[Senate Hearing 106-1141]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 106-1141
 
                         FIRESTONE TIRE RECALL

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 12, 2000

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation







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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine              JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                  Mark Buse, Republican Staff Director
               Ann Choiniere, Republican General Counsel
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel




                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 12, 2000...............................     1
Statement of Senator Abraham.....................................     6
Statement of Senator Ashcroft....................................    22
Statement of Senator Breaux......................................    12
Statement of Senator Bryan.......................................     5
Statement of Senator Burns.......................................     8
Statement of Senator Cleland.....................................     8
Statement of Senator Dorgan......................................    11
Statement of Senator Frist.......................................    11
Statement of Senator Gorton......................................    13
Statement of Senator Hollings....................................     2
    Prepared statement...........................................     3
Statement of Senator Hutchison...................................     4
Statement of Senator Inouye......................................    14
Statement of Senator McCain......................................     1
Statement of Senator Snowe.......................................     9
Statement of Senator Wyden.......................................     7

                               Witnesses

Claybrook, Joan, President, Public Citizen.......................    80
    Prepared statement...........................................    83
Ditlow, Clarence, Executive Director, Center for Auto Safety.....   103
    Prepared statement...........................................   105
Lampe, John, Executive Vice President, accompanied by Bob Wyant, 
  Vice President for Quality Assurance, Bridgestone/Firestone, 
  Inc............................................................    42
    Prepared statement...........................................    44
Nasser, Jac, President and Chief Executive Officer, Ford Motor 
  Company........................................................    56
    Prepared statement...........................................    65
Ono, Masatoshi, Chief Executive Officer, Bridgestone/Firestone, 
  Inc............................................................    41
    Prepared statement...........................................    44
Slater, Hon. Rodney E., Secretary, Department of Transportation, 
  accompanied by Dr. Sue Bailey, Administrator, National Highway 
  Traffic Safety Administration..................................    15
    Slater, Hon. Rodney E., prepared statement...................    19
    Bailey, Dr. Sue, prepared statement..........................    20

                                Appendix

Lampe, John, Executive Vice President, Bridgestone/Firestone, 
  Inc., letter...................................................   113



                         FIRESTONE TIRE RECALL

                              ----------                              


                      TUESDAY, SEPTEMBER 12, 2000

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:30 a.m. in room 
SH-216, Hart Senate Office Building, Hon. John McCain, Chairman 
of the Committee, presiding.

            OPENING STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    The Chairman. Good morning. I want to thank the witnesses 
for their presence this morning. This morning's hearing is 
important for a variety of reasons. It will offer the committee 
and the public an opportunity to gain a better understanding of 
the recall of 14.4 million Firestone tires. More importantly, 
it will begin the process for this committee and hopefully this 
Congress to examine and improve the policies of the National 
Highway Traffic Safety Administration to detect defects and 
enhance the obligation of industry to provide safe vehicles to 
consumers.
    While a great deal has been said by many people over the 
past few weeks about this problem, the fact remains that our 
attention to ensuring the safety of the driving public is 
fleeting. It unfortunately takes a cumulative tragedy of more 
than 80 lives to bring our collective attention to the long-
overdue task of reforming the way we investigate and remedy 
vehicle defects.
    Let me be clear. It is not my intention to use today's 
hearings to lay blame upon any individual, company, or 
Government agency. The liability of the parties involved will 
be appropriately determined through ongoing investigations and 
eventually the courts.
    The fact is, we all share the blame equally when the system 
fails. Congress sometimes interferes with Government regulators 
in the prosecution of their duties, industry can be too focused 
on profits rather than the safety of the public, and agencies 
can become bureaucracies more concerned with paperwork than 
advancing the very causes they were created to serve.
    Serious questions remain about what Ford and Firestone knew 
of this problem and when they knew it. The mounting evidence is 
making it increasingly difficult to credibly believe that 
neither of these companies knew anything of this problem until 
late this summer. A recent Washington Post article cites a 
Firestone report from mid-1998 that shows a dramatic increase 
in customer claims on one of the tires that is subject to this 
recall.
    Furthermore, annual claims reports from Firestone show an 
increase in claims associated with the tires subject to the 
recall beginning in 1996 through 1999. Ford also received 
numerous complaints about Firestone tires on Explorers in 
overseas markets. These complaints were significant enough to 
cause Ford to replace tires in 16 foreign countries.
    Taken individually, each of these incidents may not be 
cause for alarm, but taken collectively it is difficult to 
believe that no one realized this was a problem until a month 
ago. Both Ford and Firestone owe the American people an 
explanation for why it took them so long to act.
    I cite this article not as evidence of guilt, but as an 
example of the problems with the current system. The current 
system must be changed. When manufacturers fail to tell the 
truth or purposefully neglect to report safety data, people 
lose their lives. Severe penalties must result. It is my 
intention to work with the Ranking Member and other members of 
the committee to develop legislation to reform the process used 
to detect, investigate, and recall defective vehicles.
    Two weeks ago, I wrote to Secretary Slater about this 
recall and asked for the administration's recommendations to 
improve NHTSA's ability to detect defects. I look forward to 
hearing the Secretary's views on that today.
    Additionally, the committee will ask the Inspector General 
to review the Office of Defects Investigations and make further 
recommendations on how to improve its functioning and ensure 
that it has the resources that it needs to protect the public's 
safety. I am hopeful today we can move beyond recriminations 
and toward the process of reform.
    Again, I want to thank the witnesses for their presence, 
and I look forward to their testimony.
    Senator Hollings.

             STATEMENT OF HON. ERNEST F. HOLLINGS, 
                U.S. SENATOR FROM SOUTH CAROLINA

    Senator Hollings. First, Mr. Chairman, let me welcome you 
back to the committee, Senator McCain. We are delighted that 
you are in good health and back with us.
    Let me just sort of file my statement and summarize to save 
time. What you and I typically have here is a situation where 
Ford says we ought to recall the Firestone tires, Firestone 
says we ought to recall the Ford cars, or Explorers. That 
happens in these lawsuits. I used to try them, and it is like 
tying two cats by their tails and throwing them over the 
clothesline and let them claw each other, and that is why we 
have joint cases and several in the tort procedure, but that is 
not our duty here.
    Our duty here is to try to see how we can improve the 
situation and facilitate the replacement, if nothing else more 
than anything else now require the reporting of any overseas 
recalls. If we had had that, we would have been aware of this 
at least 2 years ago. Reporting of the lawsuits, there is a 
Business Week article to the effect that the lawyers are at 
fault. Not at all.
    We get into the trial of the case and the other side is 
ready to settle, and they are ready to pay off, you cannot tell 
the client that we have got to hold it up because I want to get 
publicity. The lawyers are not at fault. The company is at 
fault with all of these lawsuits and taking due diligence. 
Under that circumstance they should have done something long 
ago, other than just to recall.
    So we ought to have those lawsuits, because when you have a 
lawsuit it is not just changing a tire, it is damage, probably 
injury. It could have been life lost. Otherwise, we have got to 
upgrade the standards. The Firestone tire that is defective 
that we are talking about complies with the present standard, 
and so obviously the standards need upgrading, and we need to 
upgrade the Secretary's budget, because I think we had a severe 
cutback in the eighties.
    We replaced some of that cut, but in contrast the number of 
automobiles and otherwise to be checked have increased 
measurably, and so we have got to play a little catch-up on the 
budget itself.
    Thank you very much.
    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina
    We have convened today to address a very serious issue--a massive 
number of tires that are alleged to be defective in their design and 
manufacturing. This matter involves two companies that are giants in 
their industries: Ford, the number two automaker, and Firestone, the 
number two tire manufacturer in the world. Firestone, in fact, has a 
plant in my home state, which is located in Aiken. From the data I have 
seen almost none of the tires that have been linked to tread 
separations and accidents have involved tires from that plant.
    As I noted, this is a serious case that has yet to be resolved. 
When the recall was announced on August 9th, it was noted that 46 
deaths had been linked to Firestone's tires and Ford's vehicles. Now 
just a few weeks later, that figure has risen to 88 deaths. 
Unfortunately, we are still counting.
    We have come today to try to get to the bottom of this matter. And 
there are some important questions that have to be answered. They 
include:

    (1) LIs the number of tires that have been designated for recall 
sufficient or should the recall be extended?

    (2) LWhen did the relevant parties--Firestone, Ford and NHTSA--
become aware of the problem and did they act appropriately to protect 
car owners from danger once the problem was discovered?

    (3) LAre Firestone's tires and Ford's SUVs affected by 
manufacturing defects and design flaws and have the companies known or 
should have been aware of these conditions?

    But the really crucial question is what is Congress going to do 
about it? Surely, this case begs for policy changes. Federal tire 
standards haven't been changed since 1973. Current law allows companies 
to discover defects and conduct major recalls in foreign countries 
without having any obligation to inform U.S. regulators or American 
consumers. The current maximum civil penalties companies face is less 
than $1 million. How is this going to deter multi-billion dollar 
companies? Some will criticize NHTSA for not being aggressive enough on 
the matter. That criticism is warranted. But when the agency went forth 
with a rule earlier this year to establish updated rollover standards, 
Members of Congress introduced legislation to block the regulations. In 
response, I offered language to the State, Justice, Commerce 
appropriations bill to salvage the rule by deferring the matter to the 
National Academy of Sciences.
    I am currently working with my able chairman on comprehensive 
legislation to remove the numerous loopholes that exist in today's laws 
and to ensure DOT has the authority and resources it needs to guard 
against these egregious actions.
    But I also would be remiss if I did not take this time to talk 
about another policy issue, which I believe is equally important to 
this case--and that is tort reform. If ever there were a case that 
proves the fallacy of federal tort reform bills--it's this case. If 
ever there were a case to prove the foolishness and recklessness of 
criticisms of trial lawyers--like so many in this body like to do--it's 
this case. Eighty-eight deaths and still counting. These products have 
been on the market for how long--at least 10 years. And guess who first 
discovered and exposed the issue? No, it was not members of Congress. 
No, it was not DOT or Secretary Slater. No, it was not the media, 
newspapers, nor a Texas television station. It was trial lawyers. They 
were the individuals who exposed this coverup if there is one. The 
reason we sit here today testifying before all the media and the nation 
about this issue is because of the diligent, arduous, persistent work 
of trial lawyers--those brave men and women lawyers who, unlike their 
corporate counterparts, work from the sweat of their brow, not on a 
guarantee but on a contingency fee, in their efforts to seek 
compensation for those who have suffered a serious injury or loss of a 
loved one due to a defective product.
    I also must point out my aghastness at the aghastness of some 
members of Congress about this matter. Some act as if this case is 
something unique. It's not. This conduct happens all the time. Why do 
you think in the last 5 years there have been over 73 million recalls 
of automobiles alone?
    Have we forgotten the Firestone 500 tire debacle of the late 1970s 
and early 1980s--19 million tires recalled on the basis of tread 
separations, 41 deaths. And what did the Congress do? It cooperated 
with the Reagan Administration in slashing NHTSA's budget so it could 
prevent NHTSA from going after such conduct. Though I have fought years 
to give NHTSA more FUNDING, and though the Clinton Administration has 
sought some improvements, the agency has never recovered from the 
massive budget cuts of that period. But guess who initiated the review 
of the Firestone 500 case--plaintiffs' lawyers.
    Have we forgotten the Ford Pinto case involving a defectively 
designed gas tank that caused Ford Pinto automobiles to explode on 
impact? Evidence at trial revealed Ford knew the problem existed and 
could have fixed the gas tank for $11 a car. However, it was not until 
lawsuits were filed, and a $3.5 million punitive verdict was issued, 
that the company decided to redesign the car.
    Have we forgotten about the GM pickup side-saddle gas tank case--
where the company placed a gas tank on the outside of the guard rail 
causing the vehicle to explode upon impact--resulting in several 
hundred deaths?
    Certainly, I can go on and on, with example after example, but the 
point is clear that this case we're reviewing today is nothing new. The 
fact is that most of these matters are exposed and settled through the 
tort system. Yet, for more than 20 years, members of this body have 
pushed for the passage of legislation to restrain the tort system from 
holding companies accountable when they engage in egregious and 
flagrant conduct. They would do this by making it more difficult for 
citizens who are injured by such conduct to collect damages from 
wrongdoers--even in light of evidence that the company concealed 
information and knew about the dangers of a product before it was 
marketed. I am often perplexed as to why members of this body would be 
more enthusiastic about passing legislation to protect Ford and 
Firestone, even if it's proven they knew of defects in their products, 
than legislation to give NHTSA more resources to protect the public.
    Even as we sit here today, there are product liability, class 
action and asbestos bills awaiting action. As I mentioned earlier, this 
case should make it clear as to why it is unwise for Congress to pursue 
such measures.

    The Chairman. Thank you very much, Senator Hollings.
    I would remind my colleagues we have three full panels 
today, and would respectfully request that their opening 
statements be as brief as possible.
    Senator Hutchison.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you, Mr. Chairman. In my home 
State of Texas alone there are 338,000 Ford Explorers currently 
registered with the Texas Department of Transportation. I 
understand from what I have read that the separation on the 
tires in question is more likely to occur at high temperatures. 
Well, it is no secret that this summer, Texas has suffered one 
of the worst droughts in history, and severe high temperature 
strings, breaking the 100-degree mark most every day of the 
last 2 months, and so the people of Texas are very concerned 
about this issue today, and certainly the extent of the danger 
that is presented in the future.
    As the chairman said, we need not to focus so much on the 
blame, but on what we can do now, and what we can do to prevent 
anything like this happening in the future, but it is alarming 
that last week, according to testimony received in the House 
Commerce Committee, an insurance company investigator notified 
the agency of NHTSA in July 1998 about the potential defect.
    One year later, Ford was offering free replacement tires in 
Saudi Arabia, Thailand and Malaysia, and yet NHTSA did not 
begin to look at this situation until May of this year, and by 
the time the agency commenced a formal investigation in August, 
at least 41 people had died on American roads, possibly as a 
result of faulty tires, so I think we need to find out if there 
is an information gap.
    Is there more responsibility that needs to be placed in the 
hands of NHTSA? We need to know exactly what has happened, and 
what the time line was, in order to address these issues, which 
I hope we will be able to do in the hearing today, and then as 
we go in the future, working on legislation together on a 
bipartisan basis in Congress.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Hutchison.
    Senator Bryan.

