
    approved by Ford. When Ford redesigned the Explorer in 1994, Firestone
    redesigned the tire, again to Ford's performance specifications.
    Further vehicle design changes in 1996 led to the new P235/75R15
    Wilderness AT tire, which replaced the Radial ATXII at approximately
    that time. Firestone estimates that it has manufactured more than 20
    million Radial ATX and ATXII and Wilderness AT tires in the P235/75R15
    size.
        The Radial ATX and Wilderness AT lines have been used primarily for
    all-terrain sport utility vehicles. Approximately seventy percent of
    Firestone's production was manufactured for original equipment
    installation primarily on Ford Explorers. The other thirty percent was
    devoted to replacement tires used primarily on Explorers and other
    SUVs.
        Because of the solid field performance of the ATX and Wilderness
    lines on the popular Ford Explorer, Firestone's first notice of a
    lawsuit involving a claimed tread belt separation and Ford Explorer
    rollover was in 1995. This case was ultimately tried to a defense
    verdict in favor of both Ford and Firestone in Phoenix, Arizona.
    B. Traditional Tire Industry Measuring Sticks for Field Performance
        Since tires are constantly being changed, repaired, and replaced,
    the tire industry has developed guidelines for tracking field
    performance, commonly known as ``tire adjustment data.'' An
    ``adjustment'' occurs when a customer discovers. for example, uneven or
    unusual wear on a tire, and brings the vehicle to a tire dealer or
    store asking for a new or replacement tire. Depending on the reason for
    the customer dissatisfaction, the retailer ``adjusts'' the tire by
    providing the customer with either a new replacement tire or by
    offering a discount on the customer's purchase of a replacement tire.
        In Firestone's system, the retailers track and record this
    adjustment information, using various adjustment codes for different
    tire conditions. Tread belt separation is a common reason for
    adjustments on steel belted radial tires.
        Adjustment data provide Firestone with a reliable measure of actual
    field performance of a particular tire. In contrast, data concerning
    property damage claims and lawsuits, because of the relatively small
    numbers of such incidents, are not viewed as reliable indicators of a
    tire's performance in the field.
        Adjustment data for the tires that are the subject of Firestone's
    recall were within the historically low range of all Firestone tire
    products, including the adjustments for tread belt separations (Charts
    1 and 2). In addition, the number of claims that had been made against
    Firestone on these tires was consistent with the-high volume of
    production and sales and with the vehicle application. On the lawsuit
    front. as recently as May 31, 2000, Firestone had been notified of 71
    lawsuits involving tread belt separations of ATX or Wilderness AT
    tires.
        Any incident of personal injury or death involving a Firestone
    product is a matter of great concern to the Company. As previously
    noted, however, tread belt separation is essentially an inevitable
    characteristic of tire use in normal service, no matter how well the
    manufacturer designs and produces the tires. In a large production tire
    line or type, there will be incidents of tread belt separations and, in
    America's litigious culture, damage claims.
        The P235/75R15 tires in question are an exceptionally large
    population. The approximately 15 million Firestone tires used on the
    Ford Explorer are the largest single vehicle application in Firestone's
    history and perhaps the largest in automotive history. (Vehicle
    manufacturers do not often ``single source'' to the extent Ford has
    with this popular vehicle.) In such a vehicle population, particularly
    one involving all terrain tires and the unique loading and hard service
    of sport utility vehicles and light trucks, some number of tread belt
    separation incidents and claims would be fairly expected.
        Additionally, these types of vehicles present risks and accident
    severities different from ordinary cars. Rollover accidents present an
    enhanced potential for injury and death, particularly and principally
    when occupants do not wear seatbelts.
        In February 2000, television station KHOU ran a report on tread
    belt separations of Firestone ATX and Wilderness tires and their
    involvement in Ford Explorers rollovers. Following that news broadcast,
    Firestone received an increased number of claims and lawsuits, the most
    serious of which seemed to be occurring in the warmest climates in the
    United States. In May of this year, the NHTSA began a Preliminary
    Evaluation of certain tires including the radial ATX and Wilderness AT
    lines. Following the commencement of that May 2000 Preliminary
    Evaluation, Firestone received notice of an even larger number of
    claims and lawsuits allegedly involving tread belt separations on
    Firestone tires, predominantly tires mounted on Ford Explorers.
    Meanwhile, however, the historical adjustment data relied upon by the
    tire industry and by the NHTSA to track tire performance continued to
    indicate that these particular tires did not raise any type of safety
    issue.
                    iii. the reason and basis for the recall
        In July 2000, Firestone provided the NHTSA with adjustment data,
    data on property damage claims, data on claims for personal injury and
    lawsuits, and related information regarding the history of the
    Firestone tire products that were the subject of the Preliminary
    Evaluation. Ford requested that Firestone provide Ford with the same
    information on claims and adjustments. Ford then performed a
    statistical analysis using Firestone's data. Rather than focus on
    adjustment data, that analysis focused instead on the smaller and less
    representative universe of data arising from property damage and
    personal injury claims. The conclusion drawn by Ford and Firestone from
    this analysis was that the tires that eventually became the subject of
    the recall were overrepresented in the claim data. (Chart 3) Tires
    manufactured in the Decatur plant were also overrepresented.
        Given the number of serious accidents involving tread belt
    separations that surfaced after the onset of the NHTSA preliminary
    evaluation, and after Firestone reviewed the data analysis as presented
    and compiled by Ford during the first week of August 2000, Firestone
    decided, in conjunction with Ford and after advising the NHTSA, to
    initiate the voluntary recall that is the subject of this hearing.
        What that means is that Firestone stepped out of historical tire
    industry product performance evaluation procedures and relied upon a
    different form of data to initiate this safety recall. Taking into
    account the immense popularity of the Ford Explorer and the high number
    of these vehicles on America's roads, Firestone determined that in the
    interest of customer and public safety, it should immediately announce
    a recall of the overrepresented tires. Firestone acted immediately upon
    its receipt and review of these factors and did not delay the
    announcement or initiation of the recall for any reason.
        Firestone also initiated the recall without identifying or
    pinpointing any particular cause or explanation for the apparent
    anomalies in the claim data. In fact, as mentioned above, Firestone's
    forensic review of tires returned from the field over the past several
    years and allegedly involved in such accidents indicated that the
    treads separated from these tires not because of a design or
    manufacturing defect, but for particular reasons such as
    underinflation, punctures, improper repairs, and other general
    maintenance problems. Thus, none of the yardsticks typically relied
    upon to measure tire performance indicated that the recalled tires were
    unsafe. But Firestone decided to proceed with a recall given the
    heightened concern for the safety of its customers and the motoring
    public.
                     iv. firestone's root cause evaluation
        Firestone decided that it would recall the tires in the
    overrepresented population instead of waiting to perform an analysis as
    to why the data showed what it did. Immediately following the recall
    announcement, Firestone has devoted many employees to the task of
    reviewing the manufacturing practices and processes of the recalled
    tires, as well as all other available data to determine a root cause of
    failures of the tires. Along with Ford, Firestone has analyzed the
    design and development of the tires at issue, intensively evaluated
    processes at the Decatur plant, and is now in the process of cutting
    and inspecting recalled tires, all in an effort to determine the root
    cause of the tire failures at issue. Ford and Firestone have also
    conducted a review of Firestone's Technical Center in Akron.
        As of the submission of this testimony, Firestone's evaluation is
    not complete. Firestone is considering all potential factors at this
    time, including plant operations in the 1994-1995 time period. While
    Firestone is anxious to complete its root cause evaluation, Firestone
    realizes that it is of utmost importance that the Company not rush to
    any judgment.
                        v. recall/reimbursement details
        Firestone is replacing recalled tires as quickly as possible and
    has been since the day the recall was announced. Rather than wait until
    we had sufficient tires in inventory to replace the recalled tires, we
    went forward with the recall on August 9, 2000, out of deep concern for
    customer safety.
        There has been some confusion about the recall program. While we
    are assuring adequate shipments of replacement tires to the Southern
    and Southwestern states where more than 75% of the reported accidents
    have occurred, we are shipping tires to all states. Working together
    with Ford, Firestone has taken extraordinary measures to speed up the
    recall by urging other tire manufacturers to ramp up production, by
    airlifting tires from Japan and by significantly increasing the output
    of American plants.
        Customers whose recalled tires are replaced at one of our 1,500
    Company stores, 8,500 authorized retailer locations, or 3,000 Ford,
    Mercury and Mazda locations, will have their tires replaced, mounted
    and balanced at no charge, with no taxes charged.
        If the customer elects to purchase competitive tires as
    replacements for the recalled tires, Firestone will reimburse purchase
    costs, up to $100.00 per tire, an amount Firestone believes to be fair
    and reasonable. In the reimbursement situation, the customer needs to
    obtain and keep a receipt or invoice from the supplier of the tires,
    return the recalled tires to a Company store, authorized retailer or
    auto dealer location, obtain a recalled tire surrender receipt, and
    mail the appropriate documents to Firestone.
         Firestone estimates that nearly 1.5 million tires have been
    replaced in the first month of the program. Firestone is committed to
    customers' safety and urge all drivers to keep their tires inflated to
    the level specified by the vehicle manufacturer. For drivers of Ford
    Explorers and Mercury Mountaineers with this size tire we are
    recommending an inflation of 30 psi.
                                 vi. conclusion
        Firestone acted promptly and responsibly in this difficult
    situation. It has cooperated and will continue to cooperate fully with
    the NHTSA and with this Committee.
    [GRAPHIC] [TIFF OMITTED]70217.011

    [GRAPHIC] [TIFF OMITTED]70217.012

    [GRAPHIC] [TIFF OMITTED]70217.013

        Mr. Tauzin. Thank you, Mr. Ono.
        Mr. Ono, the one thing you didn't commit to do is to agree
    to recall the 1.4 million tires that NHTSA has announced just a
    minute ago should be recalled in their opinion. Why not?
        Mr. Crigger. I believe I can address the question, Mr.
    Chairman. The requested recall on the 1.4 million tires involve
    several populations of tires and the use of claims data, in
    some cases where only one claim was made against an entire
    population of tires. We are looking at all of those. We are
    trying to analyze what should happen in all of those cases. We
    don't think that we have at this point a standard based on
    claims that would be relevant to that population. Many of those
    tires are tires that are used in hard service and different
    conditions, and the claims represent claims, not necessarily
    defects, and we need to investigate those before we can make a
    determination.
        Mr. Tauzin. Now, our investigators for a week now have been
    requesting information from your company as to what tests were
    run on these Firestone tires. Specifically, we have been
    requesting information as to whether Firestone ever speed-
    tested these Firestone tires on a Ford Explorer under
    conditions of 26 pounds per square inch pressure. Your company
    as of last night informed us that it couldn't tell us what
    tests were run and what were not run. Is that correct?
        Mr. Crigger. I believe I should defer to Mr. Wyant for that
    answer.
        Mr. Tauzin. Mr. Wyant.
        Mr. Wyant. I am not certain that I understand your
    question.
        Mr. Tauzin. Let me be clear. We have asked you for a week
    to tell us what tests were run on these Firestone tires under
    speed conditions and 26 pounds per square inch. As of last
    night your folks informed our investigators that they could not
    give us this information. Is that correct and why not?
        Mr. Wyant. I heard you say ``on a vehicle,'' and that is
    why I asked you to repeat the question. The question, as I
    understand it, is a request for data on high speed testing, and
    certainly we have done high speed testing.
        Mr. Tauzin. We have asked for a week now for documents
    identifying what tests were run at high speed, if any. You have
    not provided them to us. As of last week we were told you could
    not provide them at this time; is that correct?
        Mr. Wyant. My understanding is that we have provided
    computer printouts.
        Mr. Tauzin. Let me make a request upon you and ask for your
    commitment. This committee has the power of subpoena and I can
    put it to a vote if necessary. I would rather not do that. I
    would rather your company at this moment commit to us to give
    to this committee the records of all speed tests done on
    Firestone tires at 26, 30, 32 and 35, whatever pounds per
    square inch they were tested, from 1990 to the present time.
        Mr. Wyant. We will certainly give this committee any data
    that they request.
        Mr. Tauzin. Do we have a commitment that we will receive
    it?
        Mr. Wyant. Yes.
        Mr. Tauzin. I do not have to subpoena it?
        Mr. Wyant. You do not have to subpoena us for any of this
    information.
        Mr. Tauzin. Did you test Firestone tires under speed
    conditions at 26 pounds per square inch?
        Mr. Wyant. I cannot confirm that, and that is what this
    around the clock search has been because there are numerous
    high speed tests, as mentioned by Dr. Bailey. There are
    different standard tests which measure high speed
    characteristics of tires. And then in some cases, limited
    cases, they are high-speed tested or there are tests that are
    conducted at application inflation.
        Mr. Tauzin. So the answer is you don't know? And we will
    only know once you submit the documents to us?
        Mr. Wyant. That's correct.
        Mr. Tauzin. Number 3, we have in our possession a memo from
    Ford Motor Company in reference to the Saudi Arabian
    replacement of tires. It reads as follows. ``Firestone Legal
    has some major reservations about the plan to notify consumers
    and offers them an option. First, they feel that the U.S. DOT
    will have to be notified of the program since the same product
    is sold in the United States.''
        Is that report in this Ford memo accurate?
        Mr. Crigger. I am not aware of the particular meeting or
    comments, but I do know that in Saudi Arabia the action was
    taken by Ford and it was taken as a customer satisfaction
    issue.
        Mr. Tauzin. Was the position of Firestone Legal in 1999,
    when this action was taken, that one of the reasons you didn't
    want to assume responsibility for a recall in Saudi Arabia was
    the concern that the Department of Transportation officials in
    the United States would find out about it?
        Mr. Crigger. No, sir. I am not aware of the Legal
    Department's opinion on that issue.
        Mr. Tauzin. You were not aware of it. Mr. Ono, were you
    aware of it?
        Mr. Wyant, were you aware of it?
        Mr. Ono, have you answered? Were you personally aware of
    your Legal Department's position that it didn't want DOT to
    find out about a recall in Saudi Arabia?
        Mr. Crigger. Mr. Chairman----
        Mr. Tauzin. It is document number 39 in the book if you
    wish to refer to it.
        [Mr. Ono's responses are through an interpreter.]
        Mr. Ono. That I am not aware of.
        Mr. Tauzin. Mr. Wyant, are you aware of it?
        Mr. Ono. I was not aware of that, but I was informed that
    there was a recall in Saudi Arabia for customer satisfaction
    reasons.
        Mr. Tauzin. Mr. Wyant, are you aware of the position that
    the Ford document refers to that Firestone was concerned about
    DOT finding out about a recall in Saudi Arabia and therefore
    preferred not to have a formal recall?
        Mr. Wyant. I am not aware of that discussion and did not
    participate in it. I am aware that there were some discussions.
    That was through counsel, I believe.
        Mr. Tauzin. So you were aware that there were discussions
    about not agreeing to a recall because it would trigger
    information to DOT?
        Mr. Wyant. I am not aware of the direction as you state it.
    I am aware that there was a conversation concerning that
    reporting process.
        Mr. Tauzin. When were you aware of that?
        Mr. Wyant. I have only recently become aware of that.
        Mr. Tauzin. How did you become aware of that?
        Mr. Wyant. I was made aware of it this afternoon. I did not
    participate in that process.
        Mr. Tauzin. Who made you aware of it?
        Mr. Wyant. Counsel.
        Mr. Tauzin. So legal counsel for Firestone has now informed
    you that there were such discussions in 1999 with Ford?
        Mr. Wyant. That's correct.
        Mr. Crigger. Let me correct. I think what legal counsel has
    informed is that they said that there was a question about this
    issue, not that that was a position that was taken.
        Mr. Tauzin. Let me try again, Mr. Wyant. What were you
    informed? Mr. Crigger is apparently editorializing your
    comments. Tell me what you were informed.
        Mr. Wyant. I was simply informed that there was a
    conversation concerning this subject. That is all I really know
    about it.
        Mr. Tauzin. So the subject was discussed. Were you informed
    that Firestone did in fact have a concern about DOT finding out
    about a recall in Saudi Arabia?
        Mr. Wyant. I was not informed about any position of that
    sort.
        Mr. Crigger. If I can elaborate. There was no decision by
    Firestone Legal that impacted the recall in Saudi Arabia or the
    customer satisfaction action of Ford. There was a joint
    technical team of both Ford and Firestone that reviewed product
    in Saudi Arabia and found that there were not conditions, that
    the conditions present did not indicate any defect in tire.
        Mr. Tauzin. Mr. Crigger, the memo from Ford says that
    Firestone had two reasons why they were concerned about
    notifying customers and offering them an option, I assume an
    option to replace the tire. The first was U.S. DOT would find
    out about it and the second is that the Saudi government would
    see it as a recall and react dramatically.
        Is this memo accurate?
        Mr. Crigger. I am not aware of that memo or the meeting. I
    am aware that Firestone Legal informed us that there was a
    question about this issue, but not that there was an opinion
    about the issue.
        Mr. Tauzin. Did Firestone at any point following this
    recall on its own seek to inform DOT that these tires were
    being replaced in Saudi Arabia?
        Mr. Crigger. No. Firestone took no action in Saudi Arabia.
        Mr. Tauzin. Did you read this memo?
        Mr. Crigger. No.
        Mr. Wyant. I have not read that memo.
        Mr. Tauzin. Why don't you take time and read it. It is
    paragraph 4 of the document.
        Mr. Wyant, look at paragraph 4 and you will see the
    recitation of Chuck Seilnacht, I can't pronounce his name, the
    recitation of his version of what was going on and why
    Firestone objected to notifying customers and offering them
    options to change out tires. Do you want to comment on it? Any
    one of you. Mr. Crigger?
        Mr. Crigger. I have no knowledge of this particular issue,
    but the only comment I have is that the action that was taken
    in Saudi Arabia was a customer satisfaction action. A team of
    both Ford and Firestone looked at the tires, made an evaluation
    that there was no defect involved but there were unusual
    circumstances. There were circumstances of people reducing air
    pressure----
        Mr. Tauzin. There were people dying in accidents and Ford
    auto dealers were calling and complaining about the safety
    implications of these tires, and you are saying it is a
    consumer satisfaction issue?
        Mr. Crigger. But there was no evidence of any defect. Yes,
    there were failures, but they were due predominantly to
    underinflated tires, to bad punctures and this sort of activity
    that was discovered by the technical team.
        Mr. Tauzin. I am going to have to wrap up because we all
    have time restraints.
        Mrs. Wilson. Mr. Chairman, will you yield?
        Mr. Tauzin. I will be happy to yield.
        Mrs. Wilson. You say there is no defect and this is all
    just consumer problems and underinflation. This is an internal
    Firestone document, which I think you probably recognize.
        Can you tell me why it is that so many more consumers were
    underinflating their tires in 1996 as opposed in other years
    earlier? What changed in terms of consumer behavior?
        Mr. Crigger. The response previously was in response to the
    Saudi Arabia issue.
        Mr. Tauzin. I thank the gentlewoman. Let me ask you
    quickly. Look at those statistics. Look at the chart. These are
    your documents. Ms. Wilson has just shown you an internal
    document of Firestone. There is a huge spike in claims for tire
    separation. Eighty percent are separation of Firestone tires
    resulting in serious accidents, injuries, bodily and property
    damage.
        She is asking the question we should all ask. Is that
    because consumers were changing the inflation on their tires in
    1 year out of all of these years?
        Mr. Crigger. Obviously not.
        Mr. Tauzin. Obviously not. So why do you keep making that
    claim? Why do you keep telling the American public that it is
    their fault, that they are inflating their tires wrong when we
    look at statistics that indicate that something is wrong with
    the tires.
        Mr. Crigger. We don't mean to say that it is America's
    fault. It is not. We are very concerned about all of the
    incidents that have occurred. We regret terribly what is
    happening. And if we could have prevented it, we would have
    prevented it. Unfortunately this kind of data, this kind of
    claims data----
        Mr. Tauzin. Mr. Crigger, if you weren't so interested in
    keeping the facts from the Department of Transportation, maybe
    you would have prevented it.
        Mr. Markey is recognized.
        Mr. Markey. Thank you, Mr. Chairman. I am going to continue
    down this same line of inquiry so that I can understand what it
    was in Saudi Arabia that your company did not think was
    relevant to the American marketplace.
        Mr. Ono, what is unique about Saudi Arabian driving that
    would not be relevant to the American marketplace. Since this
    vehicle is advertised as an all-terrain vehicle, they are
    Wilderness tires, what is it about unusual conditions in Saudi
    Arabia that would be different from how this tire is advertised
    for use in the American marketplace?
        Mr. Ono. Well, the first thing I can mention is the speeds
    at which the vehicles are driven. We are looking at an average
    of 100 miles per hour and also I would mention the heat that is
    involved, that it is hot. Also, I would mention the severely
    underinflated tires, and I would consider this a major cause.
        Coming to the United States, you realize in comparison
    there is a lack of care for the tires. That would be my
    conclusion.
        Mr. Markey. Mr. Ono, are you aware that most of these
    accidents have occurred in the southern part of the United
    States? Are you aware that it is very warm in the southern part
    of the United States?
        Are you aware that in many of the areas of the United
    States, because of the great distances that these vehicles are
    driven at great speeds and over terrain which would be equal in
    terms of the test which you would place this tire at, why do
    you--why did you not in your corporate analysis take the
    experience which you had in Venezuela and in Saudi Arabia and
    relate it to the fact that most of these accidents in the
    United States were occurring in our hot climates, in our more
    rural areas where they would be used in almost the identical
    conditions as they were being used in Saudi Arabia and
    Venezuela?
        That is a question for Mr. Ono.
        Mr. Ono. First of all, as far as the Venezuela issue is
    concerned, I would mention that they were primarily locally
    made tires, so the materials were different. So I would say
    that they were different.
        Also, with regard to Saudi Arabia, I mentioned
    underinflated tires being used frequently in operation.
        Interpreter correction: Correcting the reference made about
    underinflation, referring to Venezuela as well as Saudi Arabia.
        Mr. Markey. How does Mr. Ono differentiate?
        The Interpreter. The interpreter has not finished the
    interpretation.
        Mr. Ono. As far as Saudi Arabia is concerned, there is
    rough terrain there and so road hazards are very frequent, and
    for that reason I would not equate the two as being the same.
        Mr. Markey. Let me speak back to Mr. Ono again. Mr. Ono has
    to understand that the United States in its southern area is
    very warm, in many parts over 100 degrees for the entire
    summer. Most of these accidents have occurred in that part of
    the country. By not relating the obvious similarities between
    Saudi Arabia and the United States, you give our consumers the
    impression that you don't care about their safety even though
    the conditions are very similar to those in Saudi Arabia.
        Mr. Ono. That is not the case because we give first
    priority to safety.
        Mr. Crigger. If I could add a couple of points, I think it
    would be helpful here. The committee does have a copy of the
    Middle East tire survey that was done at the time to review the
    Saudi Arabian situation. There were two things. One, the tire
    that was being discussed, and that was a 16-inch tire, and all
    of our data that we have about the performance of the 16-inch
    tire in the United States says it is fine, it meets all
    parameters that we want for safety and for quality. So we
    didn't have any indication that there was a problem.
        What we did do, along with Ford, a test in Southwest where
    we pulled off tires in hot climates and checked those tires,
    and we found no problems with those tires. So the follow-up
    with that found that there was not an issue.
        Mr. Markey. The problem you have here, Mr. Crigger, is that
    the kinds of conditions that Mr. Ono is citing as the reason
    why you would not share that information with the American
    consumer is that--is that the conditions are different when in
    fact the conditions are identical. So for us it appears that
    Firestone was hiding information from the American consumer
    that was directly relevant to the safety of their families in
    vehicles using Firestone tires.
        Mr. Tauzin. The gentleman's time has expired. Mr. Ono may
    respond if he would like to.
        Mr. Ono, would you like to respond to the gentleman's
    statement?
        Mr. Ono. It is not that we are hiding information. We have
    conducted this research with Ford, and we have shared our data
    with Ford. Certainly in addition to being hot, it was the
    severely underinflated tires driven at high speeds, and I would
    say these were the major factors, and I am referring to Saudi
    Arabia.
        Mr. Tauzin. The gentleman from Michigan, Mr. Upton, is
    recognized, the chairman of the Oversight Subcommittee.
        Mr. Upton. Thank you, Mr. Chairman. Mr. Crigger and Mr.
    Wyant, these numbers on the board here, 294 claims in 1997, 384
    claims in 1998, 772 claims in 1999, did those numbers actually
    cross your desk? Did you see that as those years came about?
        Mr. Crigger. I did not.
        Mr. Upton. Mr. Wyant?
        Mr. Wyant. I did not.
        Mr. Upton. Who at Firestone tracks these numbers?
        Mr. Wyant. I can't tell, but I believe those are property
    damage claims, property damage claims.
        Mr. Upton. So in your role you don't see those numbers on
    even a yearly basis?
        Mr. Crigger. No, sir, I personally don't see those.
        Mr. Wyant. I believe they are reported on an annual basis.
    But to put it in context, the normal process for our company,
    and I believe for the tire industry, although there may be some
    disagreement on that, I believe the standard or norm is the
    customer warranty adjustment process where it is customer
    satisfaction driven, and it is not customary to utilize claims
    because typically the claims are very low and you can't use
    them to assess product performance or product quality.
        Mr. Upton. I tell you what concerns me. This is a letter
    that is in the book. I will read it to you. It is brief. This
    is a letter from John Behr, an account executive at Firestone
    to Ford Motor Company.
        Mr. Tauzin. Document 17.
        Mr. Upton. Thank you. It is after the Saudi Arabian recall.
    It is dated March 11, 1999. It just says this. ``Obviously that
    return rate is extremely low and substantiates our belief that
    this tire performs exceptionally well in the U.S. market.''
        Now, as I have looked at some of the statistics with regard
    to the tires that have been a majority of the claims, the tires
    in question amount to about 10 percent of Firestone's total
    tire production from 1997 to 1999. Ten percent of the tires.
    Yet better than 50 percent of all of the tire claims are these
    tires. Shouldn't that have put Firestone on notice that there
    were some problems with the tires, particularly when 50 percent
    of those tires were from the Decatur plant. If that is not a
    signal that you have a problem with the tires, versus
    everything else that you produce, how is it that you tell Ford
    in this letter that the tire performs exceptionally well? That
    is an A.
        Mr. Crigger. I believe in this case, sir, you are looking
    at the tire P25570R16.
        Mr. Upton. Right, for the Explorer.
        Mr. Crigger. This is the 16-inch tire. This tire performs
    exceptionally well. The tires that have the safety issue that
    we have recalled are the P23----
        Mr. Upton. Were these tires not recalled in Saudi Arabia or
    replaced?
        Mr. Crigger. The 16-inch tire in Saudi Arabia was replaced
    by Ford on the basis of customer satisfaction, but not on the
    basis of defect in the tire. As I mentioned, both companies
    looked at the performance of the tire, and you have a copy of
    our report, and the technicians concluded that it was not a
    tire defect that was involved here.
        Mr. Upton. What do you do with the tires when you know that
    50 percent of the tire claims coming from 10 percent of your
    production have problems?
        Mr. Crigger. What we----
        Mr. Upton. You have known that for 3 years.
        Mr. Crigger. Unfortunately, in hindsight you are right. We
    wish we had looked at claims the way that we now look at
    claims. Claims have never been a performance indicator. I know
    now, looking back historically, it is something that we wish we
    had seen. But we had always looked at the indicators that we
    would normally use and that the industry uses: The performance
    testing, the tire warranty information, which is the largest
    pool of information concerning the performance of a tire, and
    of course inspection of tires in the field. And all of those
    indicators indicated all along that these tires were fine. They
    were performing well. They had good numbers with respect to
    adjustment and so on.
        Only after we got into this in more depth, particularly
    after we saw the serious injury claims mounting this year, did
    we begin to collect information of all kinds. And yes, we
    analyzed along with Ford information associated with claims.
        Mr. Upton. Chairman Nasser in his testimony on the next
    panel says it has been standard practice in the automobile
    industry that tires are the only part of the vehicle not
    warranted by the vehicle manufacturer. They are the only part
    for which manufacturers do not receive field performance data.
    At Ford this will change. I presume he is going to add emphasis
    when he delivers that in his statement.
        Are you going to agree with Ford's request? Allow them to
    receive your field performance data?
        Mr. Crigger. We are going to cooperate with Ford, yes.
        Mr. Upton. And he is correct that you did not provide that
    material up to this point?
        Mr. Wyant. The claims data has not been used for
    measurements of tire performance, but adjustment data has.
        Mr. Upton. This says field performance data. I presume this
    means testing on the track.
        Mr. Wyant. They see every bit of the field performance data
    that is devoted to approving a tire. I believe that is
    referring to adjustment data which is periodically reviewed.
    But if they want larger review or total review, I don't think
    that we would have any problem with doing that.
        Mr. Upton. Have they requested that in the past and you
    have not delivered?
        Mr. Wyant. Only periodically and in special circumstances
    and I think there was a review, and I might be wrong on memory,
    on this particular tire, that is the 16-inch Explorer tire that
    was reviewed with Ford to my knowledge. That was a request to
    do that and we complied.
        Mr. Upton. I talked with some of the Firestone dealers in
    my district this morning, and they indicated that all of the
    tires that they are swapping with customers, all of the tires
    that they are then retrieving from customers are in fact going
    back to Firestone. Have you found anything yet from any of the
    tires that you have taken back from customers?
        Mr. Wyant. At this point there are maybe thousands,
    certainly there are over 500 tires back in Akron when we came
    here, there may be over a thousand now, and they are being
    micro analyzed by the Ford people and outside parties,
    including outside laboratories and specialists, to try to
    determine the cause because unless we come up with cause, we
    don't have an answer to the problem. So we must find the cause,
    and we are doing everything we humanly can to find that. And
    believe me, there is nobody that wants to find cause more than
    we do.
        Mr. Upton. There is a shortage of tires to be used as
    replacement tires, as I have heard from my folks in Michigan.
    During this shortage, is Firestone allowing other
    manufacturers' tires to be used as replacement tires?
        Mr. Crigger. Yes. We have opened it up so that any tire
    that a consumer can find for their vehicle, they may take that
    tire as a replacement and then we will reimburse them.
        Mr. Upton. So Goodyear or General, it doesn't matter?
        Mr. Crigger. That's correct. We have gotten good
    cooperation from our competitors to increase the supply of
    tires.
        Mr. Tauzin. The gentleman's time has expired. Go ahead, Mr.
    Markey.
        Mr. Markey. On this recall, is Firestone going to reimburse
    for the labor as well? It was original equipment. In addition
    to the new tires, will you give the $50 or $75?
        Mr. Crigger. We are reimbursing up to $100 per tire for
    consumers who have other product put on the car if they are
    able to find a competitor tire.
        Mr. Markey. Does that include the labor to put the tire on?
        Mr. Crigger. Yes, that accounts for the complete
    replacement.
        Mr. Tauzin. The gentleman's time has expired. The gentleman
    from Michigan, the ranking minority member of the full
    committee, Mr. Dingell, is recognized.
        Mr. Dingell. Thank you, Mr. Chairman. Gentlemen, you have
    indicated that Ford conducted an analysis of Firestone's claims
    data. Ford is your largest customer. Ford requested the data on
    June 8. Firestone did not give it until July 28, 7 weeks later.
    Can you tell me why?
        Mr. Wyant. Ford did request the data in conversation. It
    was further--subsequently further solidified in a phone call
    request. And in response to them we requested confidentiality
    of the data as it was submitted to NHTSA with confidentiality,
    and my recollection is that it took approximately 4 weeks to
    get confidentiality agreed to. Ford did submit the data.
        Mr. Dingell. Ford didn't want to give you confidentiality,
    but you wanted confidentiality?
        Mr. Wyant. That's correct.
        Mr. Dingell. As recently as April 28 of this year, just 4
    days before NHTSA initiated its investigation, Firestone
    provided Ford with assurances that its Wilderness and ATX tires
    were okay. I would refer you to the memo from Mr. Robert O.
    Martin, Bridgestone/Firestone's Vice President for Corporate
    Quality Assurance. In that memo, Mr. Martin says Bridgestone/
    Firestone's Akron Technical Center analyzed 243 tires taken off
    63 Ford vehicles and their mileage ranged from 11,320 to 76,092
    miles. According to Mr. Martin, he said as follows: Examination
    of the tires revealed no tire deficiencies and that the tires
    performed as expected.
        That is in addition to the other memo that we have here
    which says approximately the same thing a year earlier. Can you
    tell me how Firestone's technical center missed seeing the
    problem?
        Mr. Crigger. This was the Southwest test that I referred to
    earlier. I don't think there was a problem found in these
    tires. That was the point of the test. It was a follow-up.
        Mr. Dingell. You will note that this is 4 days prior to the
    time that NHTSA initiated its investigation, a time following a
    number of things, including the television show which was shown
    earlier, pointing out major defects in those tires.
        Mr. Crigger. Well, I think the population of tires is huge.
    There is 14.4 million tires involved in the population that was
    recalled.
        Mr. Dingell. You also had complaints during this time and
    previous to this time about Bridgestone/Firestone tires; had
    you not?
        Mr. Crigger. Yes. We had had complaints.
        Mr. Dingell. The Firestone recall affected a number of Ford
    vehicles. It also affected Mazda, Navaho SUVs and V series
    pickup trucks. The NHTSA advisory last week also affects the
    Chevy Blazer SUV and three model years of Nissan pickup trucks.
    There are a number of different vehicles and a large number of
    vehicle models that were made by different manufacturers.
    Doesn't that tell you there must be something wrong with the
    tires and not with the vehicles?
        Mr. Crigger. We certainly had our concern about safety
    issues and the tires, and that is why we recalled the tires
    that we did. That is a fact.
        We are looking now for the root cause. Even though these
    incidents are horrible and we regret every one and wish we
    could change it, it nevertheless is a small population that we
    are trying to identify in terms of root cause.
        Mr. Dingell. You had figures on a large number of tires on
    different vehicles on different models.
        Now, tell me how the plant at Decatur operated during the
    period of the strike, which began in July 1994 and ended in
    December 1996. I am told that the replacement workers first
    entered the plant in January 1995. Now I would ask, first of
    all, how many of these replacement workers were used for
    inspectors, quality control and positions like awlers to
    address the problem of blisters in tires?
        Mr. Crigger. My understanding is that replacement workers
    were not used in the quality control inspection.
        Mr. Dingell. Can you make that as a flat statement?
        Mr. Wyant. I have been told that as a flat statement.
        Mr. Dingell. You have been told but you do not know it.
        Mr. Wyant. I was not there.
        Mr. Dingell. How many were used for inspectors, and how
    many were used for awlers?
        Mr. Wyant. The replacement workers went through the same
    training processes as everyone else. The last place they wound
    up was in these critical technical positions, including the
    laboratories, the final inspection which includes repair or, as
    you state, awling.
        Mr. Dingell. I am going to ask that the Chair do assist me
    in procuring further information on that particular point.
        Now----
        Mr. Tauzin. Let me do that for the gentleman. Do we have an
    agreement from Firestone that you will submit the information
    requested by Mr. Dingell to the committee?
        Mr. Crigger. Yes. No problem.
        [The information referred to follows:]
        [GRAPHIC] [TIFF OMITTED]70217.014