              STATEMENT OF HON. RICHARD H. BRYAN, 
                    U.S. SENATOR FROM NEVADA

    Senator Bryan. Thank you very much, Mr. Chairman, for 
convening this hearing. I think what we are dealing with this 
morning is a systemic failure, a failure that has had tragic 
consequences for 88 Americans who lost their lives and hundreds 
of others who, as a result of this failure, were injured as a 
consequence, and for the two companies involved, Ford and 
Firestone, it is a sordid chapter in the history of two 
companies that for more than a century have become household 
names for the American public.
    Americans are quite properly indignant when they learn that 
Firestone initiated and Ford initiated recalls in Saudi Arabia 
more than year before the notice of recall was issued in this 
country. Other countries were also given earlier recall 
notices, Malaysia, Thailand, Venezuela, Colombia, and Ecuador, 
and the question arises, are not American lives as important to 
protect and safeguard as lives in these other countries, which 
were clearly given an earlier notice and opportunity, something 
that I find particularly troublesome, Mr. Chairman, and perhaps 
we can get into that issue this morning.
    I know nothing about the case that appears on the front 
page of The New York Times dealing with what is called a thick 
film ignition, a TFI module, but I do know that the language 
that the courts used in indicting and condemning the actions of 
Ford are quite troublesome.
    Let me just read very briefly. Among the things the court 
had to say is that Ford's dissimilation reached its nadir in 
the testimony of Bob Weeks, Ford's witness designated as the 
most knowledgeable about safety issues, when he insisted that 
safe is too subjective, and denied knowledge of any written 
definition of what is safe with Ford Motor Company, and then 
the court went on to say, rather, it seems Ford used the 
tortured interpretations of common language to avoid its 
responsibility to NHTSA, the Environmental Protection Agency, 
and the consuming public.
    Now, I do not know if this is a part of a pattern of 
conduct or not, but that is something that clearly we need to 
explore this morning.
    And finally, Mr. Chairman, it seems to me we need to 
examine whether or not NHTSA itself has the tools to do the 
job, among those things we need to consider is whether or not 
we ought to increase the amount of civil penalties, whether or 
not there should be a requirement, and I would think the answer 
to this is clear, that there ought to be a requirement(s) that 
a foreign recall require and trigger automatically a notice to 
the agency that is responsible, NHTSA. That apparently is not 
the current law. Whether or not the retention of records should 
be extended for a period of time so that retrospectively we can 
examine the safety examination as it relates to a product that 
is later recalled, whether or not the statute of limitations 
ought to be issued, and whether or not we ought to be amending 
the statute of limitations on the period of time for reporting 
defects.
    I look forward to hearing from the distinguished panels you 
have convened this morning, and hopefully we can provide 
answers this morning to the question that the American public 
is asking each of us, why were we not given notice much earlier 
in light of the overwhelming evidence that there was a problem 
with these tires.
    I thank you, Mr. Chairman.
    The Chairman. Thank you. Senator Abraham.

              STATEMENT OF HON. SPENCER ABRAHAM, 
                   U.S. SENATOR FROM MICHIGAN

    Senator Abraham. Thank you, Mr. Chairman. I want to commend 
you for calling this hearing, and I look forward to working 
with you both on the hearing today and the legislation you 
mentioned to ensure that the committee gathers all the facts 
and provides consumers as much information as we can on the 
issue of defective tires.
    Clearly, I think this hearing should focus on the current 
tire recall, what should have been done, what should still be 
done, and what steps in the future must be taken to ensure 
consumer confidence as well as minimize consumer risk and I 
think, Mr. Chairman, if we proceed in a constructive and 
informative fashion we can move closer to answering those 
important questions.
    Also, Mr. Chairman, I would like to just welcome today one 
of my constituents, Jack Nasser of Ford Motor Company to the 
Senate Commerce Committee. During his brief tenure as the head 
of Ford he has built a strong reputation as both a respected 
business and community leader, and I commend him for both being 
here today and for what Ford has already launched in an effort 
to address this problem, but obviously, Mr. Chairman, as a 
Senator from Michigan I also represent a considerable number of 
Ford employees in addition to Mr. Nasser, and I would note that 
they are extremely hardworking and decent craftsmen and women 
who take great pride in the product they produce.
    As the son of a United autoworker myself, I can assure the 
committee that our auto workers and auto companies are 
dedicated to providing consumers with the highest quality and 
safest vehicles possible.
    Mr. Chairman, it strikes me that there are several areas of 
inquiry that we must examine in today's hearing. One, we need 
to evaluate and understand the circumstances, the reasons that 
recalls were instituted in other countries and why no similar 
action took place here in the United States. Second, we must 
explore the magnitude of the existing recall. Is it sufficient? 
What are the critical next steps that these companies as well 
as the Government should take to address the situation, and 
third, I believe the committee must examine the current 
Government procedures and practices in addressing this type of 
situation. Should existing laws and regulations be amended? Are 
there new steps we should pursue?
    I appreciate you taking this step to begin the process in 
putting the hearing together, and the witness' willingness to 
be here with us today, and I look forward to working with you, 
Mr. Chairman, and our colleagues on the committee to address 
these problems with you.
    The Chairman. Thank you.
    Senator Wyden.

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman. I will be brief, 
and really have only three points. The first is, after all that 
is already on the record I believe that it is thoroughly 
unreasonable for Firestone to not admit that there is a safety 
defect after all of these deaths that have been linked to their 
product.
    I think it is also unreasonable that they have failed to 
disclose the 100 lawsuits, in not reporting to regulators that 
there were problems. That is point number 1.
    Point number 2, as of last week only about a quarter of the 
recalled Firestone tires had been replaced. Consumers in my 
home State of Oregon are in the last group of customers under 
Firestone's phase 3 recall. They are going to have to wait 
until next year to get replacement tires. I have got a Ford 
Explorer in the basement of this building, and I will just go 
through the process in terms of replacement there, but I want 
to see my constituents get some assistance.
    And finally, the last point I want to make, Mr. Chairman, 
is that today we are going to have witnesses. They are going to 
be subjected to vigorous questioning, and there will be debate 
among our colleagues as to what to do, but I would submit that 
because there were similar hearings 20 years ago with the same 
company the real challenge now is to ensure that changes are 
adopted, substantive changes are adopted so that another 
committee is not sitting in this same room 20 years from now 
going over the very same issues.
    So we ought to recognize that this is our first and 
foremost challenge today, and I look forward to working with 
the chairman and our colleagues to addressing this issue, and I 
thank you.
    The Chairman. Thank you. Senator Burns.

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. Thank you very much, Mr. Chairman. My 
statement will be very brief. Thank you for calling this 
hearing, and I think we are fulfilling our oversight 
responsibility today not just by looking at the continuing 
stories of this situation, but also at our ability to assure 
that Government is fulfilling its responsibilities.
    Gaps have been noted, if you read the press and what is 
happening in hearings previous to this one. I think now that 
probably more gaps will be noted as a result of this hearing. 
We can take that information, connect the dots, and fill in 
some of the blanks. The consuming public expects no less.
    I look forward to the testimony we will hear today and the 
questions and answers that will follow these opening 
statements, and I thank the chairman for convening this 
hearing.
    The Chairman. Thank you.
    Senator Cleland.

                STATEMENT OF HON. MAX CLELAND, 
                   U.S. SENATOR FROM GEORGIA

    Senator Cleland. Thank you, Mr. Chairman. Welcome back, Mr. 
Chairman. It is good to see you, Mr. Chairman. Based on what I 
have heard about these tires, it is a good thing I do not have 
them on my wheelchair, otherwise I would not be here, probably.
    Let me just say that I do recall that, as a student of 
American history that Henry Ford and Harvey Firestone and 
Thomas Edison worked closely together and were very good 
friends at the turn of the 20th Century, and worked together in 
harmony to produce in effect probably one of the greatest cars 
and one of the greatest corporate teams the world has ever 
known, and made the American automobile the envy of the world.
    Something dramatic has happened. I do not know what 
happened, and I hope that these hearings will cast some light 
on what has gone wrong, but it distresses me that two great 
companies that together helped to build the American automobile 
and its safe travel over millions of miles now will not even 
sit at the same table together at this hearing. Something has 
to be done.
    I would say that another thing that bothers me is that 
tires were recalled in Saudi Arabia, Malaysia, Thailand, 
Venezuela, Colombia, and Ecuador before American officials were 
ever really notified. I mean, the American consumer is not 
chopped liver, and we ought to know about these things.
    However the arrangement between Ford and Firestone was 
early on in the 20th Century, it is obvious that something has 
gone wrong now. They keep information from one another, from 
the U.S. Department of Transportation and worst of all from the 
American consumer. I am looking for some way to respond to the 
47 Georgians who have reported to the National Highway Traffic 
Safety Administration problems with their tires, some of them 
while traveling at speeds upwards of 70 miles an hour, and the 
countless others who are legitimately concerned about their 
family's safety.
    Now, the Ford Explorer has been the highest selling sports 
utility vehicle among all SUV's. Many of these sales were to 
families who bought the Explorer based on its being a safer 
vehicle due to the increased height above other cars on the 
road. I understand that by the spring of 1999 Firestone had 
already logged 800 consumer complaints of tread separation, and 
for over 10 years Ford had been advocating inflating tires to a 
less than maximum level to decrease chances of roll-over, 
rather than making structural changes to the automobile.
    While the jury is still out on whether the tire and lower 
psi level combination contributed to some of these accidents, I 
am disappointed that the Explorer was marketed as a safe family 
vehicle when problems were actually known.
    Now, this corporate behavior is actually unacceptable. What 
can we do? Well, we can work with the National Highway Traffic 
Safety Administration to improve their ability to gather 
information about products sold in the U.S., and increase the 
resources with which they have to work. I would like to know, 
Ms. Bailey, about your budgets and whether or not you are able 
to do the job we expect of you.
    I would also like to encourage the National Highway Traffic 
Safety Administration to continue its work with these companies 
to ensure that the 6.5 million tires in the voluntary recall 
are actually changed out.
    Last year this committee and the entire Congress passed a 
law to establish the Federal Motor Carrier Safety 
Administration. Safety was an integral part of this new agency, 
and its establishment, and I believe we can aid the National 
Highway Traffic Safety Administration, an agency which has been 
focused on safety since its establishment, to better accomplish 
its goals in promoting highway safety.
    I look forward to hearing the testimony of Secretary Slater 
and Dr. Bailey on their insights and what we can do as a 
Congress to make sure that no more lives are lost to this 
tragic situation.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Snowe.

              STATEMENT OF HON. OLYMPIA J. SNOWE, 
                    U.S. SENATOR FROM MAINE

    Senator Snowe. Thank you, Mr. Chairman. I want to thank you 
for holding this hearing, of vital importance to Americans, and 
you know, listening to a number of the issues that have already 
been raised in the course of the various hearings last week and 
now, I find my level of disbelief only increases the more I 
learn about the indefensible lapse of corporate action and 
behavior that we are examining here today, and of all the many 
questions that behavior has raised in my mind, none is more 
prominent or more illustrative than the issue at hand, the 
simple question of how is it we even got to this point?
    Here we are, at least 88 American lives later, 250 
Americans injured, trying to figure out how it is that so many 
warning signs were seemingly ignored on the way to tragedies 
that in all likelihood could have been prevented? Numerous red 
flags have been disregarded over a decade. How is it both 
companies involved, and Federal regulators, had evidence these 
tires might be hazardous, Ford Explorers were almost three 
times as likely to be involved in tire-related fatalities, and 
as far back as 2 years ago State Farm notified NHTSA about 
Firestone tire failures, yet no action was taken?
    How is it that Ford was concerned enough to take 16-inch 
Firestone tires off trucks in Venezuela and the Persian Gulf, 
Malaysia, Colombia, and Ecuador, but apparently not concerned 
enough to do so here in the United States? When the company 
issues a recall or obtains evidence concerning a potentially 
dangerous product being marketed in another country, there 
should be no question that the American public and U.S. 
authorities at the very least have a right to know, and they 
deserve to know.
    Now, it is certainly true we cannot change what has 
happened, but we certainly have an obligation to explore the 
chain of events that allowed, whether through benign neglect or 
purposeful withholding of information, or both, these tragedies 
to occur so that they will not occur again. We owe that much to 
the families.
    I saw a headline in the newspaper the other day that said 
documents portray tire debacle as a story of lost 
opportunities. It was a story of lost opportunities to save 
lives, Mr. Chairman, and that is essentially what this hearing 
is all about.
    And so I say to the corporations who are here today who are 
implicated in this entire episode, you are not apart from this 
society. You are a part of this society, and while we can never 
ensure that every product will be safe at all times under all 
circumstances, the American public must have some assurance 
that all actors in bringing consumer products to market, from 
manufactured goods, to contractors, to the Federal Government, 
are acting in good faith and in the best interest and the well-
being of consumers.
    As a Nation and as a society, we believe you should have as 
broad and as fair a playing field as possible on which you may 
compete and hopefully succeed. We say if you are willing to 
assume the risk in the marketplace we are prepared to reward 
you generously should you build a better mouse trap, a better 
tire, or a better SUV.
    In return, in relative terms, we ask very little. We ask 
that when we use your products responsibly, that you reveal 
flaws in your design and manufacturing, that you deal with us 
honestly. We ask you to assume responsibility for your actions, 
as we ask each other to do so as individuals, and so we have a 
right to know, Mr. Chairman, whether or not the companies 
intentionally withheld information from regulators.
    We do have a right to know who knew what when, and what 
could have been done differently. We have an obligation to 
ensure and to determine that these tragic circumstances do not 
repeat themselves ever.
    Obviously, we cannot legislate corporate conscience, but we 
can ensure that the NHTSA budget is adequately funded, and that 
is where we have an obligation to make sure that we have the 
kind of funding that ensures oversight and has the regulatory 
legal framework to ensure that we can protect the well-being of 
consumers. We owe that much to the American people.
    Thank you, Mr. Chairman.
    The Chairman. Senator Dorgan.

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, we are glad you are back with 
us.
    We do not live in a perfect world, and mistakes will be 
made and products will fail. We all understand that. But the 
story in this circumstance is enormously troubling to me. Both 
Ford and Firestone in the early cases were sued for tire 
failures, and those suits were settled with gag orders, and 
those gag orders prevented the American people and our 
government safety experts from knowing what the risks were with 
those products. That is enormously troubling.
    I assume some knew what the risks were, but the gag orders 
prevented most people from knowing what the risks were, and 
others then purchased products and lost their lives because of 
that. That is just unforgivable, and I hope that through these 
hearings and through other mechanisms we discover ways to 
prevent that from ever happening again, and perhaps through 
this tragedy of product failure and loss of lives Congress will 
rediscover merit in the role of Government, in sensible 
regulations, and in the enforcement of safety standards.
    Funding regulatory agencies and giving them the teeth in 
law to deal with these issues is important. We have been 
through a couple of decades in which the word regulation was 
used as a pejorative sort of word around here in Washington, 
D.C. Sensible regulation in the face of larger and larger 
corporations that have greater and greater power over the lives 
of the American people, especially sensible regulations in the 
area of safety standards, and especially the enforcement of 
those regulations, ought to be made clear with this case and 
perhaps in that manner other lives will be saved in the future.
    I am anxious to hear from the corporations, and I would say 
that I would agree with my colleague from Oregon. I think it is 
important to just step up and admit that these were product 
failures, significant mistakes were made, the gag orders should 
not have occurred, the company should have understood this 
earlier. I mean, let us clear the slate here and start over, 
but let us also learn from this in a significant way about the 
merits and value of having sensible regulatory opportunities to 
enforce safety standards.
    The Chairman. Dr. Frist.

                 STATEMENT OF HON. BILL FRIST, 
                  U.S. SENATOR FROM TENNESSEE

    Senator Frist. Thank you, Mr. Chairman. I will be brief. I 
do think it is regrettable we are here once again in the U.S. 
Senate Commerce Committee to discuss how we have failed, and we 
is in a generic sense, the American consumer.
    This recall marks a personal tragedy for many families. A 
good friend of mine is now dead because he was driving a Ford 
Explorer with a Firestone ATX tire. Many people have lost loved 
ones, and industry regulators, Congress has been insufficiently 
vigilant.
    The size and scope of the Firestone recall in question 
regarding Ford Explorer stability during a blow-out are 
tremendous, with 90 deaths attributed to this tread separation, 
and 4.5 million of these tires still on the road today. We must 
act, we should act, and we should act in an expeditious way.
    Three critical goals in my mind: first, we must make the 
consumer whole. It is imperative that a mechanical failure not 
be a ticking time bomb that thrusts drivers into deadly 
accidents. Those tires still on the road must be replaced with 
greatest urgency.
    Second, we must demand accountability, accountability 
across the board. Finger-pointing between Firestone and Ford 
and public relations campaigns and even public servants 
standing on the issue is insufficient, is not right, because 
they are not the solutions that Americans both demand and, I 
believe, deserve.
    And third, Congress and the executive branch regulators 
need to enact a more effective warning system, it is crystal 
clear, in order to shed light, to have full transparency when 
such defects are there. Lives are at stake. Dr. Gary Haas is 
dead today. Gary and I operated for years side by side, or in 
the same operating room at the Massachusetts General Hospital 
in Boston. Unfortunately in a different situation in a 
different car with a different tire--as I mentioned, it was a 
Firestone ATX tire which separated from his Ford Explorer--he 
would be alive today. He had taken his son to go to college, a 
great man, a great surgeon who has contributed so much in his 
life.
    There are many personal stories like that, and it is hard 
to separate from those personal stories, but it is crystal 
clear that we must and have a responsibility to do all of this. 
The big statistics, the big numbers are important to use for 
documentation, but clearly our role is to respond in a 
reasonable, balanced, intelligent, common sense way, and I look 
forward to these hearings contributing to that debate and to 
that discussion and ultimately to the implementation of a 
policy which will save lives.
    The Chairman. Senator Breaux.

               STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. Welcome back, Mr. Chairman, also, on behalf 
of all of us.
    As millions of Americans, I have a Ford truck and I have 
Firestone Wilderness tires on it, and that certainly gives me a 
great deal of concern. I think that what we in this committee 
need to determine today is what happened, exactly how it 
happened, where it happened, and even more importantly, what is 
being done to prevent it from ever occurring again.
    I think the confidence that the American public has with 
people who produce products is in a large extent based on the 
honesty of those producers of those products. The American 
people are smart enough to know that products fail. We are not 
living in a perfect world. But what they do expect from those 
who do produce products that are determined to be defective is 
honesty in admitting it and letting the American people know 
that they are taking the steps immediately to make sure that it 
does not happen again.
    It seems to me that early on there were a lot of bells and 
whistles and red flags being raised about the safety of these 
products not just in this country but throughout the entire 
world, and I think the big problem we have here is the fact 
that this is clearly a situation that never should have 
occurred. The product should not have been made defective, of 
course, but even more importantly than that, we should never 
have allowed a situation to occur that in effect denied the 
fact that there was a problem. I think that is as much of a 
serious problem as the fact that the products were made 
defective in the first place.
    Thank you, Mr. Chairman.
    The Chairman. Senator Gorton.

                STATEMENT OF HON. SLADE GORTON, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Gorton. Thirty, 26, 32, 35, not an audible used, 
Mr. Chairman, by the Washington Redskins, but answers I have 
received while inquiring about the proper tire pressure for 
recalled Firestone tires. Making phone calls over the last few 
weeks to Ford dealerships, Firestone tire outlets and other 
tire manufacturers to check on the progress of recall in 
Washington State, I have gotten conflicting reports from every 
source about the best tire pressure for Firestone tires on 
Explorer SUV's.
    This is unacceptable even for this relatively short period 
of time before they are all replaced. It is something that, Mr. 
Secretary, I would like very much for you to look into 
promptly, and if you cannot get answers from the companies that 
are consistent, would you please in your capacity advise people 
as to how they should be using the tires as long as they are 
required to continue to use them.
    As we work to uncover the truth about where the current 
system failed, I call upon both Ford and Firestone to do the 
same thing. Efforts by Ford to shut down production at three 
assembly plants to make 70,000 new tires available to consumers 
is a necessary step, one, but only one of which must be taken 
to remedy a situation that gets worse every day.
    After the round of hearings last week, I think it is fair 
to conclude that all parties in this fiasco are at fault to 
some degree, but each blames the other. Continued finger-
pointing is going to do nothing to ensure the safety of my 
constituents, or those of any other member of this panel. We 
must determine the root of the problem in order to ensure that 
it does not happen again.
    The National Highway Traffic Safety Administration cannot 
allow a situation like this to continue without much more 
prompt intervention, and it obviously needs the tools in order 
to do so.
    Last week, at one of the earlier hearings, Mr. Chairman, I 
pointed out that citizens in northern States like my own are 
very much lagging from the point of view of these replacements. 
My constituents do not know when they can get their tires 
replaced. The Firestone Tire Service Center in Seattle says it 
is a 2- to 6-week wait. The Firestone hotline says that that is 
highly optimistic. Russ Dean Ford in Pasco, Washington has been 
waiting for 6 or 7 weeks for any tires, Goodyear, Michelin, 
Firestone or any other make. They simply do not have them.
    The only places in Washington at which you can get prompt 
replacements are those who manufacture their own tires, and one 
of those dealerships, Les Schwab, is not requiring the 
customers to pay for those replacements but is seeking that 
payment from Firestone itself, which is a highly responsible 
act.
    But Mr. Chairman, we need to know how this took place. We 
need to know, even more importantly, how we are going to 
prevent it from taking place again in the future, and we need 
to be told how people should protect themselves in the time 
that they cannot get these tires replaced.
    The Chairman. Thank you.
    Senator Inouye.

              STATEMENT OF HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    Senator Inouye. Thank you, Mr. Chairman, and welcome back, 
sir.
    The Chairman. Thank you, sir.
    Senator Inouye. I believe that all of us should remember 
that we are not here as prosecutors in a criminal case, nor are 
we here as lawyers trying a multimillion dollar liability case. 
We are here to determine whether something went wrong with our 
regulatory system and, if so, is there something we can do to 
improve upon that, and so, Mr. Chairman, I am here to listen 
and learn.
    The Chairman. Thank you, Senator Inouye. I want to thank 
the witnesses for their patience. The length of the opening 
statements indicate the deep concern that the members of this 
committee have.
    I would just like to make two comments, Secretary Slater 
and Ms. Bailey, before we begin. One is that I intend, and I 
hope that all the members of the committee will join me in 
writing a letter to the Appropriations Committee asking them to 
remove the provision which would prohibit the implementation of 
the consumer rollover rating system study, or system until a 
study is conducted by the National Academy of Sciences. It is a 
classic example of inappropriate legislation on appropriations 
bills, and it also reflects and enhances the cynicism of the 
American people that special interests can have a provision 
like that enacted on an appropriations bill.
    It was appropriate only to be enacted, if it was necessary, 
by this committee, the authorizing committee, not the 
appropriating committees, and I hope all of my colleagues will 
join me in seeing that that provision be removed by the 
Transportation Appropriations Committee conferees.
    Finally, Secretary, I have discussed with Senator Hollings 
the importance of acting as quickly as possible. That is why it 
is important that we hear from you today. Senator Hollings and 
I believe that it is possible that we could mark up legislation 
next Wednesday here in the committee that may not be 
comprehensive legislation, but perhaps we could mark up and 
report out of the committee and try and get action in the 
Congress before we go out of session in a very few weeks, and 
that is why your testimony, Ms. Bailey, is important here 
today.
    Thank you, Secretary Slater.

        STATEMENT OF HON. RODNEY E. SLATER, SECRETARY, 
         DEPARTMENT OF TRANSPORTATION, ACCOMPANIED BY 
DR. SUE BAILEY, ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY 
                     ADMINISTRATION (NHTSA)

    Secretary Slater. Thank you, Mr. Chairman. Chairman McCain, 
Senator Hollings, members of the committee, first of all let me 
acknowledge how we listened carefully to all of the opening 
statements, and how very much we appreciate the partnership 
that we have enjoyed with this committee to work on matters of 
importance as it relates to transportation and transportation 
safety over the course of this Administration.
    Let me also acknowledge at the outset that I am very 
pleased, and I know Dr. Bailey is as well, to hear about the 
specific measures you just mentioned, Mr. Chairman, that will 
clearly help us in this regard.
    I would like to thank you and the members of the committee 
for holding this hearing, and to begin I want to emphasize yet 
again the importance of safety to this Administration and to 
the U.S. Department of Transportation. Safety is our top 
transportation priority. At the Department of Transportation we 
have said that it is the North Star by which we are guided and 
by which we are willing to be judged.
    I want to again commend the leadership of the committee and 
all who have worked with us to really change the focus of 
transportation and to focus clearly on safety over the course 
of our work together. Let me also say that I am very pleased to 
be joined here today by Dr. Bailey, who will come before this 
committee in but a few days, on Thursday, to seek formal 
confirmation by the Senate. She has already been recess-
appointed by the President, but we appreciate yet again, Mr. 
Chairman, the opportunity that you and members of the committee 
afford her to come before you to talk about her commitment to 
safety and the commitment of NHTSA to safety.
    In that regard, as I think about the fact that she will 
come before you in the next few days, I reflect on the fact 
that almost 4 years ago I came before this committee and 
committed to you at that time, as I, too, was seeking 
confirmation, that I and the 100,000 members of the U.S. 
Department of Transportation would continue to make safety and 
security the highest priority of the Department.
    I promised to strive to raise our current levels of safety 
to ever higher heights, and to work with members of this 
committee, our partners and stakeholders, and the American 
people in doing so. We have done that, and this committee 
should be proud of the work that we have done together.
    I also appreciate the fact that not only is the record 
impressive, but we are yet committed to improving on that 
record. We will do so, as was mentioned by Senator Cleland, as 
we fully implement the provisions in the Motor Carrier Safety 
Administration bill that was passed just last year.
    We will do so as this committee and the Congress continue 
to move on pipeline safety legislation, as the Senate 
unanimously approved this measure just the other day, and the 
House now takes it up. We will improve the safety of our system 
as we fully implement the authorizing legislation of TEA-21 
dealing with surface transportation and AIR-21 dealing with air 
transportation matters, both record-level investments not only 
in safety but also in our transportation system across the 
board.
    Again, the record is impressive. Highway death and injury 
rates are at the lowest level ever, and commercial aircraft 
fatality accident rates are again going down, and going even 
lower as we make commitments to an 80-percent reduction over 
the next 10 years. Alcohol-related fatalities are at an all-
time low; boating fatalities and rail/highway grade crossing 
fatalities have been reduced as well. Natural gas transmission 
pipeline failures have been reduced, but will be reduced even 
more so as we pass the pipeline safety legislation, and serious 
hazardous material transportation incidents have been reduced 
as well. Overall, our transportation system is the safest it 
has ever been.
    Having said that, though, and acknowledging the work of 
NHTSA and others who have worked hard with you to bring those 
reductions into being, when we consider what Senator Frist said 
about his dear friend, and we reflect soberly and somberly on 
the issue that brings us together, we acknowledge that we must 
do better, and we have to do better in making our system even 
safer.
    All of you have noted that this can be done through a 
thorough investigation of the recall issues. That is now before 
us. Also benefiting from the lessons learned as a result of 
this experience, and then acting proactively, we can provide 
proactive leadership to provide corrective measures, and to 
enhance the safety program to ensure that this never, ever 
happens again.
    That is a commitment that we share with you, Mr. Chairman, 
Senator Hollings, and all of the members of this committee. In 
addressing you today, then, I want to acknowledge the effort, 
the serious and forthright effort of NHTSA under the leadership 
of Administrator Bailey, that they are making to address the 
investigation and the recall of Firestone ATX and ATX-II and 
Wilderness AT tires. We also continue to broaden the 
investigation where necessary, as we did a few weeks ago, with 
the consumer advisory dealing with another series of tires as 
it relates to this ongoing investigation.
    Dr. Bailey has submitted a statement for the record in 
which she provides the status of the investigation as it is 
today. The investigation is continuing, and is continuing on an 
urgent basis. I have directed the agency to use every means 
available to conclude the investigation as soon as possible, 
and to that end I would like to just note for the benefit of 
the committee that we are reprogramming approximately $1.8 
million of our fiscal year 2001 funding to the Firestone 
investigation from other NHTSA activities, and we will continue 
to do whatever is necessary.
    Mr. Chairman, you mentioned that you wrote me on August 14 
to ask that we, quote, review and examine the data collection 
reporting system used by NHTSA to detect defects, close quote. 
Today, I would like to note that we have done just that, and 
then outline a series of legislative actions that I believe we 
can take. Again, I want to underscore the fact that we are 
pleased to hear that you and Senator Hollings and other members 
of the committee have talked and believe that we can move on 
this matter and do so expeditiously.
    Before I do, though, let me urge the members, as you have 
already acknowledged, to deal with the provision in the 
appropriations bill as you have expressed. If I may also, Mr. 
Chairman, I would also like the conferees to be supportive of 
the .08 BAC provision in the appropriations bill, and also to 
work with us to remove the provision that would limit us in our 
efforts to move forward on the hours of service provision so as 
to correct measures or laws that have been in place for more 
than 60 years. Clearly, the trucking industry has changed 
tremendously over that period of time.
    But in dealing specifically with the issue at hand, at the 
top of our list would be a comprehensive bill that we will talk 
about in greater detail, but that you and I had some 
communication on back in March of this year, to increase civil 
penalties for defective noncomplying products, to extend the 
period within which manufacturers must provide a remedy at no 
cost to customers, and to require manufacturers to test their 
products as a basis for their certification of compliance. We 
hope that it will be possible again to move, as you have noted, 
this important legislation on an urgent basis. Its provisions 
will advance the cause of safety.
    We would also resubmit our March proposal as part of a 
larger bill that builds on the lessons, frankly, that we have 
learned as a result of the Firestone investigation. It is clear 
that the scope of NHTSA's efforts to obtain data about 
potential safety defects needs to be broadened, and here before 
the committee and manufacturers we would like to say that as 
you make requests for information we, too, would like the 
companies to present us the same information at the same time.
    Again, though, it is clear that the scope of NHTSA's 
efforts to obtain data about potential safety defects needs to 
be broadened. To this end, NHTSA needs stronger investigative 
authority to get the data it needs. Armed with this authority, 
NHTSA will be in a position to act more quickly in exercising 
its full authority in dealing with challenges like the one we 
face.
    We would ask the Congress to move expeditiously in 
providing this new authority, and to give the agency the tools 
it needs to forge ahead. Our legislative proposal will require 
manufacturers to report information about potential defects in 
vehicles or equipment that first come to light, even if that 
might be in foreign countries if that information relates to, 
in any way, vehicles or equipment in the United States.
    Due to the lack of this requirement, we did not learn about 
the problems Ford and Firestone were having in Saudi Arabia and 
other countries until after we opened our own investigation in 
May of this year. This provision, we believe if enacted will 
ensure that this kind of situation never happens again.
    In the international context, our proposal will seek 
greater authority to obtain information from foreign 
governments and organizations concerning possible safety 
defects that could show up in the United States. We believe 
that greater interaction with foreign safety agencies will help 
us get an early warning on problems before they occur, and I 
would just mention in passing that as we work with our 
international partners, as we will at an upcoming international 
transportation safety symposium, on matters dealing with all 
aspects of transportation, we believe that we can put in place 
the kinds of relationships that will allow us to really fully 
implement this kind of authority, once given.
    Conversely, we believe that by having this kind of 
information, we would also be able to provide useful insights 
to foreign governments if they find themselves in similar 
situations.
    Our new proposal also will seek to close a number of 
loopholes in our ability to get timely information from 
manufacturers and other resources about possible defects. We 
should have full authority to get safety information from 
manufacturers about their claims experience, as well as 
warranty and adjustment data.
    We need the same type of information from companies that 
supply original equipment such as brake systems and the like to 
the vehicle manufacturers, and we need to get timely 
information about claims information from the insurance 
industry as well. Our bill will seek authority from all of 
these parties on each of these measures.
    And then I know Senator Bryan also made reference to 
removing the ceiling on penalties. Our bill will also provide 
that, Senator, as well.
    Finally, Mr. Chairman, we will seek additional funding for 
NHTSA's safety enforcement program. The Office of Defects 
Investigation needs to have additional resources both in 
funding and in people, and we will ask the Congress to provide 
that amount of resources. We will immediately reprogram, as I 
have noted, $1.8 million in fiscal year 2001 funding to provide 
more focus on the Firestone investigation, and we will redirect 
these funds from other NHTSA programs. We do that because we 
know it is the right thing to do.
    I know that several Members of Congress have either 
introduced legislation or are considering introducing 
legislation. We welcome these initiatives, as well as your own, 
Mr. Chairman, and look forward to working with you and other 
members of the committee to ensure the enactment of effective 
legislation that will strengthen highway safety.
    I believe that this legislation will give us the expanded 
authority we need. I pledge that as long as I am Secretary of 
Transportation we will do everything we can in our power and 
working with others to use this authority and our existing 
authority vigorously. My constant message to the employees at 
the Department of Transportation is that we must be ever 
visionary and vigilant. We are committed to that end. I can 
think of no clearer case in which this message must be 
fulfilled than the one that brings us together here today. We 
must look to the future to guard against any repetition of the 
tragedies caused by defective vehicles or equipment.
    Mr. Chairman, this concludes my testimony. Dr. Bailey and I 
would be pleased to respond to any questions you or members of 
the committee might have.
    [The prepared statements of Secretary Slater and Dr. Bailey 
follow:]
        Prepared Statement of Hon. Rodney E. Slater, Secretary, 
                   U.S. Department of Transportation
Mr. Chairman and Members of the Committee:

    Thank you for holding this important full Committee hearing. 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, Mr. Chairman, and that of other 
Committee members.
    Mr. Chairman, almost four years ago when I appeared before this 
Committee at my confirmation hearing, I pledged to you that I would 
continue to make safety and security the highest priority of the 
Department. I promised to strive to raise our current levels of safety 
to even greater heights. In closing, I want to highlight some of the 
major accomplishments that this Committee, in particular, was 
instrumental in helping to achieve. The record is impressive:

   Highway death and injury rates have dropped to all-time 
        lows: from 1.6 to 1.5 deaths per 100 million vehicle miles 
        traveled; and from 133 to 119 injuries per 100 million vehicle 
        miles traveled

   Commercial aircraft fatal accident rate reduced from 0.055 
        to 0.04 per 100,000 flight hours

   Alcohol-related highway fatalities reduced to 38% from 38.6% 
        as a percentage of the total

   Boating fatalities reduced from 857 per year to 773

   Rail related fatalities per million train-miles reduced from 
        1.57 to 1.30

   Natural gas transmission pipeline failures reduced from 
        4,871 per year to 3,754

   Serious hazardous material transportation incidents reduced 
        from 422 per year to 341.

    In addressing you today, I want to acknowledge the outstanding 
effort that NHTSA, under the leadership of Administrator Dr. Sue 
Bailey, is making to address the investigation and recall of Firestone 
ATX, ATX II and Wilderness AT tires. Dr. Bailey has submitted a 
statement for the record, in which she provides the status of the 
investigation as of today. The investigation is continuing on an urgent 
basis. I have directed the agency to use every means available to 
conclude the investigation within six months. Dr. Bailey is available 
to respond to any questions you may have on the history and progress of 
the investigation.
    Mr. Chairman, you wrote me on August 14 to ask that we ``review and 
examine the data collection reporting system used by NHTSA to detect 
defects.'' Today I will outline a series of legislative actions that I 
believe we need to take. But before doing so, I want to urge members of 
this Committee, especially those who will serve as conferees on our 
appropriations bill, to strike language in the bill to effectively 
block efforts to complete implementation of the consumer rollover 
rating system proposed by this Department in June.
    At the top of our list is the comprehensive bill that we submitted 
in March of this year 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. We hope it will be possible to move this important 
legislation on an urgent basis. Its provisions will advance the cause 
of safety.
    We will resubmit our March proposal as part of a larger bill that 
builds on the lessons we have learned in the Firestone investigation.
    It is clear that the scope of NHTSA's efforts to obtain data about 
potential safety defects needs to be broadened. To do this, NHTSA needs 
stronger investigative authority to get the data it needs. Armed with 
this authority, NHTSA will move quickly to exercise its authority to 
the fullest extent possible. I would ask Congress to move quickly to 
legislate new authority, and give the agency the tools it needs to 
forge ahead quickly.
    Our legislative proposal will require manufacturers to report 
information about potential defects in vehicles or equipment that first 
comes to light in foreign countries, if that information relates in any 
way to vehicles or equipment in the United States. Due to the lack of 
this requirement, we did not learn of the problems Ford and Firestone 
were having in Saudi Arabia and other countries until after we had 
opened our own investigation in May of this year. If this provision is 
enacted, we can ensure that this will not happen again.
    In the international context, our proposal will seek greater 
authority to seek and obtain information from foreign governments and 
organizations concerning possible safety defects that could show up in 
the United States. We will believe that greater interaction with 
foreign safety agencies will help us get an early warning of problems 
before they occur here. Conversely, we could provide useful information 
to foreign governments, if they find themselves in a similar situation.
    Our new proposal will also seek to close a number of loopholes in 
our ability to get timely information from manufacturers and other 
sources about possible defects. We should have full authority to get 
safety information from manufacturers about their claims experience, as 
well as warranty and adjustment data. We need the same type of 
information from the companies who supply original equipment, such as 
braking systems, to the vehicle manufacturers. And we need to get 
timely information about claims information from the insurance 
industry. Our bill will seek authority for each of these measures. It 
will also seek to remove the ceiling on penalties for related 
violations.
    Finally, Mr. Chairman, we will seek additional funding for NHTSA's 
safety enforcement program. The Office of Defect Investigation needs to 
have additional resources, both in funding and in people, and we will 
ask the Congress to provide it. We will immediately reprogram $1.8 
million of FY 2001 funding to the Firestone investigation from other 
NHTSA activities.
    I know that several members of Congress have either introduced 
legislation or are considering introducing legislation. We welcome 
these initiatives, as well as yours, Mr. Chairman, and want to work 
together to secure the enactment of effective legislation that will 
strengthen highway safety.
    I believe that this legislation will give us the expanded authority 
that we need. I pledge that as long as I am Secretary, we will do 
everything in our power to use this authority, and our existing 
authority, vigorously. My constant message to Departmental staff is 
that we must be vigilant and visionary. 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.
    Mr. Chairman, this concludes my testimony. Dr. Bailey and I will be 
glad to answer your questions.
                                 ______
                                 
 Prepared Statement of Dr. Sue Bailey, Administrator, National Highway 
                 Traffic Safety Administration (NHTSA)
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. The National Highway Traffic Safety Administration (NHTSA) has 
learned some valuable lessons from this recall, and now is the time to 
put those lessons to use in preventing future problems.
    Secretary Slater has outlined the legislation that we believe we 
need. I will discuss what I believe we must do to improve our 
regulations and our internal procedures. First, let me summarize where 
we now are in the Firestone investigation.
The Firestone ATX/Wilderness Recall
    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 had 
1400 complaints with reports of 88 fatalities and 250 injuries 
involving the tires covered by the investigation. We will provide 
information about additional incidents as we collect it.
    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. As of August 9, Firestone estimated that approximately 
6.5 million of the 14.4 million tires included in the recall were 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.
Lessons Learned
    As Secretary Slater stated in his opening remarks, we have 
concluded that we need to get additional legislative authority to 
enable us to learn of defects that first appear in vehicles or 
equipment in foreign countries. Such authority could have enabled us to 
learn of the problems being experienced by Ford and Firestone sooner 
than we did. If we get the additional authority, I assure you that we 
will work vigorously to use it.
    We have also learned that we can do a better job of using the 
authority that we already have. In particular, we must accelerate our 
efforts to bring NHTSA's tire safety standard into line with current 
practice. We are expanding our review of the standard, which has not 
been significantly changed since 1968. The vehicles on the road today 
are much different than those of 30 years ago and are operated at 
higher speeds now that the national maximum speed limit has ended. We 
need to amend the standard to address those changes.
    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 plan to implement measures 
that would allow us to track claims and litigation information 
routinely, even as we are asking Congress to enhance our authority to 
get this information.
    We will also continue our efforts to provide information to 
consumers about vehicle stability. It seems clear that the failure of 
these tires presents a greater risk to occupants of sport utility 
vehicles and compact pickups, with their greater susceptibility to 
rollover, than to occupants of passenger cars. We are urging the 
conferees on our appropriations bill for fiscal year 2001 to allow us 
to complete our implementation of the consumer rollover rating system 
proposed in June without delay.
    Finally, we are taking a hard look at our investigative procedures 
to make sure we do not miss problems like this in the future. We will 
ensure that we use our people and resources in the most effective way 
and seek any additional resources that we may need.
    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.

    The Chairman. Thank you, Mr. Secretary. Thank you for your 
strong statement.
    In a departure from the usual custom of the committee, 
because of the importance of this issue, two members have 
arrived who might want to make brief opening comments, Senator 
Ashcroft and then Senator Rockefeller.
    Senator Rockefeller does not. Senator Ashcroft, would you 
like to make a brief comment?