        [GRAPHIC] [TIFF OMITTED]70217.015

        [GRAPHIC] [TIFF OMITTED]70217.016

        [GRAPHIC] [TIFF OMITTED]70217.017

        Mr. Tauzin. Mr. Dingell, proceed.
        Mr. Dingell. Your statement says, and I quote, ``Our
    analysis of the failed tires has shown that failures were
    caused by external damage, improper maintenance or by operating
    the tire with pressure significantly below the 26 pound per
    square inch level recommended for the Explorer by Ford.'' By
    significantly below 26 pounds per square inch, do you mean 20
    pounds per square inch or below?
        Mr. Wyant. Excuse me, Congressman, are you in the Southwest
    survey?
        Mr. Dingell. That is in your statement.
        Mr. Wyant. The Southwest survey had numerous tires in it,
    in the teens, that is correct.
        Mr. Dingell. Thank you. Mr. Chairman, I have used my time.
        Mr. Tauzin. The Chair is always pleased to follow the
    gentleman's line of questions and I appreciate them, sir.
        The Chair now recognizes Dr. Ganske.
        Mr. Ganske. Thank you, Mr. Chairman, and, Mr. Ono, thank
    you for coming a long ways to be with us today.
        Mr. Ono, do you agree that the tires made at the Decatur
    plant have a significantly higher failure rate than the same
    type of tires made at other plants?
        Mr. Ono. I believe you can say that based on the claims
    data.
        Mr. Ganske. Mr. Ono, the tires made at all of the plants
    were inflated or it was recommended that all of the tires made
    at all of the different plants, it was recommended that they be
    inflated at 26 pounds on the Explorer; is that right? Was there
    any difference in inflation recommendations between the plants
    of the tires made at the Decatur plant versus any of the other
    plants?
        Mr. Ono. I was not too clear on your question, but I
    believe our tires are designed to a spec given by Ford of 26
    psi.
        Mr. Ganske. And there was no difference between the tires
    made at the Decatur plant and the other plants in terms of that
    recommendation?
        Mr. Ono. Absolutely none.
        Mr. Ganske. But the tires at the one plant failed more than
    the tires made at the other plants. So if the inflation
    pressure, which was the same for the ATX tires from all of the
    plants, that couldn't be the cause of the difference in the
    failure rate at the Decatur plant then, couldn't it?
        Mr. Ono. Well, that was our thinking as well, and we
    conducted for approximately 2 months an investigation with the
    cooperation from Ford and also by getting help from Japan, but
    we were not able to find a major problem.
        Mr. Ganske. Okay, so we are in agreement. The tire pressure
    was not a factor because it was the same for all of the ATX
    tires regardless of which plants that they were produced in. So
    that gets me back to Mr. Dingell's question. There was a lot of
    labor strife and striker replacement at the Decatur plant. You
    had a lot of new workers on the line. Were experienced
    inspectors replaced during the strike?
        Mr. Wyant. Was the question directed at me?
        Mr. Ganske. No, I would like Mr. Ono to answer that if he
    would, please.
        The Interpreter. You are asking about inspectors?
        Mr. Ganske. Yes.
        Mr. Ono. I believe Bob would be able to respond to you in
    greater detail.
        Mr. Wyant. As I explained with Congressman Dingell, I am
    not 100 percent certain about the timing because you said by
    the end of the strike----
        Mr. Ganske. During the strike.
        Mr. Wyant. That information or documentation of that will
    have to be provided.
        Mr. Ganske. All right.
        Mr. Crigger. I can say that it is my understanding that it
    was supervisors and salaried quality assurance people that
    performed that function initially.
        Mr. Ganske. That it was supervisors----
        Mr. Crigger. And salaried quality assurance people.
        Mr. Ganske. Does the company have any records from the
    Decatur plant indicating problems with quality control during
    that time period, Mr. Ono?
        Mr. Wyant. May I attempt to answer the question?
        Mr. Ganske. Sure.
        Mr. Wyant. We have extreme amounts of process control data.
    The process begins at the front of the plant, which is raw
    materials, through every process in the plant out to the
    warehouse, and the probable cause team or the team to find
    cause has been through millions and millions of pieces of data
    trying to find out if there is a measurable quality control
    item within the plant that would indicate that. At this point
    we do not have that and that is why we are asking for outside
    support from independent third party people.
        Mr. Ganske. So your answer is that you don't know at this
    time?
        Mr. Wyant. I do not know at this time.
        Mr. Ganske. Maybe you know this. Were the numbers of
    defective tires pulled off the line different during the strike
    than at times other than the strike?
        Mr. Wyant. Pulled off the line means for some reason,
    cause?
        Mr. Ganske. Yes.
        Mr. Wyant. Not to my knowledge.
        Mr. Ganske. Do you know that for a fact? Have you looked at
    that?
        Mr. Wyant. I have not looked at that.
        Mr. Ganske. My final question is: Will that data be made
    available to NHTSA?
        Mr. Wyant. Certainly.
        Mr. Ganske. I thank you. I yield back the balance of my
    time.
        Mr. Tauzin. The Chair is advised that there are three votes
    now being called on the floor and perhaps it is appropriate now
    for us to take a break. What we will do is recess until 6:45.
    That will give everybody a chance to have a good break. The
    Chair announces a recess until 6:45.
        [Brief recess.]
        Mr. Tauzin. The committee will please come back to order.
    We will ask our guests to take seats and someone to catch the
    doors. It will take a few minutes to settle down.
        Mr. Ono, let me welcome you again, and as we left for the
    votes, we had completed questions on this side. The Chair now
    recognizes Mr. Sawyer from Ohio for a round of questions.
        Mr. Stupak. I think I'm next.
        Mr. Tauzin. I'm sorry, Mr. Stupak from Michigan.
        Mr. Stupak. Thank you, Mr. Chairman. Mr. Ono, would you and
    Bridgestone/Firestone join me today in calling for and
    cooperating with a blue ribbon, truly independent panel to
    perform a review on the AT, the ATX and the Wilderness tires to
    determine the cause and propose solutions? Would you give us
    that commitment today?
        Mr. Ono. Yes, I do commit.
        Mr. Stupak. Thank you. Firestone has maintained that the
    problem is not tire failure, but yet Goodyear Wranglers on the
    same vehicles under same conditions do not experience a tread
    belt separation. How do you explain that these failures are
    occurring in an abnormally large percentage of Bridgestone/
    Firestone tires but not Goodyear tires?
        Mr. Crigger. We recognize that there's a problem. There's
    no question there's a problem. I don't have any data on the
    Goodyear performance or Goodyear tires, but when we recognized
    this problem, that's why we recalled the tires.
        Mr. Stupak. But the problem then has to be in the tire,
    right?
        Mr. Crigger. There's something we're looking for in the
    tire, that's exactly right. We're looking for a root cause in
    that tire. As I mentioned earlier, the incidents that we have
    are so serious that they stun us all and they're shocking to us
    all. And we're looking, though, at a huge population of tires
    to find out why, what is a relative few are creating such
    problems.
        Mr. Stupak. When you design and build a tire you take in
    consideration, do you not, that consumers drive too fast, that
    they drive underinflated, that they overload their vehicles.
    That's all in consideration of tires--when you design a tire,
    don't you?
        Mr. Crigger. I think Bob probably should.
        Mr. Stupak. Okay. Mr. Wyant.
        Mr. Wyant. Certainly a certain amount of that is included
    and is indicated in tire and rim load inflation tables as an
    example, but when you're talking about low inflation level,
    particularly when you get down into the teens or 15 below, no,
    that is not included in the design standard.
        Mr. Stupak. But in this tire, those factors are taken into
    consideration, correct?
        Mr. Wyant. Those service factors, no, they are not. Tires
    will not run in those low inflation conditions.
        Mr. Stupak. So when you design a tire, is it your
    testimony, then, it can only run underneath the specifications
    you say?
        Mr. Wyant. The tire in this particular case specified at 26
    psi will run at 26 psi, and if maintained in that range it will
    perform.
        Mr. Stupak. Then why does Firestone have a separate tire
    for high-speed driving called the URH-rated tire and why do you
    have a special service tire that's developed for another part
    of the world and why do you have an S-rated tire that's more
    resistant to puncture and other things? All the excuses you're
    giving why the American consumer is having problems with these
    tires, you make a special tire for those areas.
        Mr. Wyant. You're referring to I believe top-flight types
    of tires or high-speed tires, tires that are designed for high
    speeds, meaning 95 and up.
        Mr. Stupak. Well, I'm talking about the URH-rated tire, I'm
    talking about the off-road tire, and you have a special service
    tire that you use. I'm talking about a tire that's S-rated. So
    you can't have it both ways. You can't say if you're going to
    run at high speeds you've got to have this tire. You can't say
    that if you're going to run underinflated you've got to have
    this tire. And you can't say to the American people, if you're
    going to do all those things, you go and use the tire for a
    certain part. These tires are built to withstand wear and tear
    that the American public and Saudi public and Venezuelan and
    all the rest of them use.
        Mr. Wyant. They are designed to perform in an extremely
    difficult environment, and yes, they are designed to perform in
    that region. But as example, high-speed--such as in Saudi
    Arabia and even in Venezuela--tires are not designed to go 40-,
    50-, 60,000 miles at 95 miles an hour and up.
        Mr. Stupak. Are you saying, then, the only tires that are
    allowed are 40-, 60,000 miles tires that are driven at high
    speed?
        Mr. Wyant. I missed the first part, sorry.
        Mr. Stupak. Are you saying, then, that if your tire has
    40,000 to 60,000 miles on it, it cannot go at a high speed?
        Mr. Wyant. No, I didn't say that. I said if a tire is not
    designed for that, it cannot do that.
        Mr. Stupak. Well, what are the limitations then on this
    tire, this 15-inch, this P235/75R15-inch tire? What are the
    limitations?
        Mr. Wyant. With respect to speed?
        Mr. Stupak. Any limitation you place on this tire.
        Mr. Wyant. I'll make the case before--there was a
    discussion about Saudi Arabia.
        Mr. Stupak. No, no. I'm talking about American consumers. I
    go out and buy my Ford Explorer and they have 235/75R15. What
    limitations would you place on me, as a consumer with that SUV,
    with your tires? What limitations would you give me?
        Mr. Wyant. Well, the tire is not a speed-rated tire,
    meaning it's not designed for the 95-mile-per-hour and up under
    continuous service. It is designed for this market at speeds
    below that.
        Mr. Stupak. All right. What about off the road, what about
    low pressure? Do you give me a guide on how many times I have
    to check my tire, my pressure?
        Mr. Wyant. If the tire runs at low speed for limited times
    at reduced inflation, it can run off the road. The difficulty
    comes when you then come back on the road; if you do not
    reinflate, then you're severely overloaded, and particularly if
    you run high speeds.
        Mr. Stupak. In testimony earlier, I thought, Mr. Ono, that
    you said that when you were talking about the Venezuela tires,
    that you used different materials to build that tire, and most
    of those tires were--the problems in Venezuela were used with
    different materials. Was that a correct statement?
        Mr. Ono. Well, the steel use is different. In America
    polyethylene is used, while--polyester--correction. In the
    United States polyester is being used. In Venezuela nylon-
    embodied poly is used and also compounds used are different.
        Mr. Stupak. But still in Venezuela the tires that had
    difficulties were American-built ones, plus Venezuela-built
    tires?
        Mr. Ono. It was--they were the Venezuela-built tires that
    had problems in Venezuela, and as far as the ATX and the ATX II
    tires, those tires were also recalled in Venezuela.
        Mr. Stupak. I realize they were recalled.
        Mr. Ono. Correction--replaced in Venezuela. That is, the
    tires recalled in the United States, the ATX and the ATX II,
    were also replaced in Venezuela. I'm talking about 235/75R15.
        Mr. Tauzin. If the gentleman would yield a second, it's my
    understanding there was a Ford replacement in Venezuela that
    included Venezuelan-made as well as American-made tires, and
    that there has subsequently been a Firestone recall with
    reference to Venezuelan-made tires that has extended the recall
    in effect. Is that correct?
        Mr. Crigger. My understanding is that the Firestone action
    had to do with Venezuelan-produced tires. Venezuelan----
        Mr. Tauzin. The Firestone action. But the Ford action had
    to do with both Venezuelan- and American-made tires. I yield
    back to the gentleman.
        Mr. Stupak. Were any of those Venezuelan tires ever
    imported or exported here to the United States?
        Mr. Crigger. No.
        Mr. Stupak. Thank you, Mr. Chairman.
        Mr. Tauzin. I thank the gentleman. The time has expired.
        The Chair now recognizes the gentleman from Tennessee Mr.
    Bryant.
        Mr. Bryant. Thank you, Mr. Chairman. Gentlemen, I have a
    number of questions I do want to ask you, and I might begin
    with my understanding of your explanation of this chart and the
    increase in the claims which I understand to be domestic
    claims, the charts from 1992 to 2000; and for the first 3 or 4
    years they're relatively the same, and then there is an incline
    beginning in 1996.
        Is there any explanation you can offer those of us here
    that are looking at this chart for that dramatic increase over
    a number of years? Did something happen 1995/1996 that--in
    regards to this tire, and I understand most of these were tread
    separation and had to do with SUVs and maybe even the Explorer.
    Did the Explorer change? I mean, what happened? Do you have any
    explanation?
        Mr. Crigger. I wish we knew what happened. We're searching,
    as Mr. Wyant said, we're searching diligently trying to look
    for root cause. We really want to identify this root cause. We
    want it because the American people need it. We need it. We
    need to understand it, and it's been elusive. The chart that's
    shown represents I think probably less than two one-hundredths
    or two-tenths of 1 percent of all of these tires. It's a small
    population. It's critical, of course, because of the damage
    that we've seen, but we haven't been able to identify that yet.
        Mr. Bryant. Now you say in terms of quality control--and I
    guess that's, Mr. Wyant, in your area--that what you used as a
    measuring stick was not necessarily the claims made but rather
    the adjustments that you would make under the warranty
    provisions. And I understand in reading some of the data that's
    been provided that that standard was within an acceptable
    margin, parameters--is that correct--during all these years?
        Mr. Wyant. That's correct.
        Mr. Bryant. Now, is that consistent, that the adjustments
    would be within an acceptable standard, yet claims made would
    be clearly outside?
        Mr. Wyant. Let me explain. That chart as an example, as
    Gary said, is in the recall population from--that is .02
    percent. So we're looking for this sort of needle in the
    haystack. But when the needle in the haystack is there, it's
    terrible. We know that. We don't know why but we know it's
    terrible.
        That particular chart there has not been used. We have used
    adjustment data because it is a more precise measure, and
    within the adjustment population things look normal. In fact,
    some of these tires look excellent, but still, we have got this
    needle in the haystack phenomenon that is not good. So based
    on, in fact, claims data, not understanding the cause, and not
    really understanding the phenomenon, we took out 14.4 million
    tires on the basis of safety, even though we did not know the
    cause.
        Mr. Tauzin. Would the gentleman yield a second? This needs
    to be clarified. The tires that fail in these claims appear
    normal until they blow. No one in their right mind would take
    them in under warranty. They wouldn't show up as a warranty
    claim, would they not?
        Mr. Wyant. It has been our company's practice for many
    years to provide customer satisfaction. In that population, our
    tires that in fact have punctures, repairs, et cetera, the
    population distribution within that I am unsure of.
        Mr. Tauzin. Let me say it a different way. The idea of
    relying upon warranty claims to decide whether you've got a
    problem or not doesn't make any sense when it comes to tires
    that blow apart because they look normal. I have got four of
    them sitting downstairs in the basement, in the parking lot,
    under my Ford Explorer. I just went and looked at them this
    morning, and they all look perfectly normal. But any one of
    them could blow if I drive at a high speed in hot conditions
    and low inflation--all these combination of elements. I would
    never take one of those four tires in for warranty. It would
    never show up as a problem until it blew and I'm dead.
        That's the problem with the statistics we have here and how
    did--and why did Firestone not understand that as they were
    calculating and collecting these statistics? I don't understand
    why you continue to rely upon warranty data to decide you had a
    problem is my point. I thank the gentleman.
        Mr. Bryant. Mr. Wyant, do you have any comment? I have
    another question if you don't.
        Mr. Wyant. Yes. Obviously at this point, with the
    circumstance that has occurred, we are looking closely at this
    type of claim data. Certainly that is true. Normal tread
    separations have some type of warning to them. In many reports
    here there is not a warning. There is not a warning with a
    blowout or a massive puncture, as an example, or a bottoming
    out on a chuckhole. So there are events for which there is not
    warning, and in this particular case, there are reported
    incidents, many, where there's not warning for a tread
    separation. That is not normal.
        Mr. Crigger. Because there are normally tread separations
    in tires; I mean, some level, that occur in all tires. I think
    you will find that. But of course what's happened here is the
    incident of the tread separation is greater, that's why we were
    concerned, and the result has been terrible.
        Mr. Wyant. Explain to me why on this particular tire that
    you, as manufacturer of the tire, recommend that it run at 30
    psi on the Explorer, but yet Ford--and I assume in their
    manual, manual for the Explorer--recommends at 26 psi?
        Mr. Crigger. Bob, of course, could speak to the technical
    detail, but from the nontechnical point of view it's simply to
    add a margin of safety, particularly during this time when we
    have tires on the road, not yet replaced, which we're trying
    desperately to get replaced by every means we know.
        Mr. Bryant. Weren't these recommendations in place before
    this whole situation came to the public?
        Mr. Crigger. I don't believe they were.
        Mr. Wyant. No, they were not.
        Mr. Bryant. They were not?
        Mr. Wyant. They were not.
        Mr. Bryant. You were in the room when I asked the--I think
    it was Dr. Bailey--about the statistic that seemed to be out of
    kilter in terms of the number of incidents and fatalities with
    the Explorer as opposed to--with these tires on the Explorer--
    as opposed to other vehicles, other SUVs with these same tires.
    Do you have an explanation, any accounting for that?
        Mr. Wyant. I believe you're referring to the FARS data; is
    that correct?
        Mr. Bryant. Yes, I believe so.
        Mr. Crigger. Well, we know in total that our tires were
    sourced to the Explorer vehicle and the great majority that
    were only a couple of years when other tires were sourced to
    that vehicle. So there is a combination of our tires on that
    vehicle out there in a great abundance and perhaps more than
    any other vehicle combination, I don't know. I think it's one
    of the largest ever for Firestone on one vehicle population.
        Mr. Wyant. My hesitation on that response was due to the
    fact that I believe the FARS data does not typically state the
    brand or tire. What it states, I believe, is that--an alleged
    tire-related issue, and when you look at it that way I believe
    the numbers are something like 5 percent of the FARS population
    is alleged to be tire related.
        Mr. Bryant. In some of the materials--this will be my last
    question--that was prepared by the committee for me to review,
    and I mentioned this to Dr. Bailey and I'm not sure I
    understood her explanation about the new recall of the, what,
    1.4 million tires, and how in the material that was furnished
    to me by the committee, they indicate there's a number of
    examples, the so-called population, that there really are only
    a few; like in some of these tires, there's only maybe one
    incident or two incidents. But because of the relatively low
    number of tires out there, it meets their formula, that they
    have to be recalled. Can you explain that to me? Is she right
    or is that--is it true?
        Mr. Wyant. Let me try to answer that one because I was
    there.
        Mr. Bryant. I'm sorry. Who's going to try to answer?
        Mr. Wyant. I'm going to try to answer because I was there.
    The original request from NHTSA to expand the recall, our
    decision was that we could not make a decision at this time and
    would come back to that issue after these hearings, after these
    proceedings, when we could look at it with a clearer mind, so
    to speak.
        It was recognized that there were tires in there being
    requested for recall that had one alleged incident, and that
    does not appear, even though the rate is higher and we
    acknowledge the rate would be higher, but the base is low, and
    one incident will drive the data back and forth. And that is
    one of the reasons for discomfort with the use of claims data.
    When the volumes enumerator or denominator are low, it jumps
    all over the place.
        So if you take a number and say that is the level and
    everything above that is going to be recalled, it is very
    problematic. I think it's a very problematic issue for the
    industry.
        Having said that, we have cooperated extremely openly with
    NHTSA and certainly will continue to do that. That issue needs
    to be resolved. If there's a new bright line based on claims
    data, I think it needs to be one that is agreed to by NHTSA and
    by the industry and that it can in fact be done. So our
    decision at that time is we could not decide at that moment.
        Mr. Crigger. I think that, just to add, I think that points
    out why claims data had never been looked at in this way,
    because the normal circumstance was that there might be one or
    two claims, and that's a claim, not an actual defect. That's
    just a claim. What happened differently here is when we looked
    at these and the numbers and the incidents and put all that
    together, then we wish, of course, we had looked at claims long
    ago.
        Mr. Bryant. Thank you, Mr. Chairman.
        Mr. Tauzin. I thank the gentleman. The Chair recognizes the
    gentleman from Tennessee, Mr. Gordon.
        Mr. Gordon. Thank you. Let me first say to our guests, this
    has been a long day and I appreciate your patience. It's long
    for all of us.
        As I understand it, Ford requires suppliers to use the QS-
    9000 quality assurance program to control the quality of parts
    throughout their manufacturing process, including Bridgestone/
    Firestone, and also that Ford can assure conformity of this QS-
    9000 procedure, either directly or through a third party. And
    through the conversations that my staff have had with your
    office, what has been relayed to me is that both Firestone and
    Ford feel like that this process was followed properly, that
    the assurance or the quality program was followed, and that the
    verification was followed, and you have gone back over this and
    you still can't find a problem. However, we have a problem or
    you wouldn't have the recalls. So we sort of have this black
    hole, this disconnect in between.
        Again, my interest is more looking to the future and the
    lives we can save in the future and the problems we can save
    rather than trying to point fingers here, and so I would ask
    that through this long and excruciating review of this control
    assurance program, what have you discovered? I mean, what do we
    need to do different in the future? How does this need to be
    changed? And I would just like whoever to address it.
        Mr. Wyant. I'll try to address it. We are a QS-9000
    certified company, and it by definition requires pretty high
    frequency of audits, both externally--in our case it's Lloyds
    of London--and internally where we have to audit ourself and
    record, and the key foundation is continuous improvement. In
    this particular case, in let's say the Decatur plant in, I
    believe it was September 1997, the plant was certified for QS-
    9000. I think the data to date shows in fact that the Decatur
    plant, if you look at 1997 on from adjustment data and in
    claims data--but I have some uncertainties about claims data--
    looks very good. So looking at it that way, one could say that
    the maybe QS-9000 is a causal factor here. QS-9000 encompasses
    the entire plant from front to back, and that's my comment.
        Mr. Gordon. Well, I would also assume that QS-9000 means a
    continuing improvement of it and trying to do better. So my
    question to you is, after you have gone back over this a number
    of times what needs to be improved, what needs to be changed
    within this quality assurance program both as a supplier as
    well as a manufacturer in terms of their verification?
        Mr. Wyant. Obviously, this is one of the difficulties until
    we find this cause, this low-frequency event but serious event.
    Until we find that, I really cannot answer that question.
    That's why cause is so important.
        Mr. Gordon. Well, is this just a Bridgestone problem or is
    this--and in terms of this QS-9000--or is this an industry
    problem that needs to be reviewed? I mean, who needs to take
    the lead in doing what, so that this doesn't happen again?
    Should Bridgestone clean up their mess and that's it? Should
    Ford do a better job in trying to--when I say Ford, any of the
    manufacturers--in verifying? Do you need additional--does NHTSA
    need to come in and do more?
        Mr. Wyant. I think there have been some very good
    suggestions made including NHTSA, and particularly, the testing
    process has already begun, including the industry and NHTSA and
    SAE to see, to try to determine if that is, let's say, the
    missing link; can it be discovered or uncovered in that
    process. So I think those are all good moves.
        Mr. Gordon. Do we leave this as a consumer--what's going to
    make me feel better here? Do we leave this up to private
    industry and yourself to do to a great extent what you did with
    this earlier QS-9000 and to come up with this procedure, let us
    know what it's going to be, and then we feel comfortable with
    that; or does there need to be a greater role for the National
    Highway Traffic and Safety Administration coming in as a
    monitor there?
        Mr. Wyant. I think we've already agreed that we need to
    have a joint investigation, if you will, of this, including
    NHTSA, us outside parties and organizations, like the rubber
    manufacturer associations, which means the tire industry.
        Mr. Gordon. Again, I'm not looking at who's at blame now.
    How do we get a better process?
        Mr. Crigger. Well, I think--I was just going to say I think
    maybe part of what Bob is saying is that the better process is
    to have all of these agencies and industry looking at what can
    be done, and we're committed to work with NHTSA, this committee
    or whoever, to find any improvement that will ensure against
    this kind of event again.
        Mr. Gordon. And so how do we get that process? I mean, do
    we wait for you to do it or do we need--you know, should it be
    congressional action? How do we get this process started?
        Mr. Crigger. I believe some of the process has already
    begun. I don't know what the next steps would be, but I believe
    this looking at new ways and new methodologies within NHTSA has
    already begun.
        Mr. Gordon. It would seem to me that if you don't have an
    answer, then we're going to have to supply the answer. Thank
    you, Mr. Chairman.
        Mr. Tauzin. The Chair thanks the gentleman. The gentleman
    from North Carolina, Mr. Burr, is recognized for 5 minutes.
        Mr. Burr. Thank you, Mr. Chairman. Mr. Chairman, would it
    be appropriate if I asked the crowd if there are any
    representatives here from NHTSA still?
        Mr. Tauzin. Yes, it would certainly be appropriate.
        Mr. Burr. Would the record be so kind to show that nobody
    from NHTSA is here for the remainder----
        Mr. Tauzin. Would the gentleman identify himself.
        Mr. Womack. I'm John Womack, deputy chief counsel for
    NHTSA.
        Mr. Tauzin. Deputy chief counsel, John Womack.
        Mr. Burr. I appreciate the gentleman for identifying
    himself and would only make the comment to my colleagues here
    that I would have hoped that a large amount of the NHTSA team
    would have stayed, that I think it's valuable to hear the
    firsthand information from not only these witnesses but Mr.
    Nasser and Ford, and hopefully it would give them some insight
    as to some of the challenges they're dealing with.
        Mr. Tauzin. Would the gentleman yield?
        Mr. Burr. Yes.
        Mr. Tauzin. I think there are two other NHTSA personnel
    here. Would you identify yourself for the record?
        Mr. Young. My name is Bob Young. I'm defects investigator
    with the ODI. I'm here for that precise reason.
        Mr. Burr. I appreciate that. I would encourage you not to
    be as reluctant to identify yourself next time somebody asks
    for----
        Mr. Tauzin. And there's an additional NHTSA personnel, I
    think.
        Ms. Droneburg. Hi, my name is Terri Droneburg.
        Mr. Tauzin. She didn't hear that. She was the investigator
    on the Firestone case. Please supply your name to the clerk.
        Mr. Burr. I'm only sorry after hearing that, Mr. Chairman,
    that she wasn't on the panel with Ms. Bailey to testify, since
    she was intricately involved.
        Mr. Tauzin. Mr. Burr, if you would yield for a second, too.
    Let me compliment Mr. Nasser. He's been sitting here all day
    and I appreciate that, sir. I think it's not only good that you
    came but good that you stayed and heard these other witnesses.
    I appreciate that. Mr. Burr.
        Mr. Burr. I thank the chairman for his indulgence and let
    me once again thank Mr. Ono for his attendance and the distance
    he's traveled. Although my questions won't be directed at him,
    it's not because I don't want him to contribute to any answers
    if he feels so moved, but I will address them to his
    colleagues, Mr. Crigger and Mr. Wyant.
        Let me ask both of you, were you briefed by your legal
    counsel prior to this testimony, and if so, were there areas
    that your legal counsel told you to stay away from or not
    answer?
        Mr. Crigger. No, sir.
        Mr. Wyant. No.
        Mr. Burr. Were you briefed?
        Mr. Wyant. We were certainly briefed, but there's no area
    that's off limits.
        Mr. Burr. Let me ask you, there was a settlement--I say
    that for the lack of the correct understanding--with at least
    State Farm, possibly other insurance companies, on issues that
    they felt were Firestone's responsibility because they were
    exposed for damages that they felt were the result of the
    defect in tires. Firestone settled those; am I correct?
        Mr. Wyant. Yes, that's correct.
        Mr. Burr. Was Firestone the only insurance company that
    that type of thing happened?
        Mr. Wyant. I wouldn't think so. State Farm is the largest
    vehicle insurer in the country. I believe they have over 20
    percent of the markets.
        Mr. Burr. Was part of the agreement with State Farm that
    you would not have to admit to a tire defect?
        Mr. Wyant. I don't know anything about that, sir.
        Mr. Crigger. I'm not aware of the question.
        Mr. Burr. I mean, you two are apparently intricately
    involved in finding a solution to the current problem that you
    have, and the reason that I ask both of you the question is
    that I would hope that also the Firestone information would
    have--or, excuse me, the State Farm information would have been
    shared with two people who are intricately involved in finding
    a solution to a tire problem. Did you have something else?
        Mr. Crigger. Well, I was going to say I'm informed there
    was no settlement with State Farm, that individual lawsuits
    have been settled.
        Mr. Burr. There was, though, some type of, was there not
    a--okay. I'll take your legal counsel's shaking of his head as
    there was no type of reimbursement made to State Farm, but
    clearly, there were for the cases that State Farm had insured.
        Mr. Crigger. There where cases that were handled by State
    Farm, that's correct.
        Mr. Burr. Which again I would stress, that if you two are
    intricately involved in the solution, as I would expect NHTSA
    to be intricately involved in the information that's out there,
    that both of you ignored very pertinent information, or
    somebody in your companies, as it related to what State Farm
    and, in NHTSA's case, one particular claims adjuster had in
    fact identified.
        Let me move on to specifically the Middle East and to
    Saudi. In Saudi Arabia----
        Mr. Tauzin. Would the gentleman hold for a second?
        Mr. Burr. Be happy to.
        Mr. Tauzin. We have being distributed a document--what's
    the number of it, 75--which relates to the claims or
    subrogation claims that were settled for losses for the year
    1995, 1997, 1998 and 1999.
        Mr. Burr. I thank the chairman.
        Mr. Tauzin. And would note that for the record. I thank the
    gentleman.
        Mr. Burr. Do either one of you suggest that there's not a
    defect in at least some of these tires?
        Mr. Crigger. No, I certainly wouldn't say that. There's
    clearly something wrong. There's something to be found here.
    This is not normal.
        Mr. Burr. Do you also agree that there must be a defect in
    some of the tires you had in Saudi?
        Mr. Crigger. That was not the finding in the case of Saudi.
        Mr. Burr. And what was the suggested pressure of the tires
    in Saudi based upon Firestone specs?
        Mr. Wyant. That would be a Ford Motor Company spec. I'm not
    certain what it was. I believe it was 28 or 30, but I think
    they should answer that.
        Mr. Burr. Well, I have certainly gone through your field
    survey, the Saudi field survey, and tried to determine it. And
    the reference point used for 54 percent were over 30. I
    interpreted that meaning 30 was the benchmark.
        Mr. Crigger. I think 30 was the pressure in Saudi.
        Mr. Burr. Is there a reason it was 30 there but that you
    agreed to 26 here?
        Mr. Crigger. Again, I'm not the technical person, but I
    believe in the case of Saudi Arabia we're talking about a
    larger tire, a 16-inch tire, and in the case of the recall tire
    we're talking about a 15-inch tire.
        Mr. Burr. In one of the instances in Saudi, a Firestone
    representative sent a letter to a dealer who had been
    persistent about the problem that he saw in more than one case.
    Let me read you the response that went back. This would be on
    tab 15, if you're interested. The response that went back is:
    Entire pressure should be checked every 2 weeks at least and
    before every long distance drive. I'm sure you will agree that
    it cannot be guaranteed that the tire was used at a proper tire
    pressure throughout its life.
        Does Firestone still stand by that statement from a
    Firestone representative that not only the customer is
    responsible but that even though you can't guarantee that the
    customer does it, that you have no obligation, no exposure?
        Mr. Crigger. I'm sorry, sir, I missed the last part of
    your----
        Mr. Burr. In this particular case the Firestone response
    was the customer should be checking the tire pressure every 2
    weeks and before long distance drives, and we--it says: I am
    sure you will agree that it cannot be guaranteed that the tire
    was used at the proper tire pressure throughout its life.
        In other words, there may have been a time when the tire
    pressure went up or down from what we suggested, and that's the
    fault of the consumer.
        Mr. Tauzin. For the record, again we are talking about
    document 15.
        Mr. Burr. And I think that that response from Firestone is
    from Keshav Das, K-E-S-H-A-V, last name D-A-S.
        Now, let me ask you, what does the manual say, because I
    think I've heard both of you quote that customers are supposed
    to check their tire pressure every month. Is that not correct?
    Did I not hear one of you or both of you state that earlier?
        Mr. Wyant. I don't believe we stated that but that would be
    considered a normal practice, yes.
        Mr. Burr. Then why would a Firestone representative put in
    a letter that it's the customer's responsibility for them to
    check it every 2 weeks and before a long distance drive?
        Mr. Wyant. I think there are, even in this country,
    advisories to check your inflation or adjust your inflation
    when you change the load or if you're going to high load in
    long distance travel. I think that's considered normal, and
    that may have been considered in this 2-week response,
    particularly in Saudi where there is significant deflation/
    reflation issues because of going off road in the sand.
        Mr. Burr. I could ask a number of other questions and I'm
    not going to for the sake of time and because I think I would
    go over ground already plowed. But let me just make an
    observation on my part. I hope that Firestone understands the
    frustration that I think all members on this committee share
    because we read statements like this that clearly lead us to
    believe that Firestone was attempting to push aside a potential
    problem, and pretty soon the problem just got so big that a
    response to a dealer or a settlement on a subordinate claim
    wasn't enough.
        Now, I'm not sure whether it was Houston TV or whether it
    was Ford Motor Company or whether it was NHTSA, it's sort of
    irrelevant. We've got to solve this problem and I wish I could
    agree with you. I mean, I would like to have you stand up and
    say, you know, what we put in that letter was a bunch of crap,
    that was not a sufficient response to our dealer, for our
    customer. We should have been more concerned, we should have
    had our eyes open.
        But that's not the impression that we get when we read
    document after document after document where we're debating who
    was supposed to check the tires, how often were they supposed
    to check them, and whether in fact Firestone has any
    responsibility in it. My hope is that you will find that defect
    and that you will find it quickly and that we will know the
    scope of the problem.
        I thank the chairman for his indulgence and I yield back.
        Mr. Tauzin. I thank the gentleman. If he's looking for a
    real good case in the documents, look at document 80. Mr.
    Kenneth Bondi, who was told by the Firestone company that his
    treads were worn and that was the problem. And he responded,
    Well, that's neat, but I didn't send you the treads, they're
    lying on the highway; I sent you the tire without the treads.
    How do you know they were worn? And Firestone paid him. It's an
    interesting document. Read it. The Chair recognizes the
    gentleman from Ohio, Mr. Sawyer.
        Mr. Sawyer. Thank you very much, Mr. Chairman. I think if
    there's anything that the committee has learned this afternoon
    and this evening is that the issues that we're dealing with
    here today are enormously complex, the stakes are high, and
    that we're all searching for an answer.
        Let me ask you this. I have got a series of relatively
    quick questions, I hope. Is it fair to say that a tire is a
    complex instrument, that the actual compounds, the sourcing of
    materials, the manufacturing process, the design of the tire
    and the ambient conditions at specific manufacturing locations
    could have an effect on the performance of the tire in a way
    that could contribute to the kind of phenomenon that we're
    discussing here today?
        Mr. Wyant. That is correct. The one thing I would like to
    make clear, that I don't believe it has been made clear, but
    one of the reasons the inflation issue continues to come up, as
    it would with any tire manufacturer, is that it is the most
    essential part of the performance of a tire. Without sufficient
    air pressure you will get a tread separation, and that is a
    normal event when you have that condition. It is normally
    exhibited by shoulder wear, as you pointed out, and it is
    evidence of a separation inside of the tire because that's what
    tires do.
        Mr. Burr. Would my friend from Ohio yield 1 second?
        Mr. Sawyer. Can I get my time back?
        Mr. Burr. If the chairman will indulge you. Let me just
    make this point, Mr. Wyant. I don't believe that the habits of
    Americans as it relates to checking their tire pressure has
    changed significantly in this decade, and the belief that a
    reduction in tire pressure has caused this aberration because
    everybody's running them at a lower rate is just not
    believable. If it was the case because of the habits of most
    Americans, there would be more than your tires blowing up on
    the road. I am even guilty of running my tires at less than the
    recommended rate because I don't check them as frequently, and
    I think I know more than average in America.
        Mr. Crigger. I agree with you on that. That's true and I
    don't think we're trying to say that there's some change in the
    habits of people that have caused underinflated tires to be the
    reason for this phenomena. What I think--we're just saying that
    normal, under normal conditions, you would expect to see tread
    failures associated with underinflated or other phenomena,
    improper repair, punctures and so forth.
        Clearly what we have here is a problem. There's no question
    about that, and we're looking for the solution. What is the
    root cause of that problem? But there's a level, there's a
    level of masking that had existed because there is a--in a
    sense, a normalcy because of the outside impacts and influences
    on the tire that got lost here, and now we have found the
    problem and we're trying to identify it.
        Mr. Tauzin. The gentleman from Ohio has the time.
        Mr. Burr. I thank my friend from Ohio.
        Mr. Sawyer. Thank you, Mr. Chairman. My point was that it
    seems to me there's clearly a complexity of cause involved in
    all of this and that it could be any of these variables or it
    could be a combination of these variables working together. Am
    I correct in that assumption?
        Mr. Crigger. [Nodding in the affirmative.]
        Mr. Sawyer. In the course of the life of a tire design,
    does a tire remain stagnant--is the design and the
    manufacturing of that tire consistent over the life of a model
    or does that--does that model migrate, does it evolve in its
    design?
        Mr. Wyant. The normal practice as I described before, it's
    under a QS-9000, there are continuous changes or continuous
    upgrades in processes, in designs and in manufacturing; that is
    correct.
        Mr. Sawyer. Is it possible that that abrupt change could be
    the product of one or more of these design variables in the
    productive life of that design?
        Mr. Wyant. It certainly could. Unfortunately, we do not
    have that narrowed down.
        Mr. Sawyer. You don't have it narrowed down yet, but that's
    the sort of thing I assume that you're looking for.
        Mr. Wyant. That's correct.
        Mr. Sawyer. In the course of all of this do you
    continuously test the tire according to NHTSA standards for the
    changes that are taking place or does this take--how frequently
    do those tests take place?
        Mr. Wyant. We have rather frequent high speed and endurance
    checks in production, and there's a whole schedule for doing
    that, and it depends on how frequently and the volume of
    production; but these checks are made as an ongoing matter of
    business.
        Mr. Sawyer. These tests were initially put in place, am I
    correct, in 1968?
        Mr. Wyant. That's correct, on the DOT.
        Mr. Sawyer. And they were design ed for tires that were
    largely bias belt tires as the state-of-the-art as it existed
    32 years ago.
        Mr. Wyant. That's correct.
        Mr. Sawyer. Would it be your suggestion that one of the
    elements that we need to undertake as we look at all of this is
    to look at the testing protocols, their appropriateness to the
    product and their appropriateness to the application to which
    they're going to be put in the real world?
        Mr. Wyant. We certainly agree with that and we would
    cooperate with NHTSA and the industry to accomplish that goal.
        Mr. Sawyer. Let me just close with this, Mr. Chairman. You
    may recall that in July we had a hearing where Secretary Slater
    and Secretary Richardson were here with regard to the matter of
    fuel consumption. On that occasion, I said let me mention one
    way that we can make a difference in our fuel consumption
    that's enormously important. The appropriate inflation level of
    tires makes a huge difference in fuel consumption, and simply
    checking your tires once a month not only decreases fuel
    consumption dramatically but it increases the life of the tire.
        It seems to me that that kind of continuous education is an
    enormously important part of what we do here today, what tire
    manufacturers and tire dealers ought to do on a continuing
    basis and what government agencies ought to do if we're going
    to promote the responsible use of products like tires that we
    place our lives on. Thank you, Mr. Chairman.
        Mr. Tauzin. I thank the gentleman. The Chair recognizes the
    gentleman from California, Mr. Rogan.
        Mr. Rogan. Thank you, Mr. Chairman. Gentlemen, thank you
    for your patience here today. I would like to go over briefly
    my notes respecting the chronology of the Firestone tire sales
    overseas during this period. I want to make sure I have it
    right. If I misstate something, please feel free to correct me.
        With respect to the Firestone tires that were sold in the
    Middle East, it was 1997 when the first complaints on the
    performance of the 16-inch Firestone tire were reaching your
    office; is that correct?
        Mr. Wyant. I'm aware of a tire coming in to the Akron Tech
    Center. I'm not certain if it was 1997 or 1998, but there was a
    tire.
        Mr. Rogan. Would it be fair to say that some time at or
    about 1997, a number of complaints at some point started coming
    in about the Firestone tire performance in the Middle East?
        Mr. Wyant. That's fair.
        Mr. Rogan. And essentially, you checked those on a case-by-
    case basis and found that all of the problems emanated from
    some sort of customer abuse, but not from tire defect?
        Mr. Wyant. That's correct.
        Mr. Rogan. And at some point Ford Motor Company decided to
    simply recall all of those 16-inch tires that had been sold on
    Ford vehicles in the Middle East?
        Mr. Wyant. Correct.
        Mr. Rogan. Was that a unilateral decision by Ford or did
    Firestone participate and agree to that?
        Mr. Wyant. We did not participate in that.
        Mr. Rogan. Then at some point Firestone learned that there
    were similar problems with tires being used in Venezuela,
    Malaysia and Thailand on both the 15-inch and the 16-inch
    tires, correct?
        Mr. Wyant. Venezuela is correct. I'm fuzzy and uncertain
    about the Malaysia, Thailand.
        Mr. Rogan. Do any of the other witnesses----
        Mr. Crigger. I'm not aware of those other countries, but I
    know in the case of Venezuela, we were talking about
    Venezuelan-produced product.
        Mr. Rogan. And that was on the 15-inch and 16-inch tire?
        Mr. Crigger. I believe that's correct.
        Mr. Rogan. When you say a Venezuelan-produced product, is
    there any kind of product oversight that is done on foreign
    companies that Firestone owns to make sure that they are at
    least producing the tire to standard?
        Mr. Wyant. They fall under QS or corporate QA types of
    processes and procedures, as do all of our plants, but they
    have local market conditions.
        Mr. Rogan. But is there a reason why you differentiate and
    say a ``Venezuelan-produced'' tire--is there anything about it
    being produced in Venezuela that makes it somehow less reliable
    than, say, a domestically produced Firestone tire made here in
    the United States?
        Mr. Wyant. The Venezuelan issue is one of mislabeling of
    tires, and there's a significant number of tires in the market
    that are mislabeled that are being recalled as a customer
    satisfaction issue and replaced.
        Mr. Rogan. My question is, from Firestone's perspective, do
    you maintain certain safeguards and quality control over all of
    your products that are manufactured, whether they're
    manufactured offshore or here in the United States?
        Mr. Wyant. That's correct.
        Mr. Rogan. And that would also apply to Venezuela?
        Mr. Wyant. Correct.
        Mr. Rogan. So was there anything about the fact that
    Firestone tires were manufactured in Venezuela that, in and of
    itself, would cause anyone to have any concern about quality of
    manufacture?
        Mr. Wyant. Those were the tires that were mislabeled.
        Mr. Rogan. But not, not mislabeled to where the quality of
    the manufacturer was concerned?
        Mr. Wyant. That's correct.
        Mr. Rogan. And those tires were also recalled by Ford in a
    unilateral action?
        Mr. Wyant. Yes .
        Mr. Crigger. Supplemented now by our own action earlier
    this week after working with Indecka, the agency there.
        Mr. Rogan. When you received these reports from the Middle
    East, and at least from Venezuela and from apparently some
    other offshore jurisdictions, did that give cause for concern
    to Firestone that there may be a design defect or a product
    defect in the domestically produced Firestone 15- and 16-inch
    tires?
        Mr. Crigger. As we discussed earlier, in the case of Saudi
    Arabia, which is the one I know from discussion the most about,
    the answer was no, because the team of engineers that went and
    investigated tires there, including both Ford and Firestone
    engineers, did not find a tire defect at the root of the
    problem in Saudi Arabia.
        Mr. Rogan. The reason I asked the question is that when I
    looked at the documents it appeared that Firestone was
    satisfied that this was a unique circumstance in the way the
    tires were being used in Saudi Arabia or the Middle East that
    didn't apply here domestically, and so there was no cause for
    concern.
        Mr. Wyant. That's correct. Both Bridgestone/Firestone and
    Ford Motor Company had joint surveys in Saudi Arabia, and as a
    result of that, there was a joint survey in the southwest part
    of the United States to confirm that the tires in this market
    were okay.
        Mr. Rogan. Mr. Chairman, may I ask the committee's
    indulgence for 1 additional minute?
        Mr. Tauzin. Would the gentleman repeat his request?
        Mr. Rogan. If the committee would indulge me with 1
    additional minute.
        Mr. Tauzin. Is there any objection?
        Mr. Rogan. I just see that the red light is on, and I don't
    want to impose on the committee's time.
        Mr. Tauzin. I think the gentleman has--we show you having
    35 more seconds. Proceed, sir.
        Mr. Rogan. Then can I have a minute and 35 seconds?
        Mr. Tauzin. Is there any objection? Without objection, the
    gentleman's time is extended.
        Mr. Rogan. I thank the chairman and my colleagues. The
    reason I asked the question, gentlemen, is that it at least
    appears to me that the concern was not limited to these
    overseas tires; both Ford and Firestone undertook additional
    tests on these tires in the United States in 1999 and 2000. And
    so if you were simply satisfied that this was a condition
    peculiar to Saudi Arabia, there wouldn't be a need for an
    additional 2 years of testing, and that's where I'm seeking the
    clarification.
        Mr. Wyant. The action in the United States was to confirm
    that they indeed were okay. All of our data shows that there is
    no problem on those tires in the United States.
        Mr. Rogan. But when did you get back the report that said
    that the condition is peculiar to Saudi driving conditions?
    That wasn't as late as middle of 2000, was it? It didn't take 2
    years to get that report generated to you, 2 to 3 years?
        Mr. Wyant. No, I'm on memory here again. I think it was
    middle-ish of 1999 from the Saudi survey, somewhere in there,
    maybe earlier.
        Mr. Rogan. But Firestone continued conducting tests even up
    to 2000 but never notified NHTSA of any of these concerns?
        Mr. Wyant. I'm not sure what tests you're referring to that
    we continued. We did a joint survey to evaluate the product.
    That's correct.
        Mr. Rogan. And that went all the way into 2000 and still up
    until 2000?
        Mr. Wyant. I'm not sure exactly when that was.
        Mr. Tauzin. The gentleman's time has expired but the
    gentleman may respond.
        Mr. Wyant. It's correct.
        Mr. Tauzin. That's correct.
        Mr. Rogan. Is it July 7, 1999? Does that date ring a bell?
        Mr. Wyant. No. On what part, sir?
        Mr. Rogan. On the survey that came back.
        Mr. Wyant. No.
        Mr. Tauzin. The Chair will allow a response and we've got
    to move on, Jim. Please respond to Mr. Rogan's question and we
    will move on to Mr. Green.
        Mr. Crigger. That's correct; July 7 for the Middle East
    tire survey.
        Mr. Tauzin. The Chair recognizes the gentleman from Texas,
    Mr. Green.
        Mr. Green. Thank you, Mr. Chairman. And like everyone else,
    it has been a long day, not only for ourselves but for our
    panel and even the next panel. Let me talk about the particular
    interest I have, because--and I appreciate my colleague from
    California, because coming from Texas we're now looking at the
    Department of Transportation complaints summary. It seems like
    75 percent of the failures come from Texas, and maybe it's
    because this last 2 months we've had, you know, 100 degree
    temperatures every day. It was 105 in Houston, maybe not as bad
    as Saudi Arabia, but pretty close; or maybe it's because in
    Texas we do drive a lot of SUVs and use a lot of tires.
        What is the average warranty on an ATX? Is it 50-, 60,000
    miles?
        Mr. Wyant. I don't believe there is a mileage warranty on
    that tire.
        Mr. Green. It seems like when I go buy a tire and my
    constituents do, they have a warranty of the more you pay, the
    better your warranty, 40-, 50-, 60,000 or some even 70-, I
    think. Is there any kind of--Firestone's bound to sell a
    warranty or guarantee a tire for a certain number of miles?
        Mr. Wyant. You are correct. Certain levels of tires, and
    generally there are price positions that cover different types
    and levels of warranty.
        Mr. Green. I am looking at the complaints, and it shows
    mostly ATXs. Does anybody have an idea what the typical--would
    it be 40,000, 50,000, 60,000?
        Mr. Wyant. It would tend to be at the higher end.
        Mr. Green. So 60,000 wouldn't be out of sight?
        Mr. Crigger. I don't think there is a particular mileage
    warranty that was associated with this particular tire, I mean
    as a stated mileage warranty.
        Mr. Green. Okay. That is surprising. Because, having bought
    tires for many years, typically you do have some type of
    warranty.
        Mr. Crigger. I think this would come sort of under the
    standard warranty, which would be we would adjust up to 6
    years, I believe, depending upon----
        Mr. Green. Well, that gets into my next question. You had
    lots of questions on what Firestone is doing to correct the
    problem. Obviously, a lot of our constituents, particularly
    mine in Houston, Texas, may have tires that are the ATX that
    may need to come in; and we understand from earlier testimony
    there is a waiting list. I would like to hear some of the
    questions about how Firestone is compensating some of these
    customers for these recalled tires. It is my understanding
    there is an offer of a $100 rebate per tire?
        Mr. Crigger. That is correct.
        Mr. Green. I happened to purchase a Bridgestone yesterday
    because of a tire mishap, and it was $116, and that wasn't bad
    because it wasn't the size tire that we are talking about, but
    it was for an SUV, and I am interested in how this offer
    compares to what the average ATX tire would be. Is an ATX tire
    about $100 or $120, in the Texas market, for example?
        Mr. Crigger. I don't know that answer specifically, but my
    understanding is that the $100 should be able to cover ordinary
    tire replacement, including the labor.
        Mr. Green. Okay. And are you prorating it for tire wear?
    For example, if I had four ATXs on my Explorer and I drove it
    for 25,000, is that $100 going to be covering all four, each
    tire, or is there going to be an adjustment based on the wear?
        Mr. Crigger. No, there is no adjustment for wear. We are
    replacing the tires, regardless of wear or age.
        Mr. Green. Okay. Some of the impression I received from
    your testimony and also the concern I have--and I think my
    colleague from Ohio realizes how important it is that we as
    tire consumers check our tires. In your testimony, you said
    tread belt separations are usually caused by damage to the
    tires--improper repairs, overload, underinflation or simply by
    using tires with excessive wear. That statement is in no way
    trying to transfer the responsibility to the user from the
    production?
        Mr. Crigger. No, sir. We know we have a problem here, and
    we are trying to find it. That is simply the standard condition
    that we are talking about tires. When----
        Mr. Wyant. One comment on that. Again, the shoulder wear
    issue does happen in service, and it is very--it is not
    infrequent to see belts that are worn off and exposed and the
    tire is brought in for an adjustment, and certainly that is a
    tread separation, but that is what happens out there.
        Mr. Green. In using SUVs for many years, like I said, I
    don't get to hunt and fish near as much as I would like, but
    you typically do lower your air pressure when you are off road,
    but you fill it--you put more in it when you are driving like
    everyday city driving or over the road. So I think most people
    who have those understand that, that if you--so, hopefully,
    they do remember, because if they don't remember to take it
    out, they will probably get stuck somewhere.
        The other thing, when someone brings their ATXs in with the
    $100 rebate, are they required to buy other Firestone tires, or
    can they buy Bridgestone or some other tire?
        Mr. Crigger. No, any tire. They can go have their tires
    replaced with our tire, a competitor tire, wherever, and then
    they come in to turn in the tires, because we have to account
    for them under the recall, and then they get a refund for them.
        Mr. Green. Okay. Thank you, Mr. Chairman. I appreciate the
    time.
        Mr. Tauzin. The Chair thanks the gentleman.
        The Chair recognizes the gentlewoman from New Mexico, Mrs.
    Wilson.
        Mrs. Wilson. Thank you, Mr. Chairman.
        In a letter to the New Mexico Attorney General, Glen Hass
    from Bridgestone explains that you abandoned your phased
    recall, but you do say--he does say that ``the shortage of
    replacement tires at this point requires prioritization of
    those tires which are available in order to maximize overall
    public safety. We are attempting to address that issue
    generally by directing greater numbers of tires proportionally
    to those areas where we have experienced the greatest number of
    incidents.''
        Why isn't New Mexico on the list?
        Mr. Crigger. My understanding is that all of the hot States
    are trying to be satisfied in their needs. We are trying to
    satisfy all of the requirement everywhere.
        As you mentioned in the letter, we quickly abandoned the
    phased recall idea. The phased recall idea was never meant to
    be, although there was a misunderstanding that State 1 would be
    handled first, and then only after it was handled would State 2
    be handled and so on. But we are trying to go where there is
    the greatest need. We are doing everything we can to get tires
    to all of the States; and, as we have just discussed, we have
    opened it up so that any competitor tire available anywhere
    that a consumer can find for a replacement is eligible for the
    replacement, as long as it is within the parameters of the
    vehicle.
        Mrs. Wilson. Let me ask that again. You have given a list
    of where your highest priority States are based on your
    analysis of the incidents. Why isn't New Mexico on the list?
        Mr. Wyant. At the time of the creation of that list, I
    believe New Mexico was right at the cutoff of phase 2 when it
    was originally described. It just went in sequence, and it was
    just a cutoff based on where does it begin to level out. Now,
    that may be slightly different now, but that is----
        Mrs. Wilson. That was just based on numbers of incidents,
    is that correct?
        Mr. Wyant. That is correct.
        Mrs. Wilson. Not numbers of incidents per capita, right?
        Mr. Wyant. Right.
        Mrs. Wilson. How many people are there in the State of
    California--Jim, can you help me?
        Mr. Rogan. Thirty-four million.
        Mrs. Wilson. Thirty-four million in California, 1.6 million
    people in New Mexico. Ten percent of your fatalities are in the
    State of New Mexico, and you didn't bother to figure out that
    per capita might make a difference?
        Mr. Crigger. Clearly, that was a mistake. Clearly, we have
    abandoned that kind of a program; and we are trying to satisfy
    everyone's needs as quickly as we can. We didn't wait to make
    the recall. As soon as we understood what was happening, we
    took the tires back. We didn't know why, but we took the tires
    back.
        We couldn't, of course, have an inventory of that many
    tires; and we couldn't--the industry couldn't supply that many
    tires. So we have made some mistakes along the way, there is no
    question. But we didn't make a plan--we didn't have a plan that
    was all worked out. We simply reacted as quickly as we could,
    and we have been changing and modifying as we have gone along
    to try and make it better for consumers wherever we can.
        Mrs. Wilson. You know, it would be nice--you are saying
    here tonight that clearly you have made mistakes. Boy, that is
    real clear now. But it would have been real nice if you had
    been willing to acknowledge that in 1997 when you began
    gathering data that said that over 2,500 tires were separating.
    It would have been even better if, when the Attorney General
    wrote to you from the State of New Mexico, that you would have
    acknowledged that in the letter that you sent back to her and
    said, yep, whoops, you are right, let's fix it.
        Let's talk a little bit about that data. You have said,
    said publicly many times and said here again today, that you
    are working around the clock to find the root cause. When did
    Firestone start working round the clock to find the root cause?
        Mr. Wyant. That was about the same time or slightly prior
    to the decision process in early August.
        Mrs. Wilson. So you started working round the clock in
    August of 2000, is that correct?
        Mr. Wyant. That is correct.
        Mrs. Wilson. What were you doing while you were gathering
    this data and running your tests and going out to Phoenix and
    Tucson and trying to figure out whether you had a problem?
        Mr. Crigger. Well, we are always monitoring field
    performance, as I mentioned before. And, believe me, this is
    extremely regrettable as we look back in hindsight. But the
    type of claim data that we are talking about there was not used
    as a measure of performance indication.
        Mrs. Wilson. What was this data used for?
        Mr. Crigger. It was a summary of the number of claims, and
    I believe it was used in an accounting sense.
        Mrs. Wilson. To determine your profit and loss and
    liability, wasn't it?
        Mr. Crigger. It was a summary of the liability, that is
    correct, but it was not an indicator----
        Mrs. Wilson. So you looked at it from a financial point of
    view but not a consumer safety point of view?
        Mr. Crigger. I am sorry to say that I believe that is the
    case. Obviously, that is different today. But the information
    that we were looking at--in-plant testing, field testing,
    warranty data--all of the information that was--that we relied
    on for quality and assurance that the tires were good all
    looked right. It all looked good.
        Now, what we have seen different here--and you are right.
    When you look back at this you see that this is a different
    phenomena. This is a population of tires that is so big that
    the claims data have validity, and we never had a population of
    tires like that before. Now, of course, we have seen it; and we
    acted on it as soon as we saw it. I wish we could have seen it
    sooner.
        Mrs. Wilson. I guess I would just end by saying this: I am
    a pro-business Republican. I am married to an insurance defense
    attorney. We talk a lot about liability in our house and about
    tort reform, and I usually lose a little credibility with every
    audience when I admit that I am married to a lawyer. Despite
    that, he is a nice guy. But it seems to me I am looking at a
    company that pays attention to claims data as it affects profit
    and loss and liability, and you have lost your way. It is about
    time you fired your lawyers and started listening to your
    hearts and protecting the people of this country. And when you
    do that, you will recover your reputation as a great American
    company.
        Thank you, Mr. Chairman.
        Mr. Tauzin. I thank the gentlewoman. As a recovering
    lawyer, I want to applaud your statement.
        The Chair recognizes the gentleman from Minnesota, Mr.
    Luther.
        Mr. Luther. Thank you, Mr. Chairman.
        I want to follow up a little bit on the testimony about
    claims. As I understand what you are saying is that you have
    always looked at warranty data rather than claims data in
    judging performance or making a decision on a recall. Is that
    what I hear you saying?
        Mr. Crigger. That is correct.
        Mr. Luther. When did you change your policy and begin
    starting to look at claims data?
        Mr. Crigger. My understanding is that when we were working
    in the preliminary evaluation, gathering data, supplying data
    to NHTSA, that this kind of data came into play, we started
    looking at it, collecting it. I also understand that it wasn't
    captured in all of the easy electronic ways that some of the
    other data was, and so it had to be compiled, but that is----
        Mr. Luther. So, really, it is within the last month?
        Mr. Crigger. It was very close to the time in which we made
    the recall determination, that is correct. Not that we hadn't
    looked at this data. That is the problem here, is that we had
    looked at it and we had never looked at it in conjunction with
    performance of tires.
        Mr. Luther. Well, I guess where that would take me is how
    many claims do you have today?
        Mr. Crigger. I don't know the answer to that. I am advised
    that, associated with the original population of the
    preliminary evaluation, it was about 2,400 claims.
        Mr. Luther. Okay. And over what period of time? In other
    words, when did they start? What percentage are in litigation?
        Mr. Crigger. Over a period of 10 years, and less than 10
    percent of them are litigated.
        Mr. Luther. And I assume expert opinions have been rendered
    in those cases? Experts have been hired by the adverse parties
    and opinions have been rendered?
        Mr. Crigger. Yes.
        Mr. Luther. Would that span the entire 10 years then?
        Mr. Crigger. During that time, yes. That is one of the
    things that, because the numbers have clearly this year gone up
    dramatically, attendant to the publicity and everything else,
    but they weren't known in those numbers before, and as we did
    the forensic analysis, just as you suggest, with experts other
    than our own on tires and individual cases, in virtually all of
    those cases there were punctures, improper repairs or something
    that influenced the tire from the outside.
        Mr. Luther. What opinions have been rendered by the adverse
    parties in those cases?
        Mr. Crigger. There have been a variety of opinions that
    have been rendered.
        Mr. Luther. Can you share some of them with us?
        Mr. Crigger. Sorry, these are just--it is not an area that
    I am--in addition to the kinds of things that I describe, there
    have been opinions or claims of design defects, certainly
    manufacturing defects, contamination, other areas.
        Mr. Luther. Would you be willing to share those opinions
    with the committee at the request of committee staff?
        Mr. Crigger. Yes, yes, we will.
        Mr. Luther. And have some of those cases been settled?
        Mr. Crigger. I believe they have.
        Mr. Luther. Are any subject to confidentiality agreements?
        Mr. Crigger. My understanding is that confidentiality
    agreements are in place in some cases to protect industry trade
    secrets.
        Mr. Luther. And obviously protecting any trade secrets,
    setting that aside, are you willing to waive those
    confidentiality agreements in order to get the information to
    the committee?
        Mr. Crigger. Other than the necessity to get release from
    plaintiffs in some of those cases, yes.
        Mr. Luther. But at least from your standpoint, you are
    willing to waive them.
        Mr. Crigger. Particularly settlement amounts and those
    kinds of things, nontrade secret areas, yes.
        Mr. Luther. I am referring to the causes here and the
    information.
        Mr. Crigger. That is not--my understanding is that that is
    not subject to confidentiality.
        Mr. Luther. But in any event, from your standpoint, you
    will certainly waive that so that the information can be made
    available.
        Mr. Crigger. That is correct.
        Mr. Luther. When did you start doing an internal analysis
    within your company of these claims?
        Mr. Crigger. Well, as I mentioned, my understanding is we
    have always looked at claims, but they have been looked at
    separately. They weren't part of what I would call the QA
    review of tire performance, so that data has been looked at.
        Mr. Luther. And there are documents, internal company
    documents that reflect these claims----
        Mr. Crigger. Yes.
        Mr. Luther. [continuing] and the analyses that have been
    done?
        Mr. Crigger. I am sure that is correct. But only in the
    most recent case, which, of course, is the most serious case,
    did this become a factor in our discussion of performance.
        Mr. Luther. But those internal documents again would be
    available to the committee?
        Mr. Crigger. I believe they have been provided.
        Mr. Luther. And if not, any request----
        Mr. Crigger. We certainly will honor the requests, yes.
        Mr. Luther. Thank you.
        Then, on the final point, on the current advisory from the
    agency on the 1.4 million tires, when will you be able to
    decide on that? Because, obviously, any member of this
    committee can have constituents right now driving with those
    tires, and I am sure everyone would be very interested in
    knowing exactly when can we have a firm decision from you on
    that.
        Mr. Crigger. I understand we are trying to diligently look
    at those individual cases. Because, as I mentioned earlier, in
    many of those, there is only one claim that has generated the
    rate, and we are trying to do that in a matter of days.
        Mr. Luther. Okay. So we are looking at a matter of days on
    each of the categories that fit within that request?
        Mr. Crigger. I think to review all of the categories.
        Mr. Luther. Okay. Thank you.
        Thank you, Mr. Chairman.
        Mr. Tauzin. If the gentleman will yield, does that mean you
    will have a public decision within a few days on whether to
    agree or not agree on these new recalls or expansions?
        Mr. Crigger. Yes.
        Mr. Tauzin. So we are a matter of days away from a
    decision?
        Mr. Crigger. That is correct.
        Mr. Tauzin. Thank you, Mr. Luther.
        The gentleman from Illinois, Mr. Shimkus, is recognized.
        Mr. Shimkus. Thank you, Mr. Chairman.
        The first question is pretty basic, and it is to Mr. Ono.
    Because I have received this question and so I would like for
    Mr. Ono to answer it, and then I will tell Mr. Ono how I
    answered the question.
        The question posed to me today was, what do I tell the
    employees at the Decatur Firestone plant? So my question is, if
    you were asked that question, what would you tell--what is your
    message to the Firestone employees in Decatur, Illinois, today?
        Mr. Ono. As far as my message to the employees at the
    Decatur plant, I have already issued a message to improve
    quality even more and have asked for their endeavor in this
    area.
        Mr. Shimkus. I was asked that by one of the local medias.
    Decatur is approximately 30, 35 miles from my district. I do
    have some of your employees as my constituents. My response to
    the employees is work with management, produce the best quality
    tire, and regain the trust of the American people. And that is
    in the best interests of my constituents who work in your
    facility and hopefully you can move in that direction.
        Mr. Crigger. We know we have 2000 dedicated, committed
    employees in Decatur, and we want to find the root cause so
    that we can satisfy the country and satisfy Decatur.
        Mr. Shimkus. Mr. Chairman, that is all the questions I
    have. I yield back.
        Mr. Tauzin. I thank the gentleman.
        The gentlewoman from California, Ms. Eshoo, is recognized
    for 5 minutes.
        Ms. Eshoo. Thank you, Mr. Chairman, for calling this all-
    important hearing.
        I would like to begin by asking the people that are here
    testifying, when you began to reimburse buyers of ATX and
    Wilderness tires who experienced this tread separation, when
    did you start reimbursing them?
        Mr. Crigger. You mean under the recall program?
        Ms. Eshoo. No. Just the very first time that something
    happened, when did you start to reimburse for the tread
    separation?
        Mr. Crigger. Well, if I understand the question, we would
    have done ordinary warranty adjustments from the first incident
    or the first presentation----
        Ms. Eshoo. Well, I don't think this is ordinary warranty
    adjustment. I don't think that is what the hearing is about. I
    think you know exactly what I am asking about. I am not talking
    about tires that may end up with X number of nails in them. I
    am talking about the tires that are in question.
        So what I am looking to determine from you is, when this
    began, when was there a reimbursement of these--on the ATX and
    the Wilderness tires? Maybe I should ask you when you began to
    reimburse State Farm policyholders or any other policyholders
    for damages that were sustained from tread separation?
        Mr. Crigger. Let me see if I----
        Ms. Eshoo. I can't believe that this is a clouded question.
    I mean, I am known for being pretty direct, and I don't know
    how--let me move on and ask how many reimbursements you made
    and how much was paid out?
        You don't know anything about that either?
        Mr. Crigger. I am still not sure of your question. I think
    the first lawsuit that was brought on these recalled tires was
    in 1994.
        Mr. Tauzin. Will the gentlewoman yield?
        Ms. Eshoo. As a result of that, did you initiate any
    corrective action on your part? Were there any mini-recalls?
    Was there any change in tire makeup? Was there testing?
        Mr. Crigger. I don't think there--on each individual case,
    of course, there is a forensic analysis. In the 1994 case,
    there was no determination of any tire problem associated with
    that case, but we do continuous field survey, continuous
    testing and continuous monitoring of the warranty data.
        Ms. Eshoo. So it was so insignificant--this is what I seem
    to be getting here--it was so insignificant that until the 6.5
    million tires were determined to be part of a recall that the
    action was just so slow that you considered it insignificant?
        Mr. Crigger. No, it is never insignificant when anyone is
    injured or there is a loss of life associated with our product.
        Ms. Eshoo. So when was the flag raised? What was the
    determining factor, whether it was reimbursement to buyers
    relative to the problem? When did the red flag go up with
    Firestone/Bridgestone?
        Mr. Wyant. The decision was made on August 8, and the
    announcement was made on August 9, and that is when the
    reimbursement program began.
        Ms. Eshoo. There never was any reimbursement before that?
        Mr. Wyant. Okay. Reimbursement in a general term in the
    tire industry. Radial tires particularly come out of service
    quite frequently due to tread separations or wearout to tread
    separations; and, in that sense, there is adjustment or
    reimbursement as a course of business to satisfy customers; and
    that has been practiced for many years for all tire companies.
        Ms. Eshoo. So business was going along just fine until
    August 8? Is that what you are saying?
        Mr. Crigger. No, obviously not. Obviously not.
        Ms. Eshoo. Why can't you answer that question then? Were
    there any indicators, any red flags, anything that went up
    before this debacle, this consumer debacle, public relations
    debacle for your company, tragedies for families? Was there
    anything that you ever considered before this that you can
    share with us?
        Mr. Crigger. All of the information that we used, the
    traditional information to evaluate the quality and performance
    of tires showed these tires to be good tires, effective tires.
        Ms. Eshoo. Let me ask, what do each one of you drive? What
    kind of tires do you have?
        Mr. Crigger. I have Wilderness tires.
        Ms. Eshoo. You have what?
        Mr. Crigger. I have Wilderness AT tires.
        Ms. Eshoo. What have you done? Have you gone to your local
    dealer?
        Mr. Crigger. They are not among the recalled population.
        Ms. Eshoo. Are you worried about driving them yourself, or
    your family?
        Mr. Crigger. No, I am not. Obviously, Firestone is very
    concerned about this.
        Ms. Eshoo. Do you really mean that?
        Mr. Crigger. We have employees as well--we are a big
    organization in terms of employees, and our employees drive on
    these same tires that are being recalled. If we had had any
    indication that we should do something, we would have done it.
    We have done the right thing. We reacted when we knew. We wish
    we knew earlier. Clearly, we wish we knew earlier. None of us--
    it rips the hearts out of the whole company and the individuals
    in it to think that people have died on our tires.
        Ms. Eshoo. Well, then why are you resistant to the
    additional 1.4? Where is that resistance coming from and why?
        Mr. Crigger. We are trying to evaluate that now. But, as I
    mentioned, in those cases----
        Ms. Eshoo. If you didn't evaluate the data before, though,
    why would the American public trust you to evaluate data fairly
    now----
        Mr. Crigger. Clearly, we have----
        Ms. Eshoo. [continuing] when the signal only went up on
    August 8?
        Mr. Tauzin. The gentlewoman's time has expired.
        The gentleman may respond.
        Mr. Crigger. Clearly, we need to regain America's trust.
    There is no question about that. And we want to do that. We are
    trying to do that.
        Ms. Eshoo. Can the rest of the people at the panel just
    answer the question?
        Mr. Tauzin. The gentlewoman's time has expired.
        I had a request from Mr. Dingell who had to leave early
    because of his foot injury to make the vote, and he asked for
    additional time to ask a question. Is there any objection?
    Without objection, Mr. Dingell is recognized for 2 minutes.
        Mr. Dingell. Mr. Chairman, I thank you.
        Gentlemen, your statement says that in its efforts to find
    the root cause of the problem, Firestone is looking at plant
    operations in the mid-1990's. This included a period of time
    when Decatur and other Firestone plants were operated with
    replacement workers.
        Now, I would like to bring to your attention a graph over
    there which shows in purple the claims rate attributable to
    tires produced at the Decatur plant during the time it was
    operated by replacement workers and the claims attributable to
    that plant after the strike ended in 1996. This graph was
    prepared at my request by Ford Motor Company who used
    Firestone's tread separation data. As you can see, claims
    attributable to production at Decatur dropped dramatically
    after the strike ended. From January 1995 to November 1996--
    when replacement workers operated the plant--the claims rate
    was extremely high: 404 claims per million tires produced.
    After November 1996, when permanent workers were allowed to
    return to their jobs, the claims rate attributable to
    production at the plant fell 55 percent to 183 claims per
    million tires produced.
        Now, I would note that to me, at least, the claims rate of
    183 per million is still too high. But the question now is,
    does this analysis not indicate to you and to me that a
    significant part of the problem at Decatur occurred during the
    time the plant was operated with replacement workers?
        Mr. Wyant. We don't have any disagreement about the timing.
    We believe the strike was 1994-1995 with replacement workers,
    and it is coincident with that peak, and we are looking at
    that, have been looking at that, and it is still on the table,
    but we are not here to blame the workers of the Decatur plant.
        Mr. Dingell. It is pretty hard to say it is a coincidence.
    You had a lower level of failure and complaints and then the
    strike came. You put in replacement workers. Then you had a
    significant increase in the number of claims. Then, when the
    regular workers came back, the level of claims subsided.
        Now, what could have caused the ATX 15-inch tires produced
    at Decatur to account for such a large number of claims during
    that period?
        Mr. Wyant. That is what we are trying to determine through
    the cause team to find out that same answer. We would like to
    know what that answer is. We just do not know at this time.
        Mr. Dingell. You have not been just looking at this today.
    This is a question that has been before you for a long time.
    Here you have a question of replacement workers in there. It is
    the only thing that anyone here can point to. Can you point to
    anything else which would indicate a basis for assuming that
    this was a cause for this enormous increase in the level of
    claims?
        Mr. Wyant. I am not prepared to say that that is the cause.
    It is coincident in time. We all agree.
        Mr. Dingell. Now, let us look here. Decatur is not even the
    largest producer of ATX 15-inch tires. Joliette and Wilson are
    both larger producers of these tires, are they not?
        Mr. Wyant. That is correct.
        Mr. Dingell. Now, you indicated to me earlier that
    replacement workers were not used in positions that required
    technical expertise such as inspectors, quality control and
    awlers. Now, are you able to make--can you tell me who was used
    to do that kind of work? Was it replacement workers? Was it
    regular workers who had been doing the work previously? Was it
    management? Who did that work?
        Mr. Wyant. The people that did that work at that time at
    the initiation of the replacement program were salaried people,
    they were supervisors, they were QA people, they were lab
    technicians. And, as I indicated before, we will get you
    documentation that shows what happened throughout that process.
    I do not know if that was 100 percent of the way or part of the
    way.
        Mr. Dingell. All right. Now, it must be observed that in
    those plants for that kind of work, you did use hourly, blue
    collar workers, did you not, for inspectors and for awlers?
        Mr. Wyant. That is correct.
        Mr. Dingell. That is correct. So you lost the entirety of
    them, of that body of workers when the strike occurred, did you
    not?
        Mr. Wyant. That is correct, but we----
        Mr. Dingell. That is correct.
        Mr. Wyant. But we retained, of course, the supervisors in
    those areas and other technical people.
        Mr. Tauzin. The gentleman's time has expired.
        Mr. Markey. Will the gentleman yield briefly?
        Mr. Dingell. If I have time, I will be happy to yield, but
    I am afraid the 2 minutes are all gone.
        Mr. Markey. I would just like to follow up on this Decatur
    question just for a second. When did you find out that there
    was a higher rate of separations at the Decatur plant than
    other plants?
        Mr. Wyant. The claims data indicated that when we went into
    the detailed analysis here at the end of July.
        Mr. Markey. So the end of July was the first time that you
    knew that you had a higher rate of separation at Decatur than
    the other plants?
        Mr. Wyant. The big indicator was on the claims data. If we
    look at the adjustment data, there is lesser of an indicator,
    that is correct.
        Mr. Markey. Well, let me refer you to--in book 1 here. Do
    you have it down there? In book 1, tab 25. In book 1, there is
    a chart on tab 25, a memo to Dave Lobbe from William Thomas.
    And the date is--let me get the date here. The date is January
    19, 2000. So it was the beginning of this year. If we move into
    this tab and you move about 10 pages in, what you will find is
    the 1997 separations by plant; and under your own document here
    it says that 57 percent of the total separations in 1999 came
    from the Decatur plant.
        Mr. Tauzin. Which, by the way, was 10 percent of the total
    production.
        Mr. Markey. And then it lists all the other plants.
    Moreover, a little bit later, which I am sure was of great
    concern to you, about 3 pages later in this memo, it says that
    62 percent of the total separation costs came from the Decatur
    plant. So that must have been of great concern to someone in
    the corporation, that at only one plant 62 percent of your
    costs were now rising from these separations. This notice that
    you had of this problem was January 19, 2000.
        Moreover, on the first of those pages that I referred you
    to, it actually has the 1998 numbers as well which shows that
    the lion's share of the problems in your operation came from
    Decatur. And I am not talking 20 percent or 30 percent but 57
    percent, 62 percent of your problems. Don't you consider that
    to be notice that you had a serious problem at the Decatur
    plant?
        Mr. Tauzin. There is a document a year earlier than that,
    Mr. Markey, in the books that shows the same thing. By the way,
    my correction, it was 18 percent of total production with 57
    percent of separations, but there is a document a year earlier
    than the one Mr. Markey is citing.
        Mr. Markey. So following up then on the point that Mr.
    Dingell made, the temporary workers were hired; they made these
    tires. In 1998 and 1999, in your own document, you have
    evidence that the Decatur plant is responsible now for the
    lion's share of all of the separations of your entire
    operation. Do you consider that to be notice that you had a
    serious problem with these tires that were affecting the
    public?
        Mr. Crigger. As we discussed earlier, I wish we had looked
    at this kind of a document in conjunction with our performance
    in terms of the tires. This was looked at in a different way--
    --
        Mr. Markey. What was the document prepared for? The
    document was prepared in order to identify problems at your
    plant. The document was prepared in order to find out what the
    liabilities for your company would be because of defects in a
    product that the public was buying. For what other reason would
    this document have been prepared other than for you to identify
    a serious problem at the Decatur plant subsequent to the strike
    which had led to the production of these defective tires?
        Mr. Crigger. Clearly, we have a problem at the Decatur
    plant; and we are trying to determine the cause. It would be
    easy to blame the replacement workers, but we haven't been able
    to pinpoint that----
        Mr. Markey. I am talking about you now. I am not talking
    about the replacement workers. I am talking about this is a
    January 19, 2000, memo to you. You did not begin this recall
    until August.
        Mr. Crigger. That is correct.
        Mr. Markey. Why did you wait 9 months? You knew in January
    that you had a serious problem, and you waited until August to
    recall the tires.
        Mr. Wyant. Just to comment on that, we are not here to make
    excuses about that, and we have acknowledged that issue. But
    some of the confusion--confusing factors about this, there was
    increasing production in this time period, and there is
    abundance of flotation-type tires that are in this plant, and
    they are on--substantially on this list, of the 1.4 million,
    and they are an extraordinary service, much more difficult
    service, higher percent off the road, and it makes it more
    difficult to make the analysis clear. As Mr. Crigger said, in
    hindsight, we should have taken this as a flag and should have
    done a better job of investigating.
        Mr. Tauzin. Proceeding a little bit out of order now, and
    we are going to wrap up your testimony in just a second, but I
    want to follow up on both of my friends' questions. You
    provided NHTSA and us with this 1998 separations by plant graph
    that Mr. Markey is citing. Did you prepare one for 1997? We
    don't have it.
        Mr. Wyant. We will check. If we have it, we will certainly
    give it to you.
        Mr. Tauzin. Is this an annual preparation and do you have
    them for previous years? If you do, I am making a formal
    request upon you for those documents.
        Mr. Wyant. Yes.
        Mr. Dingell. Mr. Chairman.
        Mr. Tauzin. Mr. Dingell, you have a few seconds left of
    that 2 minutes I gave you, sir.
        Mr. Dingell. I will try and do it.
        I note here that Firestone representatives have told me
    that during the period between July 1994 and the end of the
    year, which was before the replacement workers were brought in,
    the Decatur plant produced 641,325 tires. How many did they
    produce after that, after the replacement workers were brought
    in during a similar period of time?
        Mr. Wyant. I do not have that information available to me.
        Mr. Tauzin. Would you please supply those production
    figures?
        Mr. Wyant. We can get those figures.
        Mr. Dingell. I am curious how you could have produced this
    number of tires at Decatur when you apparently had a strike or
    some kind of difficulty going on.
        Well, thank you, Mr. Chairman. You have been very generous.
        Mr. Tauzin. Thank you, Mr. Dingell. Again, we tried to
    accommodate you. I hope you understand that. We try to
    accommodate all members, but we also have to accommodate our
    future panel.
        Mr. Ono and Mr. Crigger and Mr. Wyant, at the initiation of
    this question and answer session, I made a request upon you
    which you agreed to honor in supplying this committee with all
    of the test data on these tires. I want you to know why we want
    it, because we may have future inquiries directed to you.
        We are going to want to know whether or not you were aware
    in 1989 and 1990 that Ford was going to recommend and was, in
    fact, recommending 26 pounds per square inch in their Ford
    Explorers and, knowing that, did you, in fact, test in high
    speed for that pressure. And if not, how is it that you
    certified these tires to Ford so that they would put them on
    the Ford Explorer line as it went out to consumers not only in
    America but across the world? Those are very important
    questions, and I can't get answers to them because you have
    failed over the last week to supply us with test data
    information.
        Mr. Wyant. We have been looking for that data almost around
    the clock, and it is older data and we have not yet found that.
        Mr. Tauzin. I hope it doesn't show up on somebody's coffee
    table, but I expect to see it as soon as you find it so that we
    can proceed with these questions.
        The record will stay open for 30 days, as is our custom. We
    reserve the right to submit written questions to you as well as
    to make further requests for documents. We hope that you will
    comply.
        As I pointed out, we do have the power of subpoena. I would
    rather not have to exercise it, if you will be as freely
    cooperative as you have indicated you want to be today.
        There have been numerous requests from other members for
    documents. I hope you have a good list of them, because we do.
    We will be expecting to see them as quickly as you can obtain
    them for us.
        I don't have to tell you that this is not the end, this is
    just the beginning of this inquiry. We are as anxious as I hope
    you are to see this behind us and Americans and citizens of the
    world who buy your products much safer individuals.
        We thank you for your testimony, and you are dismissed.
        Mr. Wyant. Thank you very much.
        Mr. Crigger. Thank you.
        Mr. Tauzin. The Chair will now call the third panel, which
    will consist of Mr. Jack Nasser, President and Chief Executive
    Officer of Ford Motor Company in Dearborn, Michigan; Mr. Thomas
    Baughman, Engineering Director, Truck Consumer Business Group
    of Ford Motor Company; and Helen O. Petrauskas, Vice President
    of Environment and Safety Engineering of Ford Motor Company.
        The Chair recognizes--it will just be Mr. Nasser. Then we
    will welcome Mr. Nasser, and the Chair recognizes Mr. Upton to
    administer the oath to the witness.
        Mr. Upton.
        Mr. Upton. Mr. Nasser, we thank you for waiting patiently
    throughout the day. And as you heard with the first two panels,
    we have a long-standing tradition of taking your testimony
    under oath. Do you have any objection to that?
        Mr. Nasser. No.
        Mr. Upton. The committee rules allow you to be represented
    by counsel as well. Do you wish to have counsel?
        Mr. Nasser. No, I don't.
        [witness sworn.]
        Mr. Upton. You are now under oath, and I yield back to
    Chairman Tauzin.
        Mr. Tauzin. Thank you, Mr. Upton.
        Mr. Tauzin. Mr. Nasser, as is customary, your written
    statement is a part of our record. You have 5 minutes to
    summarize so that we might get into questions and answers. And
    you are welcome, and, again, my appreciation for your
    reconsidering and being with us today and particularly for
    sitting through this long hearing at this point. Mr. Nasser.

      TESTIMONY OF JACQUES NASSER, PRESIDENT AND CHIEF EXECUTIVE
                      OFFICER, FORD MOTOR COMPANY

        Mr. Nasser. Good evening, Chairman Tauzin and Chairman
    Upton and members of the committee. I appreciate the
    opportunity to be here. I know that this has been a very
    complicated and very sad situation, and we are all concerned.
        But before I discuss the Firestone recall, I would like to
    say a few words about our company. As I think everyone knows,
    Ford has a distinguished heritage and a bright future, and,
    without question, it is an American icon. Throughout our
    history, our strength has been with our employees and loyal
    customers.
        Thirty-two years ago, I joined Ford Australia as a trainee,
    and I never dreamed some day I would lead Ford Motor Company
    and represent the Ford team. I am here tonight because I know
    that you and the public have questions about the tire recall,
    and I am here to answer those questions, and I will remain here
    until you are satisfied.
        Now, let's get to the heart of the issue. When did Ford
    know there was a problem with the Firestone tires? What have we
    done about it, and what are we going to do about it in the
    future?
        Let's start with, first, when did Ford know there was a
    problem with the Firestone tires?
        Now, I have said this before, Mr. Chairman, but I think it
    is worth repeating. Because tires are the only component of a
    vehicle that are separately warranted, Ford did not know--I
    will repeat that--Ford did not know that there was a defect
    with the recalled tires until we virtually pried the data from
    Firestone's hands and analyzed it ourselves. It was only then,
    a few days before the recall was announced, that Ford engineers
    discovered the conclusive evidence that the tires were
    defective. We then demanded, insisted that Firestone pull the
    tires from the road.
        Looking back, and it is easy to look back at this point,
    the first signs of a problem developed in Saudi Arabia, and we
    have had a lot of discussion on the Middle East and Saudi
    Arabia during this hearing. It first started when our dealers
    reported to us complaints.
        We immediately asked Firestone to investigate. Firestone
    did so, and they concluded that the tread separations were
    caused--and you heard that earlier this evening--by improper
    maintenance and road hazards that are unique to that
    environment.
        I have to say that we were still very troubled by that
    explanation, so we didn't stop there. We then asked Firestone
    to conduct all sorts of tests on those tires, and after each
    and every test Firestone reported there was no evidence of a
    defect. This did not satisfy our Saudi customers; and, for us,
    customers are paramount.
        So, about a year ago, Ford replaced the Firestone tires. We
    replaced them with Goodyear tires, because we had no choice. We
    did it because we put our customers first.
        I should add that at the very same time that we were going
    through those issues in Saudi Arabia, we wanted to know if our
    U.S. customers were having tire problems. This goes back to
    early last year when we asked Firestone to review its data, and
    we were assured at that time that there was absolutely no
    problem in the U.S. Our data as well as government safety data
    didn't show anything either, so we had nothing to go on at that
    point. Firestone was saying, no problems. The government data
    suggested there weren't any problems. Our own data, which is
    limited because we don't warrant the tires, suggested no
    problems.
        We still felt that we should do more. We didn't want to
    stop there. We kept on going, and we asked Firestone for one
    more evaluation, a deep-dive, thorough evaluation, particularly
    in the Texas, Nevada and Arizona area, because that is where a
    lot of these tires and a lot of the volume happened to be.
    Firestone reported back, as before, that there was absolutely
    no defect, and you heard some of that earlier this evening.
        My purpose isn't to finger-point--that is not what this is
    about--but simply to tell you that at each and every step, Ford
    actively, proactively took the initiative to uncover the tire
    problem and to try and find a solution. But it was not until
    Firestone's confidential claims data became available to us
    that it became clear that something had to be done. Looking
    back, particularly after listening to the testimony this
    evening, if I have one single regret, it is that we did not ask
    Firestone the right questions sooner. That is my single regret,
    that we didn't ask them the right questions sooner.
        So what have we done so far? Because we are here and we
    have to try and find a solution. We started by insisting that
    Firestone recall the bad tires. I can take you through a
    chronology of that later, if you wish.
        I then made a commitment to our customers that Ford would
    dedicate all of its resources to support the Firestone recall.
    In just 3 weeks over 1.7 million tires have been replaced.
        We also worked very closely with Firestone's competitors,
    the global tire industry, to increase tire availability. I
    spoke to the heads of every one of those companies to encourage
    them to get good tires into the U.S. market as quickly as
    possible. We also suspended production at three of Ford's
    plants, because we wanted to free up more replacement tires for
    the recall.
        In summary, we did everything we possibly could to replace
    bad tires with good tires as quickly as possible.
        Now, looking forward, what are we going to do? Because I
    share the sentiment of the committee. That is the most
    important thing. We can't let this go on.
        Mr. Chairman, there are almost 3 million Goodyear tires on
    Ford Explorers that have not had, as far as we know, one tread
    separation problem--3 million tires on Explorers. So we know
    that this is a Firestone tire issue, not a vehicle issue. But
    we stand back from it and say we have got to make sure it just
    doesn't happen again.
        So today we are announcing--and I think this has to be done
    jointly with NHTSA and the committee and with the cooperation
    of other manufacturers and the global tire industry--that we
    implement two new reforms that we feel are critical for
    customer safety going forward.
        First, we will work with the tire industry to implement an
    early warning system. This early warning system will be
    designed to detect the first sign of tire problems on vehicles
    already on the road; and this reporting system must use
    comprehensive, real-world data that we now know is so critical
    to spotting defect patterns.
        Second--and this was mentioned earlier by the safety
    agency--because everyone's products and our products are
    increasingly sold around the world, this is a global
    marketplace, we will advise U.S. safety authorities of safety
    actions that are taken in overseas markets and vice versa. From
    now on, when we know it, so will the world.
        I have to say that I have received hundreds of letters from
    Ford owners, and I have spoken personally with many of them,
    and, believe me, some of these conversations have been
    extremely difficult. I want you and all Ford owners to know
    that we at Ford will not rest until every bad tire is replaced.
    I will do everything in my power as the President of the Ford
    Motor Company to maintain the confidence and the trust of our
    customers.
        Thank you, and I would be pleased to answer your questions
    at this time.
        [The prepared statement of Jacques Nasser follows:]
              Prepared Statement of Jac Nasser, Ford Motor Company
        Good afternoon, Mr. Chairman, members of the Committee. I am Jac
    Nasser, President and CEO of Ford Motor Company. I have been with Ford
    Motor Company for more than 30 years in a variety of positions around
    the world. I am proud of the great contributions Ford Motor Company has
    made to improving the standard of living of millions of people around
    the world. I am driven to make sure that everything we do serves all
    customers, and clearly their safety is uppermost on our minds. For that
    reason, I am deeply troubled by the fact that there are defective tires
    on some of our vehicles.
        As you know, Firestone manufactured and warranted these tires.
    However, because so many of these tires were used as original equipment
    on Ford products, we have taken extraordinary steps to support this
    recall and ensure the safety of our customers. Ford Motor Company is
    absolutely committed to doing the right thing to protect our customers
    and to maintain their trust.
        Throughout this period, we have been guided by three principles.
    First, we will do whatever we can to guarantee our customers' safety.
    We are committed not only to their physical safety, but also their
    feelings of security when driving our vehicles. Second, we are working
    hard to find and replace bad tires with good tires. That includes
    making sure that we understand the scope of the problem and finding the
    cause of the problem. Third, we will continue to be open about any
    data, statistics or information that we have, and will share anything
    new as soon as we know it.
        Because I don't want there to be any question about our openness, I
    wanted to personally discuss Ford's actions with you at this hearing.
    Actions We Have Taken
        Now, let's talk about the actions Ford has taken to support the
    recall and why we believe these are the right actions.
        First, this is a tire issue, not a vehicle issue. We have millions
    of Goodyear tires on 1995 through 1997 Explorers--the same
    specification tire operating under the same conditions--and they
    haven't experienced these problems.
        Furthermore, the Explorer is one of the safest SUVs on the road.
    Proof of this is our exemplary safety record over the last decade. The
    most recent data from the Department of Transportation show that the
    Explorer has a lower fatality rate than both the average passenger car
    and competitive SUV, as shown in Attachment 1. Additionally, Explorer's
    fatality rate in rollover accidents is 26 percent lower than other
    compact SUVs (Attachment 2).
        Second, we strongly support Firestone's decision to recall 15'' ATX
    and Decatur-built Wilderness AT tires. Based on the Firestone data we
    have, we've determined that these tires are problem tires. Charts
    summarizing our detailed analysis of the Firestone data are included in
    Attachments 3 through 11.
        What we still don't know is why these tires fail. We are working
    hard on that.
    Customer Focus
        As I said, our top priority is to replace faulty tires as fast as
    possible. I'd like to highlight a few of the many things we have done
    to support Firestone's recall and speed replacement. As of September 1,
    about 1.5 million tires have been replaced--about 23 percent of the
    total population of affected tires. We worked with the tire industry to
    increase production of 15-inch tires by more than 250,000 tires per
    month by the end of September. We have suspended production at three
    assembly plants, adding approximately 70,000 tires to the replacement
    population. We have engaged 3,100 Ford and Lincoln-Mercury dealers to
    perform tire replacements.
        We've also made a major effort to communicate information about the
    Firestone recall to our customers. For example, we have opened an
    additional call center to deal specifically with inquiries on the tire
    recall. We are using our website to provide detailed information on the
    recall action. And we are running national and local newspaper and
    television ads to alert customers to the recall and show them how to
    tell if their vehicles are affected.
    Overseas Actions
        I would also like to comment on our actions overseas. When reports
    of tread separation in the Middle East came to our attention, we asked
    Firestone to investigate. They concluded that the tire failures were
    due to external causes, such as poor repairs, road hazard damage, and
    extreme operating conditions. But given the problems our customers were
    having, we decided to replace the tires with a more puncture resistant
    tire.
        Another market where we have experienced tire problems is
    Venezuela. The situation in Venezuela is complicated by the fact that
    about three-quarters of the tires were locally produced. Again,
    Firestone concluded that the tread separations were caused by poor
    repairs, road hazard damage, and extreme operating conditions. In May,
    we began replacing all the Firestone tires on Ford Explorers and
    certain light trucks in Venezuela.
        Concern about the safety of all of our customers, including our
    U.S. customers, drove us to look aggressively for evidence of a defect
    in the U.S. at the same time we were taking actions overseas. I share
    this with you, not to finger point at Firestone, but simply to tell you
    what we did. As early as April of 1999, we were searching all available
    data bases--our own and the government's. We asked Firestone to check
    its records. And we had new tires tested under three separate, severe
    test conditions to try to cause tread separation to happen. Last Fall,
    we kicked off a tire inspection test program in the Southwest of the
    U.S. No defect trend was found.
        When NHTSA opened their investigation, and required Firestone to
    assemble and provide data on property damage, personal injury, and
    lawsuits, Ford insisted on obtaining the data as well. When we received
    the data late in July, we quickly analyzed it and identified the
    problem tires that were recalled August 9.
        It has been standard practice in the automotive industry that tires
    are the only part of the vehicle not warranted by the vehicle
    manufacturer. They are the only part for which vehicle manufacturers do
    not receive field performance data. At Ford, this will change.
        Through all this, we were always open and sought only to find the
    facts and do the right thing for our customers.
    Conclusion
        Our mission remains to replace bad tires with good tires as quickly
    as possible. The safety, trust and peace of mind of our consumers are
    paramount to Ford Motor Company.
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        Mr. Tauzin. Thank you, Mr. Nasser.
        The Chair recognizes himself.
        Let's first examine indeed what Ford knew and when Ford
    knew it. You candidly admitted that you regret not asking
    Firestone early enough for data. Our evidence is that you, in
    fact, asked for the claims data after NHTSA began the
    investigation, is that right?
        Mr. Nasser. Can I take you through the chronology at this
    point, Mr. Chairman?
        Mr. Tauzin. Well, I won't have time for the whole
    chronology, but am I right on that point?
        Mr. Nasser. It won't take long. We requested it on June 6.
    That was the first request. Our second request was on July 11.
    Our third request was on July 15. Our fourth request was on
    July 20. We finally received the data on July 28.
        Mr. Tauzin. Well, let's look at the data, and help me with
    this. These are claims brought by claimants whose tires caused
    them to have an accident, in their opinion. And of this 1,800
    claims, about 1,400 involved, we are told, Ford Explorers,
    about that number. Was Ford Motor Company not sued in these
    same lawsuits?
        Mr. Nasser. I am sure we had lawsuits, but we never knew
    what the problem was.
        Mr. Tauzin. Was Ford a part of the lawsuits?
        Mr. Nasser. I am sure we were.
        Mr. Tauzin. In the context of Ford being sued along with
    Firestone, did you not also as a company keep claims data?
        Mr. Nasser. We did not have claims data on tire problems.
        Mr. Tauzin. So you don't have and never kept the same kind
    of claims data that Firestone had?
        Mr. Nasser. We do not keep claims data on tires.
        Mr. Tauzin. Did you keep records of complaints by Ford
    dealers about these tires?
        Mr. Nasser. I don't think that we actually get a very good
    data base on that.
        Mr. Tauzin. What is your service hotline all about?
        Mr. Nasser. It is a method where customers and dealers can
    call in.
        Mr. Tauzin. I want to take you to one. Document 71, page 3.
    It is dated 8-19-96, pretty early in this process, and it is a
    report summary to the tech service hotline from apparently a
    dealer, I can't tell which dealer it was, but it says ``tires
    make a knocking, thumping noise. You can see the tire belt
    distort if you spin them up. Dealer has 16 Explorers like this.
    What can be done. Balancing has no effect. You have to replace
    the tires.''
        It is a clear indication from a dealer to your service
    hotline that there is a tire problem out there dated 8-19-96.
        Did a report like this to a hotline not raise a red flag at
    Ford that there was a tire problem on its Explorers?
        Mr. Nasser. If you go back to our history of the defects at
    any time, whether in the U.S. or anywhere else, we tried to get
    to the bottom of the defects. When you are selling 7 million
    vehicles a year, of course we will have calls that relate to
    service issues.
        Mr. Tauzin. You get my drift. There is a lot of stuff going
    on. A lot of tires are failing. You are being sued and
    Firestone is being sued. Dealers are issuing calls to your
    hotline, 16 Explorers at one dealer.
        Mr. Nasser. Mr. Chairman, let me just add a comment. 16
    Explorers, we don't want one Explorer that has any problem. But
    if you look at the safety record of Explorer, if you look at
    the quality level of Explorer.
        Mr. Tauzin. Mr. Nasser, you don't have to sell me. I bought
    an Explorer already. I am an Explorer owner.
        What I am trying to ask you, when your dealer calls a
    hotline and says we have 16 Explorers where the tires can't be
    balanced because the tire belt distorts when you spin them, you
    have to replace these tires, that seems to tell me as a motor
    company that Firestone is selling me some defective tires.
    Wouldn't that tell you that in 1996?
        Mr. Nasser. Looking back on it now, that certainly seems
    that is the case. We went into a rigorous review and analysis
    of every one of those cases.
        Mr. Tauzin. I want to point you to document 54 as well. It
    is Ford document dated 9-14-99, which is your customer
    complaint system, and it indicates that you found 32 possible
    tread separation claims on Firestone and Goodyear. So you are
    at least getting information from customers that these tires
    supplied by Firestone are giving you problems, and Goodyear, by
    the way. Ten of 32 possible claims were from Goodyear and this
    is dated 9-14-99. Ford is during this period receiving
    information from its customers and from its dealers that
    somebody is giving you bad tires.
        Mr. Nasser. That is why throughout this period we kept
    requesting more data, trying to understand it. As you said,
    these were possible tire issues.
        Mr. Tauzin. Let's talk about what Ford could have known had
    some things happened, and I want to find out if they happened.
    You heard me ask about testing. Did Ford in the early stages of
    producing the Explorer and equipping them with Firestone
    Wilderness and ATX tires, in those early stages, 1989, 1990,
    did Ford request Firestone to do a high speed test at 26 pounds
    per square inch recommended pressure?  Mr. Nasser. We did. We
    asked Firestone to conduct high-speed tests on those tires at
    26 psi.
        Mr. Tauzin. At high speed?
        Mr. Nasser. At all types of conditions.
        Mr. Tauzin. Did you receive evidence that they did so?
        Mr. Nasser. Let me go through the analysis that we went
    through and then I will answer your question directly. We did
    tell Firestone to conduct high-speed tests on these tires using
    the 26 psi. The air pressure was in the specifications that we
    gave to Firestone, and that is the specification and the
    certification that Firestone signed off on. And as you heard,
    Firestone said publicly that 26 psi is okay.
        In addition, because----
        Mr. Tauzin. You interpret your specs to require them to do
    testing.
        Mr. Nasser. Exactly. But we still weren't quite sure. So in
    addition to that we ran tougher tests and we ran those vehicle
    tests at 26 psi on those Firestone tires.
        Mr. Tauzin. Do you have records?
        Mr. Nasser. We will give you the records. They go back to
    1989 and also to 1994. The tests are 200 miles an hour, at a
    minimum of 100 miles per hour.
        Mr. Tauzin. At 100 miles an hour, not 200, I hope.
        Mr. Nasser. 200 miles at 100 miles an hour.
        Mr. Tauzin. That is more like it. I have an Explorer, and
    it will not do 200.
        Mr. Nasser. We will put a super charger on it for you, Mr.
    Chairman. In addition to that, we also did tougher tests that
    include durability tests and J-turn tests, and at that point we
    were still very sure that these tires would meet every
    durability that we had.
        Mr. Tauzin. Firestone certified the tires to you after you
    sent the specs to them. Did they specifically send you any test
    data that they may have run on the tires for speed testing at
    26 psi?
        Mr. Nasser. I am not aware of that and I don't think that
    we have that.
        Mr. Tauzin. What about in process testing, did you request
    Firestone to continually test in process these tires through
    the years of manufacture and sale to Ford Motor Company?
        Mr. Nasser. In the spring of 1999, when there were
    allegations of tire pressure issues, we asked Firestone to do
    tough tests, high speed tests, durability tests and they did
    that at 20 psi.
        Mr. Tauzin. I understand those special tests. I am asking
    for regular, routine, in process testing.
        Mr. Nasser. We did not.
        Mr. Tauzin. Did not. Let me make the same request upon your
    company that I made upon Firestone and ask you if you will
    cooperate. Will you supply this committee with all of the
    documentation of whatever tests were run on these tires at high
    speed under the pressure that you recommended consumers drive
    your Ford Explorers?
        Mr. Nasser. Of course we will.
        Mr. Tauzin. Let me turn quickly to the question of the
    Saudi Arabia business. You made a great commitment here today,
    Mr. Nasser. You are going to tell not only our Federal agencies
    but other agencies around the world when you discover problems.
    That is obviously the way that it should be, but that was not
    the way that it was in 1999 in Saudi Arabia. Why not?
        Mr. Nasser. If you go back to Saudi Arabia and look at the
    history, we didn't really have any good information. We knew
    there were problems. We didn't know what the problems were. We
    kept going back and trying to find out. We kept asking
    Firestone. Finally in desperation, in desperation, we moved
    from Firestone tires to Goodyear tires. We did that because we
    wanted to give our customers more durable tires.
        Mr. Tauzin. But in the Ford memo that we have often quoted,
    where there is a mention of Firestone legal team being
    concerned about the DOT, noticing what was going on in Saudi
    Arabia, there was a second page. It was redacted from the first
    copy that we got from Ford but you have since supplied it to
    us. On the second page there is a reference to the fact that
    Lieutenant Corey McGiffrey in the OGC was asked last Monday
    about the proposal, he didn't think that working on a case-by-
    case basis with the owners of the damaged vehicles presented a
    problem, but he was concerned about the implications of owner
    letter, and in parentheses, ``similar to the Firestone
    concerns.'' He was going to check with one of his colleagues
    and get more information. This seems to imply that Ford was in
    this memo saying that they shared Firestone's concerns that the
    Department of Transportation in America would find out what was
    going on out there.
        Mr. Nasser. That was a Firestone concern. We didn't head in
    this direction. We didn't go in this direction. We went and
    replaced those tires with Goodyear tires.
        Mr. Tauzin. But what I am saying is the memo your company
    supplied to us seems to indicate that your own people shared
    the Firestone concerns that----
        Mr. Nasser. I agree with that.
        Mr. Tauzin. [continuing] the Department of Transportation
    might find out about this.
        Mr. Nasser. I agree. That is why we are proposing in the
    future we take away those fears and it becomes open and
    transparent.
        Mr. Tauzin. Why didn't you let DOT know in 1999 what was
    happening in Saudi Arabia?
        Mr. Nasser. Because at the same time everything that
    happened in Saudi Arabia, we went back to Firestone and we said
    check the U.S., are there any potential issues in the U.S.? And
    the answer was always no. Nothing. By the way, those same
    tires, those 16-inch tires are exceptional tires.
        Mr. Tauzin. I understand, Mr. Nasser. But when we read a
    document that says that your people share the concerns of
    Firestone that the DOT not find out about this, it raises a
    specter that both you and Firestone preferred that our agency
    for safety in America not know what was going on in Saudi
    Arabia. I deeply appreciate your commitment to make sure that
    never happens again, but do you understand the implications of
    that kind of concern?
        Mr. Nasser. I do. It isn't shared in our hearts and it
    isn't what we are about in the company.
        Mr. Tauzin. The Chair recognizes the gentleman from
    Massachusetts, Mr. Markey.
        Mr. Nasser. Mr. Chairman, I would also like to add one
    further point. I don't want to leave the impression that what
    we did in Saudi Arabia was something that we handled in a
    secret manner. This was handled openly with the dealers. There
    was a service recall bulletin, so it wasn't something that we
    did at midnight. This was an open replacement program for our
    customers.
        Mr. Tauzin. But the whole concern, the whole idea of not
    doing a formal recall----
        Mr. Nasser. This is a formal recall.
        Mr. Tauzin. My understanding is if you go back to the first
    page, that one of the reasons why apparently Firestone wanted
    you to do it and take responsibility for it was because they
    did not want to be part of a plan to notify customers and offer
    them an option because of DOT finding out about it.
        Mr. Nasser. Mr. Chairman, I respectfully disagree with you.
    That is Firestone's opinion. We disagreed with that. We went
    ahead and replaced the tires with Goodyear tires and we did it
    with a service recall bulletin.
        Mr. Tauzin. If you disagreed with Firestone, why weren't
    you willing then to notify the U.S. Government agency that you
    were replacing these tires?
        Mr. Nasser. Because at the very same time we asked
    Firestone whether they had an issue here in the U.S. and there
    is a letter in the file that you have that specifically said
    absolutely not. And at that point we went straight to Goodyear.
        Mr. Tauzin. The Chair recognizes Mr. Markey.
        Mr. Markey. Thank you, Mr. Chairman.
        Would you support giving rollover test results to customers
    in the showroom when they are purchasing vehicles from the Ford
    Motor Company?
        Mr. Nasser. We do. Anything that can help communicate
    safety, that can get the message across on better products we
    support. Maybe at this point, Mr. Chairman, if I may, I would
    like to show a chart on Explorer because I think there has been
    a lot of discussion on Explorer and many of you are Explorer
    owners and I know many people in America, families in America
    own Explorers. I want to share this data with you because
    Explorer--SUVs in general are safer than cars. The Explorer is
    one of the safest SUVs. In addition to that, there was an issue
    of rollover. Explorer is better than the average SUV in terms
    of rollover by almost 30 percent. So every way that you look at
    it, whether you look at the five star ratings given by the
    government, we have more five star ratings at Ford. That is the
    top safety rating. We have more than any other company in the
    U.S. So anything that communicates safety----
        Mr. Markey. So you would accept a requirement that all of
    this information be made readily available to a consumer in the
    showroom?
        Mr. Nasser. Yes.
        Mr. Markey. Do you oppose the effort in the Senate to block
    NHTSA's ability to be able to conduct tests on rollovers and to
    impose reporting requirements? Do you oppose that effort in the
    Senate?
        Mr. Nasser. We do not.
        Mr. Markey. You support----
        Mr. Nasser. What we would like to do is to make sure that
    the stability index, if that is what you are talking about----
        Mr. Markey. Do you want to block NHTSA's ability to have
    rollover tests and reporting requirements? There is now an
    effort in the U.S. Senate to prohibit NHTSA from doing that.
    Are you with NHTSA on that issue or are you opposed to NHTSA?
        Mr. Nasser. There are two issues. One is a stability index.
    We feel that anything that can further stability and safety and
    can communicate what that is we are for it, and NHTSA has a
    proposal and we support that proposal.
        Mr. Markey. Do you support giving the agency the ability to
    figure out what is best for safety in the SUV area for the
    American consumer?
        Mr. Nasser. Yes, we do with cooperation from the
    manufacturers.
        Mr. Markey. Do you support the Senate's effort to block
    NHTSA's ability to put these new regulations on the book?
        Mr. Nasser. I am not aware of the Senate's effort. We
    support any safety action that is sensible and has real world
    improvements for customers.
        Mr. Markey. That leaves you enough wiggle room to come back
    tomorrow and say you don't believe that proposal in the Senate
    right now is unreasonable and that is what is troubling to me.
    If you don't know what this proposal is in the Senate, then you
    are really calling into question our ability to really give any
    credibility----
        Mr. Nasser. I am saying that we will support any real world
    improvement in safety. And if the proposal supports that, we
    will be 100 percent behind it.
        Mr. Markey. It would be helpful that you would submit in
    writing your position on that issue.
        Mr. Nasser. We will do that.
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        Mr. Markey. Thank you.
        Now, what is again difficult for me to understand is the
    situation in Saudi Arabia not being seen by your company as
    being kind of equivalent to conditions in Nevada or other
    states that are in the deep southern part of our country in
    terms of climate. You indicate that you did request an
    additional study to be done by Firestone in that area. The
    conclusions which were reached in your opinion indicate that
    Firestone basically said there is no problem in the United
    States. What would be helpful for us to understand then is what
    it was that was unique in Saudi Arabia that they identified and
    explained to you that was different from the conditions in
    Nevada, for example, in terms of the wear and tear on tires
    that were causing those accidents.
        Mr. Nasser. I think in Saudi Arabia there are a couple of
    things. Probably the major difference was the repairability of
    the Firestone tire in the Saudi Arabian conditions and the fact
    that people deflated and inflated tires very frequently for
    off-road use.
        When we went to the Southwest of the U.S. to do a more in-
    depth study that we did jointly, it was pretty clear that we
    couldn't see any defects at that point.
        After hearing the testimony from Firestone this evening, it
    is very clear that we weren't looking at the claims data. And
    on the recall tires, we did not see that claims data until late
    in July.
        Mr. Markey. There has been a claim that Ford engineers
    advised underinflating Explorer tires to reduce rollover risk
    even though underinflating tires increases the risk of thread
    separation. Is that true?
        Mr. Nasser. It is not. The tire pressure rating on the
    Explorer was specified and well known right from the start. It
    was meant to get the best ride and handling and derivatively,
    and there are many vehicles on the road today at 26 psi, and I
    think you have heard from Firestone very clearly that it is a
    red herring. It is not an issue. This is a tire issue, not a
    vehicle issue.
        Mr. Markey. Are there documents at the Ford Motor Company
    that indicate this tradeoff between tire inflation and rollover
    risk?
        Mr. Nasser. When vehicles are being developed, prior to the
    production of a vehicle there are many tradeoffs that happen.
    So I am sure the highly trained Ford engineers when they were
    developing the Explorer over 10 years ago looked at various
    tire pressures, shock absorber, damping ratings, different
    suspension systems, different handling, different steering.
    That is part of the development.
        Mr. Markey. Can you provide for the subcommittee documents
    in your possession at Ford Motor Company that relate to this
    question which engineers had to consider at your company
    between the risk, the tradeoff between tire inflation versus
    the rollover risk, could you provide those documents to us?
        Mr. Nasser. We would be pleased to do that and we would be
    pleased to bring the engineers that worked on the original
    Explorer back in to talk to the committee and explain exactly
    how vehicles are developed because it is an extremely
    complicated process.
        Mr. Markey. Thank you, Mr. Chairman.
        Mr. Tauzin. Thank you, Mr. Markey. The Chair recognizes the
    chairman of the O&I Subcommittee, Mr. Upton.
        Mr. Upton. Thank you, Mr. Chairman. Mr. Nasser, a couple of
    times this evening you indicated that perhaps you wished we had
    the hindsight to ask the right questions or at least get the
    right answers when the questions were asked.
        Going back to the questions that Mr. Tauzin asked with
    regard to the tests on the tires, anyone who looks at the
    documentation given to us, maybe 26 psi, but certainly the
    heat, you look at the southern states, you look at the heat and
    you look at the speed of these tires as well, you indicated
    that the tests that you asked for and in fact were at 26 psi,
    100 miles an hour for 200 miles, did you ask for those tests in
    the heat, in the California, Texas, Arizona type setting as
    well?
        Mr. Nasser. Those tests are done at various road conditions
    and various temperature conditions.
        Mr. Upton. So you will be able to share that data with us?
        Mr. Nasser. Yes.
        Mr. Upton. Second, you don't look just at brand new tires
    off the rack, do you look at tires that have experienced 10,
    20, 30, maybe even 40,000 miles as well?
        Mr. Nasser. We look at wear characteristics and we specify
    wear characteristics, and we look at how the tire performs over
    the life of the tire. And of course the life of a tire has
    changed dramatically, as many people have mentioned here. It
    used to be 20, 30,000 miles maximum. Now we are talking about
    60, 80,000 miles. So the whole environment of the lifetime of
    the tire has also changed dramatically.
        Mr. Upton. In your written testimony, and you will recall
    me repeating this earlier this evening, but in your written
    testimony you indicated that it has been the standard practice
    in the automotive industry that tires are the only part of the
    vehicle not warranted. They are the only part for which
    manufacturers do not receive field performance data at Ford.
    This will change. How quickly will it change? You heard
    Firestone earlier this evening indicate that they will comply
    with your request. Has it been difficult getting them to move?
        Mr. Nasser. In the past, and it goes back to the Motor
    Vehicle Act of the late sixties so it is a 30-year-old act,
    vehicles were under one act and one warranty and tires were
    under another. And I think many things have changed since then.
    We have seen tires that last longer, vehicles that have
    versatile and flexible capability on road, off road. We have a
    whole variety of hybrid vehicles and we now have a global
    economy. I think it is time that the tire manufacturers, the
    safety agencies and the automotive manufacturers came together
    and we shared that data. We shared quality and we shared
    customer input. We plan to initiate that in terms of real world
    data feedback as quickly as we can. We have started with
    Firestone and I have talked to the other tire companies also.
        Mr. Upton. Are you satisfied that Firestone has shared with
    you the information that you are going to make public in the
    future?
        Mr. Nasser. I am not sure, to be quite honest.
        Mr. Upton. Have you talked with other members of the
    alliance, GM, Chrysler, others, about requesting the same
    information from their tire----
        Mr. Nasser. I have not done that. But clearly for it to be
    effective we need it on an industry basis and probably on a
    global basis. I know the tire companies in the North Atlantic
    Global Forum have started a dialog on tire standards that would
    be at least for Europe and the U.S.
        Mr. Upton. Have Ford engineers looked at defective tires?
        Mr. Nasser. We have. We have brought back something like
    300 tires and we are doing our own analysis. We cut up the
    tires and tried to analyze them and tried to understand them.
    We are not tire experts, so we have brought in outside experts
    to help us and we are also working with Firestone. So we are
    doing it independently. We are doing it with outside experts
    and we are doing it together with Firestone.
        Mr. Upton. I talked to one of my dealerships today and one
    of them indicated that they had received yesterday literally a
    shipment of hundreds of tires to be used for customers that
    wanted to replace their Firestone tires and these tires that
    came in were a competing brand. As I recall, I think they were
    General tires. Yet they were not sure whether the warranty
    information or the arrangement that could be made in fact could
    use these specific tires and they were waiting to hear from
    Ford, even though they delivered them, whether or not they
    wanted--they wanted a clarification whether or not they could
    use another brand, another manufacturer's tire. Do you know the
    answer to that question?
        Mr. Nasser. Other brands are suitable and we have agreed to
    34 different types of tires that can substitute for the
    Firestone tire. They do include General tires. They include
    Michelin tires, Goodyear tires. They include a whole broad
    array of tires.
        Mr. Upton. Thank you, Mr. Chairman.
        Mr. Tauzin. The gentleman's time has expired. The Chair
    recognizes the ranking minority member of the full committee,
    Mr. Dingell, from Michigan.
        Mr. Dingell. Mr. Chairman, thank you.
        Mr. Nasser, I have here a Ford warranty book on the
    Explorer, and in it it says as follows: Authorized Ford Motor
    Company dealers will repair, replace or adjust all parts on
    your vehicles except tires that are defective in factory
    supplied materials or workmanship for 3 years or 36,000 miles,
    whichever occurs first.
        Then I read in the Firestone book here this language. It
    tells me if I have a tire problem I should, ``see my Firestone
    retailer listed in the yellow pages under the tire dealers
    retail.''
        Now, I think this tells me two things. One, Ford provides
    the warranties on all parts of a new car or truck except tires;
    is that correct?
        Mr. Nasser. That is correct.
        Mr. Dingell. And the tire warranty on a new car is provided
    by whatever company made the tire; is that correct?
        Mr. Nasser. That is also correct.
        Mr. Dingell. Is this a standard industry practice?
        Mr. Nasser. As far as we know all major manufacturers
    around the world have a similar process.
        Mr. Dingell. Manufacturers of autos and tires have the same
    practice. So it is a standard industry practice?
        Mr. Nasser. Yes.
        Mr. Dingell. So when consumers have a problem with a tire
    on a new Ford vehicle, they go to the tire company; is that
    right?
        Mr. Nasser. That's correct.
        Mr. Dingell. They don't take these problems to the Ford
    dealers?
        Mr. Nasser. That's correct.
        Mr. Dingell. If Firestone is having a large number of their
    tires returned off Ford vehicles, Firestone will be hearing
    about them from their dealers; is that right?
        Mr. Nasser. That is what happens.
        Mr. Dingell. But Ford will not hear about it unless
    Firestone tells Ford; is that correct?
        Mr. Nasser. That is normally right. We sometimes hear about
    it through a hotline, as the chairman indicated. But I would
    say the majority of feedback from customers would go through
    the tire dealer.
        Mr. Dingell. Does Firestone give you periodic reports about
    how their tires are performing? Do they give you periodic
    adjustment rate reports and the like? Do other tire
    manufacturers give you such information?
        Mr. Nasser. Historically Firestone from time to time, as
    they mentioned, share the warranty or what they call adjustment
    claims with us.
        Mr. Dingell. From time to time, what does that mean?
        Mr. Nasser. Probably once a year or less.
        Mr. Dingell. On a regular basis?
        Mr. Nasser. Not on a regular basis. And the claims data
    that we finally pulled out of the system so we could analyze
    it, the data that we had been asking for for months, that data
    has never been shared with any of the manufacturers, as far as
    we know.
        Mr. Dingell. Now, to your knowledge do tire manufacturers
    provide that source--you have just answered that question.
        So under the current procedure Ford would not know about
    high adjustment rates on tires unless you know about it from
    some other source; is that correct?
        Mr. Nasser. That's probably true.
        Mr. Dingell. And that is probably true throughout the
    industry?
        Mr. Nasser. We believe so.
        Mr. Dingell. Can you tell us why this system is set up this
    way? Why don't you get regular performance information from the
    manufacturers on how tires are doing, doing these things on
    these vehicles?
        Mr. Nasser. That really goes to the heart of the proposal
    of our early warning system because I think that really must
    include regular information, real world information coming in
    from the field on how every tire is performing, and it can't be
    just the warranty data. It can't be just the police data. It
    can't be just the personal injury or vehicle damage data or the
    hotline to the safety agency. It really has to be all of those
    coming in together so that we get a 360 degree view the way a
    customer would look at it for tire performance.
        Mr. Dingell. When you began your designing of the Explorer,
    you gave to the tire manufacturers the specifications for that
    particular vehicle and the specifications for the tire; is that
    correct?
        Mr. Nasser. That is correct.
        Mr. Dingell. Those specifications you gave on the tire were
    essentially performance specifications as opposed to design
    specifications, were they not?
        Mr. Nasser. That is also true.
        Mr. Dingell. Have you ever given or has anybody in the
    industry ever given design specifications to a tire
    manufacturer?
        Mr. Nasser. I don't believe so. The tire manufacturers
    consider that proprietary information. They guard that
    jealously within each of the brands, and the industry practice
    is to set a standard in terms of speed, durability, ride and
    handling, and then on a periodic basis have quality input.
        Mr. Dingell. So Ford leaves to the manufacturer of the tire
    the design of the tire to meet particular sets of
    specifications; is that correct?
        Mr. Nasser. Yes, it does.
        Mr. Dingell. Bottom line, tire manufacturers have complete
    control and responsibilities for the design, construction,
    composition and workmanship and materials used for the tires
    manufactured?
        Mr. Tauzin. The gentleman's time has expired.
        Mr. Nasser. They are the experts.
        Mr. Dingell. I thank you, Mr. Chairman.
        Mr. Tauzin. Thank you. The Chair now recognizes the
    gentleman from Ohio, Dr. Ganske.
        Mr. Ganske. Thank you for the late hour, Mr. Nasser.
        Earlier when I had a chance to question Mr. Ono from
    Bridgestone, we talked a little bit about the difference in
    tire failure rates at different plants and it looks like the
    Decatur plant has a high level but when I look over at that
    data it also looks to me like the rates for a couple of the
    other plants are higher than it should be. And there is a
    dispute, I think it is fair to say, that were the tires flawed
    or were they underinflated.
        It seems to me that we have heard when tires are run at low
    pressures it causes excess heat which can damage the tires and
    heavier models such as a sport utility vehicle generally needs
    more pressure than a lighter one. Why on a vehicle most like
    the Explorer, the Ford Ranger pickup, built on the same frame
    using the same tires, Ford recommends a higher pressure?
        Mr. Nasser. We have different tire pressures for different
    tire sizes and different vehicles.
        Mr. Ganske. These are the same tires.
        Mr. Nasser. Tire pressures vary by vehicle depending upon
    the optimal level of ride and handling for those vehicles.
        I have got to say, Congressman, that I think it became
    pretty clear from the Firestone testimony today that 26 psi is
    okay. It is an appropriate tire pressure. You heard it from
    Firestone. We went through how many competitive vehicles have
    26 psi. Toyotas, Nissans, other products. We have 3 million
    Goodyear tires on Explorers at 26 psi. No problems. So I don't
    know why we keep going back to the tire pressure issue. We are
    confusing the public. We are not getting to the root cause, and
    the more we talk about the tire pressure issue, the less time
    we are going to have on concentrating on what the real issue is
    for our customers.
        Mr. Ganske. Excuse me, but it seems to me that there has
    been ample testimony today that the tire failures have occurred
    in places where it is hotter, that--do you dispute the fact
    that a tire at a lower pressure heats up more than a tire at a
    higher pressure?
        Mr. Nasser. Of course it is a variable. But the tire
    pressures we were talking about, we are talking about 10, 12,
    15 psi, not 26.
        Mr. Ganske. Do you have a number of these tires that have
    been recalled?
        Mr. Nasser. We do. We have brought back about 300 of them.
    We are looking at them. We have independent bodies looking at
    them as well.
        Mr. Ganske. What kind of independent bodies do you have?
        Mr. Nasser. These are tire experts. We will share that with
    the committee.
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        Mr. Ganske. You selected them?
        Mr. Nasser. Yes.
        Mr. Ganske. Did you have input from NHTSA when they looked
    at the tires?
        Mr. Nasser. There are not that many around the world. I am
    sure between NHTSA and Ford and Firestone, we have them all
    tied up at the moment.
        Mr. Ganske. How are you determining which tires you look
    at?
        Mr. Nasser. Randomly, and we have concentrated on some of
    the higher mileage tires as well and some of the high
    temperature.
        Mr. Ganske. We had testimony earlier from NHTSA that they
    want to do their own testing.
        Mr. Nasser. They should.
        Mr. Ganske. Have they contacted you yet for random samples
    of those tires?
        Mr. Nasser. I am not aware of that. Normally the tires are
    going back to Firestone. We are getting some of those tires
    back because we would like to do our own testing as well.
        Mr. Ganske. So you have initiated those tests?
        Mr. Nasser. We have.
        Mr. Ganske. What have you found so far?
        Mr. Nasser. We have not reached any conclusion so far. We
    have just started.
        Mr. Ganske. Congressman Tauzin mentioned some memos from
    the Middle East where people have problems coming in over a
    line that was set up for complaints. On May 12, 1999, Ford
    issued a notice to all Ford dealers in the Middle East that
    directed them to inspect the tires of all SUVs every time a
    vehicle is brought into the dealership for any type of service.
    That memo was written several months before Ford recalled the
    tires in August 1999, and a copy is in tab 43. Was this memo
    directing dealers in the Middle East to inspect the tires of
    every SUV that came into the dealership for service Ford's
    first official response to the tire problem?
        Mr. Nasser. Congressman, it was during the period where we
    were trying to understand exactly what the problem was.
        Mr. Ganske. Why didn't you at that time if you directed all
    of your dealers to be inspecting all of these tires, knowing
    that there seemed to be some problem, why didn't you send out a
    letter to all SUV owners with those kinds of tires at that
    time?
        Mr. Nasser. We were asking Firestone because in the U.S.
    Firestone warrants the tires. In the Middle East market, where
    there really isn't a very good network of customer feedback, we
    were going to our dealers to get them to help us get Firestone
    data. That was the difference. That is the only difference
    between the two.
        Mr. Tauzin. The gentleman's time has expired. The Chair----
        Mr. Ganske. 30 additional seconds.
        Mr. Tauzin. Without objection, proceed.
        Mr. Ganske. But you are telling your dealers to look at
    those tires that come in in May and, yes, it may be difficult
    to track down every one in the Middle East that has bought one,
    but you have dealers and they are servicing vehicles. Why not
    make an effort at that time for those people in that area to
    notify them that there is a problem if you are instructing your
    dealers that there is a problem?
        Mr. Nasser. Because at that point, and that was just a
    couple of months before we really gave up with Firestone and
    went with Goodyear, we were trying to understand exactly what
    the problem was.
        Mr. Tauzin. The gentleman's time has expired.
        Mr. Ganske. I thank the chairman.
        Mr. Tauzin. The Chair recognizes Mr. Stupak for a round of
    questions.
        Mr. Stupak. Thank you. Mr. Nasser, would you and Ford join
    with me in calling for and cooperating with an independent
    panel to review the AT, the ATX and the Wilderness tires to
    determine the cause and proposed solutions?
        Mr. Nasser. We would welcome that.
        Mr. Stupak. Okay. In documents, and I am looking at
    document number 32 in the books there, it says Explorer tire
    DNP. What does DNP mean?
        Mr. Nasser. Dealer notification or something. I am not
    sure. We have so many acronyms at Ford I don't think that
    anyone really understands any of them. ONP?
        Mr. Stupak. DNP, D as in ``dog.''
        Mr. Nasser. We will send you a notification of that
    following the meeting.
        Mr. Stupak. My question is this. In there it says, and this
    is Ford in Venezuela actions. It says to align with JCC, DNP
    and to improve Explorer market image, FOV, Ford of Venezuela,
    introduced the same GCC Goodyear tire for all new Explorers
    beginning in July 1999. I take it starting in July 1999 all
    Ford Explorers in Venezuela had Goodyear tires as opposed to
    Firestone tires?
        Mr. Nasser. That is when we started the replacement program
    in Venezuela.
        Mr. Stupak. Okay.
        Mr. Nasser. What we tried to do in Venezuela, and Venezuela
    in this situation is a mess because you have got, as you heard,
    mislabeled tires, 15-inch tires, 16-inch tires, local tires,
    imported tires, a data base in terms of accidents and incidents
    that is very primitive.
        Mr. Stupak. So any Explorer sold in Venezuela starting in
    July 1999 came with Goodyear Wranglers on; is that correct?
        Mr. Nasser. That's correct.
        Mr. Stupak. But you didn't recall the tires on vehicles
    already sold until May of 2000. Why did you wait 8 months to
    recall the other tires if it is such a mess in Venezuela?
        Mr. Nasser. Because we understood that there were some
    issues, but we didn't really know the magnitude of them, and we
    wanted to at least put a stop to building any more future
    potential problems. So we moved quickly as we had done in the
    Middle East to do that.
        Mr. Stupak. But I guess I am looking at your--again your
    Explorer tire DNP, and it indicates from several newspaper
    clippings at least 60 cases have been identified. The issue has
    a high fatality rate. Ford of Venezuela will initiate a joint
    investigation with local and U.S.-based Firestone technical
    personnel. I guess the part that bothers me, July 1999 you stop
    Firestone and go to Goodyear, but you waited until almost May
    of 2000 to recall the ones already out there?
        Mr. Nasser. Yes, and we did that 5 months before Firestone
    and the government got involved. We did that on a voluntary
    basis.
        Mr. Stupak. In the memo it says background since July 1997.
    Even at meetings in Caracas with a group of independent lawyers
    representing four customers.
        Firestone continues to state there is no problem with the
    tire--with the----
        Mr. Nasser. Are you talking about in the U.S. now?
        Mr. Stupak. Yes.
        Mr. Nasser. I think Firestone clearly indicated that there
    is a problem with those tires that were included in the initial
    recall, and my impression is that they are looking at the
    additional tires that the safety agency here in the U.S., the
    additional 1.4 million tires, as a potential add to the
    original program.
        Mr. Stupak. Firestone states that underinflation, high
    speeds, things like that, is the cause of the problem with the
    tire. I think that is what we all got out of here.
        Mr. Nasser. I didn't get that out of here, I'm sorry. What
    I got out of here is that they really weren't sure what the
    defect is, that it is very clear when you look at the
    population of tires that were built in the Decatur plant and
    those tires that were included in the original recall of August
    8, manufacturing defects and other issues are----
        Mr. Stupak. Mr. Nasser, even in Venezuela, to go through
    your problem descriptions, underinflation, all of the same
    reasons. My point being this, in Venezuela, Saudi Arabia, you
    replaced both 15 and 16-inch tires?
        Mr. Nasser. Uh-huh.
        Mr. Stupak. Why don't you do the same here in the United
    States? You did it in Taiwan and Malaysia, Venezuela and Saudi
    Arabia. Why do you do it differently here?
        Mr. Nasser. Because the data doesn't support it. Are you
    data driven or not? The data doesn't support it. As soon as the
    data supports it, we volunteer it. We didn't wait. We didn't
    wait for Firestone or NHTSA or Congress. We didn't wait for
    anyone. We went ahead and did it.
        Mr. Stupak. What data supported replacing 16-inchers in
    Saudi Arabia, Venezuela, Malaysia and Taiwan? What data did you
    have then that would require you or have Ford recall the 16-
    inchers in these other countries and not here?
        Mr. Nasser. In those countries we were getting anecdotal
    data because there isn't any formal data that there were issues
    on the Firestone tires. If I go to Venezuela, the day we
    announced the recall in Venezuela, the day we announced it, we
    went to NHTSA here in the U.S. and we informed them, we told
    them about the data.
        Mr. Stupak. What is the information, your data that would
    make you recall the 16-inchers in Venezuela, Saudi Arabia,
    Taiwan----
        Mr. Nasser. Data that they were unhappy with Firestone
    tires.
        Mr. Stupak. So if the American public says we are unhappy
    with the 16-inch Firestone tire on our Ford Explorer, and I
    think it is standard on Eddie Bauer, you will replace them?
        Mr. Nasser. Congressman, look at the data. That data
    represents customer input and that customer input is world
    class. If customers turn around----
        Mr. Stupak. The reason that we are here is because of
    consumer input to the U.S. Congress, and that is why the first
    day back we have been at this hearing now pretty close to 9
    hours, I am sure that we will be here 12 hours. I think it is
    fair to say that consumers in the United States are not happy
    and certainly have lost some faith here in both Firestone and
    Ford about the whole tire thing. When they see 16-inch tires
    recalled in other countries, they are saying why not mine if
    they are the same tire?
        Mr. Tauzin. The gentleman's time has expired.
        Mr. Stupak. Thank you.
        Mr. Tauzin. Mr. Nasser, you may respond.
        Mr. Nasser. We feel for our customers as much as you do.
    They are our customers. We have despaired when we can't get to
    the root cause. We went through and analyzed it so we can
    understand exactly what is going on in the U.S. We don't want
    to replace good tires with good tires. We want to replace bad
    tires with good tires and that is what we have done. If the
    data supports it, we will replace it.
        Mr. Tauzin. The gentleman from Tennessee, Mr. Bryant, is
    recognized.
        Mr. Stupak. Can you give us the data that would require the
    16-inchers?
        Mr. Nasser. The data is publicly available now.
        Mr. Stupak. Can you identify it?
        Mr. Nasser. I have a chart on it.
        Mr. Stupak. Does that include Venezuela, Saudi Arabia? The
    answer is no. What is the data for those four countries,
    Malaysia, Saudi Arabia, Venezuela, Taiwan?
        Mr. Tauzin. The Chair requests that you supply that
    information to the committee and recognizes the gentleman from
    Tennessee, Mr. Bryant.
        Mr. Bryant. Thank you, Mr. Chairman.
        Mr. Nasser, thank you for being here today. We have a lot
    of questions and obviously these are very important matters
    that we are discussing. I am a former owner of an Explorer for
    a couple of years back in the 1997-1998 timeframe and we were
    satisfied with the performance there. It was a leased vehicle,
    so I had to turn it back. You testified earlier today in the
    Senate?
        Mr. Nasser. I did not.
        Mr. Bryant. Did a representative of Ford?
        Mr. Nasser. Yes, we had Helen Petrauskas and Tom Baughman,
    who are sitting behind me.
        Mr. Bryant. The issue of low pressure does keep coming up,
    and that is a concern because of these piles of papers that we
    have reviewed and admittedly some of this comes from Venezuela
    and the Mideast. There are indications in there that the Ford
    dealerships were encouraging Ford owners to use the lower
    pressure, the 26 psi in their tires. It has been brought up
    today too in terms of the issue of stability and that knowing
    concern out there, does it provide better stability, and
    fishtailing is mentioned in one of the white papers, that
    people operate at a lower pressure because of the fishtailing
    effect sometimes. And we understand that operating at a lower
    pressure causes problems with the tread and the separation of
    tire, so there is a tension there and I think that is where
    some of us have been going just to make sure that we cover all
    of the bases. I think you have made certainly an effective
    presentation, but those are the kinds of gnawing issues that
    are still out there.
        Would you care to comment in terms of those last remarks
    and maybe again try to ease some of our concerns about the low
    pressure issue?
        Mr. Nasser. This is really a message to our customers all
    over the U.S.
        The Explorer is an American classic. It is a family
    vehicle. It is a five star rated vehicle. It is one of the
    safest vehicles on the road. That is not just recent history.
    That is over a 10-year period. It is a vehicle that people
    depend on because it is versatile, because it is flexible,
    because it can do all of the things that they want to do in
    their life-style. And we are proud of it and there are almost 4
    million Explorers on the road and people love them. Now let me
    get to the tire issue that you talked about.
        We have 3 million Goodyear tires on Explorers that have
    been on the road for years. We don't know of any problems. We
    have competitive vehicles with very similar tires and 26 psi.
    We don't know of any problems. We saw that the defect pattern
    on the 15-inch tires from Firestone was very correlated,
    directly linked to certain plants and certain time periods.
        So I step back from that and we are convinced that we have
    set the vehicle at the right level, handling, steering,
    stability. When you look at Explorer rollover, it is one of the
    best SUVs in terms of rollover protection. It is one of the
    best in terms of serious accidents. Now that didn't happen by
    chance. It happened because we have highly trained engineers
    and people within the company who care deeply about our
    customers.
        So we are not having an esoteric argument here about
    pressure in tires. When people talk about low pressure in tires
    affecting stability, they are talking about people who bring
    the tire pressure down to 10, 12 psi, and then don't inflate it
    again at high speed.
        And I think someone mentioned earlier that some
    communication on tire care is probably needed at this point
    because I believe most of us, most customers, take their tires
    for granted because generally they are so robust, they are so
    good, they are so strong in today's modern vehicle.
        Mr. Bryant. Given the excellent product that you have in
    the Explorer and the excellent performance and favorable rating
    over the years, can you not also give some credit to Firestone,
    who I assume has had a long-standing relationship with your
    company up until recently in terms of good tires?
        Mr. Nasser. Firestone and Ford have had a tremendous
    relationship. It goes back from the start of both companies.
    And I have to say they have built millions of good tires and
    that relationship has been strong. We also have to say that
    recent events have been disappointing to us and I have said
    that we value our customers' security and safety and peace of
    mind above any other relationship that we have. So going
    forward, our relationship with Firestone, as it would be with
    any other supplier that let us down, is on a day-to-day basis.
        Mr. Tauzin. The gentleman's time has expired. Finish up
    with this question.
        Mr. Bryant. You had mentioned, I think, in your opening
    statement about the second thing that you want to bring out or
    maybe it was the first, somewhere along here, a tire pressure
    early warning system.
        Mr. Nasser. I did not mention that, but I personally
    support that. I think that was something that was mentioned by
    the safety agency, Ms. Bailey, and we think if we can do it in
    a practical way where customers will really use it and they can
    easily monitor what the tire pressures are and they can adjust
    them easily, I think that would be a magnificent add in terms
    of peace of mind and safety.
        Mr. Bryant. I misread it in terms of the location. It was
    in the white paper that we reviewed, and I think you mentioned
    it in your testimony. It corroborates that there is a problem
    out there when you run these tires at pressure lower than
    recommended and this kind of problem can develop.
        Mr. Nasser. That's correct.
        Mr. Bryant. And the early warning system would be a device
    that Ford would recommend which would prevent the situation of
    people running their tires at lower than recommended air
    pressure.
        Mr. Nasser. We would.
        Mr. Tauzin. The gentleman's time has expired. The Chair
    recognizes the gentleman from Ohio, Mr. Sawyer.
        By the way, the reason that I love my Explorer is because
    it is paid for.
        Mr. Nasser. I will add that to my description next time I
    talk about it.
        Mr. Sawyer. Thank you. We have covered so much ground today
    and I am grateful for your presence, Mr. Nasser. The issues we
    are talking about go back to the very beginning of the tire and
    automotive industries. The relationship in terms of warranties
    I suspect are deeply embedded in the culture of both
    industries, and probably go back to a time when tires were not
    as reliable as they are today.
        Mr. Nasser. Exactly.
        Mr. Sawyer. And it was an absolutely necessary financial
    relationship, one that was built on trust and confidence and
    has grown over the years. But that relationship has been built
    into law now and it was--you mentioned earlier that tires are
    no longer really separate in the design dimensions of a car.
    They are integrated into the suspension systems, the damping
    rates, the spring rates, and have really become--steering, and
    have become a functional part of the suspension as well as the
    drive train and other components.
        Should we be thinking about more modern ways to integrate
    the design and the performance of tires into the performance of
    the vehicle itself? Should we revisit the National Traffic and
    Motor Vehicle Safety Act of 1966, which has built this
    separation into law, and should we look at new ways to
    integrate that performance?
        Mr. Nasser. I can't think of many things that haven't
    changed since 1966, and particularly in this area where vehicle
    dynamics, steering, suspensions, just the overall personality
    and feel of the vehicle is now being--it is in the bloodstream
    of every part of a car or truck, and tires are becoming more
    and more a fundamental part of----
        Mr. Sawyer. It is only through those four contact patches
    that in fact all of the design performance that you have built
    into your cars really gets carried out.
        Mr. Nasser. That is correct. So we would support a review
    and we think that it should be a cross-industry review that
    includes not only the safety agencies and government, but also
    the tire companies and the automotive manufacturers.
        Mr. Sawyer. You mentioned the Trans-Atlantic Business
    Dialogue and the kind of work that has gone on toward
    harmonization over the last decade. I asked the Firestone
    people earlier, would you support transparent reporting
    procedures to share information about vehicle and tire
    performance on a transnational basis?
        Mr. Nasser. Ford Motor Company certainly would support
    that.
        Mr. Sawyer. Let me finally close with a question that Mr.
    Bryant suggested. A number of tire companies have worked to
    build, particularly with regard to run plant technology, to
    build sensing systems so you would know when you were losing
    pressure. I spoke last week with an after-market provider of
    those kinds of systems. He says that he can provide in a way
    that is not very efficient after market sensing systems that
    will provide information not only on tire pressure but
    temperatures on a continuous basis. Is that the sort of thing
    that Ford would considering offering as an option on their
    vehicles?
        Mr. Nasser. I think on certain product lines it would be a
    very popular option, but it needs to be friendly to the
    customers. It can't be a scientific device that is so difficult
    that you need a professor of engineering to figure out.
        Mr. Sawyer. It needs to be easy to use and indicate by
    idiot lights on the dashboard when you have a problem, but the
    information would be useful?
        Mr. Nasser. Very useful.
        Mr. Sawyer. Let me close by saying that I am particularly
    interested in revisiting the question whether or not the
    separation of performance and design as it existed 44 years
    ago--34 years ago, really makes the kind of sense today that
    modern tire and automotive engineering technology makes
    possible. Thank you.
        Mr. Tauzin. I thank the gentleman. The Chair recognizes the
    gentleman from North Carolina, Mr. Burr.
        Mr. Burr. Mr. Nasser, throughout this whole process has
    there ever been a point where Firestone has objected to doing
    anything that Ford has asked of them?
        Mr. Nasser. I would say ``objected'' is probably a strong
    word, Congressman. But when we asked for the claims data, it
    isn't--it isn't usual business practice for someone like the
    Ford Motor Company to ask a supplier four times for data before
    we get an answer.
        Mr. Burr. Was there ever a point either in Saudi Arabia or
    in Venezuela where Ford made a request of Firestone to do a
    recall and they objected?
        Mr. Nasser. In both cases we decided to go alone because we
    couldn't get cooperation.
        Mr. Burr. Was there a request of Firestone for them to
    either recall the tires or to participate in a recall that they
    objected to?
        Mr. Nasser. In both cases we asked for assistance from
    Firestone, and I think you have heard the Firestone testimony
    where they said they declined to participate. And when they
    declined to participate, we didn't want to leave our customers
    on their own so we went ahead.
        Mr. Burr. Is Ford concerned with any other tires
    specifically in Saudi Arabia on other Ford vehicles that there
    may be reports on now that are beginning to show the same tread
    separation, specifically Navigator and Expedition?
        Mr. Nasser. I am not aware of any, but if we find any we
    will handle it in exactly the same way.
        Mr. Burr. Let me suggest to you that tab 52, 53 and 55 are
    documents dated September 1999 which reflect the concerns that
    Ford is having with tread separation, problems with tires on
    Ford Expedition and Lincoln Navigator. They were directed to
    the Ford Customer Service, and I won't give their quote, but
    specifically they say we see a pattern began. To your knowledge
    there is nothing ongoing at Ford that is looking potentially at
    other tires on other Ford vehicles currently?
        Mr. Nasser. I am not aware of any.
        Mr. Burr. There was no notification by Ford to NHTSA of the
    possibility of additional vehicles and/or tires?
        Mr. Nasser. Not that I'm aware of, and I don't think there
    are any other notifications going on.
        Mr. Burr. Let me read one quote out of the document, and I
    quote, ``We've already received complaints from customers
    regarding the tire burst on the 1999 model year Expedition. As
    you will agree, we cannot afford to take any chances concerning
    fatalities involved in the Explorer accident s and the negative
    word of mouth generated for this model. I would encourage you
    to check with your folks to look specifically at those memo s
    and to see if there's some action that you, as the head, need
    to look at.''
        Let me ask specifically, what's changed for Ford since the
    Texas television expose where Ford's comment was that they
    blamed driver record?
        Mr. Nasser. You know, you go back to I think it was Channel
    11; they deserve a medal actually because they did focus
    attention on this. In all of the times that we went back and
    asked, are there problems, it was always ``no problems,'' ``no
    problems''; and Channel 11 started everyone to think, well,
    wait a minute, maybe there really is something there; let's dig
    deeper, let's ask different questions, let's look at this from
    a different perspective.
        So that was the start of a very different investigation. It
    had an impact on us. So I'm sure it had an impact on other
    people.
        Mr. Burr. Let me ask you the last question that I hope you
    would expect to be asked this today. In your TV ad you were
    very specific from a standpoint of your family having three
    Ford Explorers. Do they currently have any recalled tires on
    them?
        Mr. Nasser. No. They've got the 16-inch tires on them, and
    they have been, as the chairman indicated, faithful, wonderful
    vehicles for them.
        Mr. Burr. If they had recalled tires, would you be anxious
    to change those?
        Mr. Nasser. Yes, I would, and that's why we're working as
    hard as we can and talking to other companies beyond Firestone
    to get as many tires as quickly as possible.
        Mr. Burr. Thank you for your honesty and also for your
    patience today, and I yield back.
        Mr. Tauzin. I thank the gentleman.
        The Chair recognizes the gentleman from Illinois, Mr. Rush.
        Mr. Rush. Thank you, Mr. Chairman.
        Thank you, Mr. Nasser, for your patience and for your
    veracity in terms of answering some of the questions that my
    colleagues raised.
        Let me ask you about the warranty initiatives that you
    indicated in your earlier testimony that you feel will be a
    part of a new arrangement, a new agreement, where consumers
    would have the warranty on their tires as a part of their
    standard warranty package when they purchase new vehicles.
        Can you tell me, is this a negotiating point now that you
    have with Firestone and other tire manufacturers in the Nation?
        Mr. Nasser. Congressman, most tire manufacturers have a
    warranty, but it is a complicated warranty, and I heard you ask
    Firestone for their warranty and I heard them bumble through
    the answer. So I'm not going to be able to give you a better
    answer than that.
        Many of the tire companies have a warranty that is really
    based on the number of miles that the tire has traveled. So
    it's a graduated warranty period. Some have been going up to
    80,000 miles, but your reimbursement differs by how many miles
    you have traveled; and I think what we need here is a little
    more clarity to the consumer about exactly what the warranty
    conditions are.
        So I support you fully. Consumers need to know exactly
    where they stand with warranty on an important component such
    as a tire.
        Mr. Rush. So, in other words, the future customer, Ford's
    future customer, will have two sets of warranties--would
    continue to have two sets of warranties, is that right, one for
    the tire and one for the other parts of--Ford parts. Is that
    right?
        Mr. Nasser. That will continue to be the case unless we
    find that it is better for our customers to do something
    differently, and that's going to be part of the review that I
    think needs to happen going forward.
        Mr. Rush. Let me ask you this. You basically in your
    testimony have--if I interpret you correctly, you basically
    feel as though Ford has been somewhat of a victim here also, in
    terms of these tires that have been recalled and the fact that
    Ford customers have experienced injury--accidents, injury and
    even possibly deaths as a result of these faulty tires. Is that
    correct?
        Mr. Nasser. Our customers have been the victim and that's
    why we're mad. That's why we're upset because our customers
    have borne the brunt of this, and we don't like it, because we
    love our customers and they love their Ford products. So when
    we're let down and we then let our customers down, we just
    don't like that.
        Mr. Rush. Mr. Nasser, in discussions that I had with some
    of the committee staff a few moments ago, I asked them about
    the last recall, massive recall in the Nation, and they
    informed me that they, in fact, had read this committee's
    transcripts of the recall that was conducted some 22 years ago.
        My question is, what's different now 22 years later? What
    didn't we learn 22 years ago that we should have learned, that
    would have helped--prevented us from being at this point today?
    How was Ford affected by the recall some 22 years ago and where
    have we let the Nation down? Where has the Congress let the
    Nation down? Where have Ford and other automobile manufacturers
    let the Nation down, and certainly where has Firestone let the
    Nation down again 22 years later? And what's to give the
    consumers the confidence that down the line we won't have the
    same tragic occurrence and be right back here in this committee
    room again somewhere in the future? Can you answer?
        Mr. Nasser. I think it's a very pertinent question, and
    it's one that we have obviously been asking ourselves time and
    time again, and the answer probably lies in how we look forward
    now at the changes that we have to make.
        You know, history's important; you get good lessons from
    history. But we really now have to start to look forward and
    say, what do we need to do better, what do we need to do
    differently, how do we stop this from happening again. And I
    think the suggestions that I mentioned earlier are two steps
    that will help, that will help consumers, that will help make
    the communication of customer feedback on tires and vehicle
    quality more open so we cannot have this dialog 22 years from
    now.
        So there are our two suggestions.
        Mr. Rush. Thank you, Mr. Chairman. I yield back.
        Mr. Tauzin. I thank the gentleman.
        The Chair recognizes the gentleman from Illinois, Mr.
    Shimkus, for a round of questions.
        Mr. Shimkus. Thank you, Mr. Chairman. And it's been a long
    day and we appreciate your attendance and your straight
    answers.
        I think one of the things that many members are dealing
    with is--and you commended the Channel 11 story, and I think we
    did, too, for having that first airing. And as I've been trying
    to talk to the reporters from here and from at home, explaining
    the hearing, I've been using the terminology, you know, what
    Channel 11 did was, they connected the dots before Ford did,
    before Firestone did, before NHTSA did, before we all did. And
    one of the things we have to--in trying to identify the problem
    is then come up with solutions.
        So as my colleague from Illinois--how do we get off this
    treadmill so we're not here again is, we need to address
    legislatively how are we one of the first ones; or how is
    industry partnership or a third-party group, how can we connect
    the dots. And I think you addressed that in your opening
    statement, but I wanted to also applaud Channel 11 for the work
    that they did in investigative reporting and stuff that we
    don't see, I don't think, too often today.
        And one of the things that hasn't been addressed, but was
    addressed in this Time magazine article, is a debate--and I
    should ask if Firestone is still in the audience; I didn't ask
    them when the time was right--but a debate on the nylon cap
    issue, and whether the time that we have eased the speed
    limitations and the engineering and the tires along with all
    this and a need to rethink about going back to the nylon cap,
    which some of the Bridgestone tires of this size made in Japan
    still have.
        My question to you, Mr. Nasser, in giving specifications to
    the manufacturer to produce a tire for the Explorer, did you
    consider returning to the nylon cap as part of the
    specifications?
        Mr. Nasser. We don't specify a cap, an additional nylon cap
    or not. We specify standards that the tire has to meet, and to
    my knowledge, the tire industry in the U.S. does not have the
    nylon cap.
        Interestingly enough, and I'll preface this by saying that
    I'm not a tire expert, but I believe that for many of the tire
    manufacturers their tires--the tires that they use in very
    arduous conditions in some of the developing countries of the
    world, they add the nylon cap as an added protection for
    puncture, not necessarily for speed or for durability, but just
    to make the tire more robust in terms of puncture capability,
    but I think that's a question that you should address to the
    tire industry.
        Mr. Shimkus. And I'll--at the chairman's discretion, how
    best to do that, I'll leave that up to the chairman. I know we
    had talked about that.
        Mr. Tauzin. The record remains open. The gentleman can
    submit written questions, which we'll submit to Firestone. Be
    happy to do that for the gentleman.
        Mr. Shimkus. Thank you, Mr. Chairman. And just to close out
    this point, when we talk about the Firestone 500 and the
    separation there, it's my understanding that the nylon cap was
    a solution to that problem, and when we had the lower speeds,
    it was determined that that was no longer the need. Now we're
    at some higher speeds with new vehicles. I think it's a point
    well taken.
        I'd like to also offer you, as I did Mr. Ono, a chance to
    address some of the--your employees, some of them may be in my
    district. You have a St. Louis assembly plant. I'm right across
    the river. I'm sure there are a few employees that live in my
    district. Based upon your experience here today, the testimony,
    if you could send a message to them, what would you tell them?
        Mr. Nasser. I think Ford employees all around the world and
    I'm sure in your district, Congressman, are devoted to
    customers. I mean, that's what runs through our bloodstream.
    It's in our DNA. It's what we think about all the time. And I'm
    sure they're disappointed when they hear about some of the
    allegations that are around Explorer, because Explorer, as I
    said before, has been just a wonderful vehicle, and we have two
    assembly plants in the U.S. that are devoted to Explorer. The
    work force in both plants are world class, the quality is top
    notch, and customer satisfaction is at very, very high levels;
    and I'm proud of them. I'm proud of the way they have reacted
    over the last several months. They have worked hard. They've
    been involved in retrieving tires. They've been involved in
    better understanding customer data, and I'll pass that message
    on to them from you.
        Mr. Shimkus. I yield back, Mr. Chairman.
        Mr. Tauzin. I thank the gentleman.
        The Chair recognizes the gentleman from Minnesota, Mr.
    Luther.
        Mr. Luther. Thank you, Mr. Chairman.
        And thank you, Mr. Nasser, for your testimony. There was
    some dialog earlier about how a company like yours does get
    information on problems like this, and I assume one of the ways
    that you do get information is through the claims that are
    brought, because--can I assume that in a lot of the claims--I
    haven't seen a chart for you, but in a lot of the claims here,
    you would be involved; in other words, the claim would be
    brought against Firestone and against you? That would be the
    case, wouldn't it?
        Mr. Nasser. The claims that you see on that chart, as I
    understand it, are vehicle damage, property damage, personal
    injury.
        Mr. Luther. Right.
        Mr. Nasser. Damage claims. So we may see, going back to
    your description, Congressman, a dot here and there. We do not
    see those trends, and we don't see them--it wasn't until we
    asked for that data and we analyzed it by month, by plant of
    production, by type of tire, by type of vehicle that we cracked
    the code.
        So getting a legal case here and there distresses us. We
    don't like that because it means a customer is unhappy, but it
    really doesn't give us data that we can work with. We're a
    data-driven company, and you can't react to here's a little
    issue here, here's another problem here. We want to get the
    data in a form that can be analyzed.
        Mr. Luther. Okay.
        You, I know, were here when you heard testimony about how
    the claims information was handled by Firestone. I believe you
    were here in the room.
        Mr. Nasser. Yes.
        Mr. Luther. How do you handle claims information? Is it
    similar to the way Firestone does?
        Basically, as I heard them testify, they look at it from an
    accounting standpoint. It did not--it did not factor in safety
    and recalls and these kinds of decisions.
        When you get claims information, how do you treat it? How
    do you deal with it within the company?
        Mr. Nasser. The claims information we get are very minor,
    so we don't take any regard to the cost of that. What we want
    is all of the information coming in on total claims because
    that gives us a trend. We're interested in customer
    satisfaction and making sure that every one of our customers is
    delighted with their product. We don't drive the company by
    trying to analyze and manage claims data. We don't even get the
    claims data; Firestone gets the claims data.
        Mr. Luther. Well, I assume that you would be involved in a
    number of the claims against Firestone. I mean, it would be
    very typical for a claim to be brought against both the
    manufacturer of the vehicle and the manufacturer of the tire.
        Mr. Nasser. That's true.
        Mr. Luther. And so at this time that you were making the
    diligent effort that you have referred to, to try to get to the
    bottom of this, did you in fact check with the people who were
    handling the claims who would have been privy to a considerable
    amount of claims information at that time, because already by
    1996 and 1997 we're getting into the hundreds of claims, many
    of those would have of course involved you to some extent as
    well.
        Did you make any inquiry or check into the people handling
    this for you?
        Mr. Nasser. We looked at many of those claims, but we
    couldn't see any trend; and we went from there to the NHTSA
    safety agency data, and as you heard from Ms. Bailey, there
    wasn't anything there. We went back and asked Firestone one
    more time, give us some feedback. We couldn't find anything
    there, but our claims data is open. We don't close it. So
    anyone can look at it. We'll make it available to the
    committee. You can look at it. I don't think you will find
    anything there that would clearly indicate the problem prior to
    when we put it together.
        Mr. Tauzin. Mr. Luther, would the gentleman yield a second?
        Mr. Luther. Certainly.
        Mr. Tauzin. I want to inform the gentleman that one of the
    requests we'll make upon Ford, and a very detailed request, is
    exactly for that, see if you did do any analysis of these
    lawsuits, whether they were related to something wrong with the
    vehicle or something wrong with the tires. It's rather hard for
    me to believe that somebody in your company wasn't doing that.
        Mr. Nasser. We would be doing it.
        Mr. Tauzin. So we would request that you diligently search
    for any analysis or charts or research done on that single
    question, because that obviously is central to the question of
    whether or not you had notice of these tire defects.
        Mr. Luther. Thank you, Mr. Chairman.
        Can we assume then, along with that, similar to Firestone,
    that you would waive any confidentiality?
        Mr. Nasser. Yes, we would.
        Mr. Luther. Thank you. Appreciate that.
        I think, Mr. Chairman, considering the time--and I
    appreciate your responses and, we'll follow up on that
    information. Thank you.
        I yield back.
        Mr. Tauzin. Thank you, Mr. Luther.
        The Chair recognizes the gentlelady from New Mexico, Mrs.
    Wilson.
        Mrs. Wilson. Thank you, Mr. Chairman.
        Mr. Nasser, I appreciate your patience today as well, and
    I'll try to be brief. You said in your opening statement that
    your engineers analyzed information after you pried it from
    Firestone, after you asked for it in June or July, and you then
    insisted on a recall.
        Did your engineers actually analyze information or are you
    just talking about the claims rates that you analyzed?
        Mr. Nasser. The claims, and we asked--as I said, we asked
    for the claims in June and we asked----
        Mrs. Wilson. So it was looking--there's no further
    engineering analysis that you have done?
        Mr. Nasser. No, no. The engineering analysis, Mrs. Wilson,
    we're doing right now.
        Mrs. Wilson. I'd like to follow up on some of the questions
    Mr. Luther was asking with respect to cases in which you are a
    codefendant. I assume you have to do the same annual SEC
    filings as every other public company. How many pending
    lawsuits are there for your model years 1994, 1995, 1996 and
    later involving rollovers and blown tires?
        Mr. Nasser. I think there are about 50--50 for the last 10
    years.
        Mrs. Wilson. Fifty pending lawsuits in the last 10 years?
        Mr. Nasser. Fifty lawsuits over the last 10 years.
        Mrs. Wilson. And have you settled any of those lawsuits in
    which you were a codefendant with Firestone?
        Mr. Nasser. I'll have to ask that.
        Mrs. Wilson. Yes, you have?
        Mr. Nasser. Yes.
        Mrs. Wilson. What percentage--without getting into the
    details of any particular claim for which there is a
    confidentiality provision, what percentage liability has Ford
    assumed in those settlements?
        Mr. Nasser. I don't know. We can certainly provide that and
    we can give it to you, if that's acceptable--by case, you can
    look at it case by case.
        Mrs. Wilson. Does your attorney know what percentage
    liability you've assumed?
        Mr. Nasser. It varies by case, he's saying.
        Mrs. Wilson. I would like to have that data, Mr. Chairman.
        Mr. Tauzin. The Chair will request that you submit the data
    to the committee.
        [The following was received for the record:]