               STATEMENT OF HON. JOHN ASHCROFT, 
                   U.S. SENATOR FROM MISSOURI

    Senator Ashcroft. Thank you, Mr. Chairman. I am grateful 
for this opportunity. I am very concerned, as is everyone on 
the committee, about how this could have happened. I am 
saddened, as we all are, by the deaths that bring us to this 
point. Each of the individuals injured has a name and a face. 
They had dreams that will not be realized, those that have 
died, and you do them a great service by calling the meeting 
together.
    I have a unique concern, and that is that the Ford Explorer 
is made in my home State. In fact, almost half the Ford 
Explorers that are assembled in the United States are made in 
Hazelwood, Missouri, and the success of the Explorer has been a 
source of pride for the workers at the plant and everyone 
throughout the St. Louis area and, of course, if you are ever 
in doubt about this, I would be pleased to take you to the 
plant and we will watch as they drive newly assembled Explorers 
off the line.
    Yesterday, I talked with some of the workers. As you know, 
the plant has been closed for the past 2 weeks, and will not 
reopen to assemble the popular Ford Explorer until next Monday, 
and some have suggested that these workers have it pretty well. 
2,000 workers who are not reporting for work are getting paid 
95 percent of their income.
    Well, I want you to know that they are not content with not 
working, and they do not see themselves as lucky. They are 
unsure about their future. Obviously, they do not get overtime, 
which they normally get, and due to the 15,000 Explorers that 
will not be produced their profit-sharing is threatened. 
Nevertheless, I want you to know that these workers did not 
complain about Ford's decision to close the plant in order to 
get tires out to consumers as quickly as possible. In fact, I 
was really inspired by the way the employees had a sense of 
being proud that the company was willing to take very serious 
measures to serve the customers.
    And since they are not represented here today, I asked 
these employees to tell me what message they wanted me to give 
you and, while they could say it much better than I can, I will 
do my best. They want you to know that what we do here and what 
we say here makes a difference, and this applies not just to 
the committee but also to representatives of Ford, Firestone, 
NHTSA, and the consumer groups, and it makes a difference in 
their lives.
    They do not want careless or reckless allegations about the 
product that they make. They have valid concerns that 
allegations that are tossed out even if they do not have data 
devalues the name of the product that bears not only the Ford 
name but also the name of the 2,000 workers in Missouri, and 
they wanted me to share with you the Ford Explorer safety 
record, which remains substantially above average, and they 
faxed to my office safety information filed by the United 
States Department of Transportation, and they asked me to 
submit this information for the record, and I am pleased to do 
that.*
---------------------------------------------------------------------------
    * The information referred to was not available at the time this 
hearing went to press.
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    The Chairman. Without objection.
    Senator Ashcroft. Thank you. Just as the rest of the 
committee, as chairman of the Consumer Affairs Subcommittee I 
want to know what I can do to make sure this never happens 
again. I want to thank you for holding this hearing, and I am 
pleased to be a part of these matters of inquiry.
    The Chairman. Thank you very much. We will have a first 
round of 4 minutes, and obviously my colleagues would 
understand, since we have four more witnesses to appear before 
the committee and it is already 10:30, and so I will begin by 
thanking you again, Secretary Slater.
    Secretary Slater, some questions have arisen about 
sufficient funding for NHTSA. In the past several years I never 
heard of any request for additional funding or authorization 
for additional funding to this committee. Did that happen, to 
your knowledge?
    Secretary Slater. Mr. Chairman, we have actually provided, 
in partnership with the committee and the Congress, significant 
improvements in the NHTSA budget over the years. The 
President's recommendation this year is higher than either the 
House or the Senate.
    The Chairman. I was talking about previous years.
    Secretary Slater. In previous years we have also provided 
an increase in investment, and when we passed TEA-21 again an 
increase in investment. We did last year because we were trying 
to use some of what were called RABA funds for the greater 
investment in safety programs, did not find our efforts 
successful, but over the years we have done, I think, a good 
job in giving NHTSA the kinds of resources needed.
    Now, clearly, as we deal with matters involving defects and 
the investigations necessary to fully respond to those, we have 
found a need to reprogram and to make an additional request in 
this budget cycle, but I think that working with the committee 
in past years we have done a good job in providing significant 
resources to NHTSA for their broad safety purposes, and we have 
seen significant benefits result from that kind of a 
commitment.
    The Chairman. At the end of every year around here, we have 
the President pretty much having his way and billions and 
billions of dollars are added in the dead of the night, I might 
add, and I would expect that if there had been any real 
priority there would have been some of that added.
    Joan Claybrook is going to testify, and in her statement 
she says NHTSA failed to discover this defect because it lacked 
a proactive program to discover safety defects. She goes on to 
state, NHTSA was caught flat-footed in this case because it 
rarely pushes companies to obey the law. The Department allowed 
GM to resist recalling its 5 million defectively designed 1973 
to 1987 pickup trucks with side-saddle gas tanks that exploded 
in side-impact crashes, and goes on to state several examples 
in the past.
    She goes on to say, NHTSA also has no early warning system 
in place, and has not been proactive in requiring manufacturer 
warnings or in using sources of information that are on the 
pulse-beat of current real world information about vehicle 
performance.
    I do not know if you have seen her testimony or not, but I 
would like for either you or Ms. Bailey to respond to those 
allegations by Joan Claybrook.
    Secretary Slater. Well, I would ask Dr. Bailey to join me 
in responding, but I can tell you that NHTSA has been very 
aggressive in dealing with matters that pertain to frankly 
working with the industry and educating the public about 
important safety measures that could be taken. We have seen 
significant results from that effort.
    I would just give you a few. The use of seat belts, the 
significant investment of time and resources dealing with 
educating the public about drunk driving and those sorts of 
things that have brought about a significant reduction in 
deaths on our roadways.
    We have also over the years made significant improvements 
in the performance and the safety of automobiles and equipment.
    Now, clearly here with the challenge of the Firestone tires 
and the question involving SUV's and their roll-over 
tendencies, we have come forward recently with major 
initiatives to deal with those efforts as well, and with the 
enhanced program authority that we have made the case for this 
morning we will be able to bring more focus and attention to 
these matters, but we have not had a defect to deal with in 
anyway like this one for more than 20 years.
    Now that we have it, we are moving to ensure that measures 
that were attempted in 1978, when a similar issue arose, that 
those measures are taken this time, and again I want to commend 
you, Mr. Chairman and also Senator Hollings, as you have noted 
your belief that this time we can get the job done, and as an 
Administration we want to work with you to do just that.
    The Chairman. Ms. Bailey, did you want to respond?
    Dr. Bailey. I think that we may have indicated that much of 
the information we receive is through consumer complaints. We 
have a very proactive educational program to try, and increase 
and, in fact, have increased by thousands per year the number 
of complaints we get, but it is not enough.
    Clearly there was information out there that was not 
received by NHTSA through that channel. So we are seeking 
authority to widen our ability to obtain data that could allow 
us to investigate earlier and be more proactive, specifically 
the authority you will hear about here, today, not to request, 
but to require that manufacturers provide us with information 
from overseas, which in this case could have been instrumental 
in initiating an investigation sooner, and also here 
domestically, that we receive information from manufacturers 
about claims and settlements, which would also have provided us 
with information that would have instigated a sooner 
investigation.
    The Chairman. Senator Hollings.
    Senator Hollings. Thank you both. Though you say you have 
not dealt with a defect of this kind, or known of it, in 20 
years, and otherwise you did not receive the information, now, 
there are two reports in the news with respect to one, filing 
the information that you had, not 20 years ago but more 
recently, tire defects under Ford, the automobile itself.
    And otherwise, there was, if I remember, Beretsky, who said 
that in 1998 there were only six or seven complaints, in 1999 
only eight, whereby now that you are going back and looking, 
instead of seven there were 76, and instead of eight there were 
96 complaints, 47 before the report. Are those reports in the 
news correct, and what have you done about it?
    Secretary Slater. One of the things about some of the news 
reports, again they deal with information that we have in some 
instances requested. They are not yet received. That is why I 
made the point earlier that one thing we want to do today is to 
say that as the committee and its team receive information 
through your investigative efforts, that at the same time the 
companies provide us with the same information along with, 
again, following through on the request that we are making.
    Senator Hollings. Well, this information is in your files, 
as I understand it. There have been these complaints there, and 
misfiled under the automobile instead of tires in the one 
instance, but otherwise 90-some complaints, where the gentleman 
is saying we only had eight, in his memo. I mean, what about 
that.
    Secretary Slater. I agree with that. I want to come back 
with that, because I think this morning was the first time that 
we had had notice of some of that, but let me just say that 
once we started to get the information that was clearly 
available that we had not gotten earlier, we were able to give 
a more accurate statement about the degree of the problem.
    We were able to raise to 88 the number of deaths, we were 
able to deal with the 250 or so injuries, but again that was 
after we got the information we could fully examine and make 
judgments on. That also led us to making, through our broader 
investigation, the request for a voluntary recall on some 
additional series of tires. When that was not done, then we 
came back with our powers and provided a consumer advisory, so 
we have responded when we have had the information at our 
disposal.
    Now, again, I would like to ask Dr. Bailey to share with 
you what she shared with me earlier today about the most recent 
report we saw this morning, and that you had made reference to.
    Dr. Bailey. I believe you are aware that in Arizona, in 
1996, apparently there was information about tread separations 
and blow-outs that was available to Firestone but was not made 
available to NHTSA. Again, part of our not having been as 
proactive in the past is, we have not had the regulatory 
authority to be proactive. We would like to see that changed in 
the future, and that is part of the work I think we are doing 
here today.
    Specifically, the Secretary is referring to the fact we did 
not have the information in 1996. But I think it is important 
to note that after this investigation was begun in May of this 
year, we did request information from Firestone about any 
claims, testing, specifically testing as was done in the 
situation in Arizona. That could have been information that 
would have been important in terms of this investigation.
    I will tell you that we have still not received that 
information, and we went through that looking for specifically 
the information about the Arizona testing and have still not 
received that. So we will be looking into that.
    Senator Hollings. Mr. Secretary, just one question. 
Firestone is a hard learner. They were caught off base 20 years 
ago, and now here they are in trouble all over again, but I 
wonder about Bridgestone. The Japanese are known for quality 
production. Is there a similar National Highway Traffic Safety 
Administration in Japan, in Tokyo? Do they have a similar 
agency looking at safety and defects reported? I am wondering 
about Bridgestone. If I ran Bridgestone I would get rid of 
Firestone, and I am wondering about Bridgestone itself. Do they 
have it? What is their record?
    I notice one Japanese company that had been keeping secret 
defects some 20 or 30 years just apologized in the news, but 
what about Bridgestone? Do you know anything about them at all? 
Do the Japanese have such a situation or not?
    Secretary Slater. We have safety counterparts in most 
countries. The agency responsible for vehicle safety in Japan 
is the Ministry of Transport. I think it is important to note 
part of the expansion of our authority today would be to allow 
us to engage internationally with our safety counterparts which 
are present in most countries, so that we can exchange this 
type of information.
    Senator Hollings. Thank you, Mr. Chairman.
    The Chairman. Thank you. Senator Abraham.
    Senator Abraham. Thank you, Mr. Chairman. Let me just 
follow up on the request, I gather, that will be forthcoming in 
your legislation with respect to dealing with foreign agencies 
that work on safety issues. Am I to understand that you are 
prohibited from interacting with them at this point?
    Secretary Slater. No, we are not necessarily prohibited 
from interacting with them. Actually, I am in communication 
with my transportation counterparts all the time. It is just 
that the enhanced authority would clearly give us the ability 
to do so in a more constructive way.
    Also, when it comes to getting information, how about the 
performance of certain items internationally? We do not have 
the authority to require that from manufacturers now, and that 
is something----
    Senator Abraham. That I understand, Mr. Secretary, and I am 
happy we will be working on that issue, because clearly you do 
not have access to information from the manufacturers.
    The question I guess I am trying to get at is, it seems to 
me that at least the people who work in NHTSA on safety issues 
would be monitoring to some extent what is going on in other 
countries, just as a matter of course, and I guess I have heard 
today what sounded like an indication that somehow you either 
are prohibited from doing it or cannot do it and, given the 
magnitude of some of these recalls, I guess I am wondering why 
no information, not from the companies here but just from the 
media or from the international conferences or from other kinds 
of activities that you might engage in as a part of your job, 
this information would not have been detected by at least the 
people who work on safety issues, and I would like to know why 
that is the case.
    Secretary Slater. Well, I can tell you that most of our 
international activities across the Department have increased 
significantly over the last few years, as we have begun to 
recognize to a greater degree the challenges of a global 
economy and market, and we are doing a much better job in that 
arena now than in the past, and that is across the various 
transportation modes. Dr. Bailey, is there anything specific 
about NHTSA's work in that regard that might deal more 
specifically with Senator Abraham's question?
    Dr. Bailey. It is, I would want to characterize it, as more 
informal, clearly, than it should be. We need clear regulatory 
cooperation between countries, and that is not the case now, 
but it is what we are looking for. Obviously, it would be 
beneficial to exchange this type of essential safety 
information.
    The provision would also authorize the Secretary to 
reciprocate cooperation received from the regulatory 
authorities in those other countries, and it would require that 
special measures be taken, because you can imagine for trade 
this is a real issue, to protect any confidential commercial 
information and nonpublic predecisional materials be disclosed 
to or received from a foreign Government in furtherance of 
regulatory cooperation, and it is modeled on the Food & Drug 
Administration, 21 C.F.R.
    Senator Abraham. Thank you. I think my assumption is the 
committee is going to be very receptive to try and formalize 
the ability to collect information or to exchange it.
    I chair a subcommittee of the Judiciary Committee on 
Immigration, and while we do not have any, to my knowledge, 
formal responsibility or authority to find out what is 
happening with respect to immigration policies in other 
countries, I only have two people on that staff, but they keep 
pretty close tabs on what is happening in other countries, and 
I guess it is a little bit of a surprise that none of this 
information was known to anybody at NHTSA, in light of the 
magnitude of it.
    Let me just ask another question. In the House hearings 
last week it was revealed that a claims researcher for State 
Farm Insurance Company contacted NHTSA on three separate 
occasions between July 1998 and December 1999 to discuss 
concerns about these tires and the related accidents, and my 
first impression when I heard about it was, this is some sort 
of call that maybe was made out of the blue to a hotline, or 
something like that.
    But the State Farm witness' testimony indicated the 
following. They said most of the data that was provided to 
NHTSA was--this is an exact quote--was in response to a request 
from the agency. On occasion, however, we advised NHTSA of 
potential claims trends being reported from our field offices.
    The decision to initiate a contact with NHTSA is based on a 
number of factors, including whether research of our 
information reveals a number of similar reports or cases with 
possible safety implications, a particular vehicle model within 
a specific period of time.
    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.
    So it seems that the actual fact is that State Farm works 
regularly with you in terms of this kind of information 
exchange, examining crash data and supplying you periodically 
at least with information and tips about potential problems, so 
I am just wondering what your response is to the fact that this 
information was provided on three separate occasions. How do 
you explain the lack of followup? Is there a particular reason 
that no additional action was taken at the time of these 
reports, or did they not rise to a certain level of relevance? 
How do you do that, and what should we know about that as we 
proceed legislatively?
    Dr. Bailey. First, the important part of the question is 
that in fact those 21 claims were over 6 years, so we were 
getting several claims per year, while they were getting 
hundreds, or we were getting hundreds of complaints about other 
tires. And so put into perspective those 21 would still not 
have instigated the investigation at that time.
    Now, let me also say it was part of an informal 
arrangement, or a relationship with State Farm. It is the only 
relationship we have with an insurance company. I would like to 
see us in the future formalize relationships with not only 
State Farm but others, so it does not come in in the way it did 
this time, which, by the way, was unsolicited, and by e-mail. 
And there is only one contact that is recalled at this time, 
and this was 2 years ago, and we were receiving hundreds of 
those sometimes in a week.