                                 Firestone/Ford Settlements of Lawsuits Alleging Tread Separation on P235/75Rl5 Firestone Tires
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Firestone % of      Firestone settlement      Ford % of total     Ford settlement
                      Approximate date of settlement                     total settlement            amount               settlement            amount
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    September 1996....................................................                60%                  $450,000                 40%            $300,000
    January 1998......................................................  ..................                  unknown   ..................           $950,000
    March 1998........................................................  ..................                  $50,000   ..................            unknown
    March 1998........................................................  ..................                  unknown   ..................            $10,000
    April 1998........................................................  ..................                  unknown   ..................            $55,000
    June 1998.........................................................                62%                  $165,000                 38%        \1\ $101,000
    August 1998.......................................................  ..................                  unknown   ..................           $221,000
    October 1998......................................................                85%          $850,000 (12/98)                 15%            $150,000
    December 1998.....................................................  ..................                  unknown   ..................            $25,000
    May 1999..........................................................  ..................                 $250,000   ..................            unknown
    June 1999.........................................................                77%                  $250,000                 23%             $75,000
    September 1999....................................................                86%                $1,900,000                 14%            $300,000
    September 1999....................................................                79%        $2,980,000 (12/98)                 21%            $800,000
    September 1999....................................................  ..................                  unknown   ..................            $25,000
    November 1999.....................................................                83%                  $975,000                 17%            $200,000
    November 1999.....................................................  ..................                  unknown   ..................           $175,000
    December 1999.....................................................  ..................                  unknown   ..................           $125,000
    December 1999.....................................................                59%            $10,000 (2/00)                 41%              $7,000
    March 2000........................................................  ..................                  unknown   ..................            $25,000
    April 2000........................................................                92%         $4,400,000 (9/00)                  8%            $400,000
    August 2000.......................................................  ..................                 $235,000   ..................        \2\ unknown
      TOTALS..........................................................  ..................              $12,515,000   ..................         $3,944,000
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ According to Firestone data only
    \2\ Ford dealership

        Mrs. Wilson. Mr. Nasser, in the cases in Venezuela and
    Saudi Arabia, why wouldn't Firestone participate?
        Mr. Nasser. We don't know. We just don't know and we were
    frustrated. So in the end, when they declined, we just went
    ahead.
        Mrs. Wilson. So they just said no, and when you asked why
    not--I mean, I assume you would.
        Mr. Nasser. They said they just didn't want to participate.
    They didn't think they had a problem.
        Mrs. Wilson. Why do you think they wouldn't participate?
        Mr. Nasser. I don't know.
        Mrs. Wilson. I have been kind of watching body language and
    listening to comments and so on throughout the day, and things
    like evaluating your relationship with your supplier on a day-
    to-day basis and letting us down and bumble through their
    answer, pry data from them. When you restart the lines, the
    Explorer lines that you have suspended in order to use those
    tire s for replacements, why on Earth would you bolt on
    Firestone tires at the end of the line?
        Mr. Nasser. Because when you look at the data on many of
    their tires and many of their plants, they have got world-class
    tires, and if we suspected any differently, we would stop.
        Mrs. Wilson. But you are a customer-driven company where
    quality is job one. What do your customers want?
        Mr. Nasser. Well, I think looking forward--as we go forward
    and as we get past this replacing these bad tires with good
    tires, I think your question is a good one; should we offer our
    customers a choice of tire, should they be able to choose the
    type of tire that they want, and I think the answer to that is
    yes. Industry practice has always been limit the tire selection
    on a vehicle, and I look at that experience and I say maybe
    that isn't what a customer-focused company should be.
        Mrs. Wilson. I have also been listening to some of the
    words that you have used, and it's clear to me that some of the
    lessons of quality that America has learned over the last
    decade have been learned at Ford, and the first criterion for
    the Malcolm Baldrige is leadership, and I wanted to thank you
    for yours.
        Mr. Tauzin. I thank the gentlelady.
        The gentleman from Missouri, Mr. Blunt, is recognized.
        Mr. Blunt. Thank you, Mr. Chairman. I have a couple of
    questions.
        I know you have been here a long time, Mr. Nasser, and you
    may have answered these before, and I'll try to be brief and
    I'll listen carefully. That way I won't have to go back and
    review the entire record. On the question of notification, was
    the company ever--was the company ever under the impression
    that you would have to give notification to the U.S. regulators
    when you made overseas--when you recalled tires overseas?
        Mr. Nasser. No, it's clear that it isn't necessary, but in
    the case of Venezuela, when we decided to replace the Firestone
    tires in Venezuela, we informed NHTSA. That very same day we
    told them about it.
        In the case of Saudi Arabia last year, as you saw from that
    letter, we didn't because we were frustrated with the
    discussions with Firestone, and we had determined at that point
    that the best data we had, that we did not have a problem in
    the U.S. market. Going forward, I think it is in the customers'
    best interest that if there are safety recalls anywhere in the
    world, that customers get a view of that because it will help
    customers decide. It gives customers a better basis for making
    a choice.
        So I'd say, going forward, we're going to do it
    voluntarily, whether it's enacted as legislation or not.
        Mr. Tauzin. Would the gentleman yield just for a second
    just to make the record clear? It is correct, Mr. Nasser, that
    the Venezuela recall occurred after NHTSA opened its
    investigation here in the United States?
        Mr. Nasser. Yes, it was about a week after.
        Mr. Tauzin. And when you notified NHTSA of the Venezuela
    incident, NHTSA was already involved in a U.S. Investigation?
        Mr. Nasser. Yes, it was.
        Mr. Tauzin. Thank you, sir.
        Mr. Blunt. Just to follow up on that point, since your
    company intends to do it voluntarily, I assume you'd have no
    problem that there was a Federal requirement that it had to be
    done; but in terms of good business practice and following up
    on your product, you think that it should be done, and you
    intend to do it in the future in any case?
        Mr. Nasser. We would support a regulation in that
    direction, yes.
        Mr. Blunt. Well, was it--not to carry this point too far,
    but wasn't there a memo--I believe it was in March 1999 where
    the memo indicated--I read this in the Wall Street Journal, so
    I'm sure it's not news to you--where the memo indicated you
    thought--that Ford thought, from advice they'd gotten from
    Firestone, that they'd have to report on a recall outside the
    United States?
        Mr. Nasser. I'm not sure what you're referring to there.
        Mr. Blunt. There was a Wall Street Journal article, I
    believe yesterday, that talks about a March 12, 1999, memo,
    internal memo, it sounds like.
        Mr. Nasser. It's the memo we talked about earlier in the
    testimony.
        Mr. Blunt. Well, I was gone earlier, so if you would just
    give me a little brief review of that.
        Mr. Nasser. Firestone believed that if they concluded that
    there was an issue, then they would have to inform the U.S.
    regulators. That's what that memo is about, and I think it's in
    the evidence.
        Mr. Blunt. Technically is that not accurate, if they
    concluded there was an issue overseas, that they wouldn't have
    to technically inform now under the law?
        Mr. Nasser. There isn't a law that mandates that
    declaration.
        Mr. Blunt. But you intend to do that voluntarily and would
    have no problem if that was a requirement?
        Mr. Nasser. Yes, we do.
        Mr. Blunt. Thank you, Mr. Chairman. Mr. Chairman, thank you
    for the time.
        Mr. Tauzin. Thank you, Mr. Blunt.
        Before we conclude, Mr. Nasser, Mr. Rogan, I think, is on
    his way and had a few questions.
        Let me request if there are any other members who would
    like to ask for time for any additional questions. We're going
    to do like Todd Martin, we're just going to keep on going until
    we finish this match, and we have another panel. Mr. Boyden has
    been waiting very patiently to come and testify along with Mr.
    Ditlow, and if Mr. Shimkus is not arriving very, very soon--Mr.
    Rush has a question, and the Chair recognizes Mr. Rush for that
    question.
        Mr. Rush. Mr. Nasser, we've heard a lot about the Ford
    Explorer and some of the other vehicles. I wonder, does the
    Lincoln or the Mercury Mountaineer, do they have the same
    Firestone tires that are at issue today?
        Mr. Nasser. Yes, they do.
        Mr. Rush. My wife wanted me to ask you that question,
    because she has one.
        Mr. Nasser. Well, she should check to make sure it is one
    of the tires that is included in the recall, because the
    Mercury Mountaineer, of course, would have various types of
    tires, but she may have it. She should check, and if she does,
    give me a call.
        Mr. Rush. Thank you.
        Mr. Tauzin. Thank you, Mr. Rush.
        Mr. Nasser, let me explore one item with you that we
    thought would get explored and has not been done yet. That is
    in the Venezuela document 32, Explorer tire DNP, current status
    on the reference project, background, July 1997, Ford
    representatives were called to a meeting in Caracas with a
    group of independent lawyers representing four customers. Do
    you have it?
        Mr. Nasser. Yes, I do.
        Mr. Tauzin. Down in the middle of the page, ``The results
    of these investigations were inconclusive, although several
    findings were made;'' and if you go down to the last one there,
    ``high incident vehicle rollover after a tire blowout or tread
    loss has not been detected for other vehicle brands. Toyota, GM
    and Chrysler all have significant presence in this market
    segment.''
        This is a finding in the Venezuelan investigation that
    other brands or vehicles--Toyota, GM, Chrysler--present in the
    marketplace, did not have the same high incidence of vehicle
    rollover after a blowout or tread separation as did the Ford
    Explorer. Can you explain that finding in light of your
    statistics indicating a much safer statistical profile for the
    Ford Explorer here in America?
        Mr. Nasser. I can't explain it because, as you know, in
    Venezuela, the data on accidents and safety isn't very good. In
    the U.S. that data is probably the best in the world.
        We have 10 years of history on the Explorer here in the
    U.S. market. It is one of the safest SUVs. Whether you look at
    it in terms of serious crashes or whether you look at it in
    terms of rollover, it's one of the best products in the SUV
    market in relation to rollover accidents.
        So as with many things in Venezuela, it's probably going to
    take a little bit of time to really get into it and understand
    what the data will tell us.
        Mr. Tauzin. Well, also--and I have trouble with these
    acronyms, but he also says, ``beginning first quarter 1999 to
    FOV''----
        Mr. Nasser. That's Ford of Venezuela.
        Mr. Tauzin. [continuing] ``notified the situation to
    explore a PVT''----
        Mr. Nasser. Plant vehicle team.
        Mr. Tauzin. Thank you, ``and the TVC''----
        Mr. Nasser. I'm glad I'm here as an interpreter.
        The truck vehicle center. You will catch me soon, I'm sure.
        Mr. Tauzin. [continuing] ``the truck vehicle center
    notified of a similar issue occurring in GC''----
        Mr. Nasser. That's the Gulf, they're the Gulf countries.
        Mr. Tauzin. [continuing] ``Gulf countries where WDMO''----
        Mr. Nasser. World direct markets organization.
        Mr. Tauzin. No wonder you're chairman, ``was about to
    initiate a DNP''----
        Mr. Nasser. Dealer notification program.
        Mr. Tauzin. [continuing] ``consisting of a tire change to
    Goodyear brand.''
        We don't have a date when this happened, although this
    finding--this indicates, ``beginning first quarter of 1999,''
    This must have happened in 1998. All right.
        Mr. Nasser. No. The Goodyear happened around the middle of
    last year, and the recall happened, as you know, around the
    middle of----
        Mr. Tauzin. Let me try this again. The language says
    ``beginning first quarter of 1999.'' This seems to indicate
    this was written in 1998.
        Mr. Nasser. No. It says, ``beginning first quarter of 1999
    FOV notified the situation.''
        Mr. Tauzin. I see. So this is probably something that
    happened in 1999?
        Mr. Nasser. Right.
        Mr. Tauzin. And you have no explanation for why this
    finding occurred in Venezuela when your own statistics indicate
    differently here in America?
        Mr. Nasser. It's definitely different in the U.S. and that
    they're public data; and we're at the moment, as you know,
    trying to understand the situation in Venezuela.
        Mr. Tauzin. Mr. Nasser, I believe that concludes--Mr.
    Shimkus, I understand, is not going to make it--I mean Mr.
    Rogan is not going to make it. Let me apologize for holding you
    for that purpose, and thank you for your appearance today along
    with Mr. Ono and Ms. Bailey with NHTSA. We're going to have
    another panel.
        We obviously are going to keep this record open. We will
    have written questions that members and staff will submit to
    Ford Motor. We would appreciate your response to those
    questions, as well as to the submissions of documents that have
    been requested at this hearing today.
        And let me on behalf of the committee thank you for the
    commitments that Ford Motor has indicated at the hearing today.
        The commitment to make sure that NHTSA is aware of any
    safety actions taken in other countries is frankly deeply
    appreciated. It's a huge step in the right direction, and we're
    anxious to work with you and the tire companies in your efforts
    to devise an early warning system for tire defects, and that is
    extremely important. As Mr. Burr has pointed out, they are
    indications of other trends that I hope everybody is alerted to
    and that we can all focus on so that we don't end up, as Mr.
    Rush pointed out, in another mess like this 1 day.
        I thank you very much for your testimony and you are
    dismissed. Thank you.
        The Chair will now welcome, and with deep appreciation, Mr.
    Samuel Boyden, the Associate Research Administrator of the
    State Farm Insurance Companies in Bloomington, Illinois, who is
    accompanied by Mr. Herman Brandau, Associate General Counsel
    for State Farm Insurance Companies; and Mr. Clarence Ditlow,
    the Executive Director for the Center for Auto Safety here in
    Washington, DC.
        Let me, pursuant to the rules of our committee hearing,
    make you all aware that this subcommittee again is holding an
    investigative hearing, and in doing so, has had the practice of
    taking the testimony under oath. Do you have any objection to
    testifying under oath?
        The Chair then advises each of you that under the Rules of
    the House and the rules of this committee you are entitled to
    be advised by counsel. Do any of you desire to be advised by
    counsel during your testimony today?
        In that case, would you please rise and raise your right
    hand as I swear you in.
        [Witnesses sworn.]
        Mr. Tauzin. You are each now under oath and let me begin by
    welcoming Mr. Samuel Boyden, the Associate Research
    Administrator, State Farm Insurance Companies, for your
    testimony, sir.

        TESTIMONY OF HERMAN BRANDAU, ASSOCIATE GENERAL COUNSEL,
          ACCOMPANIED BY SAMUEL K. BOYDEN, ASSOCIATE RESEARCH
      ADMINISTRATOR, STATE FARM INSURANCE COMPANIES; AND CLARENCE
           DITLOW, EXECUTIVE DIRECTOR, CENTER FOR AUTO SAFETY

        Mr. Brandau. Thank you. I'm going to begin the testimony
    for State Farm, and then Mr. Boyden will conclude our
    testimony.
        Mr. Tauzin. That's fine. Mr. Brandau is recognized.
        Mr. Brandau. Mr. Chairman and members of the subcommittee,
    my name is Herman Brandau. I'm Associate General Counsel for
    State Farm Insurance. My responsibilities include coordination
    of our many public policy initiatives relating to auto safety.
    Accompanying me today is Samuel Boyden, an Associate Research
    Administrator at State Farm.
        Both of us work at our company's headquarters in
    Bloomington, Illinois. We would like to thank the members of
    the two subcommittees for inviting State Farm to testify today
    on this very important auto safety issue.
        State Farm is the Nation's largest auto insurer with 37
    million policies and one out of every five cars insured. One of
    our top priorities at State Farm is to promote improved vehicle
    and highway safety. We have worked to find legislative,
    regulatory and competitive solutions to reduce auto crashes and
    protect those involved in crashes. We have taken a lead role in
    creating two of the most important vehicle and highway safety
    organizations, the Insurance Institute for Highway Safety,
    which is chaired this year by our CEO, Ed Rust, and the
    Advocates for Highway and Auto Safety, which I cochair this
    year.
        Our current initiatives in highway safety include a
    partnership with the Children's Hospital of Philadelphia to
    research the causes of childhood deaths and injuries and
    highway crashes in a project where we use our research to
    identify and suggest ways to improve dangerous intersections.
    Our history and current activities on highway safety are
    further elaborated in our written statement.
        State Farm collects and examines claims data for multiple
    business purposes. If problems with a particular product cause
    or contribute to an individual claim, we then seek compensation
    from the manufacturer. In some instances, the same information
    developed for State Farm's internal business purposes can help
    safety experts identify potential problems.
        Mr. Boyden will now discuss his activities and relationship
    with NHTSA.
        Mr. Tauzin. Thank you. Mr. Boyden is recognized.
        Mr. Boyden. Mr. Chairman and members of the subcommittees,
    my name is Sam Boyden. I'm Associate Research Administrator. My
    work at State Farm involves gathering and analyzing data on
    auto industry and damage-related issues from our claims file s
    for a number of business purposes. We are not safety
    regulators, but rather, where appropriate, we communicate data
    to NHTSA, the lead vehicle safety agency.
        Since the mid-1990's NHTSA has sent us on a monthly basis
    details of safety-related recalls and other investigations that
    have been opened, upgraded or closed during that period. We
    sometime receive special requests on data for specific vehicles
    for safety concerns that have not been upgraded to a public
    investigation.
        In response to these requests, we have searched for
    matching claims based on information reported to us from our
    local claims offices throughout the country. Our function is to
    serve the claims department as a resource for inquiries we
    receive from the field. We are not a repository of all claims
    data. Information that is received by us is provided at the
    judgment and discretion of our individual claims
    representatives. Most of the data we provide NHTSA is in
    response to a request from the agency. However, we do notify
    NHTSA of potential claims trends being reported from our field
    offices.
        We are in regular communication with NHTSA by e-mail and
    telephone on a wide range of related issues. In a year, we
    share information on approximately 150 investigations and
    evaluations that are undertaken by NHTSA. Identifying trends
    and claims data is quite different from the requirements of
    investigating safety concerns and issuing product recalls.
    State Farm does not report defects. Rather, it reports claims
    trends that may reflect the possibility of a product defect.
        Regarding the Firestone tire issue, on July 22, 1998, I had
    a conversation with NHTSA and followed up with an e-mail
    stating we had noticed 21 reports regarding Firestone ATX
    tires. I noted that 14 of the 21 reports were for tires on 1991
    to 1995 Ford Explorers. Subsequently, during the summer of
    1999, I telephoned NHTSA to discuss this issue, among others,
    with them. Again, on December 2, 1999, I receive d a phone call
    from NHTSA to discuss a number of vehicle-related issues.
    During our conversation, I again mentioned the Firestone ATX
    tire issue.
        On April 25, 2000, in response to a request from NHTSA, I
    sent an e-mail in which I provided additional information on
    Firestone ATX, ATX II and Wilderness tires. I gave a breakdown
    by calendar year, the tire type for the period covering 1996
    through April 2000, and provided information on 70 reports.
        We thank you for the opportunity to appear before your
    subcommittees. In particular, we would like to thank the staff
    of the committees for their help in preparation for this
    hearing.
        Auto safety is a prime concern for State Farm. If there is
    any other information or assistance that we can give these
    subcommittees or your staff on this or other safety-related
    matters, we'll always be available to assist.
        [The prepared statement of Herman Brandau and Samuel Boyden
    follows:]
      Prepared Statement of Herman Brandau, Associate General Counsel and
     Samuel Boyden, Associate Research Administrator, State Farm Insurance
                                   Companies
                                  introduction
        My name is Herman Brandau, I am Associate General Counsel for State
    Farm Insurance. My responsibilities include coordination of our many
    public policy initiatives relating to auto safety. Accompanying me
    today is Samuel Boyden, an Associate Research Administrator at State
    Farm. Both of us work at our company's headquarters in Bloomington,
    Illinois. We would like to thank the members of the two subcommittees
    for inviting State Farm to testify today on this very important auto
    safety issue.
        State Farm is the nation's largest auto insurer with 37 million
    policies and one out of every five cars insured. One of our top
    priorities at State Farm is to promote improved vehicle and highway
    safety. We work to find legislative, regulatory, and competitive
    solutions to reduce auto crashes and protect those involved in crashes.
    We also seek ways to reduce injuries by restraining or protecting
    vehicle occupants.
        One of the first highway safety issues State Farm addressed was the
    problem of ``booby-trapped'' roads. We worked to improve the designs of
    bridges, poles, warning signs and other roadside hazards so as to
    minimize the chance of death or serious injury resulting from collision
    with these objects. In the 1960s, we worked to create the Insurance
    Institute for Highway Safety (IIHS). IIHS is the leading private
    vehicle and highway safety research organization. It attacks safety
    issues by addressing the three major safety components: the highway,
    the driver, and the vehicle. Ed Rust, our Chairman and CEO, is the
    current IIHS chairman. In the 1970s and early 80s, State Farm was
    involved in the battle to obtain airbags for passenger vehicles. State
    Farm was the lead party in the case that reached the Supreme Court,
    which led to reinstatement of the passive restraint requirement. In
    response to the Court's decision the passive restraint rule was
    reinstated. This decision and later federal legislation led to the
    current requirement that all passenger vehicles have both driver and
    passenger side air bags. In 1989, State Farm was one of the companies
    that helped form the Advocates for Highway and Auto Safety. This
    organization includes insurers, safety groups, medical groups, law
    enforcement organizations and consumer advocates working to improve
    vehicle and highway safety. Working with the Advocates, we have sought
    legislation to reduce drunk driving, improve vehicle safety and
    increase seat belt use. I serve as the current co-chair of the
    Advocates for Highway and Auto Safety.
        In more recent years, we have played a major role in a number of
    safety related initiatives. We helped create the the Airbag and Seat
    Belt Safety Campaign whose objectives include improving adult and child
    restraint usage and the enactment of primary seat belt laws. We have
    also entered into a partnership with the Children's Hospital of
    Philadelphia to research the causes of childhood death and injuries in
    highway crashes. The partnership's researchers recently released
    important research results recommending increased use of booster seats
    by children between the ages of 4 and 8. In 1999, we undertook our
    dangerous intersection project. We use our research to identify
    intersections where there are the most crashes and have offered to
    assist communities to study ways of improving safety at these
    intersections. We also work directly with automobile manufacturers on
    issues of reparability.
        State Farm collects and examines claims data for multiple business
    purposes. If problems with a particular product cause or contribute to
    an individual claim, we seek compensation from the manufacturer. If a
    trend emerges with the same product--either from our own data or as
    identified in a product recall--we respond to our claim employees'
    inquiries with information helpful in seeking compensation from the
    manufacturer. In some instances, the same information developed for
    State Farm's internal business purposes can help safety experts
    identify a potential problem.
        Sam will now discuss his activities and relationship with The
    National Highway Traffic Safety Administration (NHTSA).
                        information exchange with nhtsa
        My work at State Farm involves gathering and analyzing data on auto
    injury and damage related issues from our claims files. We are not
    safety regulators, but rather where appropriate, we communicate data to
    NHTSA, the lead vehicle safety agency. Since the mid 1990's, NHTSA has
    sent us, on a monthly basis, details on safety related recalls and
    other investigations that have been opened, upgraded or closed during
    that period. We sometimes receive special requests for data on specific
    vehicles for safety concerns that have not been upgraded to a public
    investigation. In response to these requests, we search for matching
    claims based on information reported to us from our local claims
    offices throughout the country. Our function is to serve the Claims
    Department as a resource for inquiries we receive from the field. We
    are not a repository of all claims data. Information that is received
    by us is provided at the judgment and discretion of individual claim
    representatives.
        Most of the data we provide NHTSA is in response to a request from
    the agency. On occasion, however, we advise NHTSA of potential claim
    trends being reported from our field offices. A decision to initiate a
    contact with NHTSA is based on a number of factors, including whether a
    search of our information reveals a number of similar reports or cases
    with possible safety implications with a particular vehicle model
    within a specific time frame. We are in regular communication with
    NHTSA by e-mail and telephone on a wide range of related issues. In a
    year we share information on approximately 150 investigations and
    evaluations that are undertaken by NHTSA. Identifying trends in claims
    data is quite different from the requirements of investigating safety
    concerns and issuing product recalls. State Farm does not report
    defects; rather it reports claims trends that may reflect the
    possibility of a product defect.
                              firestone tire issue
        On July 22, 1998, I sent an e-mail to NHTSA stating we had noticed
    21 reports regarding Firestone ATX tires. I noted that 14 of the 21
    reports were for tires on 1991 to 1995 Ford Explorers. I did not
    receive any particular response or follow up from NHTSA at the time. I
    continued to communicate with NHTSA on a great number of issues.
    Subsequently during the summer of 1999, I telephoned NHTSA and
    discussed this issue among others with them again. On December 2, 1999
    I received a phone call from a NHTSA representative to discuss a number
    of vehicle related issues. During our conversation I again mentioned
    the Firestone ATX tires issue.
        On April 25, 2000 in response to a request from NHTSA, I sent an e-
    mail in which I provided additional information on Firestone ATX, ATX
    II and Wilderness tires. I gave him a breakdown by calendar year and
    tire type for the period covering 1996 to April 2000. I provided him
    information on 70 reports.
        We thank you for the opportunity to appear before your
    subcommittees and in particular we would like to thank the staff of the
    subcommittees for their help and assistance in preparation for this
    hearing. As we noted in our statement, auto safety is a prime concern
    for State Farm. If there is any other information or assistance that we
    can give these subcommittees or your staff on this or other safety
    related matters, we will always be available to assist.

        Mr. Tauzin. Thank you, Mr. Boyden.
        Mr. Ditlow, the Executive Director of the Center for Auto
    Safety here in Washington, DC.

                      TESTIMONY OF CLARENCE DITLOW

        Mr. Ditlow. Thank you, Mr. Chairman and other stalwart
    members of the committee. I'm happy to see you stayed to hear a
    few words from us. I'll keep them brief.
        The Center for Auto Safety has been looking at automobile
    defect s for 30 years, and we have never seen or found an
    automobile defect before it was found by the automobile
    manufacturers. And in March, on the 2d of this year, I gave a
    talk at the Clemson University Tire Industry Conference,
    attended by executives from the auto companies and from the
    tire companies. And at that time I told the assembled audience
    that the Firestone ATX on Ford Explorers was the next Firestone
    500, and the No. 1 tire concern from consumers was why were so
    many Ford Explorers rolling over after Firestone ATX tread
    separation--2 months before NHTSA opened its investigation, 5
    months before the first recall.
        And NHTSA had an earlier warning from State Farm, as we
    have just heard, in 1998 and we've seen today a lot of analysis
    by this committee and by Ford and Firestone of the 2,400
    Firestone claims. Yet I saw a document submitted by Ford Motor
    Company, dated July 24, cover letter in the public record at
    NHTSA, discussing the fact that Ford Motor Company in its owner
    reports had received about 1,100, as I recall, complaints of
    blowout, tread separation and other tire failures in the
    subject vehicles.
        Now, that's getting up to knowledge at Ford Motor Company
    and a level of Firestone, but the trouble is, for the American
    public, and this goes across the--all the different sources of
    data that we have, that information is not yet in the public
    file. The American--so we would like to analyze it. We'd like
    to look at it, find out what types of complaints they are. How
    do they compare to the Firestone claims? When do they occur?
    What tires are they on? Those are all unanswered questions.
        The two big questions for the American public today are, if
    Ford recalled the 16-inch tire abroad, why aren't they
    recalling it here? If the Decatur plant is making bad tires,
    why aren't other tires at the Decatur plant being recalled?
    Until we have that information on the public record giving
    explanations that we can understand and not being held
    confidential, position is, all the Firestone ATX, all the
    Firestone ATX II and all the Wilderness tires regardless of the
    plant and regardless of the size should be recalled.
        The final thought that I would like to give you on the
    investigation process is that historically the agency has
    opened investigations on as few as one complaint. The seminal
    litigated case in this country is the Kelsey-Hayes wheels case
    that was opened, as the court of appeals noted, on the basis of
    one complaint. The failure rate was 0.2 percent on the wheels
    and they set forth the test for looking at defects, the
    balance, the frequency versus the severity.
        When the Center for Auto Safety testified before this
    committee in 1978--and I was the individual doing it--there
    were 14,000, or 14,000 consumer complaints on the Firestone 500
    tires, only 41 deaths. Today, we see 1,400 complaints but 88
    deaths. The difference is the vehicle that it is on, and we
    should go forward--and I want to do one thing. I want to
    commend this committee for putting on the public record more
    information than the public has received to date from NHTSA,
    Ford or Firestone.
        Thank you.
        [The prepared statement of Clarence Ditlow follows:]
         Prepared Statement of Clarence Ditlow, Center for Auto Safety
        Mr. Chairmen and members of the Subcommittees, thank you for the
    opportunity to testify on the recall of Bridgestone/Firestone tires on
    Ford light trucks and sport utility vehicles (SUVs). I am Clarence
    Ditlow, Executive Director of the Center for Auto Safety (CAS) which is
    a non-profit organization founded by Consumers Union and Ralph Nader in
    1970 but is now independent of both. The Center works to improve
    vehicle and highway safety.
        In May 1978, I testified before this Commerce on the Firestone 500
    steel-belted tires when CAS successfully campaigned to get 19.5 million
    Firestone tires recalled. Unfortunately, one of the key recommendations
    of the Committee to upgrade Federal Motor Vehicle Safety Standard
    (FMVSS 109) was never acted on by the National Highway Traffic Safety
    Administration (NHTSA). FMVSS 109 which sets performance standards for
    tire strength, endurance and high speed performance was developed in
    the late 1960's and early 1970's when there were very few radial tires
    and no SUVs on the road. NHTSA withdrew the only enforcement action it
    ever brought under the standard because it was so vague and difficult
    to enforce. A tire for an SUV could be certified to the even more
    lenient Safety Standard 119 for non-passenger tire cars.
        Although there are many similarities between the Firestone 500 and
    the Firestone/Ford tire failures, there is a key difference--the role
    of the vehicle on which the tires are mounted. In the Firestone 500
    recall, there were more tires and complaints (14,000 then versus 1,400
    today) but fewer deaths (41 then versus 88 and rising today). The
    primary vehicle in which Firestone ATX, ATX II and Wilderness tire
    tread separations and deaths have been associated is the Ford Explorer,
    an SUV which has been marketed as a passenger car. Although the
    Explorer meets essentially the same standards as passenger cars (albeit
    on a delayed schedule) there are no standards on rollover and only a
    weak standard on roof strength for rollover protection.
        Although the Explorer superficially drives like a passenger car, it
    is easier for a driver to lose control of an Explorer than a passenger
    car when a tire fails. When the Explorer goes out of control, it is
    more likely to roll over than a passenger car, and when it rolls over,
    its occupants are likely to be injured.
        In short, the Ford Explorer or other SUV is the worst kind of
    vehicle on which to put a bad tire. A tread separation or other tire
    failure can lead to a fatal rollover. A tire made for an SUV like the
    Explorer should have an extra margin of safety built into it like a
    nylon ply because the consequences of failure can be so bad. If reports
    that Goodyear tires on Ford Explorers have had no tread separations
    prove true, then it is critical to examine the differences between the
    Goodyear and Firestone tires on these vehicles.
        As the tragic toll of 88 known deaths and 250 injuries continues to
    climb and more information is added to the public record, it becomes
    clearer and clearer that both Ford and Firestone knew more earlier but
    failed to act until there were too many complaints, deaths and injuries
    to conceal Firestone tire failure on Ford Explorers from public
    attention. Yet all the new information generates more questions than
    answers:
     Who set the specifications for the ATX, ATX II and Wilderness
            tires? Did Ford ``squeeze the rubber out'' by requiring too
            light a tire with too low rolling resistance?
     If only the Decatur, Illinois Firestone plant made bad
            Wilderness tires due to poor quality control and worker unrest,
            than why aren't other tires produced there equally bad?
     If only 15'' tires are bad, then why did Ford recall 16''
            Firestone tires in other countries? And why didn't Firestone
            recall any tires in other countries?
     Why did Ford make suspension changes in Venezuela and not in
            the US? Was Firestone aware of the suspension changes made by
            Ford?
     If 26 pounds pressure is too low, why did Firestone go along
            with Ford?
     What are the failure rates on ATX, ATX II and Wilderness tires
            and what are the failure rates on other Firestone tires made
            during this time? Do these tires have lower failure rates on
            other SUVs?
     What is the difference between the different size ATX, ATX II
            and Wilderness tires?
     Did GM and other auto companies set different specifications
            for their tires?
     Were Firestone tires certified and tested to FMVSS 109
            passenger car tire standard or the more lenient FMVSS 119 light
            truck tire standard?
     What Firestone tires are on what vehicles and what is the
            difference in failure rates by different applications?
    Firestone and Ford Early Knowledge
        Emerging information show that both Ford and Firestone had early
    knowledge of tread separation in Firestone tires on Ford Explorers and
    other Ford vehicles. Product liability lawsuits were filed in the early
    1990's on Explorer rollovers caused by Firestone tire failures. NHTSA
    began receiving consumer complaints in 1990-93 and provided Ford and
    Firestone with summaries of all such complaints as part of its standard
    policy. In 1996, Arizona state agencies confronted Firestone about
    tread separations, particularly in hot weather, in Firestone steel-
    belted radials. In 1998, Ford began receiving complaints on Firestone
    tire failures on Explorers in other countries. That same year, State
    Farm Insurance informed NHTSA that it had received 21 damage claim
    reports on Firestone radial failures. In late 1999, Ford began to
    replace Firestone tires on Explorers in other countries but failed to
    notify NHTSA.
         By late 1999, information that Ford and Firestone were settling
    product liability lawsuits with gag orders reached CAS through
    Strategic Safety, a consulting firm which has played the leading role
    in uncovering the Bridgestone and Ford tire crisis. At about the same
    time, the number of lawsuits and Explorer rollover accidents had
    reached such a critical mass that local media in Texas, California and
    Florida began to investigate and contact. By March 2, 2000, CAS had
    received so much information that I spoke at Clemson University's
    Annual Tire Industry Conference attended by auto and tire officials and
    asked why so many Firestone ATX tires were failing on Ford Explorers
    and called it the next Firestone 500. At the same time Strategic Safety
    and CAS urged NHTSA to open an investigation on this matter which it
    did on May 2, 2000.
    Why Didn't NHTSA Learn About Firestone/Ford Earlier
        Tire defects are difficult to discover because so few consumers
    complain about them and because existing crash data bases are not
    detailed enough to identify them. When CAS initiated its efforts on the
    Firestone 500, we received no more than 100 tire complaints per year
    compared to 15,000 vehicle complaints. NHTSA is no different than CAS
    and receives very few tire complaints compared to vehicle complaints.
    To compound matters, few of the consumers who do complain provide the
    crucial tire identification number located on the inside side wall or
    even the size and model of tire. CAS goes back to consumers for such
    information but can no longer do so in the case of complaints in
    NHTSA's data base because NHTSA keeps their identity confidential.
        NHTSA should have opened an investigation in 1998 when State Farm
    provided information on the 21 claims because the agency often opens a
    defect investigation on as few as two complaints as this Committee has
    noted in the past. Rather than being low, the 21 State Farm claims is
    almost astronomical. NHTSA needs to cast a broader net on tire
    complaints because so few come into the agency and because the
    consequence of tire failure can be so catastrophic compared to other
    defects. If NHTSA doesn't have the authority to compel information on
    foreign recalls, then it should be given that authority by Congress.
    CAS v Bridgestone/Firestone and Ford
        On August 25, CAS sued Bridgestone/Firestone and Ford in US
    District Court for the District of Columbia to obtain an injunction
    ordering the replacement of all ATX, ATX II and Wilderness tires
    regardless of size and plant where made. This lawsuit is the first ever
    filed by against CAS auto/tire industry companies and reflects our
    concerns over the design of these tires for Ford SUVs. Recalls by Ford
    in foreign countries have not been limited to 15'' Firestone tires and
    should not be limited to 15'' tires in the US. For the Wilderness AT,
    this cannot be a Decatur IL plant problem or all tires lines and models
    made at Decatur would be equally defective. We are pleased to see that
    NHTSA has begun to support our position by requesting the recall of 1.4
    million more Firestone tires including many models in sizes other than
    15'' and in particular 16'' Wilderness AT tires from the Wilson NC
    plant made for 1996-98 Ford F150s. However, we are very disturbed to
    see that NHTSA has chosen not to make public its list of 88 deaths
    which would show the manufacturing plant, size and model of each tire
    linked to a death. We also question why NHTSA has put so little
    information into the public file on this investigation and has not even
    put into the public record requests for confidential treatment of
    information submitted by Ford/Firestone.
    Legislative Recommendations
        A particular dilemma with tire recalls is that a manufacturer has
    no obligation to replace a tire for free if it is more than 3 years
    old. With radial tires that last 50,000 miles or more, this limit
    should be repealed. If a manufacturer conceals a defect until the
    statutory period for free repair or replacement expires, they can get
    away without a recall. In cases of concealment, the statutory limit on
    free replacement and repair should be tolled. Moreover, the statute
    does not provide for reimbursement where a consumer pays for
    replacement or repair prior to a recall. Congress should remedy that by
    providing for reimbursement in the statute.
        The Firestone/Ford recall of 6.5 million tires to date shows
    another problem in the recall system--the shortage of critical safety
    components such as these tires in large recalls. If parts and tires are
    unavailable from the recalling manufacturer, then the public rides at
    risk until replacements become available for their vehicles. CAS is
    aware of at least 5 deaths in rollover accidents involving Firestone
    tire tread separation on Ford Explorers since the initial recall was
    announced. Although Ford and Firestone have announced they would
    reimburse consumers who buy competitor tires, there is no guarantee
    they will do so. Indeed, Firestone rescinded its offer until a Kentucky
    court issues an order prohibiting it. The Safety Act should be amended
    to give NHTSA the authority to order replacement and repair from
    competitors where there is an imminent safety hazard and the recalling
    company cannot meet demand.
        Since NHTSA failed to implement this Committee's recommendation in
    1978 that FMVSS 109 be upgraded, Congress should amend the Safety Act
    to require NHTSA to upgrade not only FMVSS 109 but also FMVSS 119 with
    specific direction to determine whether a even more stringent tire
    standard should be set for SUVs with their higher rollover propensity
    than passenger cars. This Committee should also direct NHTSA to
    reassess its 1981 decision to drop its proposed rulemaking on low tire
    pressure warning devices.
        The maximum present penalty for concealing a defect and failing to
    conduct a recall is a maximum fine of $925,000. Interestingly, the
    highest fines ever assessed have been against Firestone and Ford--
    $500,000 against Firestone in 1978 over the 500 steel-belted radial and
    $425,000 against Ford in 1999 over the defective ignition switches that
    started vehicle fires. The Safety Act should be amended to provide
    criminal penalties for knowing and willful violations of safety
    standards and refusal to recall in line with FDA and CPSC authority and
    in removing the ceiling on civil penalties under the Safety Act to be
    in line with the Clean Air Act which has no ceiling for violation of
    vehicle emission standards.
        These legislative recommendation are designed to prevent another
    public safety crisis like the Firestone tires on Ford Explorers from
    ever happening again. But for now, the single most important thing to
    be done is for Ford and Bridgestone/Firestone to recall all ATX, ATX II
    and Wilderness tires regardless of size and plant where made.

        Mr. Tauzin. Thank you, Mr. Ditlow.
        The Chair recognizes himself.
        First of all, Mr. Ditlow, when was that information of
    1,100 tire failures submitted to Ford?
        Mr. Ditlow. That was submitted--July 24, which was put in
    the docket at NHTSA; the cover letter----
        Mr. Tauzin. July of this year?
        Mr. Ditlow. July of this year in its investigation.
        Mr. Tauzin. So that's at NHTSA right now?
        Mr. Ditlow. It's in the record, but hasn't been analyzed.
        Mr. Tauzin. Let me turn to you, Mr. Boyden. What prompted
    you on your own volition to send the e-mail to NHTSA detailing
    the 21 cases of tire separation and accident and fatality to
    the attention--what made you think that that was pretty
    significant?
        Mr. Boyden. Okay. The way we receive this information is
    when our claims representatives phone in to our corporate
    office. They're trained to see things unusual in the claims
    that they're handling, and at that point contact us at
    corporate; and generally they're inquiring if there's already a
    recall or an investigation regarding that problem.
        Also, as they're calling, we collect that data from that
    claim.
        Mr. Tauzin. So you have claimants around the country
    calling you and saying, what's going on here, is there a recall
    pending, investigation, something going on, claims reps calling
    you?
        Mr. Boyden. And we, at that point, also collect that
    information for internal purposes. During 1998 and--June 1998
    we received a call. In July 1998 we received three calls, all
    for Firestone ATX tire tread separations. In the process of
    looking back at any previous records we had, that's when we
    spotted the others.
        Mr. Tauzin. So the calls alerted you to look for the trend,
    and you discovered it?
        Mr. Boyden. Correct.
        Mr. Tauzin. And you thought it was serious enough that
    NHTSA ought to know about it?
        Mr. Boyden. From what we were seeing, we had ATX tires
    mentioned in each one of these files, tire tread separation. We
    had some pretty serious losses in the almost 21. There were two
    fatalities, and with that information, like I said, we can't
    determine if that's an actual defect, but it was definitely a
    claims trend we were seeing.
        Mr. Tauzin. Did you see any other trend like that with
    other tires?
        Mr. Boyden. No, not at that time.
        Mr. Tauzin. So this is pretty unique and you reported these
    21 cases with this unique pattern to NHTSA. Did you get any
    reply from NHTSA?
        Mr. Boyden. During 1998 is when we really first started e-
    mail communications. At the first of the year, we had some
    difficulties. Mine weren't reaching NHTSA and theirs weren't
    reaching me, and we worked through that, but we pretty much
    came to the protocol that I would call, discuss something
    first, and then e-mail, and if they didn't get it, they would
    call me and the same----
        Mr. Tauzin. Did they ever call you and say, did you get our
    e-mail?
        Mr. Boyden. No.
        Mr. Tauzin. As far as you know, they never tried to
    communicate back with you after they received your e-mail
    detailing this very alarming trend?
        Mr. Boyden. Not on that particular issue. As I mentioned
    earlier, though, we are in conversation on 150 different
    investigations in the year. So we're constantly speaking.
        Mr. Tauzin. But you called them back, and you called them
    back obviously to talk about a number of things, but you gave
    them an update, didn't you?
        Mr. Boyden. Yes.
        Mr. Tauzin. When did that occur?
        Mr. Boyden. That was in midyear 1999, and for whatever
    reason I didn't have that logged.
        Mr. Tauzin. But you called them midyear and gave them a
    report. And what was your report?
        Mr. Boyden. The report was--when I shared the information
    in July 1998, we only had four reports called in for 1998. It's
    something we need to keep in mind here, too--I've heard this
    phrase used a few times--this is not our universe of claims.
    These calls that come in to our corporate office are at the
    discretion of our claims reps. They're not required to call
    these in.
        Mr. Tauzin. So these didn't represent all the cases? These
    represented--these were the ones they thought serious enough to
    call you and talk to you about it and say, what's going on
    here?
        Mr. Boyden. By the end of 1998, we had received 10 more.
        Mr. Tauzin. You received 10 more by the end of 1998. So for
    a total of 14 in 1998?
        Mr. Boyden. Correct.
        Mr. Tauzin. And you notified the agency of this?
        Mr. Boyden. Right.
        Mr. Tauzin. What did the agency tell you?
        Mr. Boyden. I can't remember.
        Mr. Tauzin. Who did you talk to?
        Mr. Boyden. At that time, we had one contact that we dealt
    with all the time.
        Mr. Tauzin. Was his name Bill Duckwitz? ?
        Mr. Boyden. Correct.
        Mr. Tauzin. So you talked to Bill Duckwitz at the agency,
    who was the liaison, I believe, to State Farm, correct?
        Mr. Boyden. Correct.
        Mr. Tauzin. And you don't recall what he had to say, but as
    far as you know, you never heard any more from him?
        Mr. Boyden. Generally, there weren't any of our phone
    conversations that dealt with one subject.
        Mr. Tauzin. You dealt with a number of subjects. But you
    then you received a call from him on December 2, 1999?
        Mr. Boyden. Right.
        Mr. Tauzin. And that is logged at State Farm?
        Mr. Boyden. That was logged.
        Mr. Tauzin. We have a copy of that log and a copy of your
    memo on it, and you talked about a number of things, but it
    says you talked about the Firestone ATX tires. What did you
    tell him in December 1999?
        Mr. Boyden. Again, that the numbers seem to be escalating.
        Mr. Tauzin. In fact, you gave him some more numbers, didn't
    you?
        Mr. Boyden. Correct.
        Mr. Tauzin. How many more?
        Mr. Boyden. Like mid-30's.
        Mr. Tauzin. Yeah. We have 35 in our records.
        You reported 35 more incidents like the 10 you reported in
    the second phone call and the 21 you reported in the e-mail.
    That's 21 and 10 is 31 and 35 more, 66 incidents you reported
    from July 1998 to December 1999 to the agency.
        Did you expect the agency to take you seriously and start
    an investigation?
        Mr. Boyden. I know that NHTSA has a lot of investigations
    that they are working on. As far as my knowledge of their
    internal workings, I can't really speak for their internal
    workings.
        Mr. Tauzin. Mr. Ditlow, you make the point that one
    complaint was enough at NHTSA to provoke one of the most
    important cases dealing with safety in the history of the
    agency. Here were 66. Does it surprise you the agency did not
    begin an immediate investigation?
        Mr. Ditlow. It goes beyond that. It shocks me because these
    weren't just complaints; there were fatalities in there. And
    they pay particular attention to accidents involving
    fatalities. It may take fifty or 100 complaints if there aren't
    any deaths or injuries, but very often if there's one death,
    two deaths, I would say it's the rule, rather than the
    exception, to open an investigation if you have multiple
    complaints with multiple deaths.
        Mr. Tauzin. In fact, in this case, we had multiple deaths.
        Mr. Ditlow. In this case, we had multiple deaths and we had
    far more than a handful----
        Mr. Tauzin. How can you explain the agency's inactivity?
        Mr. Boyden. Mr. Chairman, there's one area that hasn't been
    discussed. One area that State Farm is extremely sensitive----
        Mr. Upton. This is a new legislative day we're starting
    now.
        Mr. Tauzin. Could well be.
        Mr. Boyden. Extremely sensitive to our policyholders
    privacy. We've worked with NHTSA for quite some time and
    they're very aware of that. When we share this information in
    these inquiries, they are blocked. There are no identifiers to
    our policyholders from their VIN number or names. I don't
    believe they put it in their public data base. They have the
    information with the individual engineers, but I don't believe
    it----
        Mr. Tauzin. Could never have made it into the data base?
        Mr. Boyden. The way it normally works, if it's information
    we share or if it's only on given investigations that are open,
    if they want to take it to the next level, then we make contact
    again; and then I contact our claims representatives, who in
    turn contact our policyholders----
        Mr. Tauzin. But they never asked you to do that, did they?
        Mr. Boyden. Not at that point.
        Mr. Tauzin. It just went into some black hole somewhere?
        Mr. Boyden. I'm not sure about black holes.
        Mr. Tauzin. Let me say, I think if there are any heroes in
    this awful saga, it's the television station in Houston who
    connected the dots, Mr. Shimkus. And Mr. Boyden, I put you in
    the same category. Let me thank you for not only taking the
    trouble to spot this trend, but for reporting it when you did.
        I just can't help but imagine what would have happened had
    you been taken seriously, had the recall started in 1998
    instead of the year 2000, and how many of those folks who are
    no longer with us had had a chance to replace their tires in
    time.
        Mr. Boyden. There is one area that--and I spoke with a lady
    this week, in fact she called, not a State Farm policyholder,
    but after she had read an article that she saw we were looking
    into 16-inch vehicle tires also, she called from Tulsa,
    Oklahoma, I believe it was; and I explained to her the need to
    contact NHTSA. And this is another area that I think we've
    seen, early on that NHTSA didn't have the complaints in their
    data base.
        The more people I spoke with are really not aware of the
    fact that in their vehicle owner's manual is a procedure to
    contact NHTSA.
        Mr. Tauzin. Let me say it again so everybody hears it.
    There is in your vehicle owner's manual, every consumer who
    owns a vehicle purchased in this country, in the owner's manual
    is a section on how to contact NHTSA if you have one of these
    safety problems.
        What you are saying, Mr. Boyden, is you are hopefully
    advising more people to do that, right?
        Mr. Boyden. Half of the individuals that own these vehicles
    and had these losses, no matter how severe, even minor damages,
    and they felt as though that was a safety-related problem and
    had contacted NHTSA, we wouldn't have to concern ourselves with
    my e-mail or the news broadcast; NHTSA would have already been
    made aware of this.
        Mr. Tauzin. Well, but the fact is, you took the trouble to
    do it for them and, unfortunately, I think you were ignored.
        The Chair yields to the gentleman from Michigan, Mr.
    Stupak.
        Mr. Stupak. Thanks, Mr. Chairman.
        I think we would all agree, Mr. Boyden, that when you have
    an accident like this, the last person on your mind is probably
    NHTSA, right?
        Mr. Boyden. That is true.
        Mr. Stupak. With all due respect, the first thing you do is
    get ahold of the manufacturer of your vehicle and the
    manufacturer of your tire, because when you go to the vehicle,
    in this case Ford, they will tell you we don't warrant it, you
    have to get ahold of Firestone, if there is a Firestone in your
    area.
        Mr. Boyden. It depends on the size of the accident also.
        Mr. Stupak. Sure.
        Mr. Boyden. If it is a larger accident, normally they
    contact their agent.
        Mr. Stupak. Do you have any idea what NHTSA did with the
    information you sent them by e-mail in 1998?
        Mr. Boyden. No, I don't. Once I sent it, I realized--I
    didn't get a contact back, so I knew they received it.
        Mr. Stupak. The same with 1999, the summer of 1999 and
    again in December 1999; do you know what they did with it?
        Mr. Boyden. As far as I knew, it was being forwarded on to
    the----
        Mr. Stupak. Again, you didn't get any reply back, saying we
    didn't get your e-mail or something like that, right?
        Mr. Boyden. Right. Like I said, we were working on a number
    of different issues at the time.
        Mr. Stupak. Well, let me ask you this. What do you think
    NHTSA should have done with the information you provided them
    in 1999 and 1998?
        Mr. Boyden. At that point, what I was really sharing with
    them was a trend that we were seeing, a claim trend.
        Mr. Stupak. Sure.
        Mr. Boyden. The way I would feel is that they had looked
    into it and possibly because of the numbers, didn't feel there
    was an issue at that time.
        Mr. Stupak. So you were at least reasonably confident that
    someone was at least looking at the information you were
    sending?
        Mr. Boyden. Yes. Yes.
        Mr. Stupak. Thanks, and thanks for your testimony.
        Mr. Boyden. Thank you.
        Mr. Stupak. Mr. Ditlow, it was testified by Ford today
    about early warning system reporting. What early warning system
    for tire safety effects should be in place for the tire
    manufacturer and for the automobile manufacturer and NHTSA?
        Mr. Ditlow. Well, one requirement should be that if there
    is an adjustment rate above 1 percent, that--or a threshold
    that NHTSA picks out--that it be reported to the agency. And
    what we have seen is the adjustment rates have gone down over
    the years, but the consequences have gone up, so you might want
    to adjust that.
        The same thing would go with the automobile manufacturers.
    What you need to do when you are dealing with tire defects is
    you have to cast a bigger net, because so few consumers
    actually complain about a single failure. They replace the
    tire, they go on. Unless they have multiple failures or an
    accident, a consumer is not likely to complain, so the agency
    needs to be more proactive.
        In the case of the Firestone 500, the agency actually did a
    100,000 vehicle survey to try to get information on respective
    failure rates, but they no longer have the money to do that.
        So my two recommendations are warranty or adjustment rates
    and the reporting of product liability lawsuits.
        Mr. Stupak. In 1978, Mr. Ditlow, NHTSA requested money from
    Congress to develop a tire inflation warning system because ``a
    significant percentage of tires'' in use then were at least 10
    pounds underinflated. NHTSA didn't get the money. Do you think
    the situation would have been different if they would have
    received those funds?
        Mr. Ditlow. I certainly feel that if we had low tire
    pressure warning devices on automobiles, we would have had
    fewer failures, because people, they look at radial tires, they
    are not sure. Today we have far more self-service stations,
    fewer attendants. The problem is even bigger today than it was
    then.
        Mr. Stupak. You testified back in 1978 concerning the
    previous Firestone problem with the Firestone 500's, did you
    not?
        Mr. Ditlow. I testified, yes.
        Mr. Stupak. And at that time, you stated that in the 8
    years of monitoring vehicle safety defects, only the Pinto gas
    tank had claimed more lives than this tire, meaning the
    Firestone 500. At that point, the Firestone 500 was responsible
    for 16 deaths, 15 injuries. For the AT and the ATX, there are
    over 80 deaths recorded, and injuries.
        Is this a new record for the worst safety defect?
        Mr. Ditlow. Well, unfortunately, it is in the top three.
    Unfortunately, the records have continued to be broken over the
    years, and the GM side-saddle gas tanks is the record now at
    150.
        Mr. Stupak. What else do you think should have been done
    here? I mean, an early warning system reporting maybe, but what
    other recommendations do you think should be done here?
        Mr. Ditlow. Well, one--we do need to upgrade Standard 109.
    This committee recommended that back in 1978. The situation
    with sport utility vehicles, they have a higher center of
    gravity. A tire failure today is more likely to result in an
    accident than a tire failure would have on a passenger car back
    in those days. So that is my next most important recommendation
    in the tire area.
        Then finally, for consumers who actually have these tires,
    let's put the tire I.D. number on the outside sidewall so you
    don't have to crawl under it and look to see whether or not you
    have one of the vehicles subject to a recall. That tire
    identification number is the single most important piece of
    information on a tire, and yet it is the hardest to find.
        Mr. Stupak. I had suggested and then I got commitments from
    both Firestone and Ford to do an independent review of all that
    has happened outside their shops. Do you think that would be
    helpful in this case?
        Mr. Ditlow. Yes, it would be.
        Mr. Stupak. Thank you, Mr. Chairman. I see my time is up. I
    have no further questions.
        Mr. Tauzin. Thank you, Mr. Stupak.
        The Chair recognizes the chairman of the O&I subcommittee,
    Mr. Upton.
        Mr. Upton. Thank you, Mr. Chairman. I hope not to take my
    full 5 minutes. I just want to say, Sam--if I can call you
    Sam--I thought this story was terrific in Friday's Journal and
    I am glad that your three kids and wife are proud of you, and
    as a State Farm policyholder, I am proud of you too.
        Mr. Boyden. Thank you.
        Mr. Upton. I know you compiled, I think for Mr. Brandau at
    least, the documents that were provided to the committee which
    are fairly thick, about a half-inch thick of literally, well, I
    guess there is about 75 cases here or so, detailing all of
    these different instances that you sent on to, I guess Mr.
    Brandau, formerly sent on to NHTSA, is that right?
        Mr. Boyden. I referred those to----
        Mr. Upton. You did the work, but Mr. Brandau did the cover
    note to us, I guess.
        Mr. Brandau. To you, absolutely.
        Mr. Upton. And you didn't even mention Mr. Boyden in here,
    I don't think. Oh, yeah, there he is. He has a letter in there
    as well. I guess it is a letter to us.
        But all of this information, seriously now, all of this
    information was transmitted to NHTSA, was it not?
        Mr. Boyden. Right, it was.
        Mr. Upton. Did you detail all of this information to them?
        Mr. Boyden. With the exception of----
        Mr. Upton. Mr. Brandau's cover note, but at least you have
    your picture in there.
        Mr. Boyden. I have my picture in the paper.
        Mr. Upton. As I thumb through all of these--I have been in
    Michigan, I didn't come back, really today is my first full day
    back as it is virtually every member of the committee--but it
    is just a telling document, page by page by page, about all of
    these failures that Firestone had.
        Mr. Boyden. Right.
        Mr. Upton. Now, you sent this on to NHTSA. We know the
    history of their response or lack of response back to you. Did
    you ever think about sending it to Firestone or even to Ford?
        Mr. Boyden. Our claim representatives, on their individual
    claims, they more than likely contacted Firestone through
    subrogation. So I really didn't have a contact with Firestone
    to hear that.
        Mr. Upton. So it is a door that is just closed from the
    beginning.
        Well, again, I want to thank you, along with other folks
    here. I know that the committee thanks you as well, because if
    it hadn't been for you and Channel 11, we would probably all be
    home with our wife and kids tonight instead of here looking at
    a very serious situation that obviously governs the attention
    of this committee in its entirety. And I welcome this
    information and thank you very much for stepping forward and
    telling your story. Thank you.
        Mr. Boyden. Thank you for having us here.
        Mr. Tauzin. Thank you, Mr. Upton. We wish perhaps you had
    thought to send this information to KHOU in Houston in July
    1998. Maybe this thing would have started a little sooner.
        The Chair recognizes Mr. Sawyer.
        Mr. Sawyer. Thank you, Mr. Chairman.
        Thank you both very much for all that you have done. I
    particularly, I keep hearing you characterized as an automotive
    enthusiast, and it is nice to see somebody who is an enthusiast
    who can find safety not compromised by that enthusiasm, and
    that they are compatible with one another.
        State Farm participated in 1998 with the review of the
    Federal Motor Vehicle Safety Standards in Section 109, along
    with a number of other participants. Would it be possible for
    you to share your recommendations with regard to 109 with this
    committee?
        Mr. Brandau. That is the tire standard?
        Mr. Sawyer. Yes.
        Mr. Brandau. We--State Farm I don't believe actually made a
    formal presentation.
        Mr. Sawyer. You did not make a formal presentation?
        Mr. Brandau. On 109.
        Mr. Sawyer. The reason I ask you that is that it seems to
    me that we ought to have a better way to make use of claims
    data; that there is a data stream out there that is getting
    lost in the blizzard, and it takes a special effort to ferret
    out the meaningful information within lots of data. And it
    seems to me that it would be worthwhile for us to take a look
    at not only what and how information is collected, but
    definitions of events and to understand how they are tabulated.
    The effort that was made to isolate site of manufacture appears
    to have a significant role in the events that we have
    experienced in the last few years.
        The ability to do that, it seems to me, is not a formal
    part of the 109 standards, but perhaps ought to be, and I would
    hope that at some point you could give some thought to that.
    You encounter those data in meaningful ways and I think that
    would be useful.
        Mr. Ditlow, you mentioned something that I think is
    enormously important, that with the Firestone 500, the numbers
    were much larger, the consequences were not so great. The
    notion of a 1 percent threshold appears to begin to lose its
    meaning in the light of the change between what happened in
    1977 and 1978 and what happened in the course of the last
    couple of years.
        It seems to me that we need to figure out how best to
    quantify the catastrophic nature of a series of events; that it
    is not simply enough to speak of those in subjective terms, but
    that we ought to be able to measure it, because that simple
    absolute black-and-white bright line threshold may not tell us
    all that we need to know about the consequences of a series of
    events.
        Could you comment on that?
        Mr. Ditlow. That is correct. I mean, in many instances the
    finding of defects is almost an art, and there are no--and it
    is very hard to have a black or white line. But what you
    certainly need are mechanisms where the agency can become more
    prospective in minding these other data sources. I mean, State
    Farm Insurance Company in providing claims information to the
    agencies is really exemplary, and other insurers should follow
    that line. But we have to ask ourselves, what other data bases
    are not being tapped?
        We heard reference to the Fatal Accident Reporting System
    here earlier in these hearings, and the agency traditionally
    does not look at the Fatal Accident Reporting System until
    after an investigation is opened. And they should look at it
    beforehand. We have a National Accident Sampling System. So
    part of the message to the agency is to figure out what data
    sources are out there and to make sure that you utilize what is
    available, because an underutilized data source is a lot
    cheaper than developing a new one.
        Mr. Sawyer. Coming together and finding ways that we can
    all agree and to quantify that.
        Mr. Ditlow. Well, if you want to quantify it, what I would
    do is any--if you have a death accident, it should be reported.
    If you have a death failure involving a tire, that should be
    reported to the agency by the company, not just as a safety
    defect, but just as an early warning. If the adjustments
    rates--and what type of adjustments we are looking at. If you
    have tread separations, those are more important than wear-out
    mechanisms or chunks. So you have to--so I would like to sit
    down and work with the agency to develop this type of thing.
    But until now, the agency hasn't been focused on trying to
    develop that filter.
        Mr. Sawyer. Thank you very much, Mr. Chairman.
        Mr. Tauzin. Thank you, Tom.
        The Chair recognizes the gentleman from Tennessee, Mr.
    Bryant.
        Mr. Bryant. Thank you. I thank the panel. I thank
    especially the representatives from State Farm as well as your
    company for providing this great effort here. I think we are
    all tired; I think most of the questions have already been
    asked and I think there are probably a few left, but I am going
    to leave those to my colleagues and yield back my time.
        Mr. Tauzin. Thank you, Mr. Bryant.
        The gentleman from North Carolina, Mr. Burr.
        Mr. Burr. The gentleman from Tennessee surprised me. I was
    sitting here, trying to add up my premiums to State Farm to see
    if I paid for the trip I took, and I think clearly you could
    make the trip a couple of times, and we are probably indicative
    of your 1 out of 5 number on autos as well.
        Let me just ask you about that. You just simply, because of
    the sheer numbers of automobiles that you insure, could be and
    probably are a tremendous resource to NHTSA. Would that be an
    accurate statement?
        Mr. Boyden. I would say so.
        Mr. Burr. Would it be safe to assume that State Farm's
    relationship with NHTSA is very close?
        Mr. Brandau. Yes, it is very close, not only in terms of
    what Sam does with NHTSA, but we also cooperate with NHTSA on a
    number of safety programs. We are working very closely with
    them on the airbag safety campaign. So, through the years, we
    have had very good relationships with NHTSA. We look to NHTSA
    as the primary safety agency on auto safety, and in very many
    arenas we work with them. So we try to keep a very positive
    relationship with NHTSA.
        Mr. Burr. So I would take for granted, Sam, when you
    contact them, this is not an unusual thing for you to pass on
    some tidbit of information that maybe you pick up from the
    State Farm data base with or without identifiers and in most
    cases I am sure they are without identifiers, but the raw
    information. That is not unusual for somebody on the other end
    to receive a phone call and an e-mail follow-up from that?
        Mr. Boyden. That is correct. As I mentioned, we work with
    them on 150 or more issues a year, different investigations and
    evaluations and such.
        Mr. Burr. What, if anything, can you conclude from the fact
    that we even had a difficult time getting them to acknowledge
    that there was an original 1998 correspondence from you?
        Mr. Boyden. I am speechless. I knew that they had the e-
    mail. I had spoken with individuals over time, and they had
    made me aware that they had the e-mail. I knew it was just a
    matter of locating it.
        Mr. Burr. Did anybody from NHTSA ever follow back up with
    you, unsolicited by yourself, to see any update on the trend
    that you had identified?
        Mr. Boyden. Yes. In April of this year, the investigator--
    --
        Mr. Burr. But, clearly, that was once there was a Houston
    TV expose, say, and Ford and Firestone and NHTSA began a much
    more intensive investigation.
        Mr. Boyden. There was no initial contact prior to that.
        Mr. Burr. When NHTSA made contact with you in April, did
    you have to re-create all of the information you had already
    supplied for them, or did you just pick up from the April 28--
    or the December 1999, phone call and give them what you had
    learned in the last 3 months?
        Mr. Boyden. The July e-mail they had in hand at the time,
    so it was just updating from there and up to April of 2000.
        Mr. Burr. So there was--after the July e-mail and the
    subsequent conversations that you had with them to update them
    on the numbers, that was not reflected in the information that
    they had in April of 2000 when they contacted you?
        Mr. Boyden. I think they were aware that there were more
    numbers. I am not sure----
        Mr. Burr. But nobody had bothered to write that down, to
    put that with the July, 1998, e-mail that you had sent them?
        Mr. Boyden. I am not really sure on that.
        Mr. Burr. I may have to go to Mr. Brandau on the--I am not
    a lawyer, but I am still trying to figure out the subrogation
    issue. Firestone told me earlier that they never made any
    reimbursements to State Farm for claims that you had paid for,
    your individuals that were insured that had loss, and you went
    back to Firestone because you thought it was the fault of the
    tire. Now, am I laying out the----
        Mr. Brandau. I am not sure if that is what Firestone said,
    but I do know that we--at least in our headquarters, we do have
    indications of subrogation claims that we did have against
    Firestone. We don't have them all, but we know that we had at
    least six of the----
        Mr. Tauzin. Would the gentleman yield on that?
        Mr. Burr. Clearly, I must have misunderstood.
        Mr. Tauzin. I think there was confusion in the testimony,
    and perhaps we can get it straight. What I understood Firestone
    to say was that they had never struck a deal or an agreement
    with State Farm on the issue of the----
        Mr. Burr. The gentleman is correct.
        Mr. Tauzin. But they did settle individual subrogation
    claims.
        Mr. Burr. I used the word settlement, and I think that that
    probably was the buzzword that they didn't want to agree to.
        Mr. Tauzin. But we have a document indicating a number of
    subrogation settlements.
        Mr. Brandau. Yes, we did have a number of settlements that
    we knew of and I am sure somewhere out in the field on
    individual cases.
        Mr. Burr. From the standpoint of State Farm or any insurer,
    when a company agrees to that subrogation, State Farm would
    then drop it, am I correct? They are reimbursed?
        Mr. Brandau. Yes, we are reimbursed.
        Mr. Burr. And part of that agreement is that they don't
    accept any blame or liability; they are just paying off the
    claim?
        Mr. Brandau. That is usually what it says. But to the best
    of our knowledge, also, we had no confidentiality arrangement
    with Firestone, at least the ones that we have looked at at
    State Farm, so we were free to mention it as we have to this
    committee. So when you say we dropped it, we recovered our
    losses, but we certainly kept it in our central unit at State
    Farm, and it was something that we certainly used in terms of
    looking at trends.
        Mr. Boyden. It is not only returning our losses, it is also
    returning the policyholder's deductible. It is a requirement,
    sir.
        Mr. Burr. Mr. Chairman, I would ask if we don't have the
    information as far as the number of claims that were
    subrogated, what they can legally provide for us I hope that
    they would.
        Mr. Tauzin. I think we already have that information.
        Mr. Brandau. I think we have given you at least a summary
    of the information.
        Mr. Tauzin. State Farm--I mean Firestone also agreed, as I
    understood their testimony, to supply us with information as to
    any findings by experts on the question of defects that are
    part of these claims or lawsuits.
        Mr. Burr. I thank the Chair.
        Mr. Tauzin. I thank the gentleman.
        The gentleman from Illinois, Mr. Shimkus.
        Mr. Shimkus. Thank you, Mr. Chairman.
        My colleagues have done a good job of describing the
    virtues of an Illinois company and an Illinois citizen, and one
    of the reasons I am staying so long is to make sure that that
    is done. Illinois is a great insurance State because we don't
    regulate the price. Our insurance commissioners, they let the
    market set the price, and that is why we are a very good
    insurance State, and we are proud of companies like State Farm.
        On the subrogation issue, I mentioned this to Dr. Bailey
    and the whole idea of connecting the dots and more information.
    That information was never forwarded to NHTSA, though, am I
    correct?
        Mr. Brandau. Not the subrogation issue.
        Mr. Shimkus. Not the subrogation. Had it been, it would
    still even make more of a compelling case, Mr. Boyden, don't
    you agree, to NHTSA?
        Mr. Boyden. I believe so. I can't swear to it, but I
    believe when they open a PE level--I have had contact where
    they have gotten copies of our subrogation information, and I
    think it is on a PE level, and then the manufacturer forwards
    that to NHTSA.
        Mr. Shimkus. I will defer to you.
        The last thing I want to ask Mr. Ditlow. Another thing I
    brought up earlier was gathering this information, you know,
    who is the keeper--NHTSA, a third party interest, public
    interest group, or an industry-led----
        Mr. Ditlow. Are we talking about the information being
    provided by the auto and the tire companies?
        Mr. Shimkus. Right.
        Mr. Ditlow. Yes. If it just went to NHTSA, that would be
    fine; and it would be collected there at the agency. We would,
    as a public interest watchdog----
        Mr. Shimkus. Let me interrupt. If we could be assured that
    NHTSA would respond with good intentions, I mean, we just had a
    case of information being forwarded and no response.
        Mr. Ditlow. Right.
        Mr. Shimkus. There are people who trust third-party
    interest groups more than they trust government, and there are
    some people who trust government more than they trust corporate
    America. So the point is, somewhere, a gathering of more
    information, a bigger data base, and I am not one--I hope NHTSA
    could redeem itself like maybe some entities in corporate
    America and gather the trust, but, in this case, they have
    failed. So I am not ready to give them the good seal of
    approval that they should be the stewards of the information.
        Mr. Ditlow. Well, what I would recommend is one of two
    things. Either, A, you do, in fact, give it to an independent
    body as you suggest; or, B, if you do give it to NHTSA, that
    you make it available to watchdog outsiders like ourselves.
    Because worst of all situations is that--and much of the
    information that goes to NHTSA today is kept behind closed
    doors. We can't get access to it.
        A real simple example of that is that we used to be able to
    get complete access to consumer complaints at NHTSA, and most
    tire complaints in this country don't have that tire ID number
    on it. So we used to call them up when we did the Firestone 500
    and say, what is the tire ID number on this tire? What is the
    brand? We can't do that now because NHTSA keeps it confidential
    and only gives it to the tire manufacturer or the auto
    manufacturer to a check-off box that they have on the
    complaint. So we have lost the ability to watchdog the agency
    on these complaints that they receive.
        Mr. Shimkus. Mr. Chairman, if I may, on the opening up of
    the new tire standards which has been suggested, would that
    also bring into account a question of a previous point that I
    made about addressing the nylon cap issue?
        Mr. Ditlow. I am sorry, I thought you were asking State
    Farm.
        Mr. Shimkus. Well, I am just asking the panel.
        Mr. Ditlow. Okay. I think at the eleventh hour, I am a
    little tired.
        Mr. Shimkus. I think we all are. The nylon cap was
    discussed earlier as far as changing standards. If we opened
    up, as I understand, 109, which is the 1968 tire standard, that
    would call industry and would at least raise the issue of
    whether we wanted to go or look at using nylon caps to prohibit
    tire separation. Is that a good follow-on analysis of what
    could happen?
        Mr. Ditlow. Well, if you opened up 109 and you
    significantly upgraded it, say, for example x, I would suggest
    not only running the test at the recommended air pressure like
    26, if that is what it is, but drop it down to 04 pound to
    represent actually what happens out there in the field as part
    of the test. My judgment is that if you have tough performance
    standards the nylon cap would be a result of that performance
    standard.
        Mr. Shimkus. Thank you very much.
        Thank you, Mr. Chairman. I yield back.
        Mr. Tauzin. Thank you, Mr. Shimkus.
        I think, unless Mr. Rogan has a question----
        Mr. Rogan. I have no questions.
        Mr. Tauzin. That concludes the questioning.
        Let me beg your indulgence just for a second. We were just
    discussing the fact that many of the questions that are being
    asked right now, how information collected in organizations
    such as State Farm might properly find its way into the right
    data banks and be paid enough attention so that it has an
    impact upon safety decisions made by the agency and recalls, if
    necessary, of unsafe products--it occurred to us that we are
    still talking about collecting information about failures that
    have already occurred. We are still talking about a system that
    depends upon people getting hurt and injured before it gets to
    anybody's attention that there is a defect in a product in the
    marketplace. I would hope we also turn a lot of our attention
    to the question of how we might devise standards and testing in
    advance of products going into the marketplace so that we don't
    have to rely upon deaths and injuries to occur in order to
    effectuate recalls or other safety actions.
        I am harkening way back now to my days at what we call
    Nicholls State Harvard on the Bayou in Louisiana, a little
    university where I went to school, but I remember studying
    Greek mythology and, if I recall properly, two brothers named
    Prometheus and Epimetheus. Prometheus was the one that was
    punished for giving fire to man, and the gods punished him I
    think by tieing him to a tree where vultures ate out his heart
    every night, pretty gruesome stuff.
        But he was blessed, Prometheus. He and his brother were
    both blessed with gifts, as I recall. Prometheus had a
    marvelous gift. It was the gift of foresight. He could see into
    the future. He could see what was going to happen. And while it
    is a gift, it is a horrible gift in some ways, because how many
    of us would really want to know what is going to happen
    tomorrow and the rest of our lives? But, nevertheless, it is
    quite a fascinating gift, to be able to see in advance and,
    therefore, avoid risk and injury and death.
        Epimetheus, on the other hand, was gifted with hindsight.
    He could see beautifully what had happened yesterday.
        Unfortunately, we are dealing with a lot of hindsight
    today, and we have learned a lot, and I think we have all
    learned a lot about what happened and in retrospect what could
    have happened. As Mr. Nasser himself said, he regrets so
    horribly that he didn't ask the right questions sooner. And I
    am sure that Firestone regrets that it didn't see these trends
    developing sooner and understand them; and I am sure NHTSA
    regrets that it didn't pay attention to the information you
    provided for them, Mr. Boyden, at a critical time.
        But this committee has to move from this position of
    examining what happened yesterday to thinking about what should
    happen tomorrow, and we have to call upon perhaps the Almighty
    for some inspiration here and to each other's intellect for
    some guidance. So I ask you, as I will ask Firestone and Ford
    and NHTSA and all of my colleagues, to think this through after
    this hearing today. This has been a long but incredibly
    instructional hearing I know for all of us and for the American
    public. The next job is to follow up on this hearing to make
    sure we have all of the facts, that nothing is hidden, that the
    light shines on what happened yesterday, and then to learn from
    it and devise a policy to ensure that it doesn't happen
    tomorrow.
        I hope we build a policy built upon preventing products
    from entering the marketplace that are unsafe because we
    properly tested them in the beginning rather than depending
    upon a system, even as good as yours, to detect the trends of
    injury and death that tell us the product should have never
    been there in the first place.
        I want to particularly thank, as we conclude the hearing,
    Joe Greenman, Charles Symington, Tom DiLenge, Mark Paoletta,
    Jan Faiks and Ann Washington, and all of the staff of my good
    friend, Mr. Upton, of the Oversight and Investigation
    Subcommittee and the Commerce Committee for the extraordinary
    work they did compiling this incredible volume of documents and
    information that formed the background of this committee.
        To all of you who spent long hours and traveled around the
    country--indeed, I did not mention the minority staff. I should
    properly mention them. I don't have all of your names, and I
    apologize, but it was a combination of majority and minority
    staff who traveled around the country gathering this
    information, and I want to thank all of you. I apologize for
    not knowing all of the names of the minority who assisted, but
    I will make sure that is entered into the record today.
        This is not the end of this investigation, this is just the
    beginning, and when we conclude it I hope our committee will
    make some recommendations not just to NHTSA but to the
    industries and perhaps even to the full Congress on how we can
    build a policy that, as Mr. Rush said, does not see this
    repeated over and over again. Thank you very much for your
    attendance, your patience and your contributions.
        Mr. Upton.
        Mr. Upton. Mr. Chairman, I just might add a 30-second
    appreciation to the staff as well. These hearings don't just
    happen. For many of us, the issue came to us while we were at
    home during the August break; and for this hearing to start
    literally before Congress came back into session today and
    finished after 11 o'clock took a lot of hard time and a lot of
    terrific staff, both personal staff as well as committee staff,
    to get witnesses lined up, help us with questions, go over some
    of the testimony. And we couldn't have done it without them,
    obviously.
        I want to thank all of my colleagues. A lot of hearings
    like this, you don't see this many members here, particularly
    lasting 10\1/2\ hours, 11 hours now. So I want to thank you,
    Chairman Tauzin, for your commitment. This is not the end. It
    is, sadly, the beginning, but we want to make sure that we
    don't have future instances like this ever again.
        Thank you.
        Mr. Tauzin. Mr. Upton, before we leave, let me mention the
    minority staffers--Edith Holleman, Bruce Gwinn and Brandan
    Kelsay--for the extraordinary contributions they made. This has
    been indeed a bipartisan effort, and it continues to be and
    will continue to be until we resolve this issue.
        Thank you so much for your attendance. The hearing stands
    adjourned.
        [Whereupon, at 11:21 p.m., the subcommittees were
    adjourned.]
        [Additional material submitted for the record follows:]
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     THE RECENT FIRESTONE TIRE RECALL ACTION, FOCUSING ON THE ACTION AS IT
                       PERTAINS TO RELEVANT FORD VEHICLES