    I have personally seen the e-mail. The e-mail said, quote-
unquote, we have ``noticed'' these claims. I went over the 
material, and we have since gone over that material. It would 
not have instigated, as I say, an investigation at that time, 
given the number over the years, when 40 million tires had been 
produced.
    Senator Abraham. The only followup I just want to finish 
with is this. My impression is that what triggered NHTSA's 
greatest scrutiny most recently was the reports of a Houston 
television station investigation. Was that a key element in 
your decisions here to now press forward?
    Dr. Bailey. It was a key element, because if you remember, 
much of our work is done based on the complaints we get from 
consumers. Those complaints doubled after that KHOU hearing, 
and that was what created in March the impetus for us 
immediately to start an initial assessment and then begin the 
investigation in May, which I believe prompted the recall in 
August.
    Senator Abraham. I would only say, obviously, we will want 
to follow up with written questions, but I am a little bit 
concerned that people who do this professionally in terms of 
claim adjustments at State Farm and work with you on a 
semiformal basis did not get the kind of attention that a TV 
report did, and I guess that troubles me to some extent, but we 
look forward to finding out more from you as we proceed through 
the process.
    I have gone over my time. I apologize, Mr. Chairman.
    The Chairman. Senator Bryan.
    Senator Bryan. Thank you very much, Mr. Chairman.
    I have several questions, and I realize that we are on a 
short time constraint so, if possible, if I can get a yes or no 
answer to my question, I would be appreciative.
    We are told that, adjusted for inflation, that NHTSA's 
budget today with respect to enforcement is about half of what 
it was two decades ago, and that only 20 investigators are in 
the field that are engineers that are looking into vehicle 
safety defects. My first question, is that true, and if so, 
what are your budget recommendations for us in light of our 
experience with Firestone and Ford?
    Secretary Slater. Well, the answer is, for the most part 
true. We have again seen increases over the past 3 or 4 years, 
and that has been good, but we do need to have additional 
resources here, and the President's budget, our proposal, would 
provide significantly more resources.
    Senator Bryan. And you are satisfied, Mr. Secretary, the 
President's budget request is enough to do the job?
    Secretary Slater. We are. Now, we also are going to submit 
for consideration a request for an additional $9 million that 
would be used primarily to help us deal with the current 
challenge of the Firestone recall. We have already reallocated 
$1.8 million to expedite that process, and we are going to make 
a request for an additional $9 million.
    Senator Bryan. I thank you for the brevity of your 
response. You are indicating the President's budget request 
plus $9 million is what you are asking?
    Secretary Slater. No. The $9 million would be included, but 
what we do is, we actually reprioritize some of the resources 
for this particular purpose.
    Senator Bryan. I think I understand. So you are saying you 
think that the President's budget request, with this 
reprioritizing, is adequate to do the job?
    Secretary Slater. Yes.
    Senator Bryan. I do not believe I heard an answer to the 
distinguished Ranking Member's question about the data base. 
What we are led to believe is that the agency failed to detect 
early on some of these complaints because there is a different 
data base for tires and a different data base for automobiles. 
Can you tell me, is that true, and if it is, what are you doing 
to merge those data bases so we do not have a similar problem?
    Dr. Bailey. I think it is important to note, again, to keep 
this in perspective, that even with the State Farm data which 
was filed, by the way, and which I have at my disposal, and 
with the 46 complaints we received over almost a decade, out of 
47 million tires, even combined that would not have instigated 
an earlier investigation.
    Senator Bryan. Are you saying, Dr. Bailey, that even if the 
merged data base, if the data base had been merged or combined, 
that still would not have been enough to trigger----
    Dr. Bailey. Correct, because that would have been probably 
less than 10 a year, while we were getting hundreds of 
complaints about other tires, so it probably would have not 
caused the investigation.
    What would have caused the investigation was to have 
information from overseas, and all of that claims data that was 
out there, and that is what we are seeking here today, and what 
can remedy this.
    Let me just answer your question about the information 
system, because you are right, we have, as is often the case, 
in corporations, and around the world, as we have come into a 
computerized era, that we have stovepipes of systems. We need 
the additional funding to coordinate and integrate those 
systems so that we can bring all that data together that we are 
seeking here today for the future.
    Senator Bryan. And Dr. Bailey, does the President's budget 
provide sufficient money for you to merge the data bases, or 
consolidate them in some way, that it provides an earlier trip 
warning system? I take it for the record the answer is yes.
    Dr. Bailey. The answer is yes.
    Senator Bryan. I thank you.
    Now let me go over some of the recommendations that have 
been made. One of the criticisms is that the tire safety 
standard itself is 32 years old, at a time when many tires in 
America were bias ply, not radials. Radials last longer than 
bias ply, and it has been suggested that the safety standard 
needs to be changed with respect to radial tires.
    My question is, 1) do you agree it needs to be changed, and 
2) where are we in that process?
    Dr. Bailey. It is an old standard. It needs to be changed. 
We are in the process. We are in fact looking to the 
manufacturers to give us their input on that. In October, next 
month, we are moving ahead with that, and clearly need to 
update those standards.
    Senator Bryan. So that process is moving forward, and you 
will have a sufficient budget to move forward in that process, 
is that correct?
    Dr. Bailey. Yes, sir, with the additions.
    Senator Bryan. Finally, your comments with respect to the 
suggestion we ought to increase civil penalties. We ought to 
increase the statute of limitations, require record retention 
for longer periods of time--there is a whole series of these 
you are familiar with. Do you agree with those and, if so, are 
they going to be included in the letter you will be sending to 
our chairman, who I will be looking forward to working with and 
supporting bipartisan legislation?
    Secretary Slater. That is correct, Senator. You should know 
that those recommendations and components of the bill were 
actually put together through leadership and advice on the part 
of NHTSA.
    Senator Bryan. And is it possible for each of us as members 
of the committee to have access to that letter?
    Secretary Slater. Yes.
    Senator Bryan. We do look forward to working with the 
chairman.
    Mr. Chairman, my time has expired. I thank our panel for 
their responses, and again thank you for your leadership.
    The Chairman. Thank you, Senator Bryan.
    Senator Burns.
    Senator Burns. Mr. Chairman, I have questions for the next 
panel. I have no questions for this one. I have a previous 
engagement I have got to make at 11 o'clock, so I pass on this 
one. Thank you very much.
    The Chairman. Thank you. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Thank you, and Ms. Bailey, as you heard me say earlier, my 
big concern is that there may not be another committee sitting 
here in 20 years going over essentially the same issues which 
are not very different than the Congress looked at 20 years 
before, so to that end it seems to me we have got to come up 
with the right mix of preventive and enforcement policies, and 
I have a question in each area.
    On the preventive side, which ought to be the centerpiece 
of any strategy, you all have adopted this approach where 
mechanics for the Federal Aviation Administration reports 
safety problems that they encounter while servicing aircraft. 
What would you think of a similar approach for automobile 
service requirements, tire service centers, or independent 
mechanics, so that we could even get a jump start on a kind of 
early warning system, rather than waiting for your 
investigators to try to bring it forward? Would you all support 
that kind of approach? Mr. Secretary?
    Secretary Slater. Yes. Yes, and clearly here, Senator, just 
in a general sense I think there are lessons to be learned as 
we look across the transportation spectrum where we can 
actually employ things that have been tested, procedures that 
have been tested in other modes, and I think this is a fine 
example of one.
    I would say this, though, and hopefully there may be other 
questions on this particular matter, but in order to do that it 
is very important that we deal with this issue mindful of not 
overly criminalizing certain actions, because in order to get 
that kind of input by people at the grassroots level, the 
ground level, they really have to feel free to share 
information with you, and we have done that across the aviation 
spectrum I think quite well, and it would be very important for 
that same kind of message to be a part of this sort of approach 
in this area.
    Senator Wyden. I intend to work with the Chairman and 
Senator Hollings on that, because it seems to me what has 
worked in the FAA area could work in this area as well. That 
would be the first line of a kind of preventive strategy, but 
your response to me touches on the second area that I want to 
go to, and that is that if there is an egregious violation, one 
where a company knowingly is aware that their product is going 
to cause death, or serious injury, is it reasonable to say that 
in those instances a criminal penalty should apply?
    Now, 20 years ago John Moss, somebody who was a real hero 
of mine, said that that should have been done. We are not here 
as prosecutors, as the distinguished Senator from Hawaii said 
earlier. My question to you is, starting with a preventive kind 
of strategy which I think ought to be the focus of our work, 
and I think you are absolutely right about doing that carefully 
so as to encourage people to come forward, should we say in 
addition to that, for truly flagrant violations, where a 
company knows that the product is going to kill or maim, is it 
appropriate to have a criminal penalty, or a criminal statute 
that would allow for criminal penalty in that instance?
    Secretary Slater. Senator, the short answer there is 
clearly yes.
    Now, after saying that, though, I would hasten to say our 
approach has been to provide generally three means for 
responding once your investigation reveals certain information. 
One would be through an administrative civil penalty, and to do 
that only after a full-fledged evidentiary hearing, probably 
involving an administrative law judge. Also, a judicially 
enforced civil penalty, which the NHTSA statute already 
provides, and we would increase the levels of those penalties 
as has been noted, at one point we were talking about up to, 
like, about $4 million, but we are talking now about just 
eliminating the ceiling so that you could deal with whatever 
the situation would warrant.
    But then beyond that, you know, as you have noted and as 
you have stated, for egregious circumstances criminal penalties 
would be appropriate, where it can be demonstrated beyond a 
reasonable doubt that a person subject to the NHTSA motor 
carrier safety requirements intentionally violated them with 
serious consequences.
    Senator Wyden. I want to explore that with you, and I want 
to explore that with the Chairman and Senator Hollings. 
Something like this needs to be approached with great care, and 
I want to make it clear that I believe that the centerpiece of 
our strategy ought to be a preventive kind of approach, but I 
also think that if we are talking about companies who have 
knowledge of a pattern of activity that can kill and maim, that 
must be treated with the strongest possible deterrent, which 
would involve a criminal penalty, and I look forward to the 
bipartisan approach the Chairman is going to be taking, and I 
yield.
    The Chairman. Dr. Frist.
    Senator Frist. Thank you, Mr. Chairman. As I listen to the 
testimony and the discussion and the questions, it seems clear 
to me that NHTSA's biggest challenge, or problem, or 
deficiency, something that must be addressed, is a lack of an 
ability, and it may be in part resources, and it may be 
direction and leadership, but an ability to coordinate the 
various data bases, the various information which does exist.
    It is clear that Firestone certainly had significant 
warranty claims information. Ford seemed to be aware of an 
increased propensity for the Explorer to roll if those tires 
were fully inflated. We talked about State Farm in their 
contact with NHTSA with safety trend information that never 
quite made it, and according to news reports yesterday it would 
have appear the plaintiffs bar feared sounding the alarm at 
NHTSA would give defendants advance opportunity to defend 
themselves, lack of access to information from overseas.
    With all of that as background, what will you be doing to 
ensure better communication, addressing the communication of 
this life-saving information?
    Dr. Bailey. I think that is the essential work here today, 
to increase our authority to obtain information from anywhere 
in the public domain. In a global marketplace we need 
information from markets outside the United States and we were 
not receiving that. I think what we have missed here is the 
bulk of the material that was not our authority to receive. So 
we are asking this committee to work with us so that we can 
obtain the authority that would have given us the opportunity 
to protect Americans and save lives.
    Senator Frist. Beyond the authority, and Senator Bryan 
began in his questioning talking about standards outside of 
information, which obviously we are going to move on 
aggressively to address the authority issue internally, we 
mentioned the updating standards. Could you give us several 
other examples of things you are doing immediately internally 
that do not require legislation to improve the communication?
    Dr. Bailey. Immediately we have reassigned the staffing 
patterns so we can deal with this investigation, and realigned 
our resources as well. But all of that is ongoing now, and you 
are hearing that we are also going to be reprogramming $1.8 
million so that this investigation will be expedited.
    The Secretary has been behind us 100 percent in moving this 
faster than any investigation we have ever done before. But I 
think the bigger question here, and what I hear you asking, is 
what can we do so that we are able to be as highly efficient as 
this regulatory body should be in the future. And one of the 
main ones you are hearing is to have a data base that will let 
us make use of this new information we will have the authority 
to obtain, but also to make use of information that we have 
previously had authority to obtain but was in a form that did 
not necessarily provide information that gave us the full 
picture. It would not change the course of events, our internal 
issues surrounding information systems in this investigation. 
It is the bigger picture that is the issue for the Firestone 
question.
    Senator Frist. One just final followup to that from earlier 
is when you said the 46 reports and 45 reports would not have 
met, or the implication would not have met the threshold to 
throw up a red flag, to me that suggests the triggers are going 
to be quantitative and not qualitative. Are you confident that 
in the sophistication of a data base that you will have 
appropriate flags that go beyond just the quantitative that 
might not meet the denominator, or the ratio that would, 
through some algorithm would kick it out?
    Dr. Bailey. As one scientist to another, let me say that we 
do tend to think in terms of statistics and numbers and 
percentages and formulas, and my staff has been, I think, 
struggling with the fact that I have imposed that on them in 
this last couple of weeks. At the same time, they have always 
had in place threshold guidelines, which are good guidelines, 
and we are going to continue to apply, which of course make use 
of the data we are talking about here today, and those specific 
numbers. But they also look at other situations, such as 
catastrophic crashes and fatalities, and factor those variables 
in as well, and we will continue to do so.
    Senator Frist. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Inouye.
    Secretary Slater. Mr. Chairman, I think we should also 
mention that we are going to use some of the additional 
resources to promote our hotline and its use, and also use our 
web site to provide better communication means with the broader 
public, and so we are definitely going to use the power of 
technology, along with our relationships with manufacturers, 
with insurance companies and others to get more data, and then 
streamline the process for sharing that data across not only 
the various offices within NHTSA but also to a greater degree 
across the Department as a whole. Dr. Bailey and NHTSA are 
taking a leadership role in that regard, and the additional 
resources and authority will help them in that regard.
    The Chairman. Senator Inouye.
    Senator Inouye. Thank you.
    Dr. Bailey, you have indicated that you initiated a 
preliminary evaluation on the Firestone case in February of 
this year, and this was prompted by a Houston, Texas TV 
program.
    Dr. Bailey. The preliminary evaluation was May 2, but yes, 
the KHOU was February, and that did prompt the initial 
assessment.
    Senator Inouye. And you have indicated that had you been 
aware of some of the problems in overseas posts you would have 
acted earlier.
    Dr. Bailey. Yes, sir.
    Senator Inouye. Mr. Secretary, you have also indicated that 
had you had better information from abroad you would have acted 
earlier.
    Secretary Slater. That information, coupled with what we 
have, would have given us more information on which to base a 
decision, and we would have acted earlier, yes.
    Senator Inouye. I have been here for a few years, and 
during these few years administration after administration has 
tried to impress upon me how effective our embassies are. Each 
embassy has two very senior members, a professional defense 
attache and a commercial attache, and we are very proud of 
them. They feed us information of all sorts. We have better 
information on the weather in the Soviet Union than we have 
here, for example.
    When did you first learn about the Malaysian situation?
    Secretary Slater. It was only after we began our own 
investigation.
    Senator Inouye. The commercial attache did not tell you 
that Firestone and Ford got involved in some sort of activity 
there in 1998?
    Secretary Slater. We did not have that kind of information 
before we began our own investigation.
    Senator Inouye. Did the commercial attache advise your 
agency that in 1999 Ford had recalled 6,800 vehicles to replace 
the Firestone tires? That is big news, is it not?
    Secretary Slater. Well, it should be, but again we just did 
not have the information.
    Senator Inouye. The State Department did not pick up the 
phone and tell you that we have got problems in Saudi Arabia? 
What about Venezuela? Did the embassy there communicate with 
you, or the State Department?
    Secretary Slater. No. We found out about the recalls 
afterwards.
    Senator Inouye. This is supposed to be the age of 
information technology, and we are not getting this. Where is 
the e-mail, and you have got a letter and all of that business.
    Secretary Slater. I think, Senator, actually what we are 
now doing as a Department, is reaching out to our counterparts 
across the globe and really strengthening our own 
communications, where we recognize that transportation does not 
end at the border's edge, but that it is now international in 
its reach, it is the tie that binds. We have clearly moved from 
a period where an interstate tied cities and communities of our 