                                  ----------

                          THURSDAY, SEPTEMBER 21, 2000

              House of Representatives,
                         Committee on Commerce,
             Subcommittee on Telecommunications, Trade,
                           and Consumer Protection, and the
                  Subcommittee on Oversight and Investigations,
                                                        Washington, DC.
        The subcommittees met, pursuant to notice, at 9:15 a.m., in
    room 2123, Rayburn House Office Building, Hon. W.J. ``Billy''
    Tauzin (chairman, Subcommittee on Telecommunications, Trade and
    Consumer Protection) presiding.
        Members present, Subcommittee on Telecommunications, Trade,
    and Consumer Protection: Representatives Tauzin, Oxley,
    Stearns, Gillmor, Cox, Deal, Largent, Cubin, Shimkus, Wilson,
    Fossella, Ehrlich, Bliley (ex officio), Markey, Gordon, Rush,
    Engel, Wynn, Luther, Sawyer, Green, McCarthy, and Dingell (ex
    officio).
        Members present, Subcommittee on Oversight and
    Investigations: Representatives Upton, Cox, Burr, Bilbray,
    Ganske, Bryant, Bliley (ex officio), Stupak, Green, McCarthy,
    and Dingell (ex officio).
        Staff present: Tom DiLenge, majority counsel; Anthony
    Habib, legislative clerk; and Edith Holleman, minority counsel.
        Mr. Tauzin. The subcommittee will please come to order. We
    will ask all our guests to take seats and catch the outer doors
    so we can have the attention of all the members. Ladies and
    gentlemen, the subcommittee today meets again in joint session
    with the Oversight and Investigations Subcommittee, chaired by
    my good friend, Fred Upton, to continue our investigation into
    the Firestone recall and to complete the inquiry with reference
    to the one area that was unfortunately left blank in our
    previous hearing. That is the area of testing.
        If you recall in the previous hearing, the witnesses for
    both Ford and for Firestone were at that time unprepared to
    give us documents as to what testing of these tires that are
    currently subject to the recall occurred, going back to the
    preproduction days and through the production cycle. And since
    that time, as of Friday, we had asked both Ford and Firestone
    to submit to us as much documentation as possible on that
    testing. I want to report first to the committee that as of
    Friday, both Ford and Firestone basically complied with our
    requests, although Ford has indicated it is yet unable to find
    and produce for us documentation of tests that occurred in the
    time period, I believe, 1995 and 1996, and we are still
    obviously waiting for that documentation; and that Firestone
    has yet to produce for us some of the audit reports dealing
    with--I am told they produced it late last night--the audit
    reports dealing with the audit reviews of the tire
    manufacturer, particularly at the Decatur plant. My
    understanding is that information has been delivered as of last
    night.
        Obviously for all of our guests and our members, I think we
    owe again a debt of thanks to our investigators, both the
    Democratic and Republican investigators who are combing through
    these many thousands of documents that have been presented to
    us. But we have learned something since the last meeting of our
    two subcommittees that I think we ought to first put on the
    record.
        First of all, we have received a letter from Jack Nasser of
    the Ford Motor Company correcting his sworn testimony that was
    presented to us at our last hearing. In the letter dated
    September 19, 2000, Mr. Nasser is informing us that contrary to
    his testimony where he said that Ford had indeed requested
    Firestone to conduct high speed tests at 26 pounds per square
    inch of tire that is subject to the recall, I quote his
    statement today: ``Based on the information available to me at
    this time, I responded that Ford did request such tests, as
    noted in the letter to the subcommittee dated September 15,
    2000 from Ford executives Helen Petrauskas and Thomas Baughman
    and the testing documents which Ford has provided the
    subcommittee. That answer appears not to be accurate with
    respect to the early division of responsibility.''
        In short, Ford, not Firestone, he now says, performed high
    speed testing on tires at 26 pounds per square inch at the
    Arizona proving grounds. So that's Mr. Nasser's written letter
    now which confirms that Ford did not ask Firestone to do
    testing of Ford Explorers at 26 pounds per square inch.
        I would ask this letter be made part of the record in order
    to correct the earlier testimony of Mr. Nasser.
        Second, the letter refers to testing that was supposedly
    done at the Arizona Proving Grounds. And we have the affidavit
    produced by Ford of James D. Avouris, a retired engineer at
    Ford who claims in the affidavit to have performed high speed
    durability tests in 1989 on a UN-46 Explorer.
        I wish to state for the record, and we will allow Ford to
    explain this to us today, that our investigators interviewed
    Mr. Avouris who has denied, with attorneys present, Ford
    attorneys present, that the testing involved an Explorer. He
    has corrected this affidavit, which he signed, in oral
    examination by our investigators to the fact that the tests
    were not conducted on an Explorer, but rather were conducted on
    some sort of truck, not an Explorer.
        The conclusion we have reached from his correcting his
    affidavit--and I would like the affidavit to be made a part of
    the record at this point, without objection, is that as far as
    we can tell to date, no one, not the NHTSA agency, nor Ford,
    nor Firestone, ever conducted high speed testing of Explorer
    automobiles fitted with Firestone tires subject to this recall
    and filled to 26 pounds per square inch--not before these tires
    were put on sale on Ford Explorers and, as far as we can tell,
    not during the production years of the Ford test data that was
    presented to us until very recently this year.
        I wish to also state for the record that this morning I met
    with tire dealers who have brought some extraordinary
    information to me about the recalled tires that are coming in
    to their dealerships and the degree to which those tires are
    inflated, and they are preparing a written memorandum that they
    will submit as part of the record of this committee.
        I would like to inform the committee that the evidence they
    have orally presented to me indicates that tires are being
    brought in by consumers that are filled as low as 15 pounds per
    square inch; 15, 20, 22, they tell me, is fairly average, which
    indicates that consumers advised to fill their tires and
    maintain them at 26 in fact maintain them at quite a different
    level.
        And finally, I wish to point out that Ford, while in the
    early days of this sad and horrendous saga, in responding to
    KHOU's television report in which the television station
    connected the dots and first saw this tragedy of tire failures
    on Ford Explorers and reported it to the public, Ford responded
    it was the consumers' fault for not filling their tires and not
    maintaining their tires properly, is challenged by documents
    presented to me last night of depositions taken of one of the
    Ford chief executives who admitted in the deposition that he
    himself had not checked his tires but one time in 13,000 miles,
    indicating that it is not likely that consumers do, in fact,
    check their tire pressures as often as even Ford recommends.
        Let me finally say that we will focus today on the issue of
    tire testing. We will focus today on what really occurred
    during the early years of production and design of Ford
    Explorers and production and design of the tires that were
    spec'd by Ford and produced by Firestone for those automobiles
    and other automobiles and SUV's. We will focus on activities
    that occurred in 1996 at the Decatur plant where apparently
    most of these failures occurred, where quality control testing
    indicates a level of failure that we will discuss this morning
    that seems to be rather large.
        And we understand there is some dispute this morning as to
    what was tested. We do know 229 tires were tested in 1996 and
    the failure rate on those tires was extraordinary. Whether they
    were preproduction tires or production tires we will discuss
    this morning. But we understand a large percentage of failures
    were tire separation failures, and that Firestone in 1996
    obviously was aware they had a problem with tire separation in
    the tires being produced at the Decatur plant especially, and
    that nevertheless that information never reached NHTSA and
    there certainly was not a decision to recall tires made at the
    plant under the system.
        Second, we will hear this morning and file into the record
    evidence that Firestone obviously made corrections in the
    production of their tires in 1997 and 1998: in 1997, in the
    wall of thickness, obviously, to deal with a sidewall problem
    experienced in this 1996 testing period; and in 1998, some sort
    of wedge was added to the tires in question here as well as
    other tires, which wedge we understand helps prevent or helps
    with the problem of tire separation.
        So we do know from the evidence submitted to this
    committee, as we can discern it to this point, that No. 1,
    neither Firestone nor Ford tested Ford Explorers with Firestone
    tires subject to this recall at high speed test at 26 pounds
    per square inch; that, while testing occurred, it occurred in
    other vehicles and very often in other types of conditions.
        Second, we learned that quality control testing at the
    Decatur plant indicated a high rate of failure in those tests,
    and much of that failure was due to tire separation, and in
    1998 changes were made in the design of the tire, which for
    whatever reason they were made, did have the effect of helping
    the tire separation problems.
        We also know that several million tires were produced at
    the Decatur plant in 1996 and again in 1997. The question this
    committee would like to have answered from Ford and from
    Firestone in particular this morning is why weren't these tires
    tested under real conditions of use and recommended expected
    use by consumers? And when testing did occur in 1996,
    indicating high levels of failure, why did Firestone not report
    those test reports to NHTSA? Why did those tires in production
    continue to go into production? Why did consumers continue to
    ride on tires which Firestone in 1996 obviously had knowledge
    could contain defects that could result in the kind of
    catastrophic failures we have seen?
        So we will have a series of very important questions to be
    answered by our witnesses today. We are pleased that both Ford
    and Firestone have sent witnesses prepared to answer those
    questions, as well as to recognize and welcome Dr. Bailey again
    of our highway safety agency, NHTSA, here to continue our
    discussions of how this problem occurred and how we might move
    on.
        Finally, Senator McCain opened his hearings the same way we
    opened our hearings last week. He opened it by announcing that
    while we are on a mission to find out what went wrong so that
    we can ensure that it doesn't happen again, so we can fix the
    right problems, we are not about the business of finding
    liability or fixing blame. Someone else will do that, somewhere
    else.
        Today we will continue that mission of finding out what
    went wrong in the testing procedures, what went wrong when
    tests were conducted and information apparently did not reach
    the right eyes and ears, and what went wrong in the process by
    which these tires were allowed to remain on the market and
    eventually result in the kind of failure rate that has now,
    according to NHTSA, Dr. Bailey, resulted in a potential loss of
    103 American lives and hundreds of serious injuries and over
    800 new accounts of incidence of failure of these tires on the
    highways in America.
        I will ask all members to cooperate with me in this
    respect. We will have opening statements by any members
    desiring to file--desiring to make opening statements. I will
    ask members, however, to think about abbreviating those opening
    statements or even filing them into the record this morning.
        As a quid pro quo, what we will do is by unanimous consent,
    which I will make right now, we will change our normal 5-minute
    rule to a 10-minute rule on the round of questions, since we
    have all our witnesses on the single panel. If you will help me
    and cooperate with me in moving to questions and presentation
    of testimony as quickly as we can, I will now ask unanimous
    consent that when we move to a round of questions that every
    member be recognized for 10 minutes for questions. Is there any
    objection? Then it is so ordered.
        Mr. Stupak. Mr. Chairman if I may. In your opening
    statement, you indicated you had a letter from Mr. Nasser. I
    figure that's going to be part of the record. But in your
    opening you mentioned a number of other documents you received
    last night. I would ask that before they be made a part of the
    record, we all get a chance to see them. I am not sure if
    you're offering them in there at this time or if you plan on
    offering them later. We would just like to see them.
        Mr. Tauzin. The gentleman makes a very valid request. And
    we have tried our best to share documents before they are
    entered. We will continue to do so. We have not entered them in
    the record yet. I simply referred to them because that is the
    report of our bipartisan investigative staff as of this date.
        Second, I wish to report that we have received calls about
    a visit from Secretary Slater who is scheduled to be here later
    this morning, and that when he does appear, I will ask the
    committee to make accommodations to hear his testimony as he
    has agreed to come--I am grateful for that--and agreed to
    present the Department's recommendations on legislation which,
    as you know, we have announced that at 1 o'clock we will begin
    the process of marking up the Upton bill to correct the
    problems that this investigation has and continues to uncover
    in this failed process.
        The Chair now yields back the balance of its time and
    recognizes the gentleman, Mr. Markey, for an opening statement.
        Mr. Markey. Thank you, Mr. Chairman, very much. And I
    commend you for holding this very important additional hearing.
    Obviously, new information continues to flow into this
    subcommittee. We are learning more by the day about what the
    whole history of this lethal combination of Ford Explorers and
    Firestone tires has meant not only for Americans but for people
    all over the world. We know that all over this country, tens,
    if not hundreds of thousands of families, are going back to
    their dealerships and asking for an exchange of tires and being
    told that those tires are not available.
        We know that there are heated arguments which are taking
    place in dealerships all across this country with families
    telling the dealers to just take the leased vehicle back and
    let them have the vehicle that the dealer is driving their
    family to work with; and in turn, the dealer could drive their
    family to work in their Ford Explorer with Firestone tires, in
    order to fully paradox those Americans who do not wish to run
    the risk of endangering their own families in riding in these
    vehicles.
        The anecdotes are flowing into the subcommittee and
    obviously families across this country are justifiably angry at
    the danger which they have been placing their own family
    members under.
        We also know that because of the instability of the Ford
    Explorer with the 26 pound per square inch, much less 32 pound
    per square inch inflation of Firestone tires, that consumers,
    family members, the mothers and fathers, feel the instability
    in the car. And so it makes sense that they would continue to
    deflate their tires, thinking perhaps that that would add more
    stability to their car. They would feel that in fact on the
    turns in some kind of stressful situation on the road that they
    had more protection for their family, without realizing, of
    course, that in fact they were creating more danger for their
    family, because when these tires are deflated in combination
    with the instability of the Ford Explorer on hot pavement that,
    in fact, they were creating even more danger.
        None of this, of course, was told to mothers and fathers as
    they purchased these vehicles with the intent of actually
    creating a safer environment for their families. So naturally
    there is a great deal of anger; I mean real anger across the
    country. Millions of Americans, mothers and fathers, have gone
    out into their driveway in the last several weeks to check
    their tires maybe for the first time, never believing that
    there was any danger, thus resulting in something that has
    touched a nerve in all of America; in the families, in the
    mothers' and fathers' hearts across the country. They trust
    their government to ensure that their families are protected.
    They trust corporate America not to engage in reckless
    behavior.
        What we are now learning, of course, is that both Ford and
    Firestone had information long in advance of the point in time
    that they told NHTSA that there could be problem. Now, that is
    very troubling for this committee. We have a responsibility as
    a Congress to ensure that we now put in place the kinds of
    protections which families will expect us to put in place. We
    have to have a rollover standard. We have to have a meaningful
    rollover standard that is going to guarantee that we will not
    see a repetition of this kind of a problem. We have to give
    authority and a mandate to NHTSA to do this job.
        We need a new tire standard. We can't believe here honestly
    that we have to go back to 1968 to have a standard which has
    been put on the books. It almost defies belief. We have to
    increase the funding for NHTSA. We have to make sure that the
    safety agency responsible for protecting every single American
    family on the road has the resources they need to conduct any
    test and every test which they believe they have to in order to
    ensure that American families are protected.
        The results of these tests have to be posted in the
    dealership of every single car manufacturer in the United
    States. When someone goes in to buy a car or an SUV or a
    minivan, they should be able to look right there and know what
    in fact the danger is for their family. There should be a grade
    which every one of these vehicles, in combination with a
    particular set of tires, has been given; because, in fact, that
    is why people buy these vehicles: to protect their families.
    This little extra edge that they are going to have over
    everybody else on the road--in fact, they were giving
    themselves less of an edge; they were in fact endangering their
    families, not making them safer. How ironic is that for a
    family paying extra for a vehicle?
        So they are angry; they are really angry--and justifiably
    angry, mothers and fathers all across this country.
        So today, Mr. Chairman, we are undertaking, I think, an
    historically important markup. And we have a chance now to
    revisit 20 years, 32 years of inactivity. We have to do the job
    that ensures that we have filled in the gaps that have allowed
    public safety to be put at risk over this past decade, it turns
    out. And we have to make sure that not only the industry but
    the agency with safety and responsibility is given all of the
    power, all of the resources, it will need to be a truly
    vigilant watchdog of safety, which the public has always
    thought it was; although in retrospect, obviously it was not.
        So, Mr. Chairman, I thank you so much for calling this
    hearing today. We will be marking up the bill today, obviously,
    beginning that process. But in doing so, I would urge all
    members on both sides to reserve the right to continue to
    modify their views as to what should be included in
    legislation.
        We are obviously at the full committee level still going to
    have to make further modifications, because this is a moving
    story, a fast-moving story as information becomes available to
    all members. And so as we begin today at the subcommittee
    level, I hope that all members realize that we still do not
    know everything that we are going to know in terms of this
    legislative process. But we are constrained by the fact that we
    are going to adjourn in 3 weeks. We are going to have to do the
    very best we can, but be open-minded and flexible in terms of
    how we are going to amend this legislation on the fly,
    reflecting on the new information which we are picking up in
    order to ensure that we are giving the maximum amount of
    comfort to families that want to feel that next year when they
    are walking into these showrooms, that their vehicles are safe.
        I yield back the balance of my time.
        Mr. Tauzin. I thank the gentleman.
        Let me, before I move on, express the thanks from both Mr.
    Upton and I to the gentleman from Massachusetts, as well as Mr.
    Stupak and Mr. Dingell, for the extraordinary cooperation that
    we are receiving in terms of both this inquiry and the process
    we start at 1 o'clock this afternoon in actually producing
    legislation. I hope everyone understands there is a lot of
    waiving of time limitations so we can get about the business
    of, in the next 3 weeks, completing legislation. And all of the
    members on both sides are to be given thanks again for their
    extraordinary patience and cooperation in moving this process
    along despite the normal time restrictions.
        And before I introduce the chairman of the full committee,
    Mr. Bliley, for his opening statement, let me correct the
    record. We have gotten Mr. Stupak a copy of that deposition. It
    is a deposition of Bob Wyatt of Firestone, not Ford. I
    apologize. In his deposition, Bob Wyatt, who testified at our
    last hearing on September 25, 2000--Bob Wyatt is a VP for
    Quality Assurance at Firestone--and the deposition, as I
    pointed out, points out that even the VP of Firestone was only
    checking his tire pressure once in 13,000 miles. And that
    deposition will be shared with the minority before it is
    entered in to the record.
        Let me ask for unanimous consent that the book of documents
    that has been reviewed by the minority and the majority, which
    contains the documents that will be filed in the record today
    and contains the documents I referred to--which the letter of
    Mr. Nasser is number 18 and the affidavit of James Avouris is
    number 19 for your reference--I would ask that this book of
    documents, already reviewed and approved I believe by the
    minority, be made a part of the record. Is there any objection?
        Mr. Stupak. Mr. Chairman, we have two documents that have
    been shared with the majority: One about car engineering and
    another document. We just ask they be made part of the record.
        Mr. Tauzin. Is there any objection to the unanimous consent
    made by the Chair? Hearing none, it is so ordered.
        The gentleman, Mr. Stupak, makes unanimous consent request
    to add additional documents to the record. And is there any
    objection? Without objection, it is so ordered.
        [The documents referred to follow:]
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        Mr. Tauzin. The chairman is pleased to recognize the
    chairman of the full Commerce Committee, the gentleman from
    Richmond, Virginia, Mr. Bliley.
        Chairman Bliley. Thank you, Mr. Chairman. And thank you for
    holding this second day of hearings on the recent Firestone
    tire recall which is of grave importance to the safety of the
    American driving public. I know most Americans still have many
    unanswered questions about this human tragedy. But ones that I
    hope we can focus on today are, one, how could this have
    happened? Where were the Federal safety regulators who set
    testing requirements for these tires before they were allowed
    on the market? Where were the company tire experts who are
    responsible for ensuring the quality of the tires before they
    are sold to consumers? And how can we be sure that other tires
    on the market today are any safer than the now recalled tires?
        It appears that every one agrees that Federal testing
    requirements for tires first issued in 1968 are outdated and
    need to be more vigorous. The Federal Government currently
    requires that new tires sustain speeds of only 85 miles per
    hour for half an hour to be certified. While it is true that
    companies like Firestone go beyond these minimum requirements
    in certifying their tires, it appears that the differences are
    one of degree and not of kind. It is clear both to me as a
    layman, and to some actual tire experts, that these tests need
    to be not only more demanding on the tire, but that we need to
    develop ways to test for how a tire in the real world, after
    20- or 30,000 miles on it, will perform under stressful
    conditions. It is this scenario that accounts for most of the
    fatal accidents we are seeing today on these tires. And it is
    little wonder that the current tests fail to catch this
    terrible problem. I believe that the tests performed on these
    tires by both Firestone and Ford, even if up to industry or
    government standards, were inadequate to do the job we should
    expects these tests to do; that is, tell us whether we can be
    confident that our tires won't start to come apart as we are
    driving down the highway after only 2 or 3 years of use.
        The high speed tests conducted before the Explorer went on
    the road with these Firestone tires, with the exception of a
    single test in 1989 conducted by Ford, were not conducted at
    Ford's recommended tire pressure level, a key component in tire
    level performance. Nor were any of these high speeds tests
    performed on the Explorer itself.
        We need to do better than that to protect American
    families. We also need to address the question of vehicle tire
    margin of safety. We build cars that can go in excess of 100
    miles per hour, yet put tires on them that are generally speed-
    rated to only 112 miles per hour. What consumers do not know is
    that such a speed rating may mean that the tire may last only
    10 minutes at that speed before literally coming apart. What
    does that tell us about tire performance when sustained at
    high, if admittedly unlawful, speeds? I hope this tragedy can
    force all of us in government and industry to rethink how we
    test tires before we put them on the road.
        Thank you, Mr. Chairman.
        Mr. Tauzin. The Chair thanks the chairman and wants to
    associate himself with the opening statement of the Chair. The
    Chair is focused indeed on a serious question that is not just
    testing--testing of tires at age and wear normally under normal
    use.
        The Chair recognizes the gentleman from Michigan, the
    ranking minority member of the full committee, Mr. Dingell, for
    an opening statement.
        Mr. Dingell. Mr. Chairman, I want first of all to express
    my appreciation to you for holding the hearings. Second of all,
    I am firmly determined to cooperate with you. I have a splendid
    statement here this morning, from which I will excerpt. I would
    advise all, however, who wish enlightenment on the matter, to
    follow the full statement because it will give them the flavor
    that they will not get from the excerpt.
        Mr. Chairman, measured against NHTSA's own standard for
    taking action earlier this year, agency records demonstrate
    that NHTSA should have acted more than 2 years ago. On March 6
    of this year, NHTSA announced that it was beginning an initial
    evaluation of Firestone tire failures because the agency had
    received 25 complaints reporting tread separation and blowouts.
    These 25 complaints did not include complaints that we have
    heard so much about NHTSA receiving from State Farm in July
    1998. The fact is, however, that prior to July 1998, NHTSA's
    records show that the agency had already received 26 complaints
    about recalled Firestone tires, one more than the 25 complaints
    that NHTSA cited as the basis for its own action on March 6,
    2000. So if you add in the complaints received from State Farm,
    NHTSA had as of July 1988--1998--at least 47 complaints about
    the recalled Firestone tires, or almost twice as many
    complaints as the agency said it had received and that
    justified its initial evaluation of the matter.
        But there's more. If 25 complaints were good enough for
    NHTSA to act on March 6 of this year, why weren't the 26
    complaints NHTSA had received prior to July 1998 enough to
    justify action then? This is not a hypothetical question that I
    ask, and I would demand that the agency account fully for its
    action and also for its inaction. Information I received from
    NHTSA indicates that the agency did not, as it has claimed,
    lack sufficient information to act. NHTSA in fact had the
    information.
        This committee has a special responsibility to determine
    why NHTSA failed to act and to make sure that these kind of
    events do not happen again. So far, 103 people are believed to
    have lost their lives in accidents involving the recalled
    Firestone tires. One can only assume that by the delaying of
    the action for 2 years, as NHTSA appears to have done, lives
    were lost that otherwise might have been saved.
        The American public does deserve better from its government
    and from government agencies charged with ensuring tire safety.
    Mr. Chairman, I look forward to the testimony of the witnesses.
        Mr. Tauzin. Mr. Dingell, I would only add, sir, that the
    numbers you cited that were available to NHTSA years ago all
    should be augmented by the numbers of fatal accident reports
    that came from the FARS system that was also available to
    NHTSA, as illustrated in this chart that indicates that through
    1999 NHTSA knew, because of these four reports, that 56 fatal
    accidents had occurred, with 72 fatalities. That is added to
    the numbers that Mr. Dingell has recited.
        Mr. Dingell. Those numbers are interesting. If you look at
    1998, the numbers of accidents began to climb very sharply.
        Mr. Tauzin. The Chair thanks the gentleman for the opening
    statement.
        The Chair is pleased to recognize the chairman of the
    Oversight and Investigations Committee of our Commerce
    Committee, the gentleman from Michigan, Mr. Upton. And in doing
    so, let me again advise everyone of the extraordinary work that
    Mr. Upton and the investigators of that subcommittee have done
    to augment the work of these hearings. I personally thank you
    and your staff for the extraordinary job done, particularly in
    giving us the information that they have derived from this
    extraordinary volume of documents that has been produced.
        Mr. Upton of Michigan.
        Mr. Upton. Thank you very much, my friend, Mr. Tauzin. I
    too want to thank our staffs, both personal staff as well as
    the professional staff on the subcommittee, for really getting
    an inordinate amount of work done in a very expeditious way so
    that we could have these hearings not only 2 weeks ago but are
    actually prepared to go to markup this afternoon.
        We have learned a lot since our last hearing about so-
    called quality control tests conducted by Firestone in 1996 on
    a random sample of 229 tires from the Decatur plant which
    resulted in a number of tread separations. In fact, we think
    there might have been as high as a 5 percent failure rate from
    those tests. This is only the tip of the iceberg in terms of
    what Firestone knew for years about the dangerous defects in
    its tires. Yet, astoundingly, it was not until years later that
    this information was pried from Firestone's grip, which brought
    this all to a recall of 6.5 million tires and, sadly, at least
    103 deaths.
        Let's think about that scene for a second. Let's think
    about those tires being produced at facilities around the
    country, particularly the Decatur facility. Tires taken off the
    assembly line, tested, failing; and the word doesn't go up the
    chain of command to the showroom. Families go to those
    showrooms and they look at the wonderful new cars, spanking new
    tires, purchase that vehicle, and take their families on trips,
    whether they be to work, to church, to soccer or baseball
    games, you name it. And somehow, tragically, we see a whole
    host of accidents around the country, particularly in the
    South, with a good number of deaths.
        Somebody knew. Somebody knew that those tires were failing
    when they were produced, and yet the word did not go down the
    line. I am not an engineer, I am not a lawyer. And I don't
    believe that we will today find out precisely what was causing
    those defects. We may never learn the answers, in fact. But I
    will tell you one thinM: There was something rotten in Decatur.
        In today's hearing, we will be asking some tough questions
    to find out where we are today. My aim is not to stick a sword
    in anyone's eye for its own sake, but, rather, turn those
    swords from our hearing into plowshares. We must do this in
    order to sow the seeds of reform in our motor vehicle safety
    laws and help ensure that American families are as safe as
    possible when they travel on our Nation's roads.
        That is why I introduced bipartisan legislation last week
    which has been co-sponsored by so many Republican and Democrats
    on this panel. Our bill attempts to fix the potholes in our
    Nation's motor vehicle safety laws which have become so evident
    as a result of this investigation, and to ensure that this type
    of bad behavior is prevented in the future, preventing the
    innocent loss of life.
        This is commonsense legislation that still can be enacted
    before the legislative clock expires on the 106th Congress. I
    commend Congressman Tauzin for moving forward expeditiously to
    mark up this act later today. And with a few legislative days
    left, we do have to move with deliberate speed. Thank you, Mr.
    Chairman.
        Mr. Tauzin. Thank you Mr. Upton.
        The Chair will recognize the designated ranking minority
    member of the O&I Subcommittee, the gentleman from Michigan,
    Mr. Stupak, for an opening statement.
        Mr. Stupak. Thank you, Mr. Chairman. Today we are holding
    another hearing on this very important auto safety issue. This
    hearing is not as easy as the one we held 2 weeks ago when we
    were exposing a serious safety problem. The question everyone
    wants answered now is: Why did it happen?
        But it is not a question that we can answer today. Ford and
    Firestone's investigations are not completed, and the committee
    at this point is not in a position to take the historical raw
    data that we have seen and make definitive statements or
    judgments about what that data means.
        So a word of caution for us all today, Mr. Chairman. I have
    reviewed since the last hearing several erroneous press
    reports, because some reporters thought they could take the
    data delivered to this committee and draw conclusions about who
    knows what and when they knew it.
        Let me refer to one such article in the Washington Post on
    September 12. The Post said that in 1990, Firestone conducted
    26 test runs on the recalled tires and that 25 experienced
    tread separations. A little investigative work would have
    revealed that these were not production tires but experimental
    tires on which separations, some of which were not the type
    that we are looking at here, but the separations were being
    induced by a variety of tests.
        Then we heard about the four 1996 tires that failed at a
    high speed because the shoulder separated. Firestone witnesses
    will tell us today that the test was run because of a perceived
    problem but not the problem we are focusing on here today, and
    that a change was made in the quality control process to
    eliminate it, without any actual negative impact.
        The result has been a continuation of finger-pointing that
    doesn't get us any closer to the truth but makes great
    headlines. This morning there was a headline about some
    additional test line data, but no one has yet asked the company
    what does it mean.
        I am not here to defend Ford or Firestone; in fact,
    probably just the opposite. But I have spent most of my life
    doing criminal investigations and other things and before you
    make statements or reach conclusions or judgments, we had to
    have the facts. And I hope the purpose of these hearings is to
    get to those facts.
        In fact, some people thought my questions last week were
    too harsh. I will continue to ask tough questions, but they
    will be accurate questions based upon information we know. What
    we really need to be discussing today is whether the tests that
    the Department of Transportation and the auto and tire
    manufacturers run on tires--are they sufficient? Is the entire
    vehicle package sufficient to protect consumers driving on
    today's highways, with today's speeds, with a 1-, 2-, or 3-
    year-old.
        We should be discussing whether the Office of Defect
    Investigations at NHTSA, the National Highway Traffic Safety
    Administration, has the budget to develop, monitor, and enforce
    the standards we want, or what exactly are those standards. We
    should be discussing whether NHTSA should be a more timely
    independent investigator of vehicle tragedies, like the
    National Transportation Safety Board does with airline crashes,
    as opposed to having to rely on manufacturers for their
    investigations.
        At our last hearing I received a commitment from Ford and
    Firestone that they would jointly set up a completely
    independent panel, separate from what they are doing, to
    determine what went wrong. I recently spoke to Ford and they
    are moving in that direction, and I look forward to that panel
    being set up to get to the facts and not necessarily the
    headlines.
        So with that, Mr. Chairman, with that caution, I look
    forward to receiving the information today. I look forward to
    asking questions, and I hope we can move forward based on the
    data and the questions presented therefrom.
        Mr. Tauzin. The Chair thanks the gentleman, and we would
    like to point out for the record that the Post report of the
    1990 testing that was in fact erroneous, that information did
    not come from this committee; it came from information derived
    elsewhere. And I would agree with the gentleman; erroneous
    reporting and erroneous numbers have not helped. All of us
    understand that is why we have the hearing this morning. We
    want the facts and we want to make judgment on the facts. I
    thank the gentleman for pointing that out.
        The Chair would ask unanimous consent that all members'
    written statements be made part of the record and, without
    objection, it is so ordered. And the Chair will now ask the
    members if anyone has the need to make an opening statement and
    wishes to make a few brief remarks, if I can have your
    concurrence in keeping them brief. I understand; I will give
    you all a chance, but keep them brief because we will run short
    of time to get to the markup this afternoon.
        The vice chairman of the subcommittee, Mr. Oxley, is here
    and I want to give him a chance. Mr. Oxley, do you have an
    opening statement?
        Mr. Oxley. Thank you, Mr. Chairman. Since the committees'
    first hearing on the Firestone tire recall 3 weeks ago, barely
    a day has gone by without some sort of story in the news media.
    It is my hope that at least every consumer who may need new
    tires has now been alerted. Given the daily publicity, I think
    it also bears repeating that on the whole, the quality level of
    the vehicles and tires that people depend on each day has never
    been higher.
        Those of us on the committee have a dual responsibility. We
    must see that the immediate steps are taken to protect the
    public safety. And I think everyone--manufacturers, NHTSA, and
    this committee--is working together on this. I continue to
    follow the progress on the recall and urge all parties to do
    everything in their power to provide every consumer with safe
    tires as soon as possible.
        As lawmakers we also have a duty to respond to the
    situation with measured responsible public policy that will
    stand the test of time. That is the challenge for us right now,
    because despite intensive investigation and endless conjecture,
    we still cannot definitely pinpoint exactly why and where
    things went wrong.
        As for the hearing this morning, one key question we'll
    explore is what kind of testing was done on the tires involved
    in these accidents. I appreciate the information that has been
    submitted to the committee on short notice and look forward to
    hearing from the experts in the field.
        As we know, Federal tire standards have not changed since
    the 1960's, although industry practice certainly has. That is
    one reason why tires last twice as long as they used to. I
    think as we listen to time lines, it will be important to
    remember that we are dealing with industries that are
    constantly changing to account for such unexpected variables as
    higher speed limits and the uses consumers put vehicles to. Any
    wrongdoing should be exposed, but we again must appreciate the
    complexities of this situation.
        I would cite to the members a recent column in the Wall
    Street Journal dated September 13, 2000, Business World, by
    Homer Jenkins, which talks about--it is titled, ``Yo, America:
    Get Faster Tires.'' And he points out that there has been a
    huge increase in speed limits, particularly in a couple of
    major States, that in many ways may have contributed to the
    situation.
        These hearings are important because we need accurate
    information in order to make informed legislative decisions.
    There are things that ought to be addressed immediately and
    there are other things that may need more thought and
    discussion. I will go into more detail on this when the
    subcommittee moves to markup.
        My experience is that Congress has rarely made good laws
    when it was a purely reactive situation. Now that I am in the
    majority, I feel a special responsibility to make sure that our
    response to an urgent issue of public safety is sound and
    results in good legislation for consumers and the companies
    they deal with; that we will be able to look back in 5 or 10
    years with pride rather than regret. When legislation is passed
    in haste--Superfund comes to mind--many unintended consequences
    can occur. Let's make certain we do the right thing the first
    time. I yield back.
        Mr. Tauzin. Thank you.
        The Chair recognizes the gentleman from Ohio, Mr. Sawyer.
        Mr. Sawyer. Thank you Mr. Chairman. I respect your desire
    to keep things short, so will only point out two matters that
    really weren't clear in our first hearings.
        The first is that while it remains a 30-year-old standard,
    NHTSA and the tire industry have been working for the last 3
    years to elevate those standards to bring them to the modern
    era to reflect the enormous changes that have taken place in
    the tire design and manufacturing process in the last 3
    decades. It is an important undertaking.
        Also, as the gentleman from Ohio suggests, it is complex.
    It is complex because a tire is complex. It is a combination of
    some 200 raw materials, components including natural and
    synthetic rubbers, metals, fabric, oils, pigments and other
    chemicals. Their applications are in a wide range of diverse
    settings. Testing perhaps ought to reflect that diversity. We
    have to exercise great care in putting revisions together.
        Another message that was not delivered last week was that
    with regard to the changes in section 109, was that the
    industry itself that petitioned for those changes. So as we
    talk about testing today and talk about revisions to the law, I
    hope we will remember that there is a broader range of people
    we need to hear from. We need to hear, Mr. Chairman, more
    broadly from the automotive industry and from the tire industry
    and perhaps even from tire testing specialists across this
    country who have the expertise to understand the kind of
    changes in testing that need to take place if we are going to
    get to the kinds of answers that you've asked for today. I
    thank you very much.
        Mr. Tauzin. I thank the gentleman. I will remind him that
    we are not finished. This will extend into next year. We intend
    further hearings, particularly consumer education hearings, on
    some of these safety issues. And I thank the gentleman for that
    comment.
        The Chair recognizes the gentleman from California, Mr.
    Cox.
        Mr. Cox. Thank you. I want to congratulate the chairman for
    holding these hearings, but I believe we will get to the facts
    more quickly if we have fewer speeches from members and more
    testimony. Thank you.
        Mr. Tauzin. I thank the gentleman. Anyone else wishing to
    make an opening statement? Anyone here? Mr. Stearns is
    recognized from Florida.
        Mr. Stearns. Thank you Mr. Chairman. As I stated earlier,
    my concern is that I am receiving letters from my constituents
    in Florida where a large number of these fatalities occurred.
    And I received one recently from a father who lost his son and
    his future daughter-in-law when his Ford Explorer crashed as a
    result of the tire tread separation. He demanded
    accountability.
        But I think, my colleagues, the reform we are talking about
    is necessary, and we need to educate ourselves because the
    crashes perhaps are not attributed to one single factor. And so
    I urge the chairman to use caution and deliberation here as we
    move forward.
        I notice that he has a markup scheduled for today. A lot of
    us are still trying to read through this legislation and
    perhaps--do we have the question--the question I pose: Do we
    have enough information that we can pass legislation with a
    markup today, with a certain amount of certitude that what we
    are doing is accurate and not creating more litigation? For
    example, there is more tire information that is coming out
    about the uniform tire quality grading system, and within this
    grading system there is a category for tires' heat rating.
    Tires are graded by the manufacturer based upon the ability to
    resist and dissipate heat. And there are three grades: A, B,
    and C, with A being the most heat resistant, and C being the
    minimum standard for heat resistance. I would like to note, Mr.
    Chairman, that Firestone ATX and the Wilderness AT tires both
    use tires that are rated C. And I understand that this grade is
    given under normal operating conditions where the tire is
    properly inflated, not loaded down, and running at normal
    speed; which is contrary to what happens with a typical family
    that drives down a highway at 70 miles an hour for most of the
    day. It's hot summer day, perhaps about 90 degrees, they have a
    Ford Explorer fully packed with all the equipment, and they're
    riding with these minimum heat resistant tires which are
    underinflated, carrying extra weight, and obviously at that
    high temperature something is going to happen.
        So I know that Ford has also used Goodyear tires on the
    Explorer that used a better heat rating. So I think it is
    possible, Mr. Chairman, that we might caution ourselves about
    marking up so quickly this legislation until we have had a
    better understanding and a chance to percolate some of this
    information and to see what are more of the problems here,
    because in the end, we have both a legislative responsibility
    but we also have a moral responsibility to come to the bottom
    of this. And I appreciate, Mr. Chairman, your hearing.
        Mr. Tauzin. Would the gentleman yield?
        Mr. Stearns. I would be glad to.
        Mr. Tauzin. I would simply point out that the chairman of
    the full committee, Mr. Bliley, and myself, we have heard those
    concerns, Mr. Stearns. We appreciate them coming, about us
    being very deliberate in the way we mark up this legislation. I
    want to make clear we plan to mark up the bill, to take up the
    bill, get opening statements on the bill out of the way, take
    several noncontroversial amendments to the bill, and then to
    recess for about a week. We will probably come back on
    Wednesday of next week, so that you and all of our members will
    have as much time as we can afford to literally be better
    prepared for this very serious and important task of producing
    reform legislation.
        So we are going to balance the need to move as quickly as
    we can in order to meet the adjournment deadlines for this
    Congress with the concerns, the very real concerns the
    gentleman has expressed. Thank you for bringing these concerns
    to our attention.
        The Chair would recognize the gentleman from Texas, Mr.
    Green.
        Mr. Green. Thank you, Mr. Chairman. I agree with my
    colleague, Mr. Cox, that we would learn more by listening
    instead of talking, but I want to thank you and your staff and
    the committee for their rapid response that we are doing to the
    problem that we see. And I'll just paraphrase and ask unanimous
    consent for my full statement to be in the record.
        Since our last hearing, when Firestone testified that
    potential defects weren't known until 1998 and now we have
    documentation that shows the problems were found as early as
    1996. Hopefully, the witnesses will answer that. Also, I would
    like to continue to hear from NHTSA about the information they
    may have had and why they failed to act sooner to protect the
    driving public, and how can we change this with your
    legislation. And, Mr. Chairman, I would also like to see
    hopefully the witnesses address--and I am interested in hearing
    about reports that these tires, Firestone tires on Explorers,
    were not even tested on Explorers, and my concern is that they
    were part of the standard equipment, an integral part of the
    vehicle that should be tested. I yield back my time.
        Mr. Tauzin. Thank you Mr. Chairman.
        The gentleman, Mr. Bryant, is recognized.
        Mr. Bryant. Thank you, Mr. Chairman. I too will be brief
    and file my more complete statement as part of the record.
        Two quick points. I've been deeply disturbed to learn that
    some of the recalled tires are actually finding their way back
    on to the highways. In Tennessee, our Attorney General's Office
    is investigating reports that some used tire dealers may be
    selling the recalled tires which would then be traded in for
    new tires under the Firestone recall program. Aside from being
    unethical and illegal, this actually places more of these tires
    on the road, which is obviously a threat to public safety.
        In response to this problem, I would like to know what
    steps are being taken to get these recalled tires out of
    circulation and I would also like ask unanimous consent to
    include our Tennessee Attorney General's statement regarding
    the resale of recalled products into the record, as well as
    just a brief portion of that I would like to read, from our
    attorney general, in terms of what we have might do
    legislatively.
        Mr. Tauzin. Let me first ask if there is any objection to
    the gentleman's unanimous consent request? Hearing none, the
    gentleman's consent request is granted.
        [The statement follows:]
        [GRAPHIC] [TIFF OMITTED]70217A1.040

        [GRAPHIC] [TIFF OMITTED]70217A1.041

        [GRAPHIC] [TIFF OMITTED]70217A1.042

        Mr. Bryant. Thank you, Mr. Chairman. This will be a small
    portion. He writes and says: I want to urge this committee in
    any legislative action it takes, to tighten the recall laws and
    expand the responsibilities, enforcement, and penalty options
    available to NHTSA. At the same time, I want to urge the
    committee to ensure that any such changes clearly preserve the
    right of each State attorney general to protect their consumers
    in State court under their respective consumer protection acts.
    Specifically, I would request that any such legislation
    specifically state that any such law, regulation, or rule does
    not limit or restrict the applicability of State consumer
    protection laws or unfair or deceptive trade practice statutes,
    but, rather, shall serve as supplemental authority for the
    protection of consumers.
        With that, Mr. Chairman, I would yield back the balance of
    my time.
        Mr. Tauzin. Thank you.
        The chairman would also like to make one public
    announcement that I think is equally as important as the
    attorney general's work. One of our members reported to us that
    in his State, a major rental company rented a Ford Explorer to
    an individual with recalled tires on them and claimed that they
    were not subject to the recall because they had not yet
    experienced 20,000 miles.
        There is no such limitation on the recall. All those tires
    are recalled, regardless of mileage, and any rental company
    advising any consumer that recalled tires are okay if they are
    under 20,000 miles is giving bad information to consumers, and
    those tires should be replaced pursuant to the recall.
        The Chair thanks the gentleman. Any further requests for
    opening statements? The gentlelady is recognized, Mrs. Cubin.
        Ms. Cubin. Thank you, Mr. Chairman. This issue is of
    particular interest to me since one of our family vehicles in
    Wyoming is a 1994 Ford Explorer. Like many Ford Explorers, it
    came with standard Firestone tires. Those tires are no longer
    on our Explorer, because while my son was driving it on a hot
    August day at 75 miles an hour, which is the speed limit in
    Wyoming, one of the tires blew out. The tread separated. We
    immediately took that car and had all of the tires replaced
    except for the spare, which we will be doing as well. I
    sincerely thank God from the bottom of my heart that my son is
    not one of the people that are represented on that chart, but I
    also know as I sit here that he very well could be.
        So I will try to do what the chairman said. I will try to
    keep emotions and anger out of this discussion. But I have to
    tell you, I sympathize with the parents who have lost children,
    with families who have lost loved ones when it possibly could
    have been prevented. Nobody wants to play the blame game. I
    generally think blaming isn't a productive thing to do. I think
    generally assessing a situation and deciding how we go from
    here is the best thing to do. But we need to have this problem
    solved. We need to have safe products to begin with.
        This committee has the responsibility to the public to look
    at ways to ensure that future episodes like this do not happen
    and that more episodes like the ones that we are involved with
    today don't happen. I am pleased with the wealth of knowledge
    that the chairman has asked to come before us today but I want
    you to know there are many tough questions yet to be answered
    about the safety, the design, and the testing of Firestone
    tires. I hope that you will have the answers that we are
    looking for.
        Finally, I think we need an update on where NHTSA is and
    Ford and Firestone are with answering why these events happened
    in the first place, and how they intend to apply the knowledge
    they have already gained to make sure there won't be future
    problems.
        The last situation that has come to my attention is with
    Continental's tires on Lincoln's Ford Navigator. I think it
    should make everyone sit up and take notice if they haven't
    already. I yield back the balance of my time, Mr. Chairman.
        Mr. Tauzin. Again, I thank the gentlelady.
        Further opening statements. The gentleman from California.
        Mr. Bilbray. Thank you, Mr. Chairman. First of all, I would
    like to congratulate the vice president from Ford on a sales
    strategy in San Diego which obviously has been very successful
    over the past few years, because as I was walking precincts in
    my district this past weekend, it was extraordinary how many
    people asked about this issues because they own Explorers. In
    San Diego, we probably have more of your products on line there
    than even some States do, and I think it is part of the
    different cultures, the fact that SUVs have been modified from
    a working vehicle to the preferred vehicle of the suburban
    mother and parent.
        I think because of that I feel very strongly we need to get
    some answers. As I was going door to door, they were asking
    questions of their Member of Congress, saying, Where do I go,
    what is the future? And the questions are great. So many people
    say, I am waiting for my new tires. I continue to have to
    address this issue.
        I hope that I am able to get the answers today so we can
    take it back to San Diego and tell all of these people,
    especially the mothers that use these vehicles as the preferred
    means of transportation for their families, that we can avoid a
    problem to where you don't have a son, an adult, not only an
    adult son being in danger, but all of these children that can't
    control what they are going to drive and the mothers that
    basically have to address the issue.
        Mr. Chairman, I want to thank you for this hearing. I want
    to thank you for continuing to get the information out, to find
    answers so that the citizens of San Diego County and the entire
    United States can address this issue, because I think it runs
    very, very close to all of our households. I want to thank you
    and the ranking members of not only the subcommittees, but of
    the full committee, of the cooperative effort between the
    majority and the minority on this issue. I appreciate the fact
    that we are seeing Democrats and Republicans searching for
    answers, not just looking for political advantage or looking to
    point fingers, and I want to thank you very much and I want to
    thank the ranking member for that kind of cooperative effort.
        I think this hearing and this legislation is going to be
    something that Americans look to as the ability of Washington
    to identify a problem and to address it comprehensively without
    trying to take political advantage on the issue.
        I yield back the balance of my time.
        Mr. Tauzin. Thank you, Mr. Bilbray.
        Further requests for opening statements?
        [Additional statements submitted for the record follow:]
        Prepared Statement of Hon. Paul E. Gillmor, a Representative in
                        Congress from the State of Ohio
        Mr. Chairman, I want to thank you for calling this important second
    hearing to look into the important matter of these unnecessary traffic
    deaths.
        I look forward to hearing from our witnesses and the story they
    have to tell. Many times this town is more bent upon finding and laying
    blame than it is about accepting responsibility and making corrective
    action. While every accident that occurred is tragic and costly enough
    in the way that someone's father, mother, sibling, or brother passed
    away, those deaths will mean nothing if we do not comprehensively
    approach this problem and seek out solutions.
        This committee has spent much time and attention looking into the
    integrity of and the quality control over Firestone's ATX, ATX II, and
    Wilderness tires. This is important as a majority of the accidents
    involved these tires. However, I believe it is equally important to
    look at the vehicles concerned. The vast number of the tires that
    failed, and which precipitated the vehicles to rollover, kept occurring
    in the same place. This indicates to me that engineering questions as
    they relate to the suspension of the Explorer must not be ignored. In
    addition, the recent press accounts concerning the Lincoln Navigator, a
    Ford Explorer-type auto, and tire problems; makes me concerned that
    these road hazards are not just limited to the Firestone and Ford
    products covered in the first hearing.
        Mr. Chairman, the things we do here do make a difference. However,
    at the end of the day, our panel will not be known for the speed in
    which it acted, but the thoroughness and thoughtfulness in which it
    proceeded. I commend you for moving quickly to help Americans who drive
    these products and those who share the road with them. I would,
    however, urge caution in presupposing a conclusion in this matter. Our
    nation's history is replete with examples of good legislative
    intentions with a bad practical outcome.
        Again, I am glad we are here for this second hearing and look
    forward to reaching a point where consumers can feel safe in purchasing
    and using these products again.
                                     ______

    Prepared Statement of Hon. Eliot L. Engel, a Representative in Congress
                           from the State of New York
        Mr. Chairman, I want to thank you for calling this hearing and I
    want to thank the members of the panel for joining us today. I hope
    this hearing will be informative and shed light on an issue of great
    concern to us all.
        We certainly cannot go back and fix the problems that have led us
    here today. However, we can move forward and work to ensure that this
    terrible situation is never repeated again. We all have questions that
    we hope will be answered today. We have questions that the American
    people want answered. Unfortunately we may not get the answers that we
    would like.
        There is an apparent problem in how tires are tested. It seems that
    specifications on tires are not what they appear to be. When a consumer
    reads a tire specification label he may read that a tire is rated for a
    certain speed.
        However, the consumer is unaware that the tire was only tested at
    that speed for a limited time, when in fact the tire will be operated
    for a much longer period of time at that speed. Therefore, there is no
    way to tell how the tire will react under extensive use. While these
    tests may have met or even exceeded the National Highway Transportation
    and Safety Administration (NHTSA) standards, the question remains, are
    these standards adequate.
        Another area of concern to me is whether or not there is sufficient
    communication between the tire manufacturers and the auto
    manufacturers. For instance, are the tires adequately tested for the
    vehicle in which they will be mounted. A tire tested at a certain speed
    and weight does not indicate how the tire will behave on a particular
    vehicle. In this case, it seems that the Firestone ATX tires were never
    tested while mounted on a Ford Explorer. That is troubling to me.
        Furthermore, all of the tests performed on tires are conducted with
    tires directly off of the assembly line. We, therefore, have no idea
    how a tire will behave after it has aged and worn. Is current testing
    adequate? It seems to me that it is not. I look forward to hearing the
    testimony of our witnesses and hope we can find the answers to the many
    questions before us today.

        Mr. Tauzin. Then the Chair will recognize and introduce the
    panel. We are pleased to welcome Dr. Sue Bailey, the
    Administrator of the National Highway Traffic Safety
    Administration, together with Mr. John Lampe, Executive Vice
    President of Bridgestone/Firestone; Mr. Dan Saurer from the
    Division of Technology for Bridgestone/Firestone; Ms. Helen
    Petrauskas, Vice President for Safety and Engineering for the
    Ford Motor Company; and Mr. Thomas Baughman, Engineering
    Director for the Truck Division Business Group of Ford Motor
    Company.
        You will be recognized to summarize in 5 minutes your
    statements and Members will have 10 minutes to ask questions of
    you as we go through this hearing today. So we will begin with
    Dr. Bailey of the National Highway Traffic Safety
    Administration. Welcome again, Dr. Bailey. We appreciate your
    testimony.
        Before we do that, this is an O&I hearing, and before you
    testify, we swear the witnesses in. Mr. Upton will give the
    oath.
        Mr. Upton. We have a long history of taking testimony under
    oath. Does anybody have objection? If not, does anybody need to
    be represented by counsel?
        If not, would you stand and raise your right hand?
        [Witnesses sworn.]
        Mr. Upton. You are now under oath. Dr. Bailey, we will
    start with your testimony.

     TESTIMONY OF HON. SUE BAILEY, ADMINISTRATOR, NATIONAL HIGHWAY
           TRAFFIC SAFETY ADMINISTRATION, U.S. DEPARTMENT OF
                             TRANSPORTATION

        Ms. Bailey. Thank you, Chairman Upton. Mr. Chairman and
    members of the committee, I am pleased to appear before you
    this morning to address the subject of regulatory actions to
    improve the safety of motor vehicle tires. I welcome the
    opportunity to address this very important issue.
        When I testified before the committee on September 6
    concerning Firestone's recall of its ATX, ATX II and Wilderness
    tires, several members expressed concern about the adequacy of
    our Federal tire regulations. I stated at that time that the
    agency needed to review the standard and update it. Today I
    will suggest some directions in which our review may lead us.
        The National Highway Traffic Safety Administration has two
    Federal motor vehicle safety standards applicable to tires:
    Standard No. 109, which applies to passenger car tires, and
    Standard No. 119, which applies to tires for vehicles other
    than passenger cars. Both of these standards have been on the
    books for a long time.
        The tire standards call for a tire to pass several
    performance tests. The tests which could be the most relevant
    to the tread separation problem in the Firestone tires are the
    tests for high speed performance and endurance. Firestone
    certified that the ATX and Wilderness tires met Standard No.
    109, the standard to which most tires used on SUVs are
    certified. We tested them on more than one occasion in our
    standards enforcement program and found that they all passed
    the performance tests, including the high speed and endurance
    tests that we now use.
        When high speeds are combined with low inflation pressure
    and heavy loads, the tires are heavily stressed. Add in the
    effects of high temperature, and you have a recipe for
    maximizing stress on a tire. We will look at both speed and
    temperature in our review of the tire standard and we will
    consider the vehicle loading and tire inflation practices of
    the owners themselves.
        This inquiry is one of special importance for tires used on
    SUVs, compacts, pickup trucks, and other vehicles whose center
    of gravity is high in relationship to their track width. If a
    tire fails suddenly, causing a driver to lose control, an SUV
    is more likely than a passenger car to roll over. The growing
    percentage of SUVs and other vehicles with high centers of
    gravity increases the importance of having tires with adequate
    margins of safety. Our rulemaking will examine whether the
    characteristics of these vehicles warrant the amendment of
    other requirements in the standard.
        There is also a significant issue of consumer information
    that needs to be addressed. We believe the public needs better
    information about the performance characteristics of the
    vehicles and the equipment it purchases. We are pleased to hear
    that the conferees on our appropriations bill may modify a
    provision in the bill so that it will not delay our consumer
    information rating system on such rollovers.
        We believe that the information developed through this
    system will provide relevant information to those consumers. We
    will also review other means of supplying consumer information,
    such as the labeling requirements on the tires and the location
    of tire inflation pressure information on the tires.
        I want to stress that we are already in the process of
    considering possible changes to these standards. Updating the
    standards is vitally important to assure that the American
    public is safe on their tires. Mr. Chairman, I want to assure
    as I have before that the Firestone investigation is our
    highest priority at NHTSA. We will remain focused on the
    investigation, and closely monitor the current recall campaign.
    We will also seek any expansion of that campaign that may be
    necessary.
        I want to thank you for holding this very important
    hearing, and I will answer any questions that you may have.
        [The prepared statement of Hon. Sue Bailey follows:]
    Prepared Statement of Hon. Sue Bailey, Administrator, National Highway
                         Traffic Safety Administration
        Mr. Chairman and members of the Committee: I am pleased to appear
    before you this morning to address the subject of regulatory actions to
    improve the safety of motor vehicle tires. I welcome the opportunity to
    address this important issue.
        When I testified before the Committee on September 6 concerning
    Firestone's recall of its ATX, ATX II and Wilderness tires, several
    members expressed concern about the adequacy of federal tire
    regulations. I stated at that time that the agency needed to review the
    standard and update it. Today I will suggest some directions in which
    our review may lead us.
        The National Highway Traffic Safety Administration (NHTSA) has two
    Federal motor vehicle safety standards applicable to tires: Standard
    No. 109, which applies to passenger car tires, and Standard No. 119,
    which applies to tires for vehicles other than passenger cars. Both of
    these standards have been on the books a long time--Standard No. 109
    since 1968 and Standard No. 119 since 1973--without major changes.
        The tire standards call for a tire to pass several performance
    tests. The tests that could be the most relevant to the tread
    separation problem in the Firestone tires are the tests for high speed
    performance and endurance. Firestone certified that the ATX and
    Wilderness tires met Standard No. 109, the standard to which most tires
    used on SUVs are certified. We tested them on more than one occasion in
    our standards enforcement program and found that they passed all the
    performance tests, including the high speed and endurance tests.
        When high speeds are combined with low inflation pressure and heavy
    loads, the tires are heavily stressed. Add in the effects of high
    temperature, and you have a recipe for maximizing stress on a tire. We
    will look at both speed and temperature in our review of the tire
    standard, and consider the vehicle loading and tire inflation practices
    of vehicle owners.
        This inquiry is of special importance for tires used on SUVs,
    compact pickup trucks, and other vehicles whose center of gravity is
    high in relation to their track width. If a tire fails suddenly,
    causing a driver to lose control, a SUV is more likely than a passenger
    car to roll over. The growing percentage of SUVs and other vehicles
    with high centers of gravity increases the importance of having tires
    with adequate margins of safety. Our rulemaking will examine whether
    the characteristics of these vehicles warrant the amendment of other
    requirements in the standard.
        There is also a significant issue of consumer information that
    needs to be addressed. We believe the public needs better information
    about the performance characteristics of the vehicles and equipment it
    purchases. We are pleased to hear that the conferees on our
    appropriations bill may modify a provision in the bill so that it will
    not delay our consumer information rating system on rollover. We
    believe that the information developed through this system will provide
    relevant information to consumers. We will also review other means of
    supplying consumer information, such as the labeling requirements in
    the tire and the location of tire inflation pressure information on the
    tires.
        I want to stress that we are already in the process of considering
    possible changes to these standards if they will improve safety.
    Updating the standards is vitally important to assure the American
    public of the safety of tires.
        Mr. Chairman, I want to assure you, as I have before, that the
    Firestone investigation is
        the highest priority in NHTSA. We will remain focused on the
    investigation, closely monitor the current recall campaign, and seek
    any expansion of the campaign that may be necessary.
        Mr. Chairman, I will conclude by expressing my thanks to you for
    holding this hearing. I will be glad to answer any questions you may
    have.

        Mr. Tauzin. Thank you.
        We will now hear from Mr. Lampe, the Executive Vice
    President of Bridgestone/Firestone.

         TESTIMONY OF JOHN T. LAMPE, EXECUTIVE VICE PRESIDENT,
        BRIDGESTONE/FIRESTONE, INC.; ACCOMPANIED BY DAN SAURER,
    DIVISION VICE PRESIDENT FOR TECHNOLOGY, BRIDGESTONE/FIRESTONE,
                                  INC.

        Mr. Lampe. My name is John Lampe and I am the Executive
    Vice President with Bridgestone/Firestone. Mr. Chairman, we are
    pleased to be here today to appear before you to discuss some
    very important aspects of this recall. Let me repeat at the
    outset that our company recognizes that there was a problem
    with a very small percentage of our tires. We must and we do
    take full responsibility for these problems.
        Before going into the substance of my remarks, let me tell
    you that this recall situation has impacted our company and our
    35,000 employees like no other event in our 100-year history.
    We are a proud company with a long history and a tradition of
    customer service and satisfaction. The fact that our customers
    are now questioning our commitment to them and our commitment
    to their safety has shaken us to our core. We are fully
    committed to concluding this recall as quickly as possible and
    to identifying the cause or causes of the tire problems.
        In order to be brief and meet the time limit, I will limit
    my opening remarks to three subjects: recommended inflation
    pressures to be equipped on the Ford Explorer; how tires are
    tested; and a brief update on our root cause analysis of the
    problem with the recalled tires.
        First, air pressure. As is the case with all vehicles, the
    vehicle manufacturer sets the air pressure as was done on the
    Explorer. Why? Because the vehicle is an integrated system and
    the tires are only a part of the system. Air pressure of the
    tire is interrelated with many other performance
    characteristics, including handling, rollover stability,
    traction, suspension load and so on. We are not vehicle experts
    and cannot know what various impact various pressure settings
    will have on the vehicle system as a whole. Typically, if the
    inflation pressure meets tire and rim load standards at 26 psi
    and the vehicle manufacturer believes that 26 psi is optimal
    for the vehicle's total performance, we must rely on that
    judgment.
        However, we now know that at 26 psi, there is a very low
    safety margin for the Explorer as compared to some other SUVs.
    Running an Explorer on low tire pressure, overloaded, in hot
    climates, appears to be a serious part of the problem that we
    are now facing. Since August 9, Ford has stated that an
    inflation pressure range between 26 psi and 30 is proper for
    the P235 75R 15 tires equipped on the Explorer and, we as the
    tire manufacturer, have recommended the air pressure on these
    tires on the Explorer at 30 psi. We believe very strongly that
    30 psi provides consumers with additional safety margins. At 30
    psi, the Explorer can handle higher speeds and over 400 pounds
    greater load than at 26. We feel so strongly on this that
    yesterday we wrote a letter to Ford to urge them to change the
    specification on these tires on these Explorers and
    Mountaineers that are equipped with P235 75R 15 to 30 psi.
        Turning to testing, we know how to test tires. Every year
    we test thousands of tires for millions of miles at different
    loads, speeds, and inflation levels. We subject tires to severe
    abuse and tests we have created to run these tires to failure
    so we can assess the outer limits of a tire's ability to
    perform.
        The recalled tires were subjected to a series of exacting
    tests before they were introduced. First, Ford Motor Company
    required a series of tests before the tires could be certified
    as original equipment on Ford vehicles. Those tests were
    performed either by Ford or by Firestone as directed by Ford in
    its engineering specifications.
        Second, Firestone tested the tires in accordance with DOT
    regulations, which call for high speed, durability, and other
    tests.
        Third, at Ford's request, starting with the 1995 model
    year, Firestone tested the tires under standards developed by
    the Society of Automotive Engineers for the purpose of speed
    rating, tests that are much more severe and extreme than the
    standard 109 test.
        Mr. Chairman, your staff and now the media have expressed
    concern about high speed endurance testing at Decatur in 1996
    as well as the modification that we made in 1998. We will
    answer all of your questions to the best of our ability on all
    of these subjects. I am fortunate to have one of my colleagues
    here today that is very familiar with both subjects. In
    addition to the extensive testing, Firestone's quality
    assurance procedures require regular testing of tires taken
    right from the production lines to assure the continuing safety
    of our tires.
        Overall, the testing that Ford and Firestone undertook
    before introducing these tires was thorough and complete.
    However, we pledge our cooperation with the committee and NHTSA
    in reevaluating tire testing standards and addressing the
    critical matter of tire and vehicle interaction in accident
    causation.
        Let me speak a moment about root cause. We are all
    interested in that, nobody more so than us. After the recall
    was announced, Bridgestone/Firestone management immediately
    created an investigative team to study and determine the cause
    of the thread separation phenomena. They were joined by groups
    of personnel from the Decatur, Illinois plant, professionals
    from the Akron Technical Center and field engineers and
    technical experts from around the United States as well as from
    our parent company, Bridgestone Corporation, Japan. A team of
    Ford Motor Company specialists also participated in the
    efforts. All of these groups have continued to work both
    individually and jointly in search of an answer to this
    problem.
        No one wants to have an answer more than we do. We have
    been and are continuing to relentlessly examine all known facts
    relevant to these tires. A comprehensive review of the Decatur
    production process has been conducted to determine whether
    variances in any production process could have caused or
    contributed to this problem which appears in a very small
    percentage of these tires. I want to make clear and be honest
    with the committee, we have not come to a conclusion about the
    cause or causes of this problem, but we have identified some
    areas where we believe additional work can be fruitful.
    Specifically, we are looking at the interaction between the
    design specification of the P235 15 together and combined with
    the potential manufacturing variances, process variances, at
    the Decatur plant.
        Mr. Chairman and members of the committee, I think it would
    be improper on my part to engage in future speculation and
    theories. We must rely on our experts, including the
    independent expert that we have brought on, Dr. Sanjay
    Govindjee, to an unfettered opportunity to investigate and
    answer this problem which has been aptly likened to finding a
    needle in a haystack.
        Mr. Chairman, we take full responsibility where there is a
    problem with our tires. We firmly believe, however, that the
    tire is only part of the overall safety problem shown with
    these accidents. Mr. Chairman and members of the committee, we
    believe that all of the relevant safety issues must be
    addressed. If we remove every one of our tires from these
    vehicles, rollovers and serious accidents will still continue.
        Mr. Chairman, we pledge our cooperation with the committee
    and with NHTSA to work to ensure the safety of the motoring
    public. Thank you for your time and we welcome any questions
    that the committee has.
        Joining me today here are Dan Saurer, Division Vice
    President, Technology Company, and he will address the more
    technical questions that you may have.
        Mr. Tauzin. Thank you. And my understanding is that Mr.
    Saurer will not give an opening statement.
        Mr. Lampe. That was for both of us.
        [The prepared statement of John T. Lampe follows:]
        Prepared Statement of John T. Lampe, Executive Vice President,
                          Bridgestone/Firestone, Inc.
        Chairman Tauzin, Chairman Upton and members of the House Commerce
    Committee, Bridgestone/Firestone is pleased to have the opportunity to
    appear before you today to discuss some very important issues regarding
    the tire recall situation.
        Let me repeat at the outset that BFS recognizes that there was a
    problem with a very small percentage of the recalled tires. That is why
    we took the action that we did. Before going into the substance of my
    remarks, let me tell you that this recall situation has impacted our
    company as no other event has in our 100 year history. We are a proud
    company with a century long tradition of customer service and
    satisfaction. The fact that our customers are now questioning our
    commitment to them and to their safety has shaken us to our core. We
    are fully committed to concluding this recall as quickly as possible
    and to identifying the cause or causes of the tire problems.
        I will limit my opening remarks to three subjects--Recommended PSI
    for tires to be equipped on the Explorer; how tires are tested; and a
    brief update on the root cause analysis of the problems with the
    recalled tires.
        First, air pressure. As is the case with all vehicles, the vehicle
    manufacturer sets the air pressure on the Explorer. Why? Because the
    vehicle is an integrated system and the tires are only a part of that
    system. Air pressure of the tire is interrelated with many performance
    characteristics, including handling, rollover stability, traction,
    suspension, and load. We are not vehicle experts and cannot know what
    impact various pressure settings will have on the vehicle system as a
    whole. Typically, from our perspective, if the inflation level meets
    Tire and Rim load standards at 26 PSI and the vehicle manufacturer
    believes that 26 PSI is optimal for the vehicle's performance, we must
    rely on that judgment.
        However, we now know that at 26 PSI, there is a low safety margin
    for the Explorer as compared to other SUV's. Running an Explorer at low
    tire pressures, overloaded, particularly in hot climates appears to be
    a part of the problem we are now facing. Since August 9, Ford has
    stated that an inflation pressure range of 26 PSI to 30 PSI is proper
    for the P235 75R 15 tires equipped on the Explorer and we, as the tire
    manufacturer, have recommended that the air pressure on these tires
    equipped on the Explorer be inflated to 30PSI. We believe that 30 PSI
    provides the consumer with additional safety margin; at 30 PSI, the
    Explorer can handle higher speeds and over 400 lbs. greater load than
    at 26 PSI.
        Turning to testing, Firestone knows how to test tires. Every year
    we test thousands of tires for millions of miles at different loads,
    speeds and inflation levels. We subject test tires to severe abuse and
    test to create failure, so we can assess the outer limits of a tire's
    ability to perform.
        The recalled tires were subjected to a series of exacting tests
    beforethey were introduced. First, Ford Motor Company required a series
    of tests before the tires could be certified as original equipment on
    Ford vehicles. Those tests were performed either by Ford or by
    Firestone, as directed by Ford in its engineering specifications.
    Second, Firestone tested the tires in accordance with DOT regulations,
    which call for high speed, durability, and other tests. Third, at
    Ford's request starting with the 1995 model year, Firestone tested the
    tires under standards developed by the Society of Automotive Engineers
    for purposes of speed rating the tires. The recalled tires performed
    just the way they should on these tests and were ultimately approved by
    Ford.
        In addition to this extensive testing, Firestone's quality
    assurance procedures require regular testing of tires taken from the
    production lines to assure the continuing safety of tires produced.
        Overall, the testing Ford and Firestone undertook before
    introducing these tires was thorough and complete. However, we pledge
    our cooperation with the Committee and with NHTSA in re-evaluating tire
    testing standards and in addressing the critical matter of tire and
    vehicle interaction in accident causation.
        Let me speak a moment about root cause. After the recall was
    announced, Bridgestone/Firestone management immediately created an
    investigative team to study and determine the cause of the tread
    separation phenomena. They were joined by groups of personnel from the
    Decatur, IL plant, professionals from the Akron Technical Center, and
    field engineers and technical experts from around the United States as
    well as from our parent company Bridgestone Corporation, Japan. A team
    of Ford Motor Company specialists has also participated in that effort.
    All of these groups have continued to work both individually and
    jointly in search of an answer to this problem.
        No one wants to have an answer more than we do. We have been and
    are continuing to relentlessly examine all known facts relevant to
    these tires. A comprehensive review of the Decatur production process
    has been conducted to determine whether variances in any production
    process could have caused or contributed to this problem, which appears
    in such a small percentage of these tires. We have engaged in an
    intensive review of our development and design processes to determine
    any role they might play in these issues. We are presently examining,
    dissecting, and analyzing a large sample of representative tires
    acquired in the recall in an effort to closely evaluate the condition
    of tires that have experienced actual service conditions.
        At this time, I want to make it clear that we have not been able to
    come to any conclusion about the cause or causes of this rare problem,
    although we have identified some areas where we believe additional work
    will be fruitful. Specifically, we are looking at the interaction
    between the design of the P235/75R15 and potential manufacturing
    variances at the Decatur plant. It would be inappropriate on my part to
    engage in further speculation. We must allow our experts, including the
    independent expert, Dr. Sanjay Govindjee, the unfettered opportunity to
    investigate and answer this problem, which has been aptly likened to
    ``finding a needle in a haystack.''
        Mr. Chairman, we pledge our cooperation with the Committee and with
    NHTSA to work to ensure the safety of the motoring public. Thank you
    for your time and we welcome any questions the Committee has. Joining
    me here today are Dan Saurer, Division Vice President, Technology
    Company, and Brian Queiser, Project Engineer, who will address any of
    the more technical questions you may have.

        Mr. Tauzin. Thank you.
        We will now turn to Ford Motor Company, Ms. Helen
    Petrauskas.

     TESTIMONY OF HELEN O. PETRAUSKAS, VICE PRESIDENT, ENVIRONMENT
      AND SAFETY ENGINEERING, FORD MOTOR COMPANY; ACCOMPANIED BY
       THOMAS D. BAUGHMAN, ENGINEERING DIRECTOR, TRUCK CONSUMER
                   BUSINESS GROUP, FORD MOTOR COMPANY

        Ms. Petrauskas. Thank you, Chairman Tauzin, Chairman Upton.
    I am pleased to have the opportunity to be here. Most of my
    statement talks about the technical issues, but I was so struck
    by what Congresswoman Cubin said. I personally get e-mails and
    calls and letters from customers: When are we going to get our
    tires replaced? And truly we have a group of people that are
    literally dedicated to working on that around the clock. That
    is not an exaggeration.
        Some of the good news is that we paid for some tire
    manufacturing equipment so that competitive tires could be made
    available more quickly, and it looks like there will be another
    300,000 tires every month, by the end of September, so my hope
    is that will help at least some of the people who expressed the
    same sentiments that you expressed so eloquently and relieve
    their worry and concern over their family and children.
        Ford has provided extensive documentation to the
    committee,and that documentation related to two particular
    questions: First, we have provided documents on tire testing.
    Second, we have provided documents relating to the testing and
    performance of the Explorer vehicles with respect to handling
    and stability.
        With respect to tire testing, the documents we provided to
    your committee conclusively demonstrate that Ford performed
    thorough, complete, and rigorous testing of the subject tires.
    They will also show that for the better part of 10 years
    Firestone agreed and repeatedly supported and certified to the
    recommended tire pressure of 26 psi. And then finally, the
    documents will demonstrate that all of the requisite testing
    which needs to be done at the recommended customer tire
    pressure was done at the recommended tire pressure.
        A great deal of attention has been paid to high speed
    testing. Specifically, our test procedure provides that testing
    should be done by running the tires for at least 200 miles, at
    a minimum speed of 90 miles per hour, with the pressure as
    recommended to the customer. The test was conducted for the
    four different 15-inch tires used on the Explorer since its
    introduction. Typically this testing is done on a slave or mule
    vehicle that is modified to duplicate the weight distribution
    of each of the vehicles that will use the tires being tested,
    and I have a feeling I am going to get the opportunity to
    explain all of that to the committee.
        In terms of vehicle handling and stability, the starting
    point for Ford Motor Company's approach to continuous
    improvement to safety of all of our products is the Ford safety
    design guidelines. These guidelines are continuously updated--
    --
        Mr. Tauzin. Ms. Petrauskas, could I interrupt you?
        There is a big bag someone left outside this room. If it is
    your bag, please immediately claim it; otherwise the Capitol
    Police are going to be obliged to clear this room. So if you
    have left a bag outside, take care of it quickly, right now.
    Can I ask the gentleman that is leaving, is that your bag?
    You'll take care of it quickly. Thank you. Please proceed.
        Ms. Petrauskas. The starting point for Ford Motor Company's
    approach to continuous improvement to safety for all products
    is Ford's safety design guidelines. These guidelines are
    continuously updated, and they go well beyond government
    regulations. The safety guidelines are intended to provide
    continuous improvement to enhance the already extensive Ford
    efforts to provide vehicles that exhibit a high level of
    safety. Prominent among the safety guidelines is Ford's
    guideline on resistance to rollover. The objective of this
    guideline is to design and develop a vehicle that will remain
    stable under all operating conditions, including accident
    avoidance maneuvers. The guideline states that the vehicle
    should respond in a predictable manner and give the driver
    perceptible signals that the vehicle is at its limit. Our
    extensive handling testimony is supplemented by specific
    testing focusing on vehicle behavior and violent maneuvers.
        One of the most extreme tests is the so-called J-turn test,
    a test that was performed on the 1991 Explorer. The Explorer
    met or exceeded all J-turn criteria, not only at the
    recommended tire pressure of 26 psi, but also at the maximum
    tire pressure for the ATX tire of 35 psi. This conclusion was
    validated by both track testing and computer simulation. And it
    continues to be validated by real world performance. Even
    including the accidents likely caused by thread separations,
    the Explorer continues to perform 27 percent better than the
    average passenger car and 17 percent better than the average
    compact SUV in serious accidents. It also continues to perform
    better than comparable SUVs, and there is a chart up there that
    demonstrates that; and fundamentally what it says, in all
    serious accidents and in rollover serious accidents, the
    performance of the Explorer is significantly better than that
    of the average SUV.
        Finally, contrary to assertions made in the press as
    recently as yesterday, an evaluation of single vehicle rollover
    accidents, that is, accidents not where two vehicles or more
    are involved, simply there is a single vehicle involved in the
    accident, that same government data base demonstrates that the
    Explorer performs better in these kinds of crashes than the
    average compact SUV.
        Finally, some have asked whether Explorers are more likely
    to suffer a rollover after a catastrophic thread separation.
    The fact is that the Explorer had the misfortune of being
    equipped with virtually all of the recall tires that were
    produced. But even with that considerable handicap, Federal
    Government statistics show the Explorer to be one of the safest
    vehicles on the road, both in single accidents and in multiple
    vehicle accidents.
        Let me just say in conclusion, we have done our utmost to
    provide the committee with everything that has been requested.
    The submission includes formal sign-off documents, engineering
    reports, comprehensive data tabulations, but it also includes
    engineers' handwritten notes and their e-mails to one another
    and vast amounts of testing done at design levels other than
    the design level that ultimately went into production. These
    documents paint a picture of the day-to-day work of engineers
    as they develop a product. They reflect debates among engineers
    as to alternatives that might be considered and differences of
    opinion as to the best approach to be taken. There are letters
    to suppliers, including tire suppliers, indicating improvements
    are needed in one or another characteristic. But also reflected
    in all this paper is the constant striving of thousands of Ford
    Motor Company men and women to make a better product. Thank
    you.
        [The prepared statement of Helen O. Petrauskas follows:]
         Prepared Statement of Helen O. Petrauskas, Ford Motor Company
        Good morning, Chairman Tauzin, Chairman Upton, and Members of the
    Committee. I appreciate the opportunity to be here today to provide you
    with additional information on the Firestone tire recall. In response
    to your committee's request, Ford has provided extensive documentation
    related to two testing issues. First, we have provided documents on the
    testing done by Ford or by the tire manufacturer of Firestone ATX, ATX
    II, Goodyear Wrangler and Firestone Wilderness tires. Second, we have
    provided documents related to the testing and performance of the
    Explorer with respect to handling and stability.
    Tire Testing
        The documents we provided your committee conclusively demonstrate
    that Ford performed thorough, complete and rigorous testing of the
    subject tires. Additionally, Firestone agreed and has repeatedly
    supported the recommended tire pressure of 26 psi. Finally, the
    documents demonstrate that all requisite testing was done at 26 psi,
    the tire pressure recommended to our customers.
        We have provided more than 100,000 pages of documentation to the
    Committee (Attachment 1). These documents include detailed descriptions
    of the governance process--Design Verification Plan and Report
    (DVP&R)--that our vehicle teams follow to approve tires for production.
    The DVP&R, in turn, is supported by specific test procedures that make
    up the elements of our sign-off process. These have also been provided.
    We have provided as many documents setting forth the specific results
    of the required tests as we could find.
        The tire Design Verification Plan and Report is a combination of
    supplier and vehicle manufacturer testing. The supplier is responsible
    for conducting a wide variety of tests to insure the tire meets Ford's
    functional requirements and government regulations. For example,
    supplier testing is required to confirm acceptable rolling resistance,
    wet and dry traction, and tire wear. Ford conducts vehicle testing to
    insure the tires performance is acceptable in conjunction with other
    vehicle systems. These tests address performance characteristics such
    as handling, traction and stability. In all, nearly 30 groupings of
    tests are required as part of Ford's Design Verification Plan and
    Report--a complete list and description of these tests is included in
    Attachment 2.
        One example of Ford's comprehensive approach to tire testing is the
    way we determine the speed rating of tires. The standard industry
    procedure to establish speed rating--Society of Automotive Engineers
    (SAE) procedure number J1561 provides that all tires be tested at 38
    psi. The Tire and Rim Association requires that an analytical
    calculation be used to adjust the speed rating to the tire pressure
    recommended to customers. Ford's procedure number ES-XU5A-1508-AA
    requires that speed rating be determined by running the test at the
    actual tire pressure recommended to the customer. In order to provide
    an additional margin of real world safety, Ford requires that its tires
    actually meet a ``higher'' speed rating, above the maximum vehicle
    speed. Thus, the tires that are the subject of this hearing all
    demonstrated ``passing'' performance at 26 psi at the ``S'' level even
    though the maximum speed of the Explorer is one speed rating category
    lower.
        A great deal of attention has been paid to high speed testing. We
    want to emphasize what actions were taken. Specifically, our test
    procedure provides that testing should be done by running the tires for
    at least 200 miles at a minimum speed of 90 miles per hour at an
    ambient temperature between 70 and 90 degrees Fahrenheit with tire
    pressure as recommended to the customer. This test was conducted for
    the four different 15 inch tires used on the Explorer since its
    introduction--the Firestone ATX, ATX II, and Wilderness AT and the
    Goodyear Wrangler. Typically, this testing is done on a ``slave''
    vehicle that is modified to duplicate the weight distribution of each
    of the vehicles that will use the tires being tested.
        We have been able to find two of the track worksheets used by the
    engineers who performed this high speed testing. In the case of the
    earliest test, performed in 1989, we have not been able to locate the
    track worksheet. However, we have identified the engineer who performed
    the testing and have provided an affidavit from him. And we are
    continuing to search for the remaining test track worksheet.
        Documents we have provided show that the recommended tire pressure
    of 26 psi was selected by Ford to provide the optimum balance of many
    functional characteristics. These include: performance features such as
    high speed durability, load carrying capacity, fuel economy, customer
    comfort characteristics, and stability and handling. This is
    illustrated in Attachment 3. Numerous other manufacturers of compact
    SUVs and pickup trucks also recommend 26 psi in their vehicles. So the
    Ford Explorer is hardly unique in that respect.
        The documents we have submitted also show that Firestone repeatedly
    and consistently agreed to and supported the recommended tire pressure
    of 26 psi.
    Vehicle Handling and Stability Testing
        The starting point for Ford Motor Company's approach to continuous
    improvement to safety for all products is Ford's Safety Design
    Guidelines. These guidelines are updated constantly. They represent the
    high safety standards that Ford Motor Company sets for itself and which
    go well beyond government regulations. The most recent version of these
    guidelines is attached (Attachment 4). Safety Design Guidelines are
    intended to provide continuous improvement to enhance the already
    extensive Ford efforts to provide vehicles that exhibit a high level of
    safety.
        Prominent among these safety guidelines is Ford's guideline on
    resistance to rollover. The objective of this guideline is to design
    and develop a vehicle that will remain stable under all operational
    conditions, including accident avoidance maneuvers. The guideline
    states that the vehicle should respond in a predictable manner and give
    the driver perceptible signals that the vehicle is at its limit.
        Ford Safety Design Guidelines are supported by specific engineering
    test procedures relating to all aspects of vehicle handling. Each of
    these procedures requires that tire pressure be checked and adjusted to
    recommended levels, so that the testing accurately reflects what our
    customers are likely to experience.
        As to the vehicle itself, Ford Motor Company conducts various ride
    and handling tests. For example, lane changes, slalom events, a
    handling course circuit, various understeer tests, braking tests and
    steering evaluations are all performed at various speeds and vehicle
    loading conditions. These procedures ensure that Ford's vehicles have
    appropriate steering and handling characteristics and a wide margin of
    safety.
        The extensive handling testing is supplemented by specific testing
    focusing on vehicle behavior in violent maneuvers. One of the most
    extreme tests is called the ``J-turn'' test, a test that was performed
    on the 1991 Explorer. The Explorer met or exceeded all J-turn test
    critieria not only at the recommended tire pressure of 26 psi, but also
    at the maximum tire pressure for the ATX tire of 35 psi. This
    conclusion was validated by both track testing and computer simulation.
        In providing information to the Committee, Ford included all
    testing results that we were able to collect in the time permitted.
    This means that we even included test results for prototype
    configurations that were not representative of the vehicle as finally
    produced. What is significant is that even these early prototypes met
    the severe J-turn test at the recommended tire pressure of 26 psi and
    at 35 psi. The documents show that the performance of the production
    version of the Explorer was better than the early prototype level. This
    same type of information has been provided for model year Explorers
    produced after 1991.
        All of these rigorous tests are aimed at providing a superior
    margin of safety for our customer. The ultimate proof of the robust
    design of the Explorer and its strong stability performance is in the
    way it has performed in the hands of customers for more than ten years.
    Our analysis of real world data shows that the effect of bad tires can
    now be seen. Attachment 5 is a comparison of Explorer's performance
    with 15'' Firestone tires and 15'' Goodyear tires respectively. This
    chart shows the rate (reports per million tires produced) at which
    tires are noted in government fatal accident statistics as a
    contributing factor in rollover accidents, separated by brand of tire
    used as original equipment on the Explorer. These data clearly show
    tires are called out at a higher rate for the recalled Firestone tires,
    compared to the rates for Goodyear tires on Explorers.
        Even including the accidents likely caused by tread separations the
    Explorer continued to perform 27 percent better than the average
    passenger car and 17 percent better than the average compact SUV
    (Attachment 6). Contrary to assertions made in the press as recently as
    today, an evaluation of single vehicle rollover accidents shows that
    the Explorer performs better in these kinds of crashes than the average
    compact SUV (Attachment 7).
        Finally, some have asked whether Explorers are more likely to
    suffer a rollover after a catastrophic tread separation. The fact is
    that the Explorer had the misfortune of being equipped with virtually
    all of the recalled tires that were produced. But even with that
    considerable handicap, federal government statistics show the Explorer
    to be one of the safest vehicles on the road, in both single and
    multiple vehicle accidents.
    Recall Update
        Since we last appeared before your committee on September 6, we
    have replaced more than one million additional tires and have more than
    40 percent completion of the recall. Work towards completion of this
    recall has progressed more quickly than any recall in history. However,
    we remain very concerned that there are defective tires on some of our
    vehicles and we will not rest until every bad tire is replaced. Last
    week the first newly purchased tire mold came on stream. By the end of
    September, an additional 300,000 tires per month will become available
    to customers.
        As Jac Nasser, Ford's President and CEO, recently committed to your
    Committee and to the Senate Commerce Committee, Ford is working with
    the tire industry to develop an ``early warning reporting system.''
    This system will provide information on the real world performance of
    tires. Since our announcement, we have already started meeting with our
    tire suppliers and are actively developing this system.
        In fact, this system is already starting to address issues. You may
    be aware of the recently announced Continental tire replacement
    program, which impacts the Lincoln Navigator. Our preliminary
    discussions with Continental on the ``early warning'' system allowed us
    to work together to quickly address the issue.
        Finally, our product development experts are investigating a
    dashboard indicator for future models which would alert the driver to a
    potential tire problem.
    Conclusion
        We have done our utmost to provide the committee with everything
    that has been requested. The submission includes formal signoff
    documents, engineering reports, and comprehensive data tabulations. It
    also includes engineers' handwritten notes, e-mail messages to one
    another and vast amounts of testing done at design levels other than
    the design level that ultimately went into production. These documents
    paint a picture of the day-to-day work of engineers as they develop a
    product.
        They reflect debates among engineers as to alternatives that might
    be considered, and differences of opinion as to the best approach to be
    taken. There are letters to suppliers, including tire suppliers,
    indicating improvements needed in one or another tire characteristic.
    And reflected is the constant striving by thousands of Ford Motor
    Company employees as to how we can make this product even better.
        The story these documents portray is one of extremely high
    standards being set for a product and thorough testing and evaluation
    and striving for continuous improvement in all characteristics
    important to customers.
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        Mr. Tauzin. Thank you very much, Ms. Petrauskas.
        Mr. Baughman, do you have an opening statement?
        Mr. Baughman. No.
        Mr. Tauzin. The Chair recognizes himself for 10 minutes.
        Let me reconstruct the information that we have. Dr.
    Bailey, the information we have is that the agency requires
    both speed and durability testing, and durability testing
    currently required might be done at 26 psi. But speed testing
    is not. Speed testing by agency requirement is at 32 psi?
        Ms. Bailey. That's correct.
        Mr. Tauzin. So the agency does not currently have, until we
    make changes, regulations that require either one of these two
    parties to test the Ford Explorer under these heat conditions
    with loads at 26 pounds per square inch at speed test; is that
    right?
        Ms. Bailey. That is correct, but only the high speed
    testing is done at 32. Everything else is done at 26 psi, but
    not the high speed testing.
        Mr. Tauzin. Second, there are no regulations right now
    requiring either testing of tires for aging and normal wear
    conditions; is that correct?
        Ms. Bailey. There are endurance tests and they are done at
    88 percent maximum load at 95 degrees and at the speeds that we
    normally travel in America. But that is essentially correct.
        Mr. Tauzin. That is for 1,700 miles wear, so that under
    current regulations, there is not a lot of attention paid or
    required to testing tires that have normal 2, 3 years of age
    and wear; is that correct?
        Ms. Bailey. Exactly.
        Mr. Tauzin. That may be a topic that we want to discuss in
    terms of new regulations?
        Ms. Bailey. Yes, it is.
        Mr. Tauzin. Thank you, Dr. Bailey.
        Let me turn to the tests that were done as opposed to what
    was required. Let me start with Ford. Correct me if I'm wrong,
    first of all we have an affidavit that says in 1989 you ran one
    test at high speed--and I quote--on the UN-46 Explorer. And I
    quote again, that the high speed durability tests run on the
    UN-46 Explorer were conducted at maximum rear gross axle
    weight, et cetera.
        The affidavit we have leads this committee to believe, as
    did the testimony 2 weeks ago, that Ford at least ran one test
    on a Ford Explorer at 26 pounds per square inch in speed tests
    at these proving grounds. We now learn that those tests were
    run on a slave or mule vehicle, a truck, not a Ford Explorer.
    Was this affidavit intentionally misleading?
        Ms. Petrauskas. Absolutely not, Mr. Chairman.
        Mr. Tauzin. What happened?
        Ms. Petrauskas. The tests that we run for high speed
    durability are done using something that we call a slave or
    mule vehicle.
        Mr. Tauzin. Why did you call it a Ford Explorer in the
    affidavit?
        Ms. Petrauskas. I have not talked to Mr. Avouris. He is a
    tire tester. I am sure in his mind when he took that mule and
    put it in an Explorer-type configuration through weight, to him
    that was an Explorer. Mr. Chairman, there is nothing devious
    here.
        Mr. Tauzin. I hope not, Ms. Petrauskas, but obviously it
    looks suspicious.
        Second, this slave/mule vehicle is not a Ford Explorer?
        Ms. Petrauskas. No, sir.
        Mr. Tauzin. Does it have the same axle design and axle
    spread? Does it have any of those characteristics, center of
    gravity characteristics of a Ford Explorer?
        Ms. Petrauskas. What it has is a weight distribution.
        Mr. Tauzin. A weight distribution similar, that is all?
        Ms. Petrauskas. May I take a couple seconds just to put
    this into context?
        Mr. Tauzin. Please.
        Ms. Petrauskas. Fundamentally, for truck testing we have
    three different mules. One mule is used to test all of the 14-
    inch tires, and that mule for years has been a Ford Ranger,
    which is a small pickup.
        Second, we have an F-150 which is a standard size pickup,
    and that mule is----
        Mr. Tauzin. So the tests were done with a Ford pickup
    truck, a F-150; is that accurate?
        Ms. Petrauskas. I want to be clear. It was a pickup truck
    that was modified to reflect the weight distribution that an
    Explorer would have. And so the tires that are on that truck
    for all they know, they are on a Ford Explorer and they are run
    for the 200 miles at the high speed.
        Mr. Tauzin. Is the axle wider or longer than the Ford
    Explorer?
        Ms. Petrauskas. We can give you the details.
        Mr. Tauzin. I think the answer is yes. That is what we were
    told last night; that the axle width and the length of the
    drive system are very different than a Ford Explorer. So I
    think the information that we got last night is accurate.
    Correct it in the record if we are wrong.
        Let me run through the rest of this quickly. Here is the
    information that we have. That Ford ran a single test in 1989
    before putting these vehicles with these tires on them into
    production and sale at 26 psi at high speed; but on this mule/
    slave truck, not a Ford Explorer. But again in 1994, Ford ran
    some tests, again using an F-150, and we have the records of
    those tests.
        Ms. Petrauskas. Right.
        Mr. Tauzin. In 1995 you ran some tests, but you don't have
    those records and can't produce them.
        Ms. Petrauskas. We are still looking for them.
        Mr. Tauzin. In 1998 you made the decision to turn the
    testing obligation over to Firestone. Until 1998 it was your
    responsibility?
        Ms. Petrauskas. What we did about 1998 was we actually
    changed the procedure from using slave vehicles, where you
    physically jiggled the weight around in order to simulate the
    particular vehicle to which the tire is applied, to using
    something called a tire dynamometer, and that is like an
    exercise machine for the tire.
        Mr. Tauzin. Am I correct in 1998 Ford turned the
    responsibility over to testing to Firestone, in 1998?
        Ms. Petrauskas. I believe that is correct.
        Mr. Tauzin. That is the information we have. If that is
    accurate, it also says before 1998 Ford assumed, as Mr.
    Nasser's corrective letter tells us, Ford had the obligation of
    testing these tires on the Ford Explorer?
        Ms. Petrauskas. That is correct. We used the high speed
    testing. The process we used was the one that I have described
    to you using the mule vehicles. I will talk real fast because I
    have to----
        Mr. Tauzin. Please, because I have to move quickly.
        Ms. Petrauskas. One of the things we have attached to our
    written testimony is sort of the Bible of tire testing. What
    that does is it lists some 20-odd steps.
        Mr. Tauzin. We have that.
        Ms. Petrauskas. In each of those it tells you whether a
    slave vehicle is used or whether----
        Mr. Tauzin. A machine?
        Ms. Petrauskas. Either a slave vehicle or this tire
    exercise machine; or where it says EP, it is an engineering
    protocol or a mechanical protocol. In those cases, those are
    Explorer vehicles.
        Mr. Tauzin. Exactly. In July 2000, Ford made a special
    request of Firestone to test some tires. Our information is
    that the tests were run on tires that were produced not at the
    Decatur plant but at the Wilson plant, and those tires are not
    even recalled tires; is that accurate?
        Ms. Petrauskas. What is the date?
        Mr. Tauzin. July 2000. Ford made a special request of
    Firestone to test tires. They were run on Wilderness, not ATX
    tires.
        Ms. Petrauskas. Mr. Chairman, is that in the book here so I
    can look at it?
        Mr. Tauzin. Yes, number 20 I am told. And that these tests,
    these tires passed at 106 but failed at 112 miles per hour; is
    that accurate?
        Ms. Petrauskas. I am going to have to take a minute to
    review that.
        Mr. Tauzin. Let me go to Firestone.
        You did the test. Our understanding is that at Ford's
    request you tested, in the year 2000, in July, Wilderness tires
    manufactured at the Wilson plant, and that those tires passed
    at 106 miles per hour, but failed at 10 minutes at 112; is that
    correct?
        Mr. Saurer. I don't know the details that they failed at.
        Mr. Tauzin. If you would respond in writing.
        I want to turn now to Decatur. I want you to tell us what
    happened at Decatur in 1996. Here is the information that we
    have; correct me if I'm wrong. The information we have is that
    quality control at Decatur randomly selected 239 tires for high
    speed tests, and those tests were run at Decatur in 1996. Our
    information is 110 were preproduction tires, and 125 were
    production tires. That is 54 percent of the total. That of the
    129 production tires that were tested, our information is that
    15 failed. Your information is 11.
        Let's assume that a dozen or so failed. Our information is
    also that the majority of that dozen failed because of tire
    separation. Our information is that in 1996 in these high speed
    tests conducted for quality control at Decatur, that about 10
    percent, 1 out of 10 of the production tires, failed. I don't
    think that is an insignificant number. Anyone who looks at that
    objectively, I think, would conclude that you have a horrible,
    flawed process in place in 1996 producing a 10 percent failure
    rate in the test.
        And the question is if those numbers are accurate, why
    would Firestone not report that to headquarters? You are making
    several million tires that year and selling them to the public,
    tires that are now subject to recall. Members of the public
    will be riding on tires that your own tests in 1996 say are
    going to fail 10 percent of the time potentially. How could you
    possibly have not known in 1996 that you had an obligation to
    recall those tires, to notify NHTSA, to notify headquarters,
    not only to stop production of them, but to recall those that
    you put in the hands of American consumers whose safety is now
    at risk? How could you assume that a 1 out of 10 failure rate
    was insignificant? Or not significant enough for you to issue
    immediately a recall to save lives? Please respond.
        Mr. Lampe. If I can comment briefly about the test and Mr.
    Saurer will talk about more the results. We are talking about a
    test that is a test that we agreed to do, that we do on our
    own. This is a Society of Automotive Engineer test. It is not a
    required test to do.
        Mr. Tauzin. We know that.
        Mr. Lampe. It is a very, very severe test. It is a high
    speed test. It is designed to take tires right up to their
    limits.
        Mr. Tauzin, if we don't have tires that fail tests, then
    those tests--what value are they? It takes them up to their
    limits. We expect to see some tire failures in the tests.
        Mr. Tauzin. But they are supposed to make that limit. They
    are supposed to survive at that limit. They failed you in 10
    percent of the cases. I want to know what happened inside
    Decatur. What is in the mind of the people at Decatur when they
    see these results and fail to notify headquarters, when that
    information is kept in Decatur instead of headquarters and not
    transmitted to Dr. Bailey's agency? When there is not an
    immediate advisory to Americans that we are experiencing a 10
    percent failure rate on tires that are expected to meet that
    limit? What is happening in the minds of the men and women in
    charge at Decatur when you see these results and decide not to
    advise Americans that they are riding on tires that have not
    met the limits that they should be meeting?
        Mr. Saurer. Mr. Chairman, first of all, we need to
    understand, as Mr. Lampe said, this is not a basic test of
    safety. This is a high speed rating test. The DOT 109
    requirements of high speed and endurance which is run at 26 psi
    were fully met in these tires and far exceeded the standard. We
    don't view this as a safety issue at all.
        Mr. Tauzin. Let me stop you there.
        Ms. Petrauskas. Mr. Chairman, would you yield to me?
        Mr. Tauzin. I will yield to you in a second. I want to
    correct the record. The requirement of the agency was not to
    test these tires at 26 psi at high speed. The requirement of
    the agency was 32. All I am saying is that you went beyond
    that. You did some testing on your own. Whether you are
    required to or not is irrelevant. The bottom line is that you
    did the testing. The tires failed.
        And I simply would love you to respond to that central
    question that I know is burning with all of us: Why did you not
    notify someone at headquarters that you had a major production
    problem? You were producing bad tires. You don't know today
    what went wrong. You certainly couldn't say what was wrong
    then. All you knew was something was badly wrong and you told
    no one about it. That is what is burning before us today, and
    if we are going to correct the situation with legislation, we
    need to know how and why. How can that happen at a plant in
    America?
        Mr. Stupak. Which document are you referring to?
        Mr. Tauzin. I will let staff identify it in a moment.
        Mr. Saurer. Our data, and we looked at this last night when
    we heard the press report, we see 6 tires that failed from a
    belt separation during that timeframe. The majority of those
    tires, 17, were qualification tires in process and never went
    into manufacturing.
        This particular test, as has already been said, is a very
    severe test. We run it to its limits. We have a process when
    there is a failure that the plant goes through to recheck. If
    they continue to have a problem, the plant is shut down and
    requalified and corrections made.
        Mr. Tauzin. What about all of the tires that you have
    produced and sold?
        Mr. Saurer. I don't think that this test by itself
    represents a safety problem.
        Mr. Tauzin. Let me yield to the gentlelady.
        Mrs. Wilson. Thank you, Mr. Chairman. I will pick up this
    line of questioning during my time.
        Mr. Tauzin. The Chair recognizes the gentleman from
    Massachusetts.
        Mr. Markey. Thank you, Mr. Chairman, very much.
        I want to continue along this vein of tire testing. As I
    understand it, these tires are tested at 85 miles an hour, 95,
    100 miles an hour and more, but for very brief periods of time.
    For example, it is my understanding that in order to pass
    initial production qualifications, a tire must only survive 6
    minutes at 95 miles an hour. Six minutes. Ford has its own high
    speed test that requires the tire to maintain 106 miles an
    hour, but only for 10 minutes. That is all the stress that this
    tire is exposed to.
        NHTSA in its high speed performance tests runs tires at 75
    miles an hour, 85 miles an hour, but for half an hour. That is
    what this tire is tested for. Half an hour, 10 minutes, 6
    minutes. And the test is only performed at 88 percent of the
    tire load capacity, not 100 percent; 88 percent of the tire
    load capacity, and at a tire pressure of 32 pounds per square
    inch.
        The testing at the increased higher pressure above the
    recommended 26 psi is done because purportedly for any high
    speed driving, Americans are supposed to inflate their tires.
    So in other words, people know that they are going to travel
    500 miles or 1,000 miles for a vacation, and Americans are
    assumed by NHTSA, by Ford and Firestone, that they are all
    going to go to the gas station and make sure that they get the
    right tire pressure. That is not the way that the world works.
        People have trusted you, NHTSA, Ford, Firestone, to protect
    them in advance of that. So my question revolves around these
    tests. In recent years, many States have lifted their speed
    limit above 55 miles an hour. In many States in some areas of
    their State it is 65 miles an hour, it is 75 miles per hour,
    and we all know that when the speed limit goes up to 75 miles
    an hour, people start driving 10 to 15 miles an hour faster
    than that. And they are not doing it for just 6 minutes or 10
    minutes, they are doing it for hundreds of miles. But there is
    no testing for that. No testing.
        My question to you is this: How can any of you justify not
    testing these tires after 2 years of use? And I want to hear
    each of you justify to American families that you haven't put
    in place a testing system that ensures--and let's be honest,
    those are the tires that people are riding on. They are riding
    on 2- or 3-year-old tires, not brand new tires, in a special
    test for 6 minutes, but a 2-year-old tire on a road going 1,000
    miles at 75 miles an hour perhaps, with two kids strapped into
    the back seat. How can you justify that you have not performed
    tests that tell these families, who assume that you have done
    these tests, that their families are safe?
        Mr. Saurer. Let me try to respond. We do, as we have
    indicated, many more tests beyond the DOT requirements as well
    as the Ford requirements in this particular case or any other
    vehicle manufacturer's requirement. We have outdoor test
    facilities where we run 40 million miles annually. We have
    laboratories and research facilities where we are looking at
    the development of compounds and----
        Mr. Markey. Do you do tests at 2 years of age on these
    tires?
        Mr. Saurer. We artificially age our tires.
        Mr. Markey. Do you take 2-year-old tires that have been on
    actual vehicles and test them? Not artificial; real world tires
    that have been on the road in Arizona in 100-degree temperature
    for half of the time that they have been on the vehicle and
    bring them in and test them?
        Mr. Saurer. We don't do that specifically, no, because we
    cannot control. When we do a test like that, we have no idea
    what the usage conditions----
        Mr. Markey. You do have an ability to control that, Mr.
    Saurer, you can give those tires to your employees and you can
    ensure that those employees have told you exactly what they
    have used them for. That is what happens at Converse Rubber
    with their sneakers. They give them to their own employees.
    Converse Rubber was three blocks from my house, and they used
    to give our high school basketball team a pair of sneakers each
    year, and we gave them back at the end of the year. We had a
    promise that we wouldn't take them home, so they knew how many
    hours and how many games we practiced on them. At the end, they
    took them back. Why can't you do that for your own employees?
        Let me say I think that you have disserved the public, Mr.
    Saurer, by not taking the most stringent precautions to protect
    American families. There is no reason that you can't take real
    world tires and test them.
        Mr. Saurer. We do take real world tires and test them. Our
    employees have run our tires. We have analyzed those tires. We
    go out in the field and examine----
        Mr. Markey. You just told me that you can't construct a
    test----
        Mr. Saurer. You asked a different question. Let me explain.
    We go out into the field and we look at tires that are returned
    in the field through normal warranty adjustments and we examine
    those tires. They have been tested in the real world. We look
    for any particular weaknesses in those tires. That is one of
    the key bases for which we develop new technology to improve
    the product as we go forward.
        Ms. Bailey. Congressman Markey, our testing is clearly
    outdated, and this winter we are going to update that test.
    There is no justification for that. At the same time, I
    should----
        Mr. Markey. No justification for what?
        Ms. Bailey. For tire testing standards to be based on
    standards that were set 30 years ago, and we are intent on----
        Mr. Markey. Meaning testing for only 6 minutes or 10
    minutes or half an hour?
        Ms. Bailey. Our endurance test goes for 34 hours, so we are
    testing for long enough, but that is not good enough. But you
    are right, they are not old tires. I should say if any of the
    tires that we test fail at all, they are not to be sold and
    there is a recall. But that test, I agree, is not where it
    should be.
        Mr. Markey. Do you test 2-year-old tires for 34 hours? Do
    you test 5-year-old tires for 34 hours? There are many
    Americans driving 34 hours.
        Ms. Bailey. And there are many people driving on tires
    which have been at it for 20,000 miles and 30,000 miles. We are
    looking for legislative support so we can make changes like the
    one that you are talking about. We need to be looking at the
    psi, the temperature that we run them at, and they need to be
    older tires so it has a real world import.
        Mr. Markey. I think, to be honest with you, that it is not
    a big request to Ford, to Firestone, to NHTSA, to have one test
    per year with tires that are 1 year old, 2 year old, 3 year
    old, 4 year old, 5 year old, knowing that the danger of
    families being in danger as each year goes by as the thread is
    thinning out and they are trying to squeeze the last few
    thousand miles out of their vehicle because they are working
    class families; but they are still assuming, because there is
    no warning that comes from the Federal Government or the
    manufacturers. That their families are in fact now more and
    more endangered.
        Mr. Lampe. We agree. We all agree. We agree with NHTSA as a
    company. We agree as the tire industry that we must work
    together to develop more accurate, more robust, more real world
    type testing, and we support that and we will work to those
    ends.
        Mr. Markey. We have fuel gauges, we have oil gauges, we
    have temperature gauges. There was no standard for a rear-view
    mirror or defroster, but we put that on the books over the
    years. Would you oppose a mandate that every automobile
    manufactured or sold in the United States has a tire pressure
    gauge on the dashboard that parents can see and know whether or
    not their children are being put in danger? Would you object to
    that?
        Ms. Petrauskas. As our president testified when this
    committee held its last hearing, we are actually investigating
    that kind of----
        Mr. Markey. Would you object if we mandate it?
        Ms. Petrauskas. No. The one thing is that we urge all of us
    when we look at a requirement like that is to think about what
    is it that we want.
        Mr. Markey. We will work with you to make sure that is done
    in cooperation with the industry, but would you object to it?
        Ms. Petrauskas. No, of course not.
        Mr. Lampe. Mr. Markey, we have been a proponent of that for
    years and years. We are very much in favor of that. If we can
    have a gauge that tells us when our windshield washer fluid is
    half empty, we can certainly have an indicator that tells us
    when our air pressure has gone down.
        Mr. Markey. Dr. Bailey, do you think that is a good idea?
        Ms. Bailey. NHTSA sets performance standards. In this case
    obviously, the performance was not there. That usually means
    that there are design changes, and I would certainly endorse
    those kinds of design changes.
        Mr. Tauzin. Just to follow-up on the gentleman quickly,
    isn't it true that Ford is putting those indicators on new
    model years in the Middle East?
        Ms. Petrauskas. We are actually looking at them. One of the
    things that we really need to look at is what else do we want
    this system to monitor; and one of the really intriguing things
    is if you can get it to monitor temperature as well as pressure
    and use that to give an indication to the customer. So the work
    is underway, how we might be able to have a reliable system
    like that.
        Mr. Tauzin. Why only in the Middle East?
        Ms. Bailey. Congressman Markey, I might just add that the
    Toyota Sienna van has that already in place.
        Mr. Tauzin. Why are you only doing this on new models in
    the Middle East?
        Ms. Petrauskas. No, we indicated in our testimony that we
    are looking at this as something that we go across the board
    with.
        Mr. Tauzin. Here is the status. We have a vote on the
    floor. Mr. Upton is returning from that vote and I will be able
    to hand the chair to him. I yield now to----
        Mr. Markey. Just to clarify. Dr. Bailey, did you say that
    you would support mandating a tire gauge standard? Yes or no?
        Ms. Bailey. I would support--yes, I support that.
        Mr. Markey. Okay. Thank you, Doctor.
        Mr. Upton [presiding]. Okay. Thank you again for your
    testimony. I guess, Dr. Bailey, particularly I want to thank
    you for your help in the meetings that we have had the last
    couple of weeks as we've tried to design legislation that in
    fact will fix the problem from happening again, as we did not
    see after the Firestone 500 recall back in the seventies.
        And I guess I just want to expand on a couple of things
    that Chairman Tauzin indicated, particularly as we look at the
    legislation that yesterday was adopted in the Senate in the
    full committee, John McCain's Committee on Commerce, and I
    would expect action here in the House as well as we look to
    mark up in the subcommittee this afternoon and conclude
    hopefully next week, and going on a pretty fast track here.
        One of the items that was, I believe, in the McCain bill
    and is in our bill is, of course, the requirement to you--to
    NHTSA--to in fact revise the tire safety standards that have
    not really been revised since 1968. I know that you mentioned
    that briefly in your testimony a couple weeks ago, and as we
    look at--as this will happen one way or the other, I think that
    it is very important that particularly you look at label
    requirements. We've seen documents inserted in the record today
    in terms of what consumers actually do when they look at their
    tires, whether it be on the sidewall, whether it be on the
    door, whether it be on the owners manual. But we really try to
    have NHTSA look at the whole range of testing--a variety of
    different psi, a variety of different loads, and to make sure
    that in fact we have a ``Good Housekeeping Seal of Approval''
    by NHTSA on all tires and where it can be adequately reviewed
    to make sure that the maintenance is there by all consumers.
    And I think that that's exactly where you're headed; is that
    correct?
        Ms. Bailey. That's exactly where we're headed.
        Mr. Upton. The FARS data that became available last week
    from 1999 indicated--and I think that that is where the
    additional death came from, the tires; is that correct? In the
    hearing 2 weeks ago there were 88 deaths attributed to
    Firestone tires.
        Ms. Bailey. No, sir, that is not where the data came from;
    the data that you've heard today, that we're to 101.
        Mr. Upton. 103.
        Ms. Bailey. I need to correct that. And what you're hearing
    is that--this is a data entry change I need to make here--that
    we had received a report that was taken by a young college
    student who was doing data entry for us and it said there were
    two fatalities, but on the second page it indicated that those
    two fatalities were indeed pets, and so we had to change the
    record and it is now 101 fatalities. That is accurate.
        Mr. Upton. Did that come from the FARS data?
        Ms. Bailey. No, sir; it did not. That comes from our system
    of complaints that are received by NHTSA and the review of
    those complaints and tallying of that data.
        Mr. Upton. Has anyone actually analyzed the FARS data for
    1999? I know it is now available. Has anyone actually looked at
    the data and seen what conclusions they may bring?
        Ms. Bailey. Yes, sir, they certainly have. But you are
    right in assuming that or suggesting that we have not
    integrated our FARS data as well as we might. At the same time,
    you need to understand that the FARS data is coming in from all
    over the country from law enforcement. It does not include
    complete information that lets us on a regular basis know
    exactly what happened in any particular crash or fatality. At
    the same time, we need to mine that data. We need to integrate
    our data bases so that we have all the information at our
    disposal at all times.
        Mr. Upton. Thank you.
        Mr. Lampe, at our hearing 2 weeks ago, Firestone testified
    before Ford testified. And Ford shared with us a document that
    I think I have here, on the stand over here, with regard to the
    instances of failures or claims rate, specifically at the
    Decatur plant, and it relates it to other facilities that
    Firestone owns and operates.
        As I look at my own plants--and I went through a number of
    plant tours this last week when I was in Michigan--one of the
    things I routinely ask is: What is the percent that doesn't
    make the grade and the quality assurances that are given up the
    line? And one of the things that Mr. Tauzin focused on, and a
    number of us in our opening statements as well, was that at the
    Decatur plant there were early indications that in fact the
    quality of these tires, they were not meeting the test. It
    should have been an early signal to Firestone that there were
    problems with that test.
        When you look at the data here that Ford was able to get
    from Firestone, it really jumps off the page. What did you do
    with this information, and at what stage did you put it all
    together? Because in your statement today that just yesterday
    you asked--you sent a letter to Ford, asking that they increase
    the psi from 26 to 30 on these tires--is years too late when
    you've got data like this which shows that there were serious
    problems of tire failures at that particular facility.
        Mr. Lampe. Mr. Chairman, the data that you're referring to
    is claims data, and I'll come back to that and I'll try to be
    very brief. The normal measurements, the proven measurements
    that we have used and the industry have used over years has
    been field surveys, testing that we've talked about, and
    adjustments data, when a customer walks back in and has a tire
    that he has a warranty claim on. We've used those. All of those
    measures, even the testing, which we will explain, said that
    those tires were good tires. It wasn't until that we looked at
    the claims data, and I will say with great assistance from
    Ford, from a statistical and analytical ability to look at the
    claims data, that we saw the overrepresentation in claims data
    in Decatur. Let me explain real quick when I say claims data
    because it is very confusing----
        Mr. Upton. Before you finish. The claims data, from what I
    understand, you knew this claims data in 1997.
        Mr. Lampe. We've had access, yes, sir. We've used and had
    access to that claims data for a number of years. We've never
    used it as a performance measure.
        Mr. Upton. But if you had that data in 1997 and if you knew
    that these tires were failing in terms of randomly taking them
    off the line and testing them at 6 minutes at 110 miles an
    hour, and testing them where you thought they might fail, and
    knowing that tires made in other facilities in fact were
    passing the test, why wasn't that a signal to send up the line,
    whether it be to the Ford showrooms or to the consumers, or
    certainly to your quality control people at headquarters, that
    there was a problem?
        Mr. Lampe. From the testing standpoint, Mr. Chairman, I'll
    go back to the test that we ran; was a test that is much more
    severe, much more abusive than is the 109 test.
        Mr. Upton. I understand that.
        Mr. Lampe. When tires fail on that test, Mr. Chairman, we
    don't turn our backs or close our eyes to it. We have a
    procedure that we go through to retest multiple tires, multiple
    tires, to ensure that those tires pass. We don't just let the
    test go. We retest in every situation. As far as the claims
    data, we've said, Mr. Chairman, we wish--we all wish that we
    would have done a better job or used that claims data
    differently than we used it for.
        Mr. Upton. There were some changes made to the tire later
    on; is that not right? Redesigned with some wedges and
    thicknesses of the sidewall. There was some new standards that
    were adopted for the production of that tire, were there not?
        Mr. Lampe. Sir, we'll talk about those two specific
    changes, but we make changes all the time in our manufacturing
    process in our construction of our tires.
        Mr. Upton. Did those changes come about because of the
    failures of the tests in Decatur?
        Mr. Lampe. No, sir.
        Mr. Upton. When you tested those--are these tires only made
    at Decatur, the tires?
        Mr. Lampe. Which tires are you referring to, the Wilderness
    tires, sir?
        Mr. Upton. Correct.
        Mr. Lampe. No, the Wilderness Tires are made at a number of
    plants, including Decatur--were made in Decatur; they're not
    made in Decatur anymore.
        Mr. Upton. But did those tires when they failed the test in
    Decatur, when you randomly took them off the line--whether it
    was 5 or 10 percent, it is still a significant number of
    failures--did you have that same type of incidents at other
    facilities where you made the Wilderness tires.
        Mr. Lampe. Sir, the tests we're referring to, if I'm not
    mistaken, my understanding is the majority of the tests on
    tires were ATX tires, I believe, and the ATX tire was being
    produced at Decatur at a much, much, much greater level,
    production level, than in the plants. And if that data is not
    correct, I'll get you the correct production data and I'll
    supply it to the committee. I'm sorry.
        Mr. Upton. My question is, you knew in Decatur that the
    tires were failing in terms of the tests that were conducted on
    those tires at a fairly significant rate, somewhere between 5
    and 10 percent of the tires that you took off in a random way.
    Did those same tires produced in other Firestone facilities
    have the same type of failure rate that they had in Decatur?
        Mr. Saurer. Mr. Chairman, I am not sure of the failure
    rate, but it's not uncommon to have these failures. Let me
    correct something--before I forget--for the record that John
    said. The sidewall gauge change that we made at Decatur was in
    correct response to the SA high speed. The wedge change is a
    totally different issue of continuous improvement. And when we
    made that change in the lower sidewall of the tire, this is a
    minor gauge change of rubber to control the thickness. It's a
    specification that went across all plants for just additional
    control.
        Ms. Bailey. Congressman Upton.
        Mr. Upton. Yes.
        Ms. Bailey. We are concerned about the Decatur situation
    because the wilderness tires that were part of the recall were
    only from the Decatur plant. We are sending an investigator out
    there in about a week to work together with the manufacturers
    to try and understand what has happened at Decatur, whether
    there is something significant in that plant.
        Mr. Upton. I yield to my colleague and friend from
    Michigan, Mr. Stupak.
        Mr. Stupak. Thank you, Mr. Chairman.
        Dr. Bailey, NHTSA really doesn't have standards for
    steelbelted radial tires, correct?
        Ms. Bailey. I would not go that far, but the fact that
    these same tires passed our test in 1997 certainly alerts me to
    the fact that our 30-some-year-old standard apparently is not
    providing us with the security we'd like for tire safety.
        Mr. Stupak. You said they passed your standard in 1997, but
    that standard is based on 30 years ago.
        Ms. Bailey. Yes, sir.
        Mr. Stupak. So 30 years ago we didn't have steelbelted
    radial tires.
        Ms. Bailey. Actually it was in 1968, and there were radial
    tires at that time. But you're correct, that basically at the
    time we had the bias two-ply tires.
        Mr. Stupak. So if you have a bias two-ply standard over
    here and you're dealing with a steelbelted tire over here, how
    can you say that they pass the standard when you're talking
    really about apples and oranges?
        Ms. Bailey. Well, I should also say we require tire
    manufacturers to certify tires to dynamic laboratory tests, and
    they are similar to the compliance procedures around the world.
    It does not change the fact that you're right. This is an old
    standard, 30-year-old, and we are looking to change it this
    year.
        Mr. Stupak. Well it's a little after the fact. And I know
    you've just been there and I know you just got there a couple
    months ago. But the fact is that the standards that you speak
    of at NHTSA is really something that is not comparable to
    today's tire. So, No. 1, we have to establish before we can say
    pass or fail, we have to say this is the standard, and the
    standard has to be brought to today's tire, correct?
        Ms. Bailey. We are analyzing the engineering data now to
    determine whether there is something inherent about the test
    that is inappropriate. If you recall, much of it is
    appropriate. It may be, as we heard from Congressman Markey,
    that it is the fact that we are not using old tires, that we're
    not going far enough with our testing, because in fact it's at
    95 degrees; it's at 75 to 80 miles an hour.
        Mr. Stupak. And 112 miles an hour. I know all that.
        Ms. Bailey. And at 30 and 26 psi. So I guess what I'm
    saying is I completely agree with you. We need to update the
    test, but we're evaluating now the nature of that update.
        Mr. Stupak. Before you can test anything, you have to have
    a standard. The standard has to be current with the tire you're
    testing, right? So really, if we're going to change things and
    there's going to be a markup later today in one of the
    subcommittees and talk about what should be done, isn't the
    place to start is to have a standard for today's tires, not a
    standard that was set back in 1968 for two-ply tires? Wouldn't
    that be the place to start?
        Ms. Bailey. Yes, sir. That's why we have a proposal that
    would come out this winter to make that change. I would
    appreciate your support on that.
        Mr. Stupak. We have to have some standards and I think we
    should start there with some standards. When you say about the
    testing, the American public understands that's based on a 1968
    radial tire ply. You called it right; a two-ply tire, not
    steelbelted tires, correct.
        Ms. Bailey. It's not entirely based on that tire versus
    today's tire. I can't say that from an engineering point of
    view, but it is outdated and needs to be changed.
        Mr. Stupak. So we need current tire standards, No. 1.
        Ms. Bailey. Yes.
        Mr. Stupak. No. 2, I think we agreed that we are going to
    have tire pressure, you agreed with Mr. Markey that was a good
    idea, like we would have on the dash. The markup is at 1
    o'clock today. What else would you recommend we have? Mr. Upton
    has some legislation. What else would you recommend?
        Ms. Bailey. The two main points in the legislation--and I
    appreciate he's not here, Congressman Upton's working on that
    with us, at least meeting with us about that. First, is the
    additional authority to obtain the data that you just heard
    about. That claims data that you saw on the bar graph would
    have been invaluable to us. We need that claims data. We also
    need the authority to receive data about recalls around the
    world. Also, we need to have appropriate funding in order to
    provide the regulations that will ensure the safety of
    Americans.
        Mr. Stupak. Third was authority to get the data you need.
    Fourth was recall around the world you need to be made notice
    of. Fifth was what now?
        Ms. Bailey. Claims and warranty information domestically,
    authority to receive information about defects and recalls
    outside of the United States.
        Mr. Stupak. That was No. 4. Fifth was budget.
        Ms. Bailey. Budget. And we could get real specific. There
    are several other things, including extending the recall period
    from 3 to 5 years for tires and 8 to 10 years for vehicles, and
    removing the cap so that our civil penalties actually promote
    safer production.
        Mr. Stupak. Are you recommending any criminal penalties?
        Ms. Bailey. We have the ability at this time to make a
    referral to Justice for criminal actions if there are egregious
    violations of the law. At this point, whether or not there
    would be criminal penalties has not been determined, but I
    think we can all understand that that may allow us greater
    enforcement capability.
        Mr. Stupak. So you're not asking for that then?
        Ms. Bailey. That is one of the things we're looking at in a
    multitiered approach for enforcement.
        Mr. Stupak. Okay. But you don't think the committee should
    bring that up or that should be something--that's something
    you're not seeking today? Because we have the markup today.
    You're not seeking that, correct?
        Ms. Bailey. Actually the Secretary will be testifying to
    that later.
        Mr. Stupak. So you have about 7 or 8 things. Anyone else on
    the panel think NHTSA should do something different or some
    other standards? Mr. Lampe.
        Mr. Lampe. Sir, we agree with those revisions and those
    things we need to do differently. We support those. We would
    also support any kind of standard or testing that can better
    identify the interaction between a tire and the vehicle and
    what happens in an accident causation. I am not sure that would
    be something that NHTSA would do from a standard or regulatory,
    but we certainly support what Dr. Bailey mentioned in the other
    one as well.
        Mr. Stupak. Much along the lines Mr. Markey was talking
    about, real world circumstances, some kind of testing there.
        Mr. Lampe. Yes.
        Mr. Stupak. Anything from Ford. Go ahead, Mr. Saurer.
        Mr. Saurer. I think we would want to be careful about
    throwing away all the current standards. There should be some
    consideration of raising the minimum. We have a lot of test
    background and a lot of test data with the current tests, and
    certainly we'll work and support along those lines but I think
    another consideration could be looking at the minimum
    requirements being raised as opposed to trying to create some
    new unusual test that may take a long time to develop and have
    understanding of its importance.
        And the other thing, because I think these standards have
    served us well for passenger car tires over the years, but in
    this class of SUVs and light trucks particularly, and it's
    growing, it's a very booming market, I think that's where the
    major issue is. And so we will also certainly promote more than
    an air pressure gauge on the dash. We would like to see air
    pressure monitoring systems, particularly in SUVs. Their
    technology is growing and I think that that's realistic to
    think about it in the future, and we might even do it like
    other--if we want to get really high-tech, is when pressure
    gets too low, the speed is restricted by a computer in the
    vehicle is the ultimate goal.
        Mr. Stupak. Anyone else?
        Ms. Petrauskas. I want to add that. I think when our
    president testified, Jack Nasser laid out pretty much our
    position on these various issues. I think to us, the driver, is
    it really going to improve real world safety? And if it is
    going to make that improvement, then we should do it and we
    should do it quickly. And we only hope we're given the
    opportunity to participate in the development of those.
        Mr. Stupak. Mr. Nasser mentioned two things: the early
    warning system and recall around the world. We've had about
    eight of them now put forth on the table, as a general rule,
    for it.
        Ms.  Petrauskas. Actually we were asked--maybe I am getting
    my hearings mixed up between the House and the Senate--but I
    think we were asked about the various elements. We supported
    increasing the level of civil penalties. We supported
    improvements to the brake standards. We started work to try to
    develop a rollover standard. And then finally we indicated
    response to a question whether we could conceive of truly
    egregious, unusual circumstances where there is a clear
    potential to do harm to another person; whether we would agree
    that criminal penalty might be appropriate in that sense, and
    our position was yes. In those kind of circumstances, I might
    hasten to add that I haven't seen all of the provisions, but
    I've seen a couple of them, but I'm not sure that's the
    situation they describe.
        Mr. Stupak. Let me ask one more question, if I may. The
    chairman asked some questions about Decatur, and that 10
    percent of the tires failed at Decatur and Firestone
    headquarters was not notified. And in talking with the
    chairman, the basis of that came from these documents that have
    been received by the committee from Firestone. Do you have any
    reason to dispute the chairman's conclusions of the 10 percent
    failure in failing to report from Decatur on up to Bridgestone
    headquarters, Firestone?
        Mr. Lampe. I think the chairman pointed out himself in the
    opening remarks, that when we look at what we talked about,
    tire failures, tires not meeting the testing requirement, there
    were a significant number, more than half I believe, Mr.
    Chairman, of tires that were not production tires. They were
    prototype tires. They were tires that we test to see if we can
    put them into production.
        The number that I don't know that we agree on, the number
    that I don't know that we agree on or not, is we had--I believe
    I recall six cases of all the tests we've done in Decatur, we
    had six cases where we had a tread separation indication. They
    were all at the very last step--I'm sorry, at the very last
    step of the high speed SAE tests, not the normal 109.
        Mr. Tauzin. Would the gentleman yield a second?
        Mr. Stupak. Yes.
        Mr. Tauzin. I want to make sure this is very clear. In the
    10 percent numbers I used, we discounted all of the
    preproduction tires. Let me go through them because this is
    extrapolated from the information you provided us. There were
    239 tires tested. Of that, 46 percent were preproduction tires;
    54 percent were production tires. The majority were production
    tires. Looking only at the production tires tested, our numbers
    are 15 failures out of 129. Your numbers are 11. We have a
    little dispute as to how we count them. But even giving you the
    benefit of the doubt at 11, we're talking about nearly 10
    percent failure rate on the 129 production tires, not
    preproduction. I yield back to the gentleman.
        Mr. Stupak. So you would not dispute those numbers.
        Mr. Lampe. No, I would not dispute. The only number I would
    clarify is that out of the 11 or 14, whatever we could agree
    upon, only 6 of those had a failure mode of tread separation
    that we're seeing here.
        Mr. Stupak. But even if you use your 6 percent or 6, excuse
    me, 6, that's still 5 percent that's more than was acceptable,
    wasn't it?
        Mr. Lampe. Again, that's a very abusive test. It is a high
    speed test run at very high speeds and under a loaded
    condition.
        Mr. Stupak. My question is, that is more than what you
    would expect.
        Mr. Lampe. Mr. Stupak, let me clarify one more thing,
    please; I am not trying to avoid the question. This test is
    done in a closed room, in a concentric drum, on a curved drum.
    It is much more of a duress test than you would get if you ran
    the same speed on a highway. Because the fact that it is
    closed----
        Mr. Stupak. But that test is only 6 minutes at 112 miles an
    hour. And if someone runs that speed on the highway, it will be
    more than 6 minutes. It's going to last longer, and you would
    expect the tires to blow apart, would you not?
        Mr. Lampe. Tires could possibly fail if someone ran at
    those speeds for that extended amount of time; yes, sir.
        Mr. Stupak. And you do it for 6 minutes. But if it happens
    in the real world it will be more than 6 minutes. Now, that's
    higher than what you would expect, isn't it? Use your number, 6
    of them, that's 5 percent. Five percent is higher than what you
    would expect. Why didn't you report it to anyone?
        Mr. Lampe. Sir, in every case we retested the tires again.
    We didn't close our eyes, didn't walk away from a problem we
    had in the test. We retested the tire. The procedure is to test
    multiple tires to make sure if that tire failed for a testing
    deviation or what. We test. We don't simply ignore the fact
    that we have a tire that didn't make the final step.
        Mr. Tauzin. The gentleman's time is expired. The Chair
    recognizes the gentleman from Tennessee, Mr. Bryant, for 10
    minutes.
        Mr. Bryant. Thank you, Mr. Chairman. We've done a lot of
    preparation for these hearings and learned more about tires
    than we could ever imagine. And I know as a person who drives a
    lot each year, in looking at some of the concerns, I have
    failed to have proper inflation, and speed, loads, and these
    kinds of things. As an average driver, I think I have failed to
    appreciate what good tires I have had over the years and not to
    have suffered this type of damage.
        I know there are different numbers out there. I was looking
    at something here regarding tire wear factors, speed, tires
    that run up to 35 degrees hotter and wear up to 30 percent
    faster when operated at 65 miles per hour rather than 55.
    Underinflation--tires run up to 75 percent hotter and wear up
    to 50 percent faster when underinflated by 30 percent.
    Overloading--tires wear up to 30 percent faster when overloaded
    by 20 percent; as well as the length of the run, the amount of
    the length of our trips, and how we drive under these
    conditions where we're overloaded and drive faster than 55 and
    don't have properly inflated tires.
        These are things, again, I think have been pointed out by
    this committee, that all of us take for granted every day as
    American drivers, and we have to be concerned with some of the
    testing, and I'm looking toward NHTSA primarily. And I
    appreciate the attitude that you've brought in both hearings
    and that you're willing to look at updating these standards or
    the testing standards and so forth. Because 27 years ago, no
    one knew what an SUV was, much less envisioned what we would be
    doing today.
        But that said, we do hold an obligation to our consumers
    that we anticipate these and put safe products on the road.
    Again, I think the majority of--obviously, the clear majority
    of these tires are safe products, but we have some situations
    that are developing here with not only Firestone, but with
    another company now, and with Ford and different vehicles
    there.
        One of the concerns I had--I was home over the weekend and
    spoke at a breakfast Sunday morning, and had a man there who
    had an Explorer with Firestone tires that weren't subject to
    this particular recall. And we went out and I looked at it, and
    he opened the door and inside the door panel is the recommended
    inflation. It was 26 psi. And I recall I thought that was
    Ford's recommendation, but here again I saw it there.
        And I do know that we've got Firestone, on the other hand,
    which I think asserts the position that it should be inflated
    to 30 psi, and you've got this conflict between an allegation
    of instability versus if you run it at a lower psi, then your
    tire is under more pressure and could cause damage.
        So I'm wondering how the two of you squared that in
    relationship when you first started putting Firestone tires on
    the Explorer, when one recommended 30 and the other recommended
    26. Because you've got the problem--you have rough looking
    tires, but everyone wants them to drive like highway tires. I
    know you're trying to create a hybrid situation here, but how
    did you square that relationship between the two companies as
    to what the psi should be?
        Ms. Petrauskas. If I might, Congressman, the documents that
    we submitted in response to the question from this committee
    over and over and over and over again, demonstrate that over
    almost a 10-year period, both Ford and Firestone was supporting
    the 26 psi. And, you know, if you stop and think about it, the
    Explorer performs just fine on Goodyear tires that are a 26.
    The Explorer performs just fine on Wilderness tires that are
    not built in Decatur and aren't a 26.
        Mr.  Bryant. What about the Continental tires on the Ford
    Navigator? I don't think we can point fingers at one point
    here.
        Ms. Petrauskas. If I may take just a minute to talk about
    that. Finding that was a direct result of the sort of early
    warning system that we're working on with other companies. In
    that particular case, we're talking about more of a chunking of
    the tire. There have been no injuries. I'm sorry, there was
    one. Somebody bumped themselves on the head, but there were no
    accidents, no fatalities, no injuries. So that is a completely
    different kind of situation. The only connection is that some
    of the things that this experience with the Firestone recall
    has caused us to do actually helped us identify a different
    kind of problem, not a safety problem, but nonetheless gave us
    that identification early that we otherwise might not have had.
        Mr. Bryant. Thank you. I might also add that there have
    been no rollovers on the Navigator.
        Ms. Petrauskas. No, sir, there have not.
        Mr. Bryant. Firestone, Mr. Lampe or Mr. Saurer, would you
    like to respond again to how you squared this relationship when
    you put the tires on initially, to what the proper psi should
    be?
        Mr. Lampe. Congressman Bryant, as we said in our opening
    remarks, it is true that the vehicle manufacturer establishes
    the pressure, because they know more about what that inflation
    will do with the interaction of the vehicle. But, sir, yes, we
    agreed with that inflation pressure. It's now in hindsight that
    we look back--let me explain.
        If a Ford Explorer, if any vehicle was to be run at their
    minimum amount of air pressure--which that the 26 pounds is the
    minimum, it would always be at 26 pounds, it would never go
    below 26 pounds, the vehicle would never be overloaded--we
    wouldn't have an objection, we wouldn't have a concern. The
    problem is when you're down at the minimum to begin with--and
    we know you've heard testimony about not taking care of our
    tires, not looking at our tires and so forth--when that
    pressure goes down, it can go down as little as 7 pounds, and
    you're at a critical part of the loading on a Ford Explorer 4
    by 4. So we just think that minimum was not enough and would
    like to see it at 30.
        Ms. Petrauskas. If I could just clarify, Mr. Chairman, the
    tires we're talking about have a Tire and Rim Association range
    from 20 to 35. They do today, they always have. The 26 is not
    the minimum.
        Mr. Lampe. Twenty-six is the minimum for a speed-rated
    tire, Congressman. Twenty-six is the minimum for a speed-rated
    tire.
        Mr. Bryant. I wonder, and I had a question that was sent to
    me anonymously about all these factors I alluded to and how we
    as a driver--I guess I'm guilty of, quote, abuse, unquote,
    because I don't check my tires every time I drive somewhere,
    check the air inflation, and I don't weigh my car, and I drive
    over 55 miles an hour and those kind of things. But we've
    almost got to anticipate those things are going to occur, and
    if you set out the level at 26, it's going to be lower. And if
    you're driving a car around for a year or 2 and you're running
    at 22 psi, and you're driving fast, you know, I'm thankful that
    there haven't been more examples of this.
        Mr. Lampe. In fact, there's been a couple of studies,
    Congressman, that says tires will lose close to 1 psi, 1 pound
    a month just from normal causation, I mean, not especially a
    nail or anything like that. So you're correct; inflation is
    very, very critical.
        Mr. Bryant. I think over all, it speaks to the quality of
    the tires that not only Firestone but other companies have made
    consistently over the years, and again that there haven't been
    more examples of this. We've got a problem here. I'm not making
    anything small of this. Let me go into this, because this is
    one of the things that I referenced--did you have a comment
    real quickly?
        Mr. Lampe. No, I was going to address what I believe you're
    going to approach now.
        Mr. Bryant. The recall? Now I understand from the first
    hearing that Firestone is very aggressive about trying to
    replace the tires and even had an offer to pay $100 to your
    competitors to replace the tires. My concern is apparently in
    Tennessee and perhaps across the country, there are always
    people out there trying to take advantage of a bad situation,
    somehow coming into possession of these recalled tires and then
    selling them and people can go get new tires. What is your
    control over these tires after you get those back from your
    Firestone dealers, and what is your controlling process in
    securing custody of those tires when someone goes to Goodyear
    and Michelin to replace those? How can you account those to
    make sure they're not falling into the hands of these people
    that will try to resell them?
        Mr. Lampe. I will try to make this brief because it is
    complicated. There are two situations someone could get ahold
    of recalled tires and sell them. We're outraged that that
    happened but we know it probably has. We have investigators
    out, trying to identify when it happens. But the two situations
    are, one, a used tire dealer that starts with used tires in his
    inventory and his scrap pile that are recallable tires, so he
    hasn't got them from somebody in order to resell them. He had
    them to start with and then he tries to take advantage of the
    situation. He sells them for $10 apiece. A customer puts them
    on his car and goes in and changes them for brand new tires.
    It's an outrageous thing.
        Our requirements for our dealers and our stores is when
    recalled tires are brought into them, either on a person's
    vehicle, or if the person buys from a competitor, he is still
    required to bring in the recalled tires to us. So we give him a
    receipt for it. We disable the tire right there on the spot
    either by drilling a 1-inch hole by the DOT number or by taking
    the sidewall and cutting it at least 10 inches. We disable it
    right there.
        And the second thing we need to do is dispose of them
    properly, and we have procedures in place to make sure these
    tires are disposed of in an environmentally friendly way. In
    fact, we just got praise or a citation from the EPA on some of
    the things we're doing with the recalled tires.
        Did I address your problem? It is a terrible situation.
    People will try to take advantage of the situation, but we're
    out to try to stop it as much as we can.
        Mr. Bryant. Thank you. I yield back.
        Mr. Tauzin. The gentleman yields back. The Chair recognizes
    the ranking minority member of the full committee, Mr. Dingell,
    for a round of question.
        Mr. Dingell. Mr. Chairman, I thank you. Dr. Bailey, in a
    letter to me dated September 6, 2000--which I ask unanimous
    consent be inserted in the record.
        Mr. Tauzin. Without objection, it is so ordered.
        Mr. Dingell. You said that before the NHTSA ever received
    the 21 State Farm complaints about Firestone tire failures, in
    1998 the agency received, ``26 complaints that were relevant to
    this investigation.'' I also ask, Mr. Chairman, that a number
    of other items of correspondence between me and NHTSA be----
        Mr. Tauzin. Without objection, it is so ordered.
        [The information referred to follows:]
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        Mr. Dingell. Now, Dr. Bailey, if 25 complaints were enough
    for NHTSA to decide to open an initial investigation on March 6
    this year, why weren't 26 complaints NHTSA received prior to
    July 1998 enough to justify NHTSA taking action then?
        Ms. Bailey. Each investigation is based on a variety of
    variables. In this case you mention the 25. It is my
    understanding that that 25 is a subset of the 46 that we had
    looked at over a period of 10 years.
        Mr. Dingell. So you've got 25, 26, but, in fact, you also
    got an additional 21 complaints from State Farm which were sent
    to you, which brings the total of complaints to 47. How could
    47 complaints in July 1998 not be enough for NHTSA to--when
    NHTSA said that only 25 complaints were needed to open an
    initial evaluation in March of this year?
        Ms. Bailey. Because there are 50,000 complaints we receive
    in a year. There are approximately 500 complaints that we
    receive about tires. That's all tires. There are about 50 that
    related to Firestone and only about 5 per year that were
    relating specifically to these tires. So even combined with the
    21 from State Farm, which was over a period of 6 years, in fact
    that would still not have been enough per year to instigate an
    investigation, and it did not do so.
        Mr. Dingell. Twenty-five, you said, were a sufficient
    number. And why is 25 sufficient and 26 or 21 is not, or a
    total of 47 not?
        Ms. Bailey. That is the addition. After the KHOU program in
    February of this year, the number we had that we had received
    over a decade doubled within a period of a couple of months.
    That was enough for us to begin the investigation on May 2.
        Mr. Dingell. Are you prepared to sit there and tell me that
    the number 25 was not a good warning that NHTSA should be
    looking at it, or that the additional 21 received from State
    Farm were not a good number? After all, we've now had a large
    number of people who have been injured, hurt, killed, and a
    large number of tire failures and vehicle accidents.
        Ms. Bailey. There are 240,000 rollovers a year and there
    are 10,000 people that die in rollovers in a year. There are
    certainly situations where tires fail. That's why we receive
    hundreds of complaints on a regular basis per year about tires.
    It is trying to determine when you need an investigation,
    putting it in perspective with all of that.
        Mr. Dingell. Now, NHTSA's cover letter to the copies of 26
    complaints that were received before July 1998 is dated
    September 19, 2000. In that letter, Mr. Kenneth Weinstein,
    Associate NHTSA Administer for Safety Assurance, says these
    complaints were identified by the NHTSA staff in April of this
    year. Doesn't this mean that the NHTSA staff could not have
    been aware of these 26 complaints when the agency received the
    21 complaints from State Farm in July 1998?
        Ms. Bailey. Well, we're still talking about numbers that
    are significantly lower than anybody's from other tire
    companies and concerns of failures about other tires. Let me
    explain what is going on, if that was the question, between
    March and May. We do an initial assessment; then we do a
    preliminary evaluation, which we began on May 2. But in the
    intervening time, there was a search of the Office of Defects
    Investigation's data base when we looked at all tire
    complaints. The searches were refined to identify tire, name,
    brand, and size and to identify the tire complaints that were
    associated with the Explorer vehicles. The hard copy of every
    Firestone tire failure complaint was pulled and read for
    additional detail. The majority of the complainants were called
    to ascertain the failure mode, whether it was tread separation
    or not, and to include the missing data of which there were
    extensive amounts, such as model, tire, tire size, mileage,
    vehicle model, et cetera.
        NHTSA's Data Center was also requested to perform a FARS
    search on the Ford Explorers. There were a variety of
    activities going on. We also searched for court cases and
    attempted to get information from KHOU, which was not
    forthcoming until after we began the investigation; in fact,
    only in recent weeks.
        Mr. Dingell. Are you telling me that your ability to
    process information, your ability to procure information, was
    in this case deficient?
        Ms. Bailey. In this case I think what occurred between
    March 6 when we got the information and had to validate
    information from an investigative reporter source, and could
    not do so, we, as you know, had difficulty obtaining claims
    information and began to scour our own data bases. I think that
    action was appropriate for the time with the information that
    we were given.
        But I will say that I think we need to do intensive
    analysis of our ability to integrate the data we do have.
        Mr. Dingell. It appears to have been highly deficient. I
    wonder if this is budget related.
        Ms. Bailey. That is clearly a budget issue for us and one
    that we are hoping that legislation will support. We are
    looking at over $1 million needed in order for us to update
    that data base.
        Mr. Dingell. I want to hear your recommendations as to what
    you need in the way of budget. And I would appreciate that that
    be submitted for the record, Mr. Chairman, and I hope that I
    will have unanimous consent to see that that is inserted in the
    record at the appropriate place.
        Ms. Bailey. Yes, sir.
        [The following was received for the record:]