Nation together to a point now where the waterways and the 
airways, and in some instances in the hemisphere railroads are 
tying this country together with other countries in the world, 
and we have to be more concerned than we have been in the past 
about how that is impacting all of our countries, and how we 
have to share information.
    Quite frankly, we have not been as focused on this kind of 
issue as we are now. We as a Department have recently held 
internationally the Asian meetings with all of our counterparts 
in Chicago just at the end of last year, with Africa. We have 
traveled much more extensively.
    I just think more recently we have given more focus to this 
kind of issue and these kinds of challenges, and that is why we 
have made specific provision in a more comprehensive bill that 
deals with how it can better enhance the communication flows 
with our counterparts around the world, and that is what we are 
trying to achieve here, something that has never been a matter 
of utmost consideration, but it is now.
    Senator Inouye. Mr. Chairman, I would like to receive some 
word from the State Department as to whether they knew about 
these problems.
    The Chairman. I think Senator Hollings and I would like to 
join you in a formal inquiry on that issue.
    Senator Hollings. And the Commerce Department. You know, we 
had the agricultural attache reporting directly to the 
Secretary of Agriculture. We changed in the early 1980's a law 
whereby the commercial attache reports to the Secretary of 
Commerce, so we will ask the Secretary of Commerce.
    The Chairman. Senator Snowe.
    Senator Snowe. Thank you, Mr. Chairman. Thank you, 
Secretary Slater and Ms. Bailey, for being here this morning.
    A few questions. Ms. Bailey, as I understand, State Farm 
Insurance had 70 reports of various claims with respect to 
these accidents, is that correct?
    Dr. Bailey. What was the number?
    Senator Snowe. 70 total.
    Dr. Bailey. You would have to tell me over what period.
    Senator Snowe. From 1998, 1999 the request that you made in 
April of 2000.
    Dr. Bailey. Yes, over those years it did increase.
    Senator Snowe. Were there about 70 in all between 1998 and 
1999? How many are we talking about?
    Dr. Bailey. I will get you the number. The number, I know, 
prior to the year 2000 that we knew about from State Farm was 
21, but I will get the additional number.
    Senator Snowe. But in response, in Joan Claybrook's 
testimony it says on April 25, 2000, in response to a NHTSA 
request, 70 reports covering 1996 through 2000 were sent. Would 
that be correct?
    Dr. Bailey. I know there were additional reports.
    Senator Snowe. So there could be about 70. Now, in that 70 
or so, were there deaths, fatalities related to those claims?
    Dr. Bailey. In that group above the 21 I believe there 
were, but again I would need to get the number for you.
    Senator Snowe. I gather you make the decision, the agency 
makes the decision with respect to what is statistically 
significant, is that correct?
    Dr. Bailey. Correct.
    Senator Snowe. So why would not fatalities raise a red flag 
with respect to these claims?
    Dr. Bailey. A fatality itself would not necessarily, as 
tragic as that is it would not necessarily alone instigate an 
investigation.
    Senator Snowe. It would not?
    Dr. Bailey. One fatality would not. Let me say that there 
is a difference between some equipment on vehicles that would, 
that one fatality or one failure would instigate, or just a few 
complaints would instigate, an investigation when it is a piece 
of equipment that should never fail, like a safety seat for a 
child, or a seat belt. But tires do fail on a regular basis, 
and so that has to be accounted for.
    Senator Snowe. How many fatalities would be involved, 
ordinarily, with tire failures that would come to your 
attention, especially by an insurance company that dealt with 
numerous claims and was talking about a pattern of problems, 
not just one or two isolated incidents?
    Dr. Bailey. Keep in mind I believe in that second group 
that there in fact still would be very few fatalities, and 
those words just do not even seem to go together.
    I do not mean to in any way reduce our concern, or 
invalidate the tragedy that has occurred here. But let me just 
tell you that of 46 complaints we did have there was one 
fatality in that 46 in the decade preceding. But of all the 
tire failures that we were aware of, that was a small number 
and still did not instigate an investigation, so it is not the 
fatality, it is the nature of what it is we are investigating 
and the rest of the numbers.
    Senator Snowe. But would it not be unusual that State Farm 
would contact NHTSA and say there is a problem here?
    I do not know. I am asking you. Would you say that is 
unusual? We are talking about a pattern of problems. Would you 
find that unusual that the insurance company would bring that 
to NHTSA's attention?
    Dr. Bailey. No, because we had a relationship where we 
communicated and provided information to State Farm, and they 
to us.
    Senator Snowe. Have you decided that it is a tire problem, 
or a Ford Explorer problem, or both?
    Dr. Bailey. At this time I think we are dealing with a tire 
problem, but as part of our investigation we will also explore 
the possibility of a combination.
    Senator Snowe. Now, just looking at this New York Times 
article the other day, it had a chart that said red flag. 
Again, based on Federal data, that showed that fatal accidents 
involving Ford Explorers were nearly three times as likely to 
be tire-related compared to fatalities involving other sport 
utility vehicles or cars. That data also shows the number of 
accidents involving Explorers compared with other SUV's in the 
late 1990's. You can see this chart. Did that ever come to your 
attention in any way? The way the data comes to the agency, 
would they be aware of this kind of a chart, using their own 
information?
    Dr. Bailey. Indeed, we are well aware of that, and again it 
is part of the ongoing investigation, because we are concerned 
about the roll-over capability. And in fact, as you have heard 
the Secretary testify today, that is why we are looking to 
having a roll-over rating system, and hope that the restriction 
on us to begin that work will be removed.
    Senator Snowe. So it could be a combination problem. You 
have not made that determination yet. You are looking at it?
    Dr. Bailey. Correct.
    Senator Snowe. Have you decided----
    The Chairman. Senator Snowe, your time is up.
    Senator Snowe. Thank you, Mr. Chairman.
    The Chairman. I apologize. Senator Ashcroft.
    Senator Ashcroft. Thank you, Mr. Chairman. I want to try 
and clarify a couple of things that I am not sure whether I 
understand them. Is it your view that you do not have the 
authority to receive certain information now, or that you do 
not have the authority to compel certain information be 
collected?
    Dr. Bailey. We do not have the authority to require a 
manufacturer to provide. If we request the information, yes, it 
can be provided.
    Senator Ashcroft. So what you need is the authority to 
compel information. That is what you will be asking for, and 
not to receive information, because you have already got the 
ability to get the information.
    Dr. Bailey. To obligate the manufacturer to provide that, 
yes, sir.
    Senator Ashcroft. It occurs to me that in air traffic we 
get very sensitive about analyzing fatalities and wrecks, and I 
just wondered in automobile accidents the people who 
investigate those accidents, who are they, and it seems to me 
they are fragmented. They are not organized, and it might be 
that getting that information, is it the insurance companies 
who have the broadest reach in that respect, or are there law 
enforcement agencies that have a broad reach there? Could you 
enlighten me on that?
    Secretary Slater. It is a combination of both.
    Senator Ashcroft. You have city police departments, local 
sheriffs, highway patrols, then some Federal law enforcement 
authority, and to what extent do they ascertain or try to 
identify causes for these accidents, and do they report to you 
on them?
    Dr. Bailey. One of the most sophisticated fatality 
reporting systems is our FARS data, and that comes from 
throughout the Nation, State by State and down to the local 
level of law enforcement.
    As the Secretary says, we get information from all sources, 
and again I would want the consumers to know that we are 
looking for direct information from them. That is our number 1 
way of obtaining the data. But we also do have this FARS data, 
which is from law enforcement. But as you hear here today, we 
did not have access to the bulk of the information that could 
have made a real difference here, which was that claims data.
    Senator Ashcroft. Doctor, I think you suggested that you 
have certain statistical guidelines. When you get information 
about failures in systems, is that information related to the 
consequence of the failure? In other words, does the failure 
associated with the fatality have a different weight in 
triggering investigation, and I think this is kind of following 
up on what Senator Snowe has said.
    I could see a high number of incidents that did not relate 
with any sort of real threatening or life-threatening problem, 
but if you get--it seems to me the threshold should be lower if 
those problems are associated with fatalities or serious 
injuries. Is that the way you are set up?
    Dr. Bailey. Yes, sir, it is, and that is why we compile the 
FARS data. But this is one more piece to those, to the puzzle 
here of the way in which we use that information system.
    I should say, by the way, that NHTSA itself also conducts 
about 5,000 crash investigations a year.
    Senator Ashcroft. I see my time is almost up, but you want 
to have additional information from overseas. Is there any set 
of protocols which would entitle you to that information, or 
would you just try to get it by virtue of cooperation with 
other nations?
    For instance, are there nations party to international 
agreements that require or provide for exchange that we are not 
a party to now? Is there a need for, in your judgment, some 
sort of international protocol for this sharing? I can 
understand why you would like to have the information. Is there 
a mechanism for delivering the information, assembling it that 
exists that we are not participating in, or is there a need for 
that to be developed?
    Dr. Bailey. There is a need for that to be developed.
    Senator Ashcroft. So mere authority to get the information 
would not automatically mean we have got it right now. You 
really think there needs to be some sort of routine developed 
whereby the information is shared.
    Dr. Bailey. There are two issues here. One is the exchange 
of information between our safety counterparts in other 
countries, and more specifically, in this case with Firestone, 
the information that relates to what was known by a 
manufacturer about a possible defect that was information 
contained in a subsidiary in another country. That is the 
ability to obtain information we are requesting.
    Secretary Slater. We want the manufacturers to be required 
to give us that information just as they are required to give 
us that kind of information when they are dealing with 
situations here in the U.S. We want that same information when 
they have got a situation in some other country that might be 
in some way connected with a product that is in use here in the 
U.S., and that is what we do not have as a requirement in this 
instance.
    Also, Mr. Chairman, if I may just briefly, we are working 
with our foreign counterparts on a number of harmonization 
efforts, and some of those deal with equipment, but this is 
something that is very new when it comes to the work that we do 
with our international counterparts, and it is work that is 
increasing, and so we just want more of an ability and 
authority and guidance when it comes to engaging in that kind 
of effort with our international partners.
    The Chairman. I thank you both. I appreciate your patience, 
and appreciate your answers. We have a lot of work to do 
between now and next Wednesday. I look forward to working with 
you. Thank you for appearing.
    Senator Rockefeller, my profound apologies.
    Senator Rockefeller. Mr. Chairman, it is not your fault. I 
just slipped in through the back door.
    The Chairman. If you would remain until Senator Rockefeller 
has completed his comments.
    Senator Rockefeller. I just want to make an observation 
which I think is ironic and interesting. For the last--and that 
is the difference between the Department of Transportation--
Chairman McCain I think has done a very correct thing in having 
us all sign this letter asking for something which was taken 
out of appropriations, put back in both last year and this 
year, but then I compare what you do in the FAA for the 
certification of an airplane, of a new airplane, and this, and 
it is a stunning difference.
    Many, many more people use vehicles than use airplanes. I 
do not know the exact figures, but it has got to be a huge 
difference, and I am not trying to say we should do one for the 
other, because you know, it is Ford, Chevy and Chrysler and 
others that develop their cars, and then unfortunately it is 
often when we come to examples of this sort that you all come 
in on the contrary with the FAA Schools and Libraries 
Corporation.
    I have been involved with a new corporate jet called the 
SJ30-2 for 8 years, and it has, I think, about 72,000 parts, 
parts--I mean, little parts, huge parts. Even precertification, 
even before what they call the roll-out can take place, FAA has 
inspected every single one. DOT, in other words, has inspected 
every single one of those parts.
    Then they go on to the extremely complex business of the 
testing of the in-flight capability of the airplane, and it is 
a stunning amount of information. Everything about that 
information is known by DOT, everything. There is not one 
single thing, not one single part which has not been thoroughly 
analyzed, tested, inspected, and it is a multiyear process.
    It is very frustrating but very safe, and I just want to 
make the point, Mr. Chairman, that it is just an interesting 
sort of a difference within DOT, that on the one hand, you 
cannot precertify Ford Explorers or anything else, but you do 
complain of a lack of regulatory authority, a little bit like 
the Surface Transportation Board complains of a lack of 
regulatory authority. We routinely do not do anything about it, 
and I think under Chairman McCain we are about to do something 
about that, and I am not suggesting regulatory authority ought 
to govern all of this, but it is a stunning difference between 
a mode of transportation that carries fewer people, as opposed 
to a mode of transportation that carries far more people.
    You are all over one, and limited to about 20 engineers out 
in the field, and then you have to wait until something 
happens, and I just want to make that observation.
    Thank you, Mr. Chairman.
    The Chairman. Please respond, Secretary Slater. I think it 
is a very interesting point.
    Secretary Slater. It is, and with the question that Senator 
Ashcroft was asking a few minutes ago, I thought about the 
comparison that was being made, but wanted to be more direct in 
response to him.
    You should know that we have worked very hard as a 
Department, and especially NHTSA, to make the point that it 
should be unacceptable that we sort of accept as a matter of 
course the loss of 40,000 people on our roadways on an annual 
basis. We have worked very hard to bring that number down, at 
one point over 40 percent, 41 percent of all of the automobile 
crashes involved alcohol. Fortunately, through our efforts, 
working with MADD and other organizations, we are down below 40 
now at about 38 percent, and continuing to drive that number 
down.
    .08 would be a measure that would help us in that regard. 
We have also worked with the Congress to do things like bring 
into law the zero tolerance for youth when it comes to alcohol 
and driving some years ago during the Reagan Administration 
with the leadership of the Congress. And at the time we were 
able to pass the 21 age for drinking for youth.
    And so we have I think started to do things to demonstrate 
that it is not acceptable to have those kinds of numbers. And 
we have worked in partnership with the automotive industry to 
make those improvements as well.
    Just one example and I will close. With our partnership 
with New Generation Vehicles, we are not only trying to get 
greater efficiency as it relates to gasoline mileage, about 80 
miles per gallon, but we are also testing to ensure that there 
is no safety compromise, that there is the performance and 
ultimately that it will be something that is affordable so all 
of the American people can enjoy.
    But I think that NHTSA focusing on prevention is really 
starting to make some significant headway on this issue. And it 
is not where it is with aviation. We have got 52,000 of our 
100,000 employees who are in aviation. We are now trying to get 
a few more in NHTSA and some additional authority. And I think 
we are moving in a common sense approach and way to addressing 
these issues in ways that are more common than different. And I 
appreciate you and others who have raised the issue over the 
course of the hearing.
    The Chairman. Thank you. And again, my apologies, Senator 
Rockefeller. Senator Hollings has a followup.
    Senator Hollings. Mr. Secretary, the records show that 
NHTSA's had 99 million recalls in the last 5 years. I take it 
all of those have been voluntary. Can you correct me? How many 
have you ordered in the last 5 years?
    Dr. Bailey. You are correct, sir. The vast majority are 
voluntary.
    Senator Hollings. Have you ordered any recalls in the last 
5 years that you know of?
    Dr. Bailey. Twenty percent overall, not in the last 5 
years. Twenty percent are mandatory. But again, it is the real 
minority. We are really----
    Secretary Slater. That is NHTSA influenced. And you could 
argue in this instance----
    The Chairman. Let us answer Senator Holling's question. In 
the last 5 years, how many recalls? What percent?
    Secretary Slater. I do not know that we have it for the 
last 5 years, Mr. Chairman. We will see.
    Senator Hollings. Well, we have it. They just gave it to 
me.
    Secretary Slater. That is why we said in the beginning we 
would like to have the information you have.
    Dr. Bailey. The answer is over 60 percent of the vehicles 
recalled are a direct result of our investigations. But the 
answer to the last 5 years, none.
    Senator Hollings. That is what I was saying. All of them 
(information) have been voluntary. Thank you, Mr. Chairman.
    The Chairman. Thank you. And I again want to thank the 
witnesses. Secretary Slater, I think it is one point here to--
and I am sorry to belabor it but I will be quick. I worked very 
closely with you and worked very closely with Dr. Bailey's 
predecessor, on airbags and on a whole lot of other issues. 
Never once has any of you come to me and said, look. We have 
got to increase this budget. Be our advocate here. And so I 
just want to make it clear that not only have we not resisted 
any increases, I think this committee would have been very 
receptive to an increase in funding.
    But that is behind us now. Let us work on this legislation. 
And let us also try and work together on seeing what additional 
funds that are necessary to prevent this from ever occurring 
again. And I think we have had a very excellent working 
relationship and one that I am very pleased with. But now it is 
a very important time that we really coordinate our efforts. It 
is not going to help anybody if we get in a disagreement 
between this committee and the administration in trying to 
enact this legislation within the next few weeks.
    Secretary Slater. Thank you, Mr. Chairman. You are 
absolutely correct.
    The Chairman. Thank you, both. Thank you. Our next witness 
is Mr. Masatoshi Ono, the Chief Executive Officer of 
Bridgestone/Firestone of Tokyo, Japan. And obviously your full 
testimony will be made part of the record, Mr. Ono. But also 
take whatever time that you feel necessary with your opening 
comments. Welcome before the committee.