        NHTSA has conducted a thorough assessment of the funds needed to
    carry out an effective Defects Investigation Program, and concluded
    that an additional $9 million is required in fiscal year 2001 to
    strengthen the program. The resources will be used in the following
    manner: provide enhanced testing at the Vehicle Research and Test
    Center and other facilities; modernize and enhance the Office of
    Defects Investigation's (ODI) database to incorporate analytical
    intelligence, integrate optical image retrievals and hardware; provide
    easy Internet access to ODI public files; enhance and improve
    procedures for tire testing; ensure adequate travel resources and
    staffing to improve the timeliness of ODI's processing of large amounts
    of information; and develop a media campaign (print, direct mail, and
    TV) to emphasize the importance of reporting complaint information.

        Mr. Dingell. Now, I understand that 20 of the 25 complaints
    NHTSA cited as a basis for its initial evaluation all came in
    in a 2-week period following a Houston television station's
    broadcast. Are we to assume that unless NHTSA receives an
    unusual number of complaints over a short period of time, such
    as occurred in the case following the Houston television
    report, we shouldn't expect NHTSA to open an initial or
    preliminary evaluation of the possible defects of tires or
    other motor vehicle equipment?
        Ms. Bailey. If we can validate that information. And that's
    why we need an overhaul of our ability to work with a system
    that, by the way, is over 10 years old.
        Mr. Dingell. Wouldn't you, and shouldn't we, expect NHTSA's
    staff today to open at least an initial evaluation if they were
    presented once again with 47 complaints of tread separation or
    blowouts involving a particular line of tires, as NHTSA staff
    received back in July 1998?
        Ms. Bailey. Those numbers were over a period of time. There
    was one fatality. And at the same time, we were receiving
    hundreds of complaints about other tire companies. So that
    alone would not have initiated a full investigation.
        Mr. Dingell. A lot of lives would have been saved if you
    had initiated that investigation. Doesn't that tell you you
    ought to have then reviewed the matter?
        Ms. Bailey. Could you repeat the question?
        Mr. Dingell. A lot of lives would have been saved had you
    commenced that kind of review in this matter in 1998, July.
        Ms. Bailey. Yes, sir, that's true. That's why we're seeking
    legislation so we can obtain information about the claims data
    we could not get, did not have the authority to receive, or the
    recall information from around the world. That would have
    definitely have given us the appropriate information so that we
    would have instigated an investigation sooner.
        Mr. Dingell. What changes are you going to make at NHTSA to
    make sure that it has both the ability and the requirement that
    it search its files to identify related complaints as happened
    in this case? I'm told computers can do that very well for you.
        Ms. Bailey. That's true.
        Mr. Dingell. But you do not have such mechanisms available
    to you at this time.
        Ms. Bailey. I could outline exactly what we intend to go
    through, sir, or provide it for the record.
        Mr. Dingell. I think that would be better provided for the
    record, because I think it is important, but I think it is
    something we don't have time for.
        [The following was received for the record:]

        NHTSA plans to undertake several activities to improve its ability
    to identify potential safety defects. Although our decisions regarding
    the specific actions to be taken will await the completion of our
    ongoing review of the Office of Defects Investigation (ODI) processes,
    as specified in section 15 of the TREAD Act, we can identify some
    general areas for improvement.
        With some of the additional funds authorized by the TREAD Act and
    by the FY 2001 DOT Appropriations Act, ODI intends to substantially
    improve its data handling and retrieval abilities. The existing ODI
    database, which includes consumer complaints, service bulletin
    summaries, and investigation and recall information, was developed
    approximately ten years ago, with only minor enhancements since that
    time, and it does not reflect state-of-the-art technology. It was a
    relatively low-budget system, and, among other limitations, it does not
    contain complete images of the information submitted by consumers and
    other complainants. In order to review an actual complaint, the
    document has to be identified through a broad computer search, then
    individually retrieved. While the database has been a valuable resource
    in identifying potential safety problems, as the volume of information
    contained in it has increased exponentially, it has become increasingly
    more time-consuming to retrieve individual complaints to verify and
    supplement information about particular potential problems.
        Our planned modernization will include the incorporation of
    analytical intelligence and will integrate the consumer complaint
    database with the optical image retrieval system, allowing expedited
    information search capabilities. Our overhaul will also afford the
    agency the opportunity to effectively incorporate the warranty, claims,
    and other relevant information that we will obtain from manufacturers
    of motor vehicles and motor vehicle equipment pursuant to the
    regulations to be adopted under section 3 of the TREAD Act. We also
    plan to explore possible ways of integrating the information in other
    NHTSA databases, which were originally developed for other purposes,
    into ODI's defect identification processes. We anticipate that these
    initiatives will allow the agency to be aware of potential safety
    problems earlier than under our current limited system.

        Mr. Dingell. Has NHTSA ever requested criminal penalties to
    be added to the Safety Act?
        Ms. Bailey. We have not up to this time.
        Mr. Dingell. Did the legislation NHTSA recently proposed
    include criminal penalties?
        Ms. Bailey. It is part of our multitiered approach to
    enforcement; yes, sir.
        Mr. Dingell. I'm sorry?
        Ms. Bailey. It is part of our approach for enforcement.
        Mr. Dingell. Was it in the legislation that you've
    submitted?
        Ms. Bailey. It is not in the legislation.
        Mr. Dingell. It is my recollection that both in 1966 and
    1985 when the issue of criminal penalties came up, NHTSA was
    opposed. Is that your understanding?
        Ms. Bailey. That is my understanding, and I believe the
    thinking was that it impaired our ability to engage in a
    meaningful investigation given the possibility of criminal
    action.
        Mr. Dingell. I'm not quite sure I know what you're saying.
        Ms. Bailey. It is my understanding that the concern has
    always been that it may impair our ability to investigate.
    There is a certain amount of give-and-take required. If we are
    unable to obtain information because people are concerned about
    criminal investigations and penalties----
        Mr. Dingell. What you're saying is that a person who is
    then under investigation functions as if he's under a criminal
    investigation, it tends to inhibit cooperation with you because
    of that fact; is that what you're telling me?
        Ms. Bailey. I'm explaining what my understanding is of the
    determinations earlier on not to pursue that. I can tell you
    that the Secretary will be here today and can testify more to
    that, but I know that we now feel that that will allow us
    greater ability to function.
        Mr. Dingell. That it would impair your ability to function.
        Ms. Bailey. Yes.
        Mr. Dingell. Thank you very much.
        Mr. Tauzin. Before the gentleman completes, and I thank the
    gentleman, I want to point out for the record that in addition
    to the 26 consumer complaints the gentleman has cited that was
    available to you by 1998, there were the 21 instances reported
    by State Farm, and over the 18 months there were 45 additional
    cases reported, according to the State Farm testimony orally to
    the agency by phone call. And in addition, there was the FARS
    report indicating as many as, in 1999 alone, 43 fatalities
    added to the 15 in 1998. So that is in addition to all of the
    information that Mr. Dingell has pointed out was indeed
    available to the agency in 1998, in the months immediately post
    the July 1998 State Farm filing, for the record.
        Ms. Bailey. There is some duplication in those numbers, but
    you're exactly correct. We need better ability to integrate our
    data.
        Mr. Tauzin. The Chair recognizes the vice chairman of the
    O&I Committee, Mr. Burr, for a round of questions.
        Mr. Burr. I thank the chairman and welcome our panel of
    witnesses. Mr. Lampe, either yourself or Mr. Saurer, let me
    just ask you this: Does Firestone have a defect in the recalled
    tires?
        Mr. Lampe. Sir, we believe yes, that there are, in a very
    limited numbers of those tires, a possible manufacturing
    defect.
        Mr. Burr. Is Firestone currently looking at the potential
    of defects in any tires that are not currently under recall?
        Mr. Lampe. We continue, sir, to examine all of the tire
    lines and all the sizes, again using the data we've got. We are
    a data-driven company, using the claims data that we've
    recently used to identify this recall. Yes, sir, we continue to
    do that.
        Mr. Burr. Does Firestone possess any information today that
    would indicate there is additional tread separation that's
    happening in the marketplace outside of the current group of
    recalled tires?
        Mr. Lampe. Sir, we've testified on a number of occasions
    that tread separations are not an abnormal effect, result, in
    the marketplace; not only our tires, anybody's tire. Dr. Bailey
    has testified a number of times that the best tire can fail for
    a number reasons, and one of the common failure modes is a
    tread separation.
        Mr. Burr. Is there any tread separation that specifically
    resembles that tread separation that's being experienced under
    the recalled tires that Firestone sees on non-recalled tires
    today.
        Mr. Lampe. Based on the representation of the claims and
    adjustments, sir, we do not see any data that would indicate
    that we have any problem, or any problem with other tires,
    other than the ones we identified in the recall. We believe
    that the recall was overinclusive, if anything.
        Mr. Burr. Ms. Bailey, correct me if I'm wrong. NHTSA has
    suggested a larger recall; am I correct?
        Ms. Bailey. Yes. On September 1 we, in fact, requested that
    the recall be widened.
        Mr. Burr. It was widened for what reason?
        Ms. Bailey. It was indeed not widened at that time. So we
    did a consumer advisory so we could alert the American public
    to the danger, and subsequently the company has agreed that
    they will provide remuneration for those tires.
        Mr. Burr. But they're not recalled.
        Ms. Bailey. They're not officially recalled.
        Mr. Burr. So the company has agreed to replace those tires.
        Ms. Bailey. And I should say that we are monitoring and
    investigating as to whether or not there should indeed be a
    safety recall.
        Mr. Burr. But they're not being recalled.
        Ms. Bailey. But they're not recalled at this time.
        Mr. Burr. You would agree that if Firestone had recalled
    their tires in Saudi Arabia, that NHTSA might have been forced
    to react to a potential problem in the U.S. faster.
        Ms. Bailey. Absolutely.
        Mr. Burr. And yet for this larger grouping of tires, we're
    not going to require a recall. We're going to allow a
    replacement process.
        Ms. Bailey. Not ``allow.'' I would not use that word. In
    fact, as a regulatory body at this point, we are monitoring and
    investigating whether or not we should direct an investigation.
    At this point we are still in that initial assessment phase.
        Mr. Burr. Tell me what specifically has changed at NHTSA
    since we began this investigation that would assure these
    members that, were State Farm or any insurer that regularly
    supplies information about potential trends that they feel are
    alarming, if they supplied 21 of those claims to NHTSA, what
    has changed at NHTSA today that would prevent those from
    falling through a crack and, as Mr. Dingell said, would bring
    to as high a prominence that trend that that claims adjustor
    saw as you getting 25 additional that all of sudden caused an
    investigation?
        Ms. Bailey. Initially we have realigned both personnel and
    resources so that we can conduct one of the, I think, fastest
    investigations we've ever done. This sometimes takes a year or
    2 more. We're hoping to complete this in under 6 months. At the
    same time, I am not comfortable with the informal arrangement
    that we have had in the past with State Farm. We have asked,
    therefore, for legislative support--and you will be hearing
    more about that today--so that we can officially obtain claims
    data and that we can have a more official arrangement with not
    only State Farm but other insurance companies.
        Mr. Burr. Reminding all members that you have not been in
    this position very long, and certainly were not there through
    much of the history that we're here to investigate, is it
    comfortable for every member to believe that if 21 claims from
    State Farm, with the severity of those 21 claims, that that
    would be something that NHTSA would investigate today?
        Ms. Bailey. It was analyzed at the time, and I've read the
    memo and researched that, but that is beside the point.
        Mr. Tauzin. May I interrupt a second? If Mr. Burr would
    yield a second.
        Mr. Burr. We would be happy to.
        Mr. Tauzin. We went through this very carefully 2 weeks
    ago. The gentleman has testified to our investigators that,
    upon receipt of the State Farm information, he does not recall
    analyzing it, that the analyzing that was done was done just
    recently by your agency and a memo was prepared pursuant to
    that analysis. Is that correct?
        Ms. Bailey. That is correct, but he does not have recall of
    the particular exchange.
        But I should correct the record that in our last testimony
    I had said also that I had seen the original memo that had come
    across, and that that was confused in that testimony with the
    reconstruction. And in fact I have seen the original memo and
    that----
        Mr. Tauzin. Let's----
        Ms. Bailey. [continuing] I agree with you that he does not
    recall----
        Mr. Tauzin. Wait a minute. Is there a memo that was
    prepared by the gentleman upon receipt of the State Farm? We
    have not received a copy of any such memo.
        Ms. Bailey. Yes.
        Mr. Tauzin. Is there such a memo?
        Ms. Bailey. There is a memo.
        Mr. Tauzin. May we have the memo?
        Ms. Bailey. Yes, sir. We will provide it.
        Mr. Tauzin. Where is it?
        Ms. Bailey. It is an e-mail, not a memo.
        Mr. Tauzin. There is an e-mail from State Farm to your
    office. Is there any document prepared by the gentleman who
    received the State Farm e-mail in your possession?
        Ms. Bailey. No, there was not one prepared----
        Mr. Tauzin. So there was no memo prepared by the gentleman
    then. There was no analysis that he can recall conducted then.
    All you have is a memo prepared after the analysis was done
    very recently, I think in August.
        Ms. Bailey. That is the reconstruction----
        Mr. Tauzin. That is a reconstruction?
        Ms. Bailey. [continuing] of what happened when that e-mail
    was received.
        Mr. Tauzin. Right. And as we have reconstructed what
    occurred when the e-mail was received, the gentleman has
    testified, to our investigators, that he does not recall ever
    analyzing that e-mail, and the State Farm representative who
    testified that he never heard from that gentleman by e-mail, by
    phone, by fax, by any means. Is that correct?
        Ms. Bailey. Yes.
        Mr. Tauzin. The Chair yields back to Mr. Burr.
        Mr. Burr. I thank the Chair.
        Ms. Bailey. I would like to answer your question, though. I
    recall your concern that the 21 would not have instigated an
    investigation. Even if that 21 were recorded as it should have
    been and analyzed as it should have been at the time, even that
    over 6 years, being a few a year, it would not have initiated
    an investigation. But I can assure the committees that, in
    fact, if we had all the information we should have had at the
    time and that we are seeking legislation to now have the
    authority to obtain, we would have started an investigation
    much sooner. That is claims domestically, that is the
    information about the overseas recalls, it is the information
    from insurance companies that we should have a way to receive
    and the FARS data. All of that should have been integrated and
    should be integrated in the future with the legislation we are
    hoping to receive----
        Mr. Burr. Dr. Bailey, hindsight is a wonderful tool to tell
    us what to do in the future. There is no substitute for a
    process where an individual can't disregard information that
    might be pertinent to a trend that clearly displayed the loss
    of human life. So I hope that you can, with a great degree of
    confidence, tell us that that can't happen in the future. That
    there is not only a process, there is a checks and balance
    system that exists on information and the evaluation of the
    information and the coordination of that with other data
    available in the market place.
        Ms. Bailey. I assure you of that.
        Mr. Burr. Let me move on to Miss Petrauskas. Miss
    Petrauskas, unfortunately, Ford is currently in a new recall in
    Saudi Arabia pertaining to some Navigators, am I correct?
        Ms. Petrauskas. Continental has announced that they are
    going to do a recall.
        Mr. Burr. Continental is going to do a recall on the
    Navigator.
        Ms. Petrauskas. Around the world, yes, sir.
        Mr. Burr. Tell me when Ford was aware of a problem with
    that tire for the first time.
        Ms. Petrauskas. I think the first report we received was in
    April--I want to say April 1999 was the first time we got a
    report from the field of an issue with that particular tire.
        Mr. Burr. Were you aware that there was a problem--
    potential problem with that tire, you personally?
        Ms. Petrauskas. At that time?
        Mr. Burr. Yes, ma'am.
        Ms. Petrauskas. No, sir.
        Mr. Burr. When did you become personally aware?
        Ms. Petrauskas. Actually, almost literally within the last
    week or so.
        Mr. Burr. Within the last week or so.
        Mr. Baughman, how about yourself?
        Mr. Baughman. Actually, it is Baughman. But I first became
    aware of any issues on Continental tires on Navigator vehicles
    at the first hearing when a letter was produced saying that
    there was a report of a tread separation issue in the Saudi
    Arabia area.
        Mr. Burr. I got to the hearing late, so I am not exactly
    sure of what the two of you are responsible for, but you just
    shared with me that in April 1998----
        Ms. Petrauskas. 1999.
        Mr. Burr. --Ford became aware of a potential problem. What
    caused a year and some time to go by before the two of you
    learned that somebody at Ford was looking into a potential
    problem?
        Ms. Petrauskas. I have been cautioned not to talk for a
    long time, so I will make this real fast and compact. But in
    the April 1999 data I refer to is the first field report we got
    with respect to those tires. Over a period of time, we got a
    handful of additional reports. At the hearing, the committee
    brought up one of the reports we had gotten before. It turned
    out that particular tire had a puncture in it. I think this was
    a Saudi Arabian tire. When we got back to our offices after the
    hearing one of the things we learned is that the group that is
    supposed to monitor----
        Mr. Burr. The CCRG group?
        Ms. Petrauskas. Yes, sir, the Critical Program Review Group
    actually----
        Mr. Burr. Didn't they, in fact, meet in August?
        Ms. Petrauskas. I learned subsequently that they did when I
    got back from this hearing.
        Mr. Burr. Share with me who in the hierarchy of Ford should
    know that the CCRG is currently looking at a potential tire
    problem. Because, in fact, I asked your chairman specifically
    in that hearing was he aware of any additional vehicles where
    tire problems existed, and he emphatically said he had no
    personal knowledge of that.
        Ms. Petrauskas. And I am sure that was the case. I mean, I
    work in that area, and I had no knowledge that the team was
    working on it.
        Mr. Burr. I have gone through a time-intensive thing with
    Dr. Bailey, who wasn't even here then, trying to stress the
    fact that the chain of communication did not exist such that
    NHTSA could function in the role that they were there to do. I
    would ask----
        Ms. Petrauskas. But if I may, Congressman, it did function.
    And one of the--as it happens, the group that you refer to that
    met are Critical Concern--I always forget what the acronym
    stands for--Critical Problem Review Group. This is a technical
    group. They meet once a week, and the people who come to that
    meeting are engineering supervisors. And what they are asked to
    do is every week sweep up all the problems you have heard
    about, bring them to the meeting and we are going to talk about
    them. And so that is exactly what this group did.
        Well, then, when they realized that we were having these
    meetings with individual tire companies to talk about how this
    early warning system might work, they brought it to us.
        Mr. Burr. The chairman is about to pull the hook on me. Let
    me just make this statement for the record, Mr. Chairman.
        In this particular case, we moved from the first organized
    review at Ford, the CCRG, of the potential Continental tire
    problem in late August of this year to this date, September 21;
    and we have already gone through a Continental recall, less
    than 3 weeks. And from this member's standpoint, I don't know
    if the speed with which you have gone through this is a
    response to the current interest that Congress has and the
    concern that the American people have or in fact whether the
    CCRG works that quick. And if it does it certainly broke down
    as it related to any involvement they might have had in the
    Firestone Explorer issue.
        Mr. Tauzin. The gentleman's time has expired. I will allow
    the gentlelady a quick response.
        Ms. Petrauskas. Just very quickly.
        The one thing that I was struck by on the part of the
    Continental folks, I think within 48 hours they had all of the
    information--all this claims information, all warranty
    information, all the manufacturing data--so it was easy to make
    decisions because they came to us and shared all this
    information.
        Mr. Tauzin. I thank the gentlelady.
        The Chair recognizes the gentleman from Ohio, Mr. Sawyer.
        Mr. Sawyer. Than you very much, Mr. Chairman. Ten minutes
    sounded so long when we started, and it is sounding so short in
    its execution, particularly when we realize that this afternoon
    we are going to begin the process of marking up legislation
    that could have long-standing consequences in terms of the work
    that everyone at the table is doing.
        Let me suggest that there are some concepts that are slowly
    coming to the surface. The first of these is that there is a
    complexity of cause when there is a tire failure. But the one
    that we seem to be most concerned about is the notion of when
    those tire failures are a product of a defect. Can you tell me,
    Dr. Bailey, what is a defect?
        Ms. Bailey. First of all, it takes us an average of 16
    months to determine exactly that. And without spending a lot of
    time at it, we go through an initial assessment, a preliminary
    evaluation; and we are now in the Firestone case involved in
    the engineering analysis phase. There are many steps to take
    after that. We are going to, as this is our highest priority,
    speed this up and complete this in record time. But, generally
    speaking, it takes about 16 months to determine if there is a
    defect that is causing a vehicle or component to fail.
        Mr. Sawyer. Can you tell me about the kind of help you are
    getting from the tire industry in trying to identify not only
    the specific cause in the circumstances that we have been
    talking about here, but, more broadly, what constitutes a
    defect and where standards ought to be set?
        Ms. Bailey. Firestone and Ford have been very forthcoming
    in responding to our information requests. I think where our
    communication has broken down and where we have none of us
    served the American public as we should have is in, again, our
    ability to exchange the data that would let us make the right
    decisions. In even the case of the Continental decision, that
    was all based on claims and warranty. We have no authority at
    this time to obtain that. I am hoping things will change, given
    the legislation we will be talking about later today.
        Furthermore, it is not a recall with Continental. They are
    doing a customer satisfaction campaign. NHTSA and its good
    people are doing their work to make sure that we are now going
    to determine if that is sufficient or not, as we did this
    summer when, in fact, we tried to widen the recall with
    Firestone and could not achieve that quickly, so we did a
    consumer advisory. I think we are all moving much quicker but
    not as quickly as we can.
        Mr. Sawyer. Let me ask you, can you describe briefly the
    level of cooperation that you need and receive from a tire
    industry in doing that sort of work?
        Ms. Bailey. When they suspect that they have a safety
    problem or they have claims or warranty issues that indicate
    there is a problem, they need to communicate with us sooner.
        Mr. Sawyer. Let me ask you a follow-up on a question that
    Mr. Dingell asked earlier. I know we are not dealing with the
    Senate bill, but there is some suggestion in the Senate bill
    that, in fact, the distribution of a defective tire might in
    fact be a criminalized act. There are many different kinds of
    behavior that might be sanctioned as a product of legislation.
    I personally think that concealment of information that has
    been requested, or fraudulent reporting, could comfortably fall
    into anything that might receive a high sanction.
        Ms. Bailey. Perhaps and perhaps not. Because we have an
    existing criminal statute that already addresses falsification
    and concealment or cover-up. But that is with civil penalties.
    So we are at this point, as you know. The consideration is
    whether or not that is enough.
        Mr. Sawyer. Well, and I understand that, and I fully
    appreciate the notion that criminal rather than civil concerns
    are involved there. But I become deeply concerned if, in fact,
    we are talking about criminalizing a product itself; and it
    causes great concern not only as applies to tires but virtually
    any of the components that might go into a complex product like
    an automobile. Can you comment on that?
        Ms. Bailey. I can comment by saying, in fact, if there is a
    willful violation of the law or intentional violations, then
    there is need perhaps--there is need for more vigorous
    enforcement.
        Mr. Sawyer. Indeed, but if that violation is tied to the
    notion of what is a defective product and we are having
    difficulty deciding what is a defect, then it seems to me we
    are basing a severe sanction on a very uncertain base.
        I won't take that any further. I hope that we can
    appreciate the problems involved when we deal with this.
        One of the other things that we have seen slowly emerge is
    the complexity of the testing protocols that are part of the
    development and the use of a tire in the course of its life. We
    have talked about the 109 tests, the whole range of SAE tests,
    the different environments in which the tests are conducted,
    tire dynamometers and actual vehicles to which they will be
    applied as well as to mules which replicate the performance.
    Let me ask you quickly, is wheel base or track of a significant
    difference when using mules to test a tire? We have heard the
    wheel base made a big difference, and the track made a
    difference.
        Mr. Baughman. Not in my engineering opinion. I don't think
    it is. The tires need to be tested at configurations such as if
    it is a rear wheel drive vehicle it needs to be a rear wheel
    drive vehicle. The suspension was a twin I-beam, which was used
    generically on all Ford truck products at that point in time.
    All of the axles were solid rear axles which were used
    generically on all Ford products at that period of time.
        Mr. Sawyer. So the actual dimensions of the wheel base----
        Mr. Baughman. The actual dimension of the wheel base might
    have been half a dozen inches longer, and the width of the
    vehicle might have been two or three inches wider, but the way
    in which the tire interfaced with the road, which is the
    purpose of the high-speed tests and why we run it at Arizona
    proving grounds on test track surfaces that are in excess of
    120 degrees when the tire test is run----
        Mr. Sawyer. Dr. Bailey, what are the dimensions of a tire's
    performance that ought to be the subject of testing that is
    reported to you?
        Ms. Bailey. What we are testing for is strength, endurance,
    durability under a variety of different conditions.
        Mr. Sawyer. In establishing those tests, are you attempting
    to replicate every circumstance that a tire might be used in or
    are you attempting to draw base lines from which projections of
    performance can be made?
        Ms. Bailey. I think it is a base line standard but, again,
    in many ways does replicate much of the driving that would be
    done, at least in terms of temperatures and the pounds per
    square inch of inflation and the loading. Where I think it lets
    us down is in terms of the endurance, and I think we have all
    recognized that is one of the changes we would like to make and
    again are making in the winter of this year.
        Mr. Sawyer. In the whole range of testing that goes on, is
    it fair to say that both automobile manufacturers and tire
    manufacturers do their own tests that go substantially beyond
    those that are required by 109?
        Ms. Bailey. Correct.
        Mr. Sawyer. In doing those, do you have reporting
    requirements from those tests?
        Ms. Bailey. No, we do not.
        Mr. Sawyer. Should you?
        Ms. Bailey. I think that is one of the things we could look
    at. I don't think we need the same type of authority to achieve
    that. I would hope that is something that we could do between
    the private and the public sector.
        Mr. Sawyer. Let me ask you, as the only representatives we
    have here today of the tire industry and the automotive
    industry, is that the kind of reporting that you would find
    beneficial to you without imperiling trade secrets?
        Mr. Saurer. If I understand your question, Congressman, you
    are asking reporting of our internal test development data.
        Mr. Sawyer. Results of SAE testing and so forth.
        Mr. Saurer. I don't personally think that would be
    appropriate. We are constantly changing tests, trying to invent
    new things. I think divulgence of that information gets
    involved with trade secrets. I would be concerned about that to
    some extent. We would like to cooperate, but I think we have to
    be careful there saying that any testing we did, because the
    testing protocols----
        Mr. Sawyer. I don't want to discourage testing. I
    understand.
        Mr. Saurer. The testing protocol itself is sometimes
    confidential.
        Mr. Lampe. But, Congressman, certainly on tests such as SAE
    that we do on normal production tires there is no reason that
    we wouldn't make that information available to the agency. If
    we are doing experimental testing or prototype testing, that is
    something else, but normal production testing, yes.
        Mr. Sawyer. There is so much I want to ask, but let me come
    back to one final question I want to ask Dr. Bailey.
        Mr. Dingell talked about your capacity to analyze data. I
    am really concerned that we may stipulate so much data that
    this turns into a data dump and that you have more than you can
    make use of. Can you give us some assurance, No. 1, that you
    have the capacity to perform the kind of sophisticated analysis
    that huge amount of data would require? And, if not, could you
    get back to us on what you will need, No. 1?
        No. 2, the engineering capacity. We are talking about
    extraordinarily sophisticated products all across the
    automotive spectrum, and the engineering capacity within NHTSA
    simply to evaluate the meaning of data when it comes in once it
    has gotten to the point of being able to identify problem areas
    remains a concern of mine. Could you respond to us with regard
    to that?
        Ms. Bailey. Yes, sir.
        First of all, we can, as you know, seek, as we do, outside
    testing through independent laboratories; and we do that. So I
    feel we can draw on what is best in America in terms of
    engineering expertise.
        As far as the data base goes, it is 10 years old. I am
    reviewing now whether our Defect Information Management System
    (DIMS II), which is what we are operating under, really has
    what is required. We are already looking at DIMS III which is
    going to, I think, provide us the expertise and the integrative
    analytic capability to use our data more effectively. We need
    an upgrade of everything--our software, our hardware.
        Mr. Sawyer. Personnel.
        Ms. Bailey. Everything that goes into analyzing the volume
    of data that we are getting and that we hope to get in the
    future.
        Mr. Sawyer. Thank you very much, Mr. Chairman.
        Mr. Tauzin. The Chair thanks the gentleman; and the Chair
    recognizes the gentlelady, Ms. Cubin, for a round of questions.
        Mrs. Cubin. Thank you, Mr. Chairman.
        I would like to being my question with Ms. Petrauskas. I
    would like to know, on my son's accident, the left rear tire is
    the one that lost the tread and blew out, so I want to know why
    on the--why that tire seems to have a higher rate of failure
    than the other tires do on the Ford Explorer. Is it possible
    that there is a design problem that makes the Explorer
    predisposed to having failure in the left rear tire?
        Ms. Petrauskas. The short answer to your question,
    Congresswoman, is we don't know. The interesting thing we
    found, though, is across the board in tread separation cases
    involving any kind of vehicle for whatever reason there has
    been a predominance of it occurring on the left side. Our
    engineers have spent a lot of time sort of brainstorming that
    idea or some of those brainstorming ideas, as has the press, I
    might add. But we do not really have a good explanation for
    that.
        Mrs. Cubin. Are you conducting any sort of tests on the
    Ford Explorer to see if that is a possibility, that the gas
    tank is on the left side, the drive shaft is----
        Ms. Petrauskas. Actually, part of the work that we are
    doing in terms of trying to determine what the root cause of
    the defect of the tire is involves testing of not just tires on
    Ford vehicles but those same tires on other vehicles to look at
    their performance. So our hope is once we understand the root
    cause of the tread separation then we will be able to answer a
    lot of questions.
        Mrs. Cubin. But it has to pique your curiosity at least
    that this is happening more on Ford Explorers than any other
    vehicle.
        Ms. Petrauskas. Well, fundamentally, 90 percent of these
    recalled tires that were produced went on Ford Explorers, so
    one of the--I mean, it happened to Ford Explorers. You know,
    the bad tires are on Ford Explorers. Ford Explorers have the
    bad tires. So that is the explanation there.
        But, again----
        Mrs. Cubin. It is my understanding that the Ford Explorer
    body is built on the old Bronco II chassis, is that correct?
        Ms. Petrauskas. No, it is not.
        Mrs. Cubin. So was the chassis for the Ford Explorer
    designed specifically for the Ford Explorer?
        Ms. Petrauskas. Absolutely.
        Mrs. Cubin. Next, I would like to go to Mr. Lampe.
        Talking about the testing of the tires, you talked about
    how severe the conditions are when you test 6 minutes at 112
    miles an hour. I believe that is what you said, is that
    correct?
        Mr. Lampe. I don't believe I said that, the length of time.
    I think it is a 10-minute test at 112.
        Mrs. Cubin. How would that compare on stress to the tire
    with a trip that was 4 hours of driving at 75 to 80 miles an
    hour on an interstate?
        Mr. Lampe. Congresswoman Cubin, I can't answer that. I
    don't know how to compare the two.
        Mrs. Cubin. But, listen, you need to know how to compare
    the two. Because that is exactly what happens in real life, and
    10 minutes at 112 in a cylinder isn't what happens in real
    life.
        Mr. Lampe. Yes, ma'am, I know. We need to do something
    different to get more closer to real life, and we have said
    that we will work with NHTSA, and we will do that.
        The differences I wanted to point out to you is that the
    test we do inside is done inside. It is in a closed room. If
    you are going down the highway at 75 miles per hour, you have
    the wind and air coming toward you. That will cool your car
    down, cool your radiator down. When you are doing the test in
    the closed room, you don't have that effect. All I am saying is
    it is very hard to compare the high speed test, the SAE test,
    on an indoor drum, curved drum versus driving a car at 75 miles
    an hour.
        Mrs. Cubin. You know what? I don't care how hard it is to
    compare.
        Mr. Lampe. I know you don't.
        Mrs. Cubin. Another thing, in Wyoming--my husband is very
    type A personality. We rotate the tires on our cars every 4,999
    miles, and we change the oil every 2,999 miles. He checks the
    air pressure on a very regular basis in the tires. And since I
    was a young girl I always knew that, with the extreme
    temperature changes in Wyoming, whenever there are--whenever
    new seasons come you make sure--because, as we know, air
    expands in heat, and it contracts in cold, and we have extreme
    conditions in Wyoming. Is there any kind of testing done on any
    Firestone tires, these or any, to account for or accommodate
    that difference in temperature in the real world?
        Mr. Saurer. Let me answer that, Congresswoman. We do most
    of our testing in high heat, because it is heat which really
    destroys the tire over time. Of course, we do winter testing,
    but that is primarily for snow traction. We don't view cold
    weather as a durability issue like the heat.
        Mr. Tauzin. Would the gentlelady yield for a second?
        Mrs. Cubin. Yes, sir.
        Mr. Tauzin. Only to point out that in real life Arizona,
    western conditions, New Mexico conditions, we are told that,
    even though the ambient air temperature may be 101, 105, the
    surface temperature of the road on which Americans are really
    driving is about 125 or more. And the question is, you do the
    testing with ambient air temperatures up to 90 and 100 in your
    plant. Do you heat up the surface to 125 or more?
        Mr. Saurer. Well, the drum itself will heat up from the
    tire heat.
        Mr. Tauzin. That is the point. The point is the drums are
    heating up, but in real life conditions Ms. Cubin is talking
    about in the States that she and others on this panel
    represent, the real life temperatures of the highway can exceed
    125 degrees; and my understanding is that is not replicated in
    the in-plant test and could make some significant difference.
        I only point that out, Ms. Cubin, because, as we move
    toward regulation, we need to take those into account.
        Mr. Saurer. Mr. Chairman, I would quickly add that that is
    one of the reasons that we have the outdoor proving grounds in
    the Southwest of this country where we are seeing those kind of
    temperatures. And we run some, as I said earlier, 40 million
    miles of testing on very heavy loaded--actually, on this size
    tire on loads that an Explorer can't see, around a track on
    high heat. We have those kind of tests. Those tests are
    designed to produce failures in tires so that we can understand
    the high stresses they are undergoing and so we can make
    changes to improve them on a continuous, evolutionary----
        Mrs. Cubin. Thank you, Mr. Chairman.
        I realize that the greatest amount of wear will take place
    in high temperature conditions. However, when you get to 40
    below, which it gets in Wyoming sometimes, that has an effect
    on rubber. Rubber tends to crack, which makes a tire much
    unsafer to drive on. Are any tests done in that regard?
        Mr. Saurer. We----
        Mrs. Cubin. Just yes or no.
        Mr. Saurer. Yes, there is chemistry work that is done. I am
    not a chemist.
        Mrs. Cubin. No, no, no. I am a chemist. I am talking about
    are there any tests in the laboratory or on the highway that
    are done at temperatures like 40 below zero on those tires? On
    the tires, not on the rubber.
        Mr. Saurer. On the current tires today, we do not do that.
    We used to do that on fiberglass belted tires called cold box
    testing, because fiberglass was subject to being brittle when
    cold. But we don't see that as an issue on today's radial
    tires.
        Mr. Lampe. But it is something we need to look at,
    Congresswoman Cubin.
        Mrs. Cubin. Thank you very much.
        While I am at it, I would like to go back to Ms Petrauskas.
    Are you now or will you be studying the engineering of Ford
    Explorers to see if there is a reason that the left rear tire
    seems to be the one with the biggest problem on Ford Explorers?
        Ms. Petrauskas. Again, as I indicated earlier, that is
    something that seems to be true for all vehicles.
        Mrs. Cubin. I really do not care. I am asking yes or no,
    please.
        Ms. Petrauskas. We will certainly do that as part of the
    root cause work we are doing on the tires.
        Mrs. Cubin. If you want to sell Ford Explorers ever again--
    and, frankly, I would just park mine along the side of the road
    and not even mess with it anymore--in today's environment I
    should think you would want to change today's environment and
    get the American public some reassurance that it is a safe
    vehicle and that they don't have to worry about their families.
        Ms. Petrauskas. Congresswoman, absolutely. We recognize
    that is something we have to do every single day. What gives us
    courage in all this is we know that in the real world that
    Explorer has been one of the safest SUVs we have.
        Mrs. Cubin. Well, I don't necessarily know if that is
    because the Explorer's design is excellent. I would think you
    have to look at the demographics of people who drive Ford
    Explorers. It is soccer moms. They drive slower. They don't
    have the kind of wear and tear and I am going to use the word
    ``reckless'' drivers, if you will, that other vehicles might
    have.
        Ms. Petrauskas. There is no question that demographics
    plays a role in all of these. When we make the comparison we
    make the comparison to light vehicles. In the comparison group
    is the Mercedes M class. So what we try to do is that--make
    sure they are fair comparisons. And in that context the vehicle
    has really been a star in terms of safety. But I agree 100
    percent with what you said. That is something that we have to
    earn every single day.
        Mrs. Cubin. This is a quick question of Mr. Lampe. Is the
    30 PSI level a new standard now? Is that new from the 26?
        Mr. Lampe. The 30 PSI that we have recommended?
        Mrs. Cubin. That is correct. Is that a new standard?
        Mr. Lampe. No, I can't say it is a standard. It is what we
    recommend people put in their tires.
        Mrs. Cubin. So you have stopped recommending the 26.
        Mr. Lampe. We are recommending 30 PSI in the Explorer and
    the Mountaineer, yes, ma'am.
        Mrs. Cubin. How can you be sure that is safe? Is it just in
    experience of what is happening on the highways?
        Mr. Lampe. No, we worked with Ford on this. Again, as I
    said in the opening remarks, we are very concerned about doing
    something with the tire that would change the overall
    interaction of the vehicle and the overall performance of the
    vehicle. The manufacturer has got to make sure that whatever we
    do works well with everything else in the vehicle. Ford did
    look at and approve a range from 26 to 30 PSI on the Explorer
    and the Mountaineer. We are only saying we recommend--from the
    tire standpoint we recommended the high of the range, the 30
    PSI.
        Mr. Tauzin. The gentlelady's time has expired.
        Mrs. Cubin. Could I ask one more question?
        Mr. Tauzin. Yes, ma'am.
        Mrs. Cubin. Regardless of the reasons, it is very
    troublesome to me that these tires were recalled in the Middle
    East and recalled in South America and yet nothing was done
    either by NHTSA or by Firestone to even see if there was a
    problem in the United States. That is very troublesome to me.
    It is my understanding that there are two dozen other tire
    sizes and models that have similar or greater claims rates,
    according to Firestone data. I realize it is a smaller number
    and not adequate for reasonable scientific conclusions. Are
    those going to be recalled?
        Mr. Lampe. Congresswoman, we're still working with NHTSA
    and some of that's our fault. We had a meeting with them last
    Friday that we had to cancel, and there was one this week.
    We'll continue to work with NHTSA on that. We wanted, it was
    mentioned earlier, we wanted to take the consumer out of the
    middle of this completely and we did announce to the consumer
    and to the public that if a person had these tires on their
    car, came into one of our locations, that we would replace
    these tires at no charge. And if we don't have a replacement
    tire--many of these tires haven't been produced for 5 or 6
    years--if we don't have a replacement tire we'll establish a
    reimbursement program for the consumers.
        Mr. Tauzin. And those tires are identified on your Web
    site?
        Mr. Lampe. I don't want to tell the chairman something that
    I'm not sure of. I don't know if they are or not.
        Mr. Tauzin. Let us make a request that you will do so. If
    you're going to tell the American public to get these replaced,
    then at least identify them on your Web site so that folks can
    know which tires we're talking about.
        Mr. Lampe. We certainly will do that.
        Mrs. Cubin. Dr. Bailey, I have questions that I will be
    submitting to you that time doesn't permit me to ask.
        Mr. Tauzin. The Chair recognize the gentleman from
    Minnesota Mr. Luther for a round of questions.
        Mr. Luther. Thank you, Mr. Chairman. First of all, just a
    couple kind of administrative questions. Both Firestone and
    Ford have submitted documents to us now, and as I understand
    it, there are 25 lawsuits against Ford and I believe 52 against
    Firestone, is that correct, as of now?
        Mr. Lampe. Congressman, I believe that number was accurate
    as of the end of May when we made our initial submission to
    NHTSA. That number is undoubtedly probably higher now.
        Mr. Luther. And Ford.
        Ms. Petrauskas. I'm confirming the number right now,
    momentarily. Again as of the time we have made this submission
    to NHTSA, the number you said, Congressman, is correct. It's
    25. There has been lawsuits filed subsequent to then.
        Mr. Luther. Are you both going to be providing us, then,
    with the documents on the lawsuits that have occurred since
    then?
        Ms. Petrauskas. We can do that.
        Mr. Luther. And Firestone.
        Mr. Lampe. Yes, sir.
        Mr. Luther. Has it already included all of the documents in
    the lawsuit, and will it include all the documents? And by
    that, I mean the pleadings, summons and complaint, and the
    expert opinions and the internal memos.
        Mr. Lampe. We can provide those and I believe we have.
    There was much discussion about confidentiality on these court
    cases and stuff, and I believe we pointed out in prior
    testimony that the only thing that's ever been confidential
    about these lawsuits was the settlement, and that was agreed
    upon by both parties; and trade secret information that was
    issued; a court order was issued by the judge and the judge
    ruled. But we have even committed to make that information
    available.
        Mr. Tauzin. Would the gentleman yield briefly?
        Mr. Luther. Yes.
        Mr. Tauzin. The investigators for both sides are working on
    protocols with reference to obtaining some of those internal
    informations, at the same time respecting confidentiality.
        Mr. Luther. Thank you, Mr. Chairman. And for Ford would the
    response be the same, then?
        Ms. Petrauskas. We have made available to the committee
    information, I should say documents from litigation; and, you
    know, we've indicated that we're going to cooperate in any way
    we can.
        Mr. Luther. The point that I'm making is that if you are
    not disclosing any particular document, you will advise us of
    that document or the portion of that document so that we will
    be aware that it exists; is that as I understand it?
        Ms. Petrauskas. I believe that's what we've been doing
    right along.
        Mr. Luther. Is that true for Firestone also?
        Mr. Lampe. Yes.
        Mr. Luther. Are there insurance companies involved in any
    of these cases?
        Mr. Tauzin. Could I interrupt again for a second? Our
    understanding is that Ford has not yet produced a list of
    documents that are being withheld so far, as we're working out
    these protocols. It might be helpful for you to do so.
        Ms. Petrauskas. My understanding is that there are folks
    talking to the staff about this. I'm sorry, I haven't been
    involved in it.
        Mr. Tauzin. Thank you.
        Mr. Luther.
        Mr. Luther. Are there insurance companies involved as well
    from Firestone's standpoint and from Ford's? Do you have
    insurance carriers on any of these claims?
        Mr. Lampe. Not from a first dollar standpoint we don't.
        Mr. Luther. Are there some carriers involved that would
    have been involved in any of this litigation?
        Mr. Lampe. There is excess insurance on our part, and I'm
    sure there would have been some of the carriers involved from
    the plaintiff's side.
        Mr. Luther. Is that true of Ford as well?
        Ms. Petrauskas. I believe so.
        Mr. Luther. Would you be willing to instruct those
    companies, then, to provide us documents as well?
        Ms. Petrauskas. I'm sorry?
        Mr. Luther. Would both of you be willing to instruct those
    companies to provide us with the documents?
        Ms. Petrauskas. I'm sorry; the documents, meaning?
        Mr. Luther. Related to----
        Ms. Petrauskas. Litigation materials?
        Mr. Luther. That's right.
        Ms. Petrauskas. I don't know of any reason why we wouldn't.
    We've provided everything else to the committee.
        Mr. Luther. Would that be true of Firestone?
        Mr. Lampe. We'll work with the committee on that also.
        Mr. Luther. In your companies, then, do you also have
    internal memos between management and either in-house counsel
    or outside counsel or your insurance companies relating to
    these claims? There would be memos?
        Ms. Petrauskas. I would assume that there are attorney-
    client communications going on all the time.
        Mr. Luther. Are you willing to provide that documentation
    to the committee?
        Ms. Petrauskas. My understanding is that we're working with
    the staff of the committee to try to figure out how we give the
    information that you all want to see without waiving attorney-
    client privilege. And I understand those efforts are underway.
        Mr. Luther. And as I understand, you're agreeable to doing
    that, then; to providing those memos?
        Ms. Petrauskas. Again I will tell you what I know about it
    Congressman, and that is we're working with the staff to try to
    find a way to give you the information you want, but at the
    same time still retain an attorney-client privilege. And people
    are working on that.
        Mr. Luther. So basically now you are standing by the
    attorney-client privilege on those kinds of documents.
        Ms. Petrauskas. What we would like to do is we want to find
    a way to give the committee the information it wants without
    waiving something as basic as attorney-client privilege.
        Mr. Tauzin. Would the gentleman yield again? Only to point
    out, so I can understand what's going on here, that in the
    courtrooms of America there is such a thing as attorney-client
    privilege. That does not apply to an investigative committee of
    Congress. Congress has the right to demand production of these
    documents if we so choose, and we reserve the right to do, of
    course. The problem is how to do it in a protocol that respects
    the trade secrets and other sensitive matters that are not
    relevant to our investigation. And our staffs are trying to
    work that out, but so far it has not yet worked out. I want
    that on the record. I thank the gentleman.
        Mr.  Luther. Thank you, Mr. Chairman. I will proceed on.
    Then I take it there are expert opinions that have been
    rendered regarding the cause of this problem with these tires,
    and you have reviewed those?
        Ms. Petrauskas. I don't know of the expert opinions in any
    sort of final sense with regard to the issue with these
    particular tires and, as I think we've indicated to the
    committee, there's lots of people working on trying to identify
    the root cause. If you're back to the litigation question, I
    believe we made all of these expert studies available.
        Mr. Tauzin. Would the gentleman yield once again?
        Mr. Luther. Sure.
        Mr. Tauzin. I think for the record again, we need to point
    out that we have a good example of how attorney-client
    privilege was asserted initially and then properly withdrawn,
    and that has to do with the Middle East memo in Saudi Arabia.
    Ford initially provided us with a document which gave the
    first-page information with reference to Firestone's concerns,
    but redacted the second page under attorney-client privilege.
    They later, upon our request, provided us with the second page,
    which then provided the information that Ford had concerns,
    quote, similar to Firestone's. Had we not insisted on Ford
    providing us that in spite of the attorney-client privilege, we
    would not have known that. That's why it's important that we
    indeed process this protocol as rapidly as possible.
        Mr. Luther. Thank you, Mr. Chairman. And then I'll wait for
    the outcome, then, of your work. I take it, then, there have
    been--you're both aware of some opinions that have been
    rendered as of this date on what the problem is with these
    tires. If Firestone could respond? You have seen some opinions
    that have been offered by experts.
        Mr. Lampe. I believe, sir, that we have provided all of
    that information to the committee. We have one outside
    independent investigator who just started a couple days ago and
    obviously has not rendered an opinion. That information will be
    made available to the committee.
        Mr. Luther. I'm talking about outside parties and that
    would be directed at both of you. There have been outside
    parties that have rendered opinions as to a defect in these
    tires.
        Mr. Lampe. You say outside third parties in litigation?
        Mr. Luther. Right.
        Mr. Lampe. That has been provided is my understanding.
        Mr. Luther. And you have provided all of that to the
    committee?
        Mr. Lampe. That's my understanding.
        Mr. Luther. Thank you, I appreciate that. And settlement
    amounts, is that something you are keeping confidential?
        Mr. Lampe. Settlement amounts in the past have been
    confidential. We have agreed already to supply that to the
    committee, and the only cases I must ``quotation mark'' that
    for is when we have a plaintiff that has agreed to a settled
    amount, we must get his permission. We feel we must get his
    permission to release that, but we will provide that to you.
        Mr. Luther. The reason I asked the questions and the reason
    I focused on the claims is there has been a lot of talk about
    how these tires were manufactured, and we can all find fault in
    that and the tests. But I think equally as important is how the
    company handled this matter when you were put on notice by
    various means of what was going on.
        Now, as I understand it, you were admitting today that
    there is a defect in these tires? When you testified earlier
    you used the word ``possible'' defect. Is there a defect?
        Mr. Lampe. We believe there is a defect in a very small
    percentage of these tires, sir.
        Mr. Luther. What is it within the corporate culture here--
    and organizations have cultures as well as corporations--but
    what was it within the corporate culture here that did not
    allow this information to permeate the management?
        Mr. Lampe. Sir, in the case of the tires, as we've talked
    earlier, the proven methods that we used up till now to
    determine whether we had a safety issue problem, all those
    methods were fine. We did not see anything. It was when we went
    to looking at data that we had never used before to look at a
    safety issue that the overrepresentation of a certain type of
    tire on a certain vehicle and a certain manufacturer at a
    certain plant came up. We obviously will change the way we
    looked at our data. We must.
        Mr. Luther. The interesting thing about your testimony
    today is that when we were talking about test failures, you
    were making the point that some of those test failures were not
    particularly significant because there weren't tire failures.
    So in other words, when the chairman was here and was doing a
    very good job of questioning you about the 10 percent failure
    rate or whatever, why wouldn't that put you on notice, you
    testified that that wasn't particularly important because you
    didn't view it as a safety issue. It wasn't important because
    there weren't tires failing. Then when tires start failing,
    what do you do? The information gets sent to the accounting
    department.
        So you had it both ways. On the one hand, you don't pay
    attention to the test, and then when the information comes in,
    you don't pay attention to the information on failures. Now,
    what created that kind of an environment or a culture where
    that would occur?
        Mr. Lampe. Sir, I didn't mean to give the impression that
    we do not pay attention to the test.
        Mr. Luther. No, but the point you made is that it wasn't
    particularly significant. You made that point a number of times
    because tire failures would be significant. These were very
    strenuous tests was the point that you were making. So 10
    percent, why be concerned about 10 percent failure on strenuous
    tests when there aren't tire failures? That's the point you
    were making.
        Now, when we look at the tire failures and the mounting
    information coming in, it gets sent to the accounting
    department. Tell us about the inside of the company and how it
    could handle things this way when you're talking about the
    safety of Americans.
        Mr. Tauzin. The gentleman's time has expired but I'm
    desperate to hear your answer to that, sir.
        Mr. Lampe. Thank you, Mr. Chairman. We obviously in light
    of what's happened, we've relooked at the way we've normally
    looked at claims data and early warning indicators. We are very
    very supportive of improving the early warning system as well
    with NHTSA and through the governmental agencies.
        My point on the tests, sir, were these are high speed
    tests. They are to qualify tires for high speed operations. We
    don't take them lightly. If we have a failure in the test, we
    don't stop. We retest multiple tires to make sure that the tire
    construction qualification is suitable and we will pass the
    test. I'm sorry if I gave the impression that it is incidental
    to us. It's certainly not.
        Mr. Tauzin. There were tire failures in the test.
        Mr. Lampe. Yes, sir, there were.
        Mr. Tauzin. I thank the gentleman. The Chair recognizes the
    gentlelady from New Mexico, Mrs. Wilson.
        Mrs. Wilson. Thank you, Mr. Chairman. In the first hearing
    we had, I asked Firestone about its prioritization of States
    for the recall and the reason that New Mexico was not in that
    prioritization. Has Firestone changed its distribution pattern
    at all as a result of any kind of internal discussions
    following the last hearing?
        Mr. Lampe. Congresswoman Wilson, I don't know what was
    communicated completely at the last hearing, but let me give
    you--try to summarize what we've done. When we first announced
    the recall, we announced it as a phased program. Believe me,
    that was never intended to not replace tires in every State. We
    started from day one----
        Mrs. Wilson. Mr. Lampe, I am well aware of that and that
    you abandoned that silly idea early on. The reality is that you
    are still short of supply and that you have since corresponded
    with the New Mexico Attorney General that you were prioritizing
    your supply based on the number of accidents per State. Your
    executives admitted that you weren't looking at the number of
    accidents per capita or even the number of accidents per
    vehicle. And I just want to know if, after our hearing 2 weeks
    ago, Firestone has done anything.
        Mr. Lampe. Congresswoman, I know that you talked about the
    per capita and I believe we are, I believe we are looking at
    that on a registered vehicle basis by the State. I cannot tell
    you today if we have changed our distribution process based on
    that per capita evaluation. I'm sorry. I don't know the answer.
        Mrs. Wilson. The fact that you do not know the answer tells
    me that you probably haven't done anything. Is that a fair
    assumption?
        Mr. Lampe. No, ma'am, I don't think that is a fair
    assumption.
        Mrs. Wilson. Is there anyone from Firestone here who knows
    whether you took back to your headquarters the information that
    we discovered in our last hearing and did anything?
        Mr. Lampe. Mrs. Wilson, I promise you that I will get you
    that answer immediately.
        Mrs. Wilson. Will everyone in the room representing
    Firestone please raise your hands?
        Is there anyone here from Firestone that brought that
    information back and did anything with it ?
        Mr. Lampe. Ma'am, if your question is were your concerns
    communicated, yes, they certainly were.
        Mrs. Wilson. I'm not asking whether you're communicating;
    I'm asking whether you're acting.
        Mr. Lampe. I don't know the answer to that but I will get
    the Congresswoman the answer.
        Mrs. Wilson. Thank you.
        I wanted to thank Ford Motor Company because they did act.
    Last week they shipped 6,000 tires from one of your competitors
    to the State of New Mexico. I wanted to thank Ford Motor
    Company for being responsive and concerned about consumer
    safety. I am very disappointed in your answer, sir.
        I have some other questions. In the information that we've
    been provided here on testing in 1996, Decatur tires from the
    Decatur plant failed to meet that 10-minute test that we've
    been talking about at 112 miles an hour. And then in March
    1998, there was a design change that, according to the
    documents we've received, was intended to help prevent
    separations with a wedge. Firestone has said this is not in
    response to knowledge of any problem. What knowledge or
    engineering science was it based on?
        Mr. Saurer. Let me answer that, if I may, Congresswoman.
    The wedge change is part of a continuous improvement program
    that we do every day. If you make a change in a product and
    assume that what you had was bad and now you're making it good,
    what a shame it would be. Every product in this country goes
    through evolutionary and improvement changes, just like cars,
    or whatever.
        We made that change in March 1998 for over 100 lines of
    tires involving 17 sizes in large P-metric tires when we
    realized that this market was growing and growing. We're
    talking about programs we're working on now for 2003 and
    beyond. A large P-metric tire going on really what is called
    light trucks and SUV's. We made that change because while our
    adjustment rates have been at historical lows for belt
    separation, this was a feature that we had started to use in
    our light truck tires and we knew we would be directionally
    right. This feature is actually in the recalled Decatur tires
    from 1998 on. It had nothing to do with the P235 and the recall
    situation. It's part of our ongoing philosophy. Just like our--
    --
        Mrs. Wilson. I----
        Mr. Saurer. Excuse me if I may. Just like our founder said,
    Mr. Firestone, many years ago, ``Best today and still better
    today.'' And I hope that this committee understands and
    appreciates that we will continue to make change in our product
    as we find new technologies to make them better. If we're going
    to be afraid to make change in our product because someone is
    going to accuse you of that which preceded it was bad, then
    shame on us.
        Mrs. Wilson. I wish you would answer my question because I
    wasn't accusing you of anything, sir. I asked you what
    engineering science told you that this would be an improvement.
        Mr. Saurer. This was an application, as I just said, on
    light truck tires, and in addition we do some FEA analysis.
    This was based on FEA analysis, trying to reduce belt edge
    sheer strain between the belts.
        Mr. Lampe. Mrs. Wilson, we had a belt wedge in the tires.
    What we did was increase it, the change, and we increased it
    because we felt it would give a better resistance to
    separations.
        Mrs. Wilson. And did you have testing data that would show
    you that this would yield an improvement in performance?
        Mr. Saurer. Our testing, as I said, was based on what we
    had previously developed in light truck tires, and since these
    P-metric tires are being used in the truck, we applied it in
    that manner. In addition, our scientists and engineers working
    on FEA modeling also determined through modeling that this is a
    reduction in sheer strain which is a common practice in
    laminate structures.
        Mrs. Wilson. How do you decide what your quality tests will
    be?
        Mr. Saurer. Are you referring to in the plant or overall?
        Mrs. Wilson. I'm specifically referring to this question of
    what does the government require.
        Mr. Saurer. I think----
        Mrs. Wilson. Excuse me. If you could, I am specifically
    referring to the question of what the government requires as
    opposed to what you as a company think is adequate to ensure
    the quality of your product. How do you decide what quality
    tests you use?
        Mr. Saurer. We do three basic things. We do a lot of
    laboratory and internal development testing. We test on outdoor
    facilities. We watch our adjustment rates and we also bring
    tires back from the field as a return for warranty adjustments
    and analyze them. The tests have been developed over years and
    years of experience. We run a large battery of tests and
    determine those types of tests which produce failures, products
    that we replace. We constantly try to move forward in a
    positive way.
        Mrs. Wilson. I'm not asking what the tests are. I'm asking
    you, how do you develop, how do you decide what you should do
    for tests, because you described a series of tests, 10 minutes
    at 112 miles an hour. Your colleague differs as to what the
    government requires. I want to know how internally you go about
    deciding what should your standard be for consumer safety.
        Mr. Lampe. Mrs. Wilson, we obviously comply with all the
    required tests, the governmental tests.
        Mrs. Wilson. Is that your only standard?
        Mr. Lampe. No, ma'am.
        Mrs. Wilson. All right.
        Mr. Lampe. We also self-impose other tests, recognized
    structured tests like the SAE. That is not a required
    government test, but we adopted it. And we've developed many
    more tests in our proving grounds, in our laboratories and so
    forth, based upon just evolution in our experience of what we
    need to be looking at. We do much more beyond what is required.
        Mrs. Wilson. My point is--and this will probably be my last
    line of questioning--there has been lot of discussion here
    about what those tests are and whether those--if they are
    appropriate in real world conditions or how the product is
    going to be used. It seems to me there are scant tests at the
    recommended tire pressure for the company that produces the
    vehicle. At the same time, you are testing at 10 minutes at 112
    miles an hour. Why is that the standard? And the question not
    of what the test is, but how you develop what your test should
    be in any company focused on quality is critical, and it sounds
    to me as though there are gaps here and you need to go back to
    some fundamentals of how do we decide as a company what our
    quality test should be. I yield the balance of my time, Mr.
    Chairman.
        Mr. Tauzin. I thank the gentlelady. Let me tell you where
    we are: Mr. Rush will be next. Mr. Upton is returning from the
    vote and will take over. We will try to wrap up the round of
    questions with this panel.
        Secretary Slater is available and wishes to give us a
    report from the Department of Transportation which we want to
    receive. We'll simply take his testimony and then we'll adjourn
    and move to begin our markup process.
        So, Mr. Rush is recognized at this time. Mr. Upton will be
    back in just a minute. Mr. Rush.
        Mr. Rush. Thank you, Mr. Chairman. Dr. Bailey, I would like
    to get back to the question as to how many complaints it takes
    for NHTSA to open a formal investigation. In earlier testimony,
    you told Mr. Dingell that 26 complaints that NHTSA had in 1998
    was not enough; is that correct?
        Ms. Bailey. The 26 he commented on I believe is a subset of
    the 46 we had which occurred over almost a decade.
        Mr. Rush. And you said that was not enough.
        Ms. Bailey. That would not be enough because it would be
    several a year, while we received hundreds of complaints from
    other tire companies about other tires.
        Mr. Rush. I have before me a NHTSA report which shows your
    agency opening an investigation on Michelin tires in 1994 with
    only five complaints. Can you explain that?
        Ms. Bailey. Yes, sir. That was a request from the Office of
    the Attorney General of the State of Kentucky, and that
    therefore was an unusual circumstance. Often if we're
    petitioned by a State official, we may instigate an
    investigation, and we did so in that case. The investigation,
    by the way, was closed and there was no recall.
        Mr. Rush. And so there are instances where NHTSA will open
    up an informal investigation without an extraordinary amount of
    complaints, number of complaints; is that right?
        Ms. Bailey. We look at all the variables, yes. We look at a
    number of complaints, but in this case it was also the fact
    that the Office of the Attorney General was involved. I should
    also say that, again, tires do fail, but we can sometimes open
    an investigation with only one or two complaints if it's a
    component of a car that should never fail, like a seatbelt or a
    child seat.
        Mr. Rush. Can you explain to me if you look at the chart,
    where would you have started an investigation on that chart?
        Ms. Bailey. I don't understand what you're asking about
    that particular bar graph. I can tell you about what it is that
    we use to determine, but you'll have to rephrase the question
    for me.
        Mr. Rush. Those are complaints there, right?
        Ms. Bailey. Right.
        Mr. Rush. Where would----
        Ms. Bailey. No, those are fatalities related to tire
    failure, and I'm trying to determine where that is----
        Mr. Tauzin. It comes from police----
        Ms. Bailey. That's FARS data?
        Mr. Tauzin. This is FARS data.
        Ms. Petrauskas. In the few times the tire box is checked.
        Ms. Bailey. Thank you.
        Mr. Rush. Where would you start initiating a NHTSA
    investigation based on the chart there?
        Ms. Bailey. Well, first of all, the FARS data is used
    separately. It is used for a variety of reasons, not
    necessarily applied the way that I think we all know now we
    should be applying it. So if you look there at that data, the
    data come in from law enforcement agencies around the country.
    It is incomplete data. Sometimes it will say it was tire
    failure. It will not have a vehicle. We don't have a VIN
    number. We can't validate the numbers. So it is not data that
    is used in the same way as the complaint data base, but it is
    one of the things that I am committed to reviewing so that we
    can begin to apply that data base more effectively.
        Mr. Rush. Can you explain the action of your agency as it
    relates to the ATX recall? I understand that you have that, you
    have--first of all, did you have enough information with only
    one failure--there were 24 brands, 1.4 million failures, that
    affected 24 brands; is that right?
        Ms. Bailey. I would have to check that number. You mean in
    the total recall of August 9?
        Mr. Rush. In the advisory that you put out.
        Ms. Bailey. In the advisory, there is 1.4 million in that
    advisory that we put out on September 1.
        Mr. Rush. And I understand what you included in that
    advisory was the ATX brand; is that right?
        Ms. Bailey. There were several brands included in that
    advisory. In fact, it had a long list which included a lot of
    Firestone ATX, yes.
        Mr. Rush. Were there any instances where there was one
    failure that you included on that advisory?
        Ms. Bailey. If you're referring to the fact that sometimes
    there was a low tread separation or failure rate, you have to
    also look at the production number, if there was a production
    number that was very low. But if they only produced, say, three
    of them, and one of them failed, yes, that would probably be a
    concern. But you need to know that in that list of information,
    there were sometimes production numbers of 200,000, 100,000,
    and the tread separation rates in that list indicated by the
    consumer advisory were twice or three times or more as high as
    the tread separation in the original recall. So it was a very
    serious concern on our part.
        Mr. Rush. I would like to ask Mr. Lampe, Mr. Lampe, what
    was the labor environment for Firestone in 1996?
        Mr. Lampe. Congressman Rush, 1994, July 1994, we had a
    strike by our United Steelworker employees. At that time they
    were United Rubber Workers. They came--we hired replacement
    workers, temporary workers, and in about May 1995 the unionized
    workers that had been out on strike that had not already come
    back to work, crossed over. They started coming back, and by
    1996 over half of our work force in the Decatur plant was
    unionized workers that had gone on strike and come back, and
    less than half were then replacement or temporary workers.
        Mr. Rush. How many workers was that in total? First of all,
    how many workers originally were at the Decatur plant, normally
    are at the Decatur plant? How many employees do you have there?
        Mr. Lampe. We have about 2,000 employees today, sir. I
    think back then it was less. We've increased our production
    there. It's probably about 1,400, but that's an estimate.
        Mr. Rush. How many workers were affected by the strike, all
    2,000?
        Mr. Lampe. At that time the smaller number, yes, sir; all,
    with the exception of a very small handful, did go out on
    strike.
        Mr. Rush. So you had how many replacement workers there?
        Mr. Lampe. By 1996, I believe the question was around a
    little less than half of the work force, probably around 6- or
    700.
        Mr. Rush. Have you determined, was there any causal
    relationship that existed between the replacement workers and
    the recalled tires that we're discussing today?
        Mr. Lampe. Sir, that's something we've looked at and
    discussed many times. It will probably be very easy for us to
    say yeah, that's the problem, and go on with it. We don't think
    that that was the cause of the problem; however, it's not
    something we've taken off the table. It's something we continue
    to look at as a possible factor.
        Mr. Rush. Dr. Bailey, let me ask you another question.
    Under the circumstances created by the legislation that our
    agency would share--under the circumstances created by the
    legislation, your agency would share confidential proprietary
    information with a foreign government when a recall involved
    both the U.S. And a foreign government. Once in the possession
    of the confidential proprietary information, the foreign
    government could share this information with the public or with
    its domestic manufacturers. The foreign government could, in
    the process, damage the economic stability of the U.S. Company
    whose information was released. If this chain of events were to
    occur, what recourse with would the U.S. Government have
    against a foreign government?
        Ms. Bailey. I would need to get legal counsel to determine
    the answer. But I can tell you we're actively working to obtain
    greater communication with those foreign governments and
    companies that have subsidiaries here or companies that have
    subsidiaries outside of the country.
        Mr. Tauzin. The gentleman's time has expired. I can assure
    the gentleman that it is on our list of concerns. We will
    address that and get some legal opinions for the gentleman.
        Mr. Rush. Thank you.
        Mr. Tauzin. Thank the gentleman. I'm going to return the
    chair to Mr. Upton who will have some final things to do, and
    then we will dismiss this panel. In closing. Let me thank you
    again for coming.
        Let me point out a couple things for the record. The FARS
    data are about tire failures. These are single car rollovers
    that produce accidents and deaths and result from the
    initiation of the tire failure. So it's important information
    that was coming into the agency, and it's critical in the
    future we need to pay attention to it.
        Second, Dr. Bailey, you mentioned again today that you did
    not have the authority to obtain information on claims data
    warranty and foreign recalls. You testified 2 weeks ago you had
    the authority to request it, and if you requested it you would
    get it. What you're seeking now is the automatic transfer of
    that information to you by legislation; is that correct?
        Ms. Bailey. Yes, sir.
        Mr. Tauzin. Again, let me thank you. Mr. Upton, the Chair.
        Mr. Upton [presiding]. Again I want to thank all of you for
    your testimony in advance. As you know, we are trying--we have
    identified a serious problem, and as always when that happens,
    particularly in my role as Chairman of the Oversight and
    Investigations Subcommittee, once that is done the next step is
    then to correct the problem to make sure it does not happen
    again.
        Senator McCain, to his credit, and the Senate, to its
    credit, have in fact moved legislation that passed yesterday on
    a unanimous voice vote. That bill at some point will be
    pending, I hope, on the Senate floor. We are moving as well.
    The legislation that I introduced last week, H.R. 5164, has
    been cosponsored by a good number of Republicans and Democrats,
    many of them on the panel this morning. We are--when Mr. Tauzin
    returns, they are going to begin the markup stage which will
    continue into next week. And as you may know, as we are working
    with the Senate, we're trying to preconference, I guess you
    could say, a number of items. But there are a number of
    amendments that would be offered before this subcommittee and
    before the Telecommunications and Consumer Protection
    Subcommittee and perhaps then before the full committee when
    that process resumes later this afternoon and again into next
    week.
        One of the things that I would like to put on the table
    with you all--so we don't have the language yet or the number
    of those amendments we'll be seeing in the next couple of days,
    but that language will likely be shared with your respective
    groups. And I might ask that we get a quick turnaround in terms
    of suggestions, constructive changes, how it may work, how it
    may not work, from each of you as those questions are
    submitted, whether they be later today, tomorrow, over the
    weekend, Monday and Tuesday next week. Does that sound like a
    fair question?
        Ms. Bailey. Yes, sir.
        Mr. Upton. And I know we have questions of the criminal
    penalties that Mr. Sawyer and Mr. Dingell queried this morning.
    I know Mr. Markey is working on an SUV standard. I know there
    are a number of specific amendments that we want to improve the
    process and not make it linger. And with that, again I thank
    you for your testimony. And, Dr. Bailey, I think we're asking
    you to stay a little bit longer, but the others, you are
    excused. Thank you for being with us this morning.
        Our next panelist is the Secretary of Transportation, Mr.
    Rodney Slater.
        I guess we will get started.
        Mr. Slater, we appreciate you waiting patiently to finish
    with our first panel. We're delighted you're here. We're
    delighted you've taken the opportunity to talk to a number of
    us in the last couple of weeks as well on a number of fronts.
    And the format that we are going to proceed on now, the vote
    is--even though 15 minutes have expired, members will be coming
    back, and your testimony has been made part of the record in
    its entirety.
        I am going to swear you in and you can give your statement
    at that point. We will probably do a couple of questions, but
    not long, because this is likely the last vote on the House
    floor today, and as soon as we're done, the markup is expected
    to convene. If you would rise and raise your right hand.
        [Witness sworn.]
        Mr. Upton. You are now sworn in. I neglected to ask if you
    would like to be represented by counsel but I know your answer.
    The next 5 minutes is yours. Welcome before the committee.

    TESTIMONY OF HON. RODNEY E. SLATER, SECRETARY OF TRANSPORTATION

        Mr. Slater. Thank you, Mr. Chairman. I'm looking forward to
    the dialog between you and members of the committee and Dr.
    Bailey and myself.
        And we thank you for this opportunity to come before you to
    discuss important legislation to improve the Federal law on
    motor vehicle safety. Again, I am pleased to be joined by Dr.
    Bailey and members of our NHTSA and U.S. Department of
    Transportation team. They are at U.S. the Department of
    Transportation. We wish to note that we view transportation
    safety as our top transportation priority. We speak of it as
    the North Star by which we are guided and willing to be judged,
    and so we very much appreciate this opportunity to come before
    you, Mr. Chairman, and members of the committee, because we
    know that you share the same high standard for transportation
    safety.
        Mr. Chairman, almost 4 years ago, I had the opportunity to
    come before the Congress and to pledge, if afforded the
    opportunity to be confirmed, that I and the 100,000 members of
    the U.S. Department of Transportation would continue to make
    safety and security the highest priority and a matter of utmost
    importance at the Department. I am pleased that I've able to
    work with the Congress and our many stakeholders along with our
    team to do just that.
        Clearly on all fronts, we have the safest transportation
    system in the Nation's history. Highway death and injury rates,
    all-time lows. Seatbelt and child safety seat use, all-time
    highs. Alcohol-related highway fatalities, all-time lows as
    well.
        The same can be said as relates to highway/rail grade
    crossings, deaths and injuries on our waterways, and also the
    fact that we have the safest aviation system in the world.
        But having said that, any sober and somber reflection on
    the challenge at hand clearly makes it evident that our system
    is not safe enough and we cannot rest where we now stand. It
    must be made safer, and we are committed to working with this
    Congress to that end.
        In that regard as it relates to the specific matter before
    us, the Firestone recall, we have already reallocated $1.8
    million to expedite our own investigation of this matter. We
    are also moving forward as relates to lessons learned and
    offering comprehensive legislation to the Congress that will
    strengthen the powers and the authority of NHTSA to ensure that
    nothing like this happens again. In this regard, we appreciate
    the action recently by the Senate Commerce Committee as relates
    to Senate bill 3059, and then we also acknowledge our
    appreciation for the opportunity afforded today by this
    committee and by you in particular, Mr. Chairman, and other
    members of the committee as you are poised to shortly act on a
    counterpart measure here in the House, House bill 5164.
        In addressing you today, I want to acknowledge that we have
    been serious and forthright in dealing with the investigation,
    and Dr. Bailey and her team have done a tremendous job in that
    regard. As you know, we provided recent updates as relates to
    information which brought the total to 101 fatalities and more
    than 400 injuries resulting from the tires in question. Our
    investigation continues on an urgent basis, and I have again
    directed the agency to use all means available to conclude the
    investigation as soon as possible. The challenge before us is
    to investigate this issue vigorously, to find the facts, and to
    use the lessons learned again to ensure that this or similar
    incidences of this nature will not occur.
        I would also like to underscore that the Continental and
    General Tire action also reflects the importance of some of the
    authority that we request dealing with warranty and claims
    information, because their action is based on that type of
    information. And again this is the kind of information that we
    would like to have to initiate our actions on a more
    expeditious basis.
        In March of this year, Mr. Chairman, we submitted a bill to
    the Congress to strengthen our legislative framework for our
    vehicle safety programs. The bill would have increased civil
    penalties. It would extend the period within which
    manufacturers must provide no-cost remedy to consumers and
    require manufacturers to test their products before certifying
    their compliance. In moving forward in our response to the
    Firestone investigation, we also reiterated in a more
    comprehensive proposal those things that were included in our
    March proposal, but we included some other information as well.
        And, Mr. Chairman, Chairman Tauzin, it's a pleasure seeing
    you as well. The new authority we seek under the more
    comprehensive proposal that was submitted on September 11 would
    seek to close certain gaps in our current authority that hinder
    our ability to detect problems that led to the Firestone
    recall. Example: Authority to get foreign recall information,
    clear authority to get warranty and claims information; also
    again some loopholes that could be fixed, and enhanced
    authority as it relates to our ability to work with our
    international partners. We'll probably talk a bit more about
    this over the course of the discussion. But the bill represents
    our best thinking of what needs to be done, and we look forward
    to working with the two of you and your colleagues, all of you,
    the entire committee, as we deal with the resolution that will
    come before the House momentarily.
        Our bill also addresses a number of concerns raised by what
    is clearly becoming the globalization of the motor vehicle
    industry. We believe that the provision dealing with
    international cooperation included in our bill will provide the
    kind of early warning devices networks, if you will, that
    members of this committee have said they favor and we believe
    is necessary to ensure that issues raised in the Firestone
    investigation again will not occur.
        Our bill would strengthen NHTSA's information gathering
    powers in several vital respects. It would clarify the agency's
    authority to obtain information about vehicles and equipment
    used abroad that is relevant to vehicles and equipment in the
    United States, and put us on the same statutory footing as it
    relates to our authority when it comes to obtaining information
    concerning these vehicles in this country.
        Again House Resolution 5164 addresses the need for NHTSA to
    get timely information about safety recalls and campaigns that
    occur in foreign countries. We strongly recommend that it not
    be limited, though, to information about vehicles and equipment
    that are, quote, ``also offered for sale in the United
    States,'' close quote. This limitation might excuse a
    manufacturer if the foreign vehicle or equipment is not
    identical to that which is sold in this country even though it
    may share common design and construction elements. So we look
    forward to working with the committee on this issue.
        Also the House proposal addresses the issue of NHTSA tire
    safety standards. And here NHTSA has already moved ahead on a
    process for addressing possible changes to these standards, but
    we look forward to working with the committee to do so as
    quickly as possible.
        Last, I would mention that as relates to our original
    proposal, we did request additional resources. I mentioned the
    $1.8 million that we've already reallocated, but we also
    requested an additional $9 million, and we can talk about the
    details or the specifics as to how we would use those
    resources. I would note, though, that the action taken by the
    Senate to up the authorization by about $18 million, which is
    consistent with the President's mark, would provide clearly the
    authorization we would need to get the resources that we would
    need.
        In closing, Mr. Chairman, there are two matters that have
    come up in discussions that were not a part of our original
    submission, and I would like to touch on that quickly in
    concluding my remarks, because I know that the matter came up
    this morning as well; and, Congressman Upton, you and I talked
    about it just yesterday. And this deals with the issue of the
    appropriate penalty, civil and/or criminal, when a company or
    companies fail to comply with the provisions that will be
    offered in the bills as we go forward.
        As we address the question, let me acknowledge that some
    have raised concerns that criminal penalties could adversely
    affect the ability of NHTSA or the Department to investigate
    and to gather information. And we acknowledge that sentiment.
    But as I said last week during the Senate committee hearing and
    I would like to reiterate this now, the administration supports
    a three-tiered approach to the enforcement of health and safety
    statutes: administrative civil penalties, which we are seeking;
    judicially enforced civil penalties, which the NHTSA statute
    already provides; and then in the case of egregious
    circumstances, a criminal penalty for those who knowingly and
    willfully violate the law. And clearly that discussion is
    underway again and I know we can talk a bit more about that.
        Let me also say there are a number of agencies within the
    U.S. Department of Transportation that have criminal penalty
    authority, and we can get into the details of that. But I had
    mentioned that, because we are concerned about having the
    ability to work collaboratively with industry to gather
    information, but we do have examples of where even with
    criminal penalty authority appropriately placed, that we have
    been able to work with the industry and others to gather the
    kind of information that we need.
        The last thing I would mention, and it deals also with the
    question of bringing a matter to closure, and it concerns a
    lack of authority. That is the case with NHTSA as relates to
    comparable regulatory agencies. And here again I think our
    discussions may unveil more, but there is one in particular
    that we're concerned about; and that is, unlike other agencies,
    NHTSA must try its defects and standards compliance cases de
    novo in court if a manufacturer refuses to remedy the defect or
    noncompliance. The law should be changed, we believe, to allow
    the agency to seek enforcement of its orders with the burden
    being placed on the manufacturer to show that the action
    ordered by the agency is unwarranted. The point to be made is
    that we will do a thorough investigation, move forward on an
    order, but if that order is challenged and we go to court, then
    we have to try the matter over again. This is not the case with
    other regulatory agencies, and we would ask if the committee
    would consider this.
        In summary, again we have worked very closely together. Our
    desire is to increase the no-charge remedy period of tires from
    3 to 5 years, and vehicles from 8 to 10; to raise the maximum
    penalty, actually to remove the ceiling on it, and we can
    discuss that question; to require manufacturers to test
    products before certifying them; to require used car dealers
    and school bus operators to fix recalls before selling or
    operating the vehicles in question.
        In September, we reiterated these points but we also then
    added the final four points that I would like to make, and that
    is a request for authority to get foreign recall information,
    clear authority to get warranty and claims information and
    again the Continental case speaks to that point as well as the
    Firestone case. Also, enhance our ability to work
    internationally with foreign governments. And finally, the
    provision deals with fixing certain loopholes, and just one
    example would be requiring equipment manufacturers such as
    brake manufacturers to report defects to us.
        Mr. Chairman, members of the committee, again we appreciate
    the opportunity to come before you. This is a serious matter.
    We take it seriously. We appreciate this occasion to work with
    the committee and your colleagues across the Congress to ensure
    that before we leave we have addressed this issue appropriately
    before the American people.
        [The prepared statement of Hon. Rodney E. Slater follows:]
     Prepared Statement of Hon. Rodney E. Slater, Secretary, United States
                          Department of Transportation
        Mr. Chairman and Members of the Committee: Thank you for holding
    this hearing on legislation to improve the federal law on motor vehicle
    safety. To begin, I want to emphasize the importance of safety to the
    Department of Transportation. It is our top transportation priority. It
    is the North Star by which we are guided and willing to be judged. I
    want to commend you for your leadership on this issue, Mr. Chairman,
    and that of other committee members.
        Mr. Chairman, almost four years ago when I began my service as
    Secretary of Transportation, I pledged that I would continue to make
    safety and security of the highest importance. I promised to strive to
    raise our current levels of safety to even greater heights, and I
    believe that we are accomplishing this goal on many key fronts:
    aviation, maritime, highway, transit, and rail. In the Clinton-Gore
    Administration, we have worked in partnership in a collaborative way
    across the transportation spectrum to achieve specific and measurable
    safety goals--with the States, industry, labor and management, local
    communities, safety advocates, and individual citizens--and the results
    speak for themselves.

     Highway death and injury rates have fallen to all-time lows.
     Seat belt and child safety seat use rates are at all-time
            highs.
     Alcohol-related highway fatalities are lower than ever before.
        On the whole, we have the safest transportation system in the
    history of the United States. But any careful evaluation shows us that
    its safety can still be improved. We have a challenge before us. We
    must work together to meet it.
        In addressing you today, I want to acknowledge the outstanding
    effort that NHTSA, under the leadership of its Administrator, Dr. Sue
    Bailey, is making to address the investigation and recall of Firestone
    ATX, ATX II, and Wilderness AT tires. The investigation is continuing
    on an urgent basis. I have directed the agency to use every means
    available to conclude the investigation as soon as possible. The
    challenge before us is to investigate vigorously, find the facts, and
    use the lessons we learn to avoid such incidents in the future.
        Mr. Chairman, the Department has taken the initiative this year to
    strengthen the legislative framework for our vehicle safety programs.
    In March of this year we submitted a bill to Congress to increase civil
    penalties for defective and noncomplying products, extend the period
    within which the manufacturers must provide a remedy at no cost to
    consumers, and require manufacturers to test their products as a basis
    for their certification of compliance.
        As the Firestone investigation unfolded, we again took the
    initiative, by submitting further comprehensive legislation on
    September 11 that would fix the gaps in our current authority that
    hindered our ability to detect the problems that led to the Firestone
    recall. This bill represents our best thinking on what needs to be done
    and I encourage you to consider incorporating its provisions into H.R.
    5164, the bill introduced by Chairman Upton with bipartisan committee
    support, and with your sponsorship, Mr. Chairman. We ask you and the
    Congress to join with us, in a bipartisan effort, to enact effective
    legislation before this Congress goes out of session. We firmly believe
    that all representatives of our safety-conscious industries will join
    us in supporting this important effort.
        Our bill addresses a number of the concerns raised by what is
    clearly the globalization of the motor vehicle industry. We believe
    that the provision on international cooperation included in our bill
    would provide the kind of early warning network that members of the
    committee have said they favor, and is necessary to ensure that the
    issues raised in the Firestone investigation do not recur. The
    provision would cover not only information about safety defects, but
    would include a great deal of other vehicle safety information as well.
        Our bill would strengthen NHTSA's information-gathering powers in
    vital respects. It would clarify the agency's authority to obtain
    information about foreign information relevant to vehicles and
    equipment in the United States and put it on the same statutory footing
    as its authority to obtain information concerning vehicles in this
    country. It would affirm NHTSA's information-gathering authority in
    other respects, and would require manufacturers to review information
    about crashes that may indicate a defect and advise DOT if there is a
    reason to believe a defect or noncompliance may exist.
        H.R. 5164 addresses the need for NHTSA to get timely information
    about safety recalls and safety campaigns that occur in foreign
    countries. We strongly recommend that it not be limited to information
    about vehicles and equipment that are ``also offered for sale in the
    United States,'' a limitation that might excuse a manufacturer if the
    foreign vehicle or equipment is not identical to that sold in this
    country, even though it may share common design or construction
    elements. This provision would be useful, Mr. Chairman, but we believe
    it must go further, as our bill does.
        H.R. 5164 includes some of the provisions from legislation that the
    Department submitted earlier, including an increase in civil penalties
    for a violation, from $1,000 to $5,000 for each vehicle or item or
    equipment, and an increase in the ceiling for a related series of
    violations, from $800,000 to $4,000,000. It would also extend the
    period--from the current three years to five--within which the
    purchaser of a tire can obtain a no-cost remedy for any defect or
    noncompliance. These are important provisions and I welcome their
    inclusion in the bill. I would encourage you to take the further step
    of removing the ceiling on penalties altogether, as our new bill
    proposes.
        Our bill includes other provisions that we believe should be
    incorporated into H.R. 5164 as committee deliberations take place. In
    addition to extending the period for a no-cost remedy for defective and
    noncomplying tires, we encourage you to consider a similar extension
    for motor vehicles, from the current 8-year period to 10 years. Today's
    motor vehicles remain in service much longer than the vehicles of 25
    years ago, when the no-cost remedy was first adopted. The period for a
    no-cost remedy should be extended accordingly.
        H.R. 5164 would require tire manufacturers to report information
    about claims submitted for personal injury and property damage. We
    believe this would help to avoid the situation that occurred in the
    Firestone case, but we would also encourage you to expand the
    requirement to apply to manufacturers of motor vehicles and motor
    vehicle equipment, as is currently included in our bill.
        H.R. 5164 would be enhanced by the inclusion of another provision
    that we believe is important, particularly in the context of the
    Firestone investigation. Our March bill included a requirement that
    manufacturers test their products before certifying them as complying
    with motor vehicle safety standards. We believe this is a reasonable
    requirement that would facilitate NHTSA's enforcement program and that
    would not be burdensome to responsible manufacturers.
        H.R. 5164 also addresses the issue of NHTSA's tire safety
    standards. NHTSA is already in the process of studying and considering
    possible changes to these standards if they improve safety.
        Mr. Chairman, I believe the circumstances call not only for a bill
    that focuses its efforts on the tire industry, as H.R. 5164 does, but
    one that provides a comprehensive renovation of NHTSA's safety
    authority to secure the remedy of defective motor vehicles and motor
    vehicle equipment.
        Finally, Mr. Chairman, we seek additional funding for NHTSA's
    safety enforcement program. The Office of Defects Investigation (ODI)
    needs to have additional resources, both in funding and in people, and
    we ask Congress to provide for these measures. We will immediately
    reallocate $1.8 million to the Firestone investigation from other NHTSA
    activities. We are seeking an increased authorization of $9 million to
    expand ODI's activities, increase public access to ODI's public files,
    and provide resources for updating our tire safety standards. We
    submitted a bill in February of this year to increase the authorized
    levels for NHTSA's motor vehicle safety programs, including ODI, in
    fiscal year 2001 by $17,640,000. We urge you to consider including a $9
    million authorization for NHTSA in the bill now before the committee.
        Mr. Chairman, I pledge that as long as I am Secretary, we will do
    everything in our power to use the new authority we seek, and our
    existing authority, vigorously. The Department of Transportation is
    made up of 100,000 visionary and vigilant employees, and I can think of
    no clearer case in which this message must be heard: we must look to
    the future and guard against any repetition of tragedies caused by
    defective vehicles or equipment to the American people.
        Mr. Chairman, this concludes my testimony. Dr. Bailey and I will be
    glad to answer your questions.

        Mr. Tauzin. Mr. Secretary, let me personally thank you for
    coming today. It is important that America sees how seriously
    the Department of Transportation takes its responsibility here
    and, as I told you personally, NHTSA has been one of my
    favorite agencies personally. It's saved a lot of lives over
    the years. And if it has any failings in this recent incident,
    we want to correct it and make sure it never happens again.
        That is the purpose of our very critical questions. We
    should all have that sort of capacity to look at ourselves
    critically and see where we're missing something that we can
    improve. And that is true of our legislation. I've said
    publicly we need to accept our responsibility as legislators.
    The laws aren't adequate here. And we need to give America a
    better set of laws, and your agency probably needs to give them
    a better set of regulations.
        To that end, let me ask something of you. We are going to
    in just a minute end this hearing process and take a recess,
    and then reconvene as a committee to begin the process of
    considering the legislation, the ideas that you and others have
    presented to us in the Upton bill. I have announced to all the
    members that we will take only opening statements today and a
    few noncontroversial amendments perhaps, and then we will
    recess until next Wednesday to give all of us a chance to
    interact: Chairman Bliley's staff, our staffs, the staffs of
    the minority, and hopefully designated staffers, if you and Dr.
    Bailey can do so, to work with us in a collaborative fashion.
    We are obviously looking for truly a bipartisan and an American
    solution to this problem and we need all of your help as we
    need the help of all the members here.
        So that by Wednesday next, we would appreciate if in that
    interactive process we could have some good discussions
    organized through our staffs and Chairman Bliley's staffs with
    you to make sure that we have all the relevant information, the
    proper language, the right drafts of the very technical
    amendments that ought to go on this bill.
        We begin action today as much as a demonstration as
    anything else that we will take this matter up and move it. We
    have 3 weeks to do it in. And by taking it up today, putting it
    on the table before the committee, it puts everybody on notice
    to get busy. We've got just 6 or 7 days to put this bill in
    good shape and move it to the full committee. Chairman Bliley
    is committed to work with us in that effort and to hopefully
    take it up to the full committee. Both Mr. Upton and I have
    discussed with Mr. McCain his legislation. We're going to try
    to get the two bills as close as possible so that we can get a
    compromise House and Senate version together. And then we will
    ask you to do the final, most important thing, and that is to
    prevail upon the White House for a signature before we leave
    here.
        Again, Secretary Slater, we thank you for your appearance
    today, and again we appreciate the seriousness with which the
    Department of Transportation is approaching this matter and
    hopefully will help us find the right solutions as we go
    forward. Thank you very much.
        Mr. Engel. Mr. Chairman.
        Mr. Tauzin. Yes.
        Mr. Engel. I would just like to ask the Secretary--I
    listened to your testimony, I certainly agree with everything
    you've said. And the bill before us, I certainly agree with
    that bill as well. It seems to me that you're proposing
    something much more comprehensive than the bill before us, and
    in light of what the chairman said--and I couldn't agree with
    him more, with the week that we have perhaps to get things
    together. I just would like to understand up until now what has
    been the interaction between your agency and the legislature,
    because it seems what you're proposing is much more
    comprehensive than what we have. And while I certainly have no
    objection to what we're doing, I think it's a positive step
    forward, I would like to see something much more comprehensive
    come out of this along the lines that you've mentioned.
        Mr. Slater. Congressman, a very good question. We have been
    working with the Congress very closely from day one. Now, early
    on, most of the focus was on what happened when, who knew it,
    and the investigative process. And that's where most of the
    focus was. But during that time, internally we were also
    looking at our particular needs as a Department, as an agency,
    and we reflected on the fact that in March of this year we had
    presented a proposal designed to actually strengthen our agency
    in much the same way that we are doing now; but with the
    Firestone recall, certain other matters were disclosed to us.
        We recognize some of our limitations, especially as it
    relates to foreign recalls and having manufacturers understand
    that there is a responsibility to provide that information to
    us. There is not that authority in the current law. And so we
    started to work probably a little earlier maybe with the Senate
    on that question, because last week the Senate was taking up
    the matter and looking at legislation for going forward. But
    even as we started to work with the Senate, we started to work
    with the House, and now that we have concluded that work with
    the Senate, clearly we are focused more on the specifics of our
    work with the House. The bill that is currently before the
    committee, though it has been altered a bit of late, focuses
    primarily on just the tire question. Ours is more comprehensive
    than that. You've heard me mention used car dealers and school
    buses and manufacturers to a greater extent. And at the end of
    the day, I think our continued cooperative and collaborative
    working relationship will get us the kind of comprehensive bill
    that I think we would all want.
        Mr. Tauzin. Thank you, Mr. Secretary. Let me point out to
    my friend that Mr. Upton's bill was filed even before the
    Senate bill was filed. It represented a knowledge of the facts
    and potential solutions at that time. Since that time, Mr.
    Upton in the meeting with staff and Mr. Chairman's staff and
    others, have identified at least 10 to 15 points where the bill
    can be improved, and hopefully we hope to have legislative
    language circulated between members which will indeed make it a
    more comprehensive bill. And the contributions of the Secretary
    and his staff has not only been requested today, but I know
    will be part of that process.
        Mr. Engel. Let me just say, Mr. Chairman, I think that it's
    very good news because I don't think there is any controversy
    here. I think there are things that need to be done, and the
    more comprehensive we are the better. I think that dealing with
    the tire industry is fine, but I think we need to go beyond
    that, along the lines the Secretary has proposed.
        Mr. Tauzin. The only caveat I make is that we have to get
    this bill done before we leave. And we are not going to
    complicate it with controversial matters that may bog it down,
    because this is too critical for American safety. I hope the
    gentleman will work with us in that regard.
        Mr. Engel. Yes. I would like to say I think there is enough
    on which we can all agree that would not be controversial, that
    we could pass something more comprehensive.
        Mr. Tauzin. The gentleman is correct. Again I thank you,
    Mr. Secretary. We appreciate your testimony and your continued
    assistance in this matter.
        Mr. Luther.
        Mr. Luther. Mr. Chairman, thank you. I appreciate your
    point. If I can just add to the point that was made. I think
    one thing in your consideration, I think one thing that
    probably troubles every member of the committee, is how we can
    still have a situation where people are out driving with those
    tires and having their families being subjected to that kind of
    risk in this country. And so anything that we can do in this
    process to improve the procedures in such a way that when this
    kind of determination has been made and an admission here of a
    defect and things are moving forward, anything we can do to
    make sure that we can get those tires off the road right now
    for the safety of the people of this country, I think that view
    would be shared, in any discussions. Anyway, in talking to
    other members of committee, it's a real frustrating point to
    think that people are still being put at risk, so I just wanted
    to add that.
        Mr. Tauzin. I thank the gentleman. In fact, one of the
    amendments that will be circulated has to do with recall
    procedures, and it focuses on the question of whether or not
    when a replacement recall is voluntarily executed and mandated,
    that if in fact the manufacturer does not have replacements
    available, that automatically consumers should have the right
    to seek comparable and appropriate replacements from other
    manufacturers. We are going to discuss that at the markup that
    we complete on Wednesday.
        The gentleman from California Mr. Cox.
        Mr. Cox. I just have a quick question with the chairman's
    indulgence. Secretary Slater, thank you for being here. Did
    you, prior to my arrival, express a view on the merits of the
    criminal provision in the McCain proposal?
        Mr. Slater. I did, Congressman. And basically in summary
    what I said was, while it is true that criminal provisions can
    sometimes have an adverse effect when it comes to the parties
    working together to volunteer information, that we have
    agencies within the Department that actually have criminal
    penalty authority.
        In fact, the way to approach it is really the three-tier
    approach that we would propose: One, administrative civil
    penalties, which we request; judicially imposed civil penalties
    which are currently in law; and then for egregious situations
    where there is knowing and intentional, willful, violation,
    then a criminal provision would be appropriate. And we would
    welcome the opportunity to work with the Congress to properly
    structure that so as to not again adversely impact the very
    collaborative process that really results in the unearthing of
    most of the challenges we face.
        Mr. Upton. Would the gentleman yield?
        Mr. Cox. I would be pleased to yield.
        Mr. Upton. I would like to clarify as well that as I
    understand that within the Department of Transportation's
    jurisdiction pipeline safety, some other important areas that
    you govern, in fact there are criminal sanctions for exactly
    the same type of malfeasance; is that not correct?
        Mr. Slater. That's correct. Also with the recently
    established Federal Motor Carrier Safety Administration, there
    is the provision for criminal penalties, and that was just
    acted on by the Congress last year.
        Mr. Upton. I thank the gentleman for yielding.
        Mr. Tauzin. If the gentleman would yield once more, I want
    to point out that that is also one of those 10 to 15 items that
    we are beginning to circulate, and we will seek your advice and
    counsel on that. Because in the end, I think we want a
    provision in that section that creates safe harbor for
    voluntary reporters of defects. And we want to make that
    language careful. I believe Mr. Cox wants to ensure we get
    voluntary reporting of information.
        The gentleman, Mr. Cox.
        Mr. Cox. I thank the chairman for the time. I wanted to
    clarify that point, particularly in light of the fact it was
    discussed earlier. I appreciate your going over it again, and I
    have to agree entirely with the description that you just made
    of this problem. The teeth that are provided for enforcement by
    criminal provisions are much to be desired, but the fact is
    that the criminal liability will sometimes set people within a
    firm at odds with what we're trying to obtain, which is full
    disclosure, which is something we have to do very carefully.
    Have you expressed a preference for entity liability versus
    individual liability on the criminal side?
        Mr. Slater. We haven't. And over the course of the
    discussion here, let's just commit to work together on that
    point.
        Mr. Cox. It seems to me, Mr. Chairman, that entity
    liability is easier to deal with because you would hate the
    prospect of having a manager in a company being confronted with
    information about safety problems calling in his personal
    lawyer at that point, saying that in his personal interest he
    doesn't want to see any of these things.
        Mr. Tauzin. Yes, that's exactly the nature of this debate
    and the gentleman from Michigan and I have had some
    conversations about this. He has pledged to work with us as
    well. Mr. Dingell is recognized.
        Mr. Dingell. Thank you Mr. Chairman. Mr. Slater, in most
    circumstances, ordinary civil penalties work as an enforcement
    tool, do they not?
        Mr. Slater. In most cases; that is correct. Actually that
    is what we rely on most.
        Mr. Dingell. And they generally work?
        Mr. Slater. Yes, definitely.
        Mr. Dingell. In addition to that, the sanctions of going to
    court and seeking injunctions works very well, too, does it
    not?
        Mr. Slater. That's correct.
        Mr. Dingell. Now, would you say that criminal sanctions are
    something that is needed for general enforcement work?
        Mr. Slater. Not for general enforcement work. Clearly it's
    a result that you seek only when--in limited cases, when you
    have egregious activity; knowing, willful violation.
        Mr. Dingell. And on serious matters.
        Mr. Slater. Serious matters; that's correct.
        Mr. Dingell. Now, criminal enforcement creates certain
    problems, does it not; i.e.,the resort of the individual to his
    protections under the fifth amendment against self-
    incrimination.
        Mr. Slater. That's correct.
        Mr. Dingell. And it also imposes on anybody who might have
    reason to feel the criminal sanctions were there, that he would
    have to use and resort to his rights under the fifth amendment
    to assure that he was not undertaking risk of criminal
    prosecution; is that right?
        Mr. Slater. That is the approach that many would take, yes.
        Mr. Dingell. So the practical result of that would be that
    it would tend to slow down the enforcement by a significant
    amount because you would then lose the cooperation of persons
    who were--who might feel that they were under investigation; is
    that not so?
        Mr. Slater. That's true, and that's why, Congressman, it
    should be limited again to major issues; knowing, willful
    activity.
        Mr. Dingell. Okay. And the other thing, of course, would be
    that immediately if a company or an individual were to feel he
    would be confronting that, he wouldn't do anything at all to be
    of assistance simply because of potential for a criminal
    prosecution of himself or the company; is that right?
        Mr. Slater. That is highly likely, yes.
        Mr. Dingell. It means you then would be dealing with a
    phalanx of lawyers and a thicket of legal writs; is that right?
        Mr. Slater. Most likely, yes.
        Mr. Dingell. Thank you, Mr. Chairman.
        Mr. Tauzin. The gentleman's time has expired. In fact, if
    we're going to begin our process, we need to thank you, Mr.
    Secretary.
        Mr. Markey has one question. He promises me he will limit
    himself to one question.
        Mr. Markey. That's, Mr. Secretary, on the early warning
    provision. Could you tell us about the early warning provision
    and your support for it, please?
        Mr. Slater. Yes. Clearly if we have access to information
    dealing with warranty, claims investigations, that sort of
    thing, then we have the ability to get information much earlier
    in the process. Actually the Continental tire issue or
    situation is a case in point. Had we had a firm requirement
    that they'd provide us that information and were it not
    voluntary, then, as relates to Firestone, we probably would
    have gotten that information much earlier, would have started
    the investigation and would have clearly been on top of this
    issue a lot earlier in the process.
        Mr. Markey. So in the bill that you sent us----
        Mr. Tauzin. Mr. Markey, that's No. 2. Go ahead.
        Mr. Markey. You do believe it should be an affirmative
    obligation on manufacturers whenever they gain access to
    information that they have to provide it to you.
        Mr. Slater. That is correct. And then when you have recalls
    and service complaints in foreign countries, we believe that
    that information should be provided to us as well.
        Mr. Markey. Very good. Excellent. Thank you.
        Mr. Tauzin. Thank you, Mr. Markey. I thank you, Mr.
    Secretary, and the panel is dismissed.
        With that, the Chair asks that all members have unanimous
    consent to submit opening statements and questions for the
    record. Without objection it is so ordered. The record of this
    proceeding will stay open 30 days. And by the way, I want to
    invite any parties who have been tuning in to us who have
    information or would like to submit something for our record,
    you certainly have that right to do so within the next 30 days.
        We appreciate it very much, Mr. Secretary. The hearing
    stands adjourned. We will break for about 5 or 10 minutes for
    the staff to organize a markup session and we'll be back in
    session in just a minute. Thank you.
        [Whereupon, at 1:50 p.m., the subcommittees proceeded to
    other business.]
        [Additional material submitted for the record follows:]
      Prepared Statement of Hon. Louise M. Slaughter, a Representative in
                      Congress from the State of New York
        Mr. Chairman, I am grateful for the opportunity to participate in
    these proceedings. My family has a history with Firestone Tire recalls.
    In 1978, we had to replace seven out of eight Firestone radial 500
    tires. We are grateful to be alive. During the 1978 Firestone tire
    recall, 8.7 million tires were replaced, at a cost of $150 million,
    after tax write-offs.
        I found it utter foolishness that then President Reagan slashed the
    budget of the agency charged with oversight of automobile safety by 50
    percent within the first three years of his administration and canceled
    the recommendation of National Highway Traffic Safety Administration
    (NHTSA) regarding the recall as an example of over regulation. The
    budget and authority of the NHTSA has never recovered. In the Fiscal
    Year 1999 Department of Transportation budget, NHTSA's budget is 36%
    lower than their 1980 budget in real dollars--despite the fact that
    there are 40% more registered vehicles since 1980, and 21% more
    registered drivers.
        It is unfortunate that it has taken the recent recall of 6.5
    million Firestone tires and over 100 deaths to highlight the need for
    NHTSA to have more authority. Public safety was compromised needlessly.
        Therefore, I am pleased to be a cosponsor of H.R. 5164, the
    Transportation Reporting Enhancement, Accountability and Documentation
    (TREAD) Act, which is aimed at improving auto and tire safety. The
    TREAD Act will increase NHTSA's authority to collect information about
    possibly defective products and expand its budget for investigations.
    Specifically, the TREAD Act requires auto and tire manufacturers to
    report any defects on American tires or automobiles sold in foreign
    countries, requires tire manufacturers to periodically report claims
    data to NHTSA, increases the time under which tire manufacturers must
    make free repairs on faulty products, increases penalties for
    violations, directs NHTSA to update its tire safety standard, and
    authorizes an additional $500,000 for NHTSA investigators to handle the
    increased work load.
        H.R. 5164 is a small but necessary change to instill public
    confidence in NHTSA's ability to ensure public safety. I thank you for
    this opportunity to express my support for consumer safety and look
    forward to working with this committee in passing the TREAD Act.

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