                  STATEMENT OF MASATOSHI ONO, 
      CHIEF EXECUTIVE OFFICER, BRIDGESTONE/FIRESTONE, INC.

    Mr. Ono. Chairman McCain and Senator Hollings and members 
of the Committee, as the Chief Executive Officer, I come before 
you to express my deep regret and the sympathy to you and the 
American people and especially to the families who have lost 
loved ones in these terrible auto accidents.
    I also 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 tragic. 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. We are committed to resolving this situation and 
regaining the trust of our customers. My experience last week 
suggested that my problems with English may have limited our 
ability to explain important issues to you and the American 
people. So I would ask that our remarks be completed by our 
Executive Vice President, Mr. John Lampe.

STATEMENT OF JOHN LAMPE, EXECUTIVE VICE PRESIDENT, ACCOMPANIED 
               BY BOB WYANT, VICE PRESIDENT FOR 
         QUALITY ASSURANCE, BRIDGESTONE/FIRESTONE, INC.

    Mr. Lampe. Mr. Chairman, Senator Hollings, members of the 
committee, with your permission, my name is John Lampe. I am an 
Executive Vice President with Bridgestone/Firestone.
    We want to thank you for calling this hearing. Last month 
on August 9, our company announced a voluntary recall of over 
14 million tires made over a 10-year period. We took this 
action out of concern for customer safety. We must and we do 
take full responsibility for the recalled tires and the things 
that we have done before August 9 and since.
    I firmly believe that we have been and will continue to be 
open and honest in these hearings and with the American public. 
However, I know that we have not been successful in 
communicating our most basic message, that our company and the 
thousands of employees who make up our company have a true and 
deep concern for consumer safety and customer satisfaction.
    We pledge to have open and transparent processes so that 
our customers, the Congress and the public can be confident 
that we have done the right thing now and will continue to do 
so in the future.
    I also know that we make great tire products on which 
millions of Americans have driven for billions of safe miles. 
But at the same time, gentlemen, I recognize and we recognize 
there is a problem, a very complex problem that must be solved 
because lives are at stake. And for too long we did not see the 
problem.
    The tire industry's traditional measures of product 
performance--test data, analysis of failed tires and warning 
adjustment data--told us that these tires were fine. And 
although we knew we had claims, and when we evaluated tires 
involved in these claims, we did not believe the statistics 
generated by those claims was a good indicator of tire 
performance and product performance.
    We believed until recently that the accidents and claims 
reported were simply part of supplying a large number of 
vehicles like the SUVs and light trucks. Our feeling was that 
the large population and vehicle characteristics alone 
explained these accidents and that was wrong. Our own data 
ultimately demonstrated that.
    In early August, with the assistance of Ford, a statistical 
analysis of our claim data was conducted that demonstrated that 
the tires are clearly part of the problem. When we fully 
understood this new analysis, we acted to get the tires off the 
road, even though we could not identify a cause or causes. We 
acted because each and every accident that causes serious 
injuries or death is devastating to us. And, Senator Frist, I 
am sorry for your loss as well, sir.
    Tire failure is a result. We must now focus on the cause. 
We have been working day and night to try to determine the root 
cause or causes of the tire problem. And finding that cause is 
made much more difficult because we are looking at a very small 
percentage of failures in an extremely large population of 
tires. But we believe we have narrowed the focus and believe 
the solution may lie in two areas, the unique design 
specification of the size P235/75R15 combined with variations 
in the manufacturing process at the Decatur plant. We are 
appointing Dr. Sanjay Govindjee, an independent, outside, 
completely independent, third party investigator to verify our 
work to date and to help us move to a more definitive solution 
on the tire piece of the puzzle.
    We take full responsibility, Senators, when a tire fails 
because of a defect. We firmly believe, however, that the tire 
is only part of the overall safety problem shown by these 
tragic accidents. If we are really concerned--and we are--about 
consumer safety, we will leave no stone unturned. There are 
other questions that still must be answered in this complex 
puzzle.
    The entire issue of tire inflation pressures selected by 
the vehicle manufacturer must be addressed. Does it provide an 
adequate safety margin to guard against damage caused by 
underinflation and overloading?
    For example, at PSI, at 26 pounds per square inch, the Ford 
Explorer has little safety margin to guard against overloading. 
That is one of the reasons that we have recommended 30 PSI for 
that vehicle. Problems can and do occur if the air pressure 
drops below the originally specified level.
    So what margin of safety should be required? Tires will 
fail. Dr. Bailey said it. Tires will fail and they do fail for 
a number of reasons. But in most cases, while experiencing a 
tire failure, the driver can bring that automobile under safe 
control.
    However, we have seen an alarming number of serious 
accidents from rollovers of SUVs after a tire failure. Federal 
data shows that there have been over 16,000 rollovers with the 
Ford Explorer causing 600 deaths. The tire failure has been 
involved in only a very, very small percentage of these deaths.
    But since we know a tire can fail and no death is 
acceptable, is there a dynamic test that can minimize the role 
of the tire in such catastrophic events? We believe that in the 
interest to public safety, one of the areas of focus for future 
valuations by NHTSA, by us, by the automobile industry, should 
be the interaction between the tire and the vehicle.
    The Senator has already talked about the Federal motor 
safety standards that were initiated in 1968. They do not 
address this vehicle population, a population which has 
exploded in the past 10 years. These issues have been difficult 
for us. We are not vehicle experts. And these issues may have 
made it harder for us to see that problems we had and that we 
now recognize in our tires. Or do we see the future?
    First, the tire industry, the National Highway Traffic 
Safety Administration and the auto industry need to work 
together to immediately detect and address tire problems and 
vehicle problems. We fully support the National Highway Traffic 
Safety Administration on reporting of overseas information 
regarding tire safety, revisions to the tire safety standards, 
developing early warning systems to quickly identify failure 
trends, dynamic testing to identify those vehicles which have 
tendencies to roll over and to design ways to address this. We 
support in-vehicle low pressure warning systems.
    We talk about inflation a lot. In-vehicle low pressure 
warning system. And we are in favor and would support 
increasing penalties for violations of safety laws and 
regulations. We also strongly believe in educating the public 
about the importance of tire maintenance. We have developed a 
comprehensive, multi-part program to better accomplish this 
which I can address in the questions and answers.
    Senators we are committed to take every step necessary to 
address these problems. We pledge our cooperation with this 
committee and with NHTSA to work to ensure the safety of all 
motoring public. All of our employees are committed to this. We 
recently were able to come to a successful labor agreement with 
the United Steel Workers of America. The United Steel Workers 
of America, who are represented in this room today, and their 
members will support and will help us overcome and accomplish 
what we have to do.
    As a tire manufacturer, we will continue to serve society 
with products of superior quality and work diligently to regain 
the trust of our customers. There are a lot of specifics, 
Senators, that I would have liked to have covered about the 
recall itself. But I am sure I will get the opportunity to do 
that in the question and answers.
    I would close by saying mistakes can be and are tragic. It 
is even more tragic not to learn by our mistakes and to prevent 
them from happening in the future. Mr. Chairman, thank you 
very, very much. And we welcome any questions that you may 
have.
    [The prepared statement of Mr. Ono follows:]

     Prepared Statement of Masatoshi Ono, Chief Executive Officer, 
                      Bridgestone/Firestone, Inc.
Chairman McCain, Senator Hollings and Members of the Committee:

    As Chief Executive Officer, I come before you to express my deep 
regret and sympathy to you, the American people and especially to the 
families who have lost loved ones in these terrible rollover accidents. 
I also 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 
tragic. Whenever people are injured while riding on Firestone tires, it 
is cause for great concern among Bridgestone/Firestone's management and 
our 35,000 American employees. We are committed to resolving this 
situation and regaining the trust of our customers.
    My experience last week suggested that my problems with English may 
have limited our ability to explain important issues to you and the 
American people. I would ask that our remarks be completed by our 
executive vice president, Mr. John Lampe.
                                 ______
                                 
      Prepared statement of John Lampe, Executive Vice President, 
                      Bridgestone/Firestone, Inc.
Chairman McCain, Senator Hollings, and Members of this Committee:
    We want to thank you for calling this hearing. It has been a new 
experience for us to be appearing before Congress, and probably for any 
company to be subject to such an intense Congressional investigation as 
has occurred over such a short period of time. But, we are greatly 
benefiting from this process to learn about our own mistakes, and to 
work with you, Members of the Committee, toward ensuring that our tires 
and all tires are as safe as possible.
    Firestone has manufactured hundreds of millions of safe tires for 
over one hundred years. Americans have driven billions of safe miles on 
safe Firestone tires. That is why this situation, with deaths and 
serious injuries, must be addressed and should never happen again.
    It is little more than a month ago, on August 8, that we met with 
the National Highway Traffic and Safety Administration and together 
reviewed the performance of tires that have been associated with tread 
separations. These accidents have primarily occurred on the Ford 
Explorer vehicle. We regret that almost 10% of those rollovers involved 
tire separations. In light of that fact, we announced a voluntary 
safety recall of 6.5 million tires.
    We are recalling those tires as quickly as possible. We are making 
every effort to determine why certain tires failed. So far, we have 
replaced 2 million tires. Although we sped up production, we cannot 
meet full demand. To help alleviate that problem, we are paying for 
competitor tires to act as replacements. We are reviewing every aspect 
of our manufacturing and control processes. We are making microscopic 
examinations of many recalled tires.
    We also are trying to work with Ford Motor Company to understand 
the cause. This has led us to understand a key point for the future. 
The government and others have tended to look at auto safety and tire 
safety separately. We believe that it is important to look at both 
issues together. Correct tires must be matched with vehicles; the 
mutual duties of tire manufacturers and automobile manufacturers must 
be made absolutely clear. If only it were possible to find a simple 
cause, such as certain tires made at a certain time and a certain 
plant, we would have resolved the problem.
    But, we cannot today provide you with a conclusive cause of our 
past problems. We will not rest until we determine the cause.
    We wish to take this opportunity to clarify some key points that 
were raised at last week's hearings.

   First, why didn't we immediately alert NHTSA and the 
        American public when incidents involving rollovers occurred in 
        Saudi Arabia?

   Second, why didn't we act on claims data and immediately 
        recall our tires?

   Third, did we encourage Ford to conceal information from 
        NHTSA relating to what occurred in Saudi Arabia?

   Fourth, did Ford have to ``pry'' information out of us 
        relevant to potentially serious or fatal injuries as a result 
        of rollover accidents?

   Fifth, are we going to make an additional recall of the 1.4 
        million tires suggested by NHTSA?

   Sixth, what speed tests did we conduct or not conduct, and 
        why?

   Seventh, what information have we learned about what went 
        wrong at our Decatur plant in 1995 and 1996?

    We will provide this Committee our best answers to these crucial 
questions.
    Perhaps left out of the klieg lights of last week's hearings, which 
focused on matters of the past, was the actions we will take now to 
assure the American public that Firestone tires are safe.
    First, we will appoint an outside, independent investigator to 
assist in tire analysis and determine the root cause of the tire 
problem. This investigator will help assure you and the American public 
that Firestone tires are reliable now and in the future.
    Second, we will fully cooperate with this Committee about tire 
safety. We will release data and information in order to assure 
consumer safety with our products.
    Third, we are accelerating a rollout of a nationwide consumer 
education program. If there is any good that has come out of this very 
bad situation, it is the need for the American people to be fully 
informed about tire safety. Our education program will take place in 
almost 7,000 company stores and Firestone dealers. It will provide 
everyone with information about proper tire maintenance and safety. We 
will use in-store videos, showroom displays, brochures, windshield tire 
pressure reminders, and tire pressure gauges. We will strive to assure 
that all consumers understand the safe use of tires.
    Fourth, we pledge to continue to work with NHTSA toward developing 
better ``early warning systems'' about tire safety. We commend NHTSA 
Administrator Bailey for her suggestions. We will inform NHTSA about 
recalls that occur in foreign countries. We will work with NHTSA to 
develop an in-vehicle system to alert drivers about tire pressure.
    Fifth, we will work with this committee to develop any necessary 
legislative remedies that will assure to the American public that their 
tires and vehicles are safe. The distinct roles of tire and vehicle 
manufacturers regarding safety need to be brought together, rather than 
looked at separately. We will work with you to bring this disconnect to 
an end.
    With us today are some leaders of our union workers. We stand 
united as we work together to assure millions of families that have put 
their trust and faith in Firestone that, now and in the future, we will 
manufacture the safe tires that every consumer can trust. Mistakes can 
be tragic, but it is more tragic not to learn from them. We will work 
with you in this hearing and in the future to achieve that goal.

    The Chairman. Thank you, Mr. Lampe. For the record, would 
you state your formal relationship with Bridgestone/Firestone?
    Mr. Lampe. Yes, sir. I am an Executive Vice President with 
Bridgestone/Firestone. And my specific responsibilities are I 
am in charge and responsible for our sales in the after market, 
not to OE, but in the after market. And, Senator McCain, may I 
ask that we be joined, if we may, by Bob Wyant who is our Vice 
President for Quality Assurance?
    The Chairman. He would be welcome. Mr. Wyant, if you would 
like to.
    Mr. Wyant. Thank you, Senator.
    The Chairman. Take a seat at the table. My first question 
is Bridgestone/Firestone has repeatedly stated that it was not 
aware of a problem with the tires subject to recall until 
August of this year. However, in a September 9, 2000, article, 
The Washington Post reported an ample documentation existed of 
multiple warnings to your company of a possible defect, 
including a mid-1998 report that showed a dramatic increase in 
customer claims relating to tread separation in the tires that 
are now subject to recall.
    Additionally, annual Firestone reports on claims data 
indicated a dramatic increase in claims in 1998 and 1999. Did 
not the increased number of claims in conjunction with the 
problems you were having overseas give you some indication that 
you were having a problem?
    Mr. Lampe. Senator McCain, I think it is very important 
that I start off by explaining when we talk about claims 
because there will be a lot of questions on claims. Claims for 
us and for NHTSA are represented really by three different 
distinct pieces. One is product damage claims. And that makes 
up the overwhelming majority of the total claims number when we 
look at that. We also have personal injuries and we also have 
lawsuits.
    Senator McCain, I would like to address the property damage 
part of that. It is the overwhelming piece of numbers. Senator 
McCain, our business--and I guess I have to say the support 
from our customers over the last 7 years--has been 
overwhelming. We have actually doubled, more than doubled, our 
sales in the last 6 years. We would have expected our claims 
numbers in absolute numbers to rise. We would have expected the 
dollar amount of our property damage claims to arise. But, 
Senator, the mistake we made is that we never used claims data 
as an indicator of tire performance.
    The Chairman. Why not?
    Mr. Lampe. We used--and we do not have any excuses other 
than to say we used the traditional and the more approved, 
proven methods that I believe the industry uses. And I cannot 
speak for everybody. But we use things like adjustment data, 
tires coming in that we see and we touch. We use field surveys 
to go out actually to the field. We used testing. We used those 
because they were traditional. And then all of a sudden, we 
have this claims information. And when we did this analysis 
with--believe me--with the help of Ford--Ford did most of the 
analysis--we see that it clearly pointed out that we had some 
problems in certain areas.
    The Chairman. Ford executives allege that they became 
suspicious of a potential problem with Bridgestone/Firestone 
tires in foreign markets and that Ford requested data that you 
may have then possessed confirming their suspicion. They say 
that in response you only provided warranty adjustment data 
which showed no sign of problems, and not claims data, which 
would have indicated a problem. Is that true?
    Mr. Lampe. Senator McCain, we have supplied Ford over the 
years any technical data, engineering data, that they have 
requested. Ford never requested, to the best of my knowledge--
and we have had this conversation within my company--Ford never 
requested claims data until the middle of this year, June or 
July. We had been requested by NHTSA to supply that claims data 
as well. We were putting it together for NHTSA. We supplied it 
to NHTSA in July. And within 2 to 3 weeks after that, we 
supplied it to Ford. I have absolutely no knowledge of any 
requests for claims data prior to that from Ford.
    The Chairman. My time has expired. Senator Hollings.
    Senator Hollings. That has to do with the claims. How about 
lawsuits? I notice now you will inform NHTSA about the recalls 
that occur in foreign countries. What is the position now of 
Bridgestone/Firestone on the actual lawsuits? You are right. A 
lot of these claims are with respect to the warranty. But when 
you get a lawsuit, you have got usually property damage, 
injury, maybe a death.
    Mr. Lampe. Yes, sir.
    Senator Hollings. Will you also go along with notifying us 
about the lawsuits? Because that to me rather than seal the 
records and not let anybody know which they claim the lawyers 
or the judges or the system requires or allows. What about you 
yourself, Bridgestone/Firestone? Would you go along with us now 
in letting us have the information with respect to lawsuits?
    Mr. Lampe. One hundred percent, Senator Hollings. And let 
me do mention, there has been one of the Senators in the 
opening remarks talked about gag orders. And I need to explain 
this. We have never, ever asked for a gag order on any trial 
proceedings or litigation unless it involved trade secrets 
which does require a Judge to issue a formal court order. And 
when he does that, we ask for protection on trade secrets, and 
the amount of settlement between the two parties. That is the 
only thing that we have ever asked for, confidentiality on 
litigation. And we have supplied all of that information to 
NHTSA. And we will to you, Senator Hollings.
    Senator Hollings. Are you saying the claimant's attorney is 
the one that has been requesting that?
    Mr. Lampe. No, sir. I am not saying that at all. I am not 
saying that at all.
    Senator Hollings. That crowd loves publicity.
    Mr. Lampe. I am not saying that at all.
    Senator Hollings. They get a big verdict or a big 
settlement, you cannot keep their mouth shut at the club. That 
is all you hear about for a week. Well, who is claiming that we 
ought to have the gag order? Not the judge.
    Mr. Lampe. No, sir. No, sir. Please, I will explain. We 
have asked for confidentiality on only two things in all of our 
litigation. One is trade secrets. And one is the amount of 
settlements. Sometimes that is our request. Sometimes it is a 
joint request by the plaintiff. But we have supplied all that 
information and will continue to supply that information with 
the plaintiff's admission to NHTSA and to the hearings, believe 
me, sir.
    Senator Hollings. Now, we have had some 88 deaths, 250 
injuries. And you take a whole paragraph of your statement 
here, a third, that we will strive to assure that all consumers 
understand the safe use of tires. Intimating, of course, that 
there has been some unsafe use of tires. Can you tell me in the 
88 deaths or 250 injuries the example of the unsafe use of 
tires?
    Mr. Lampe. Senator Hollings, and please the rest of the 
Senators, we are not trying to blame the public. We do believe 
that we should as an industry have been doing a better job on 
educating the public. Tire maintenance, Senator Hollings, is 
extremely important, extremely important. Tire inflation is 
critical, critical, to the performance and the durability of 
the tire.
    Senator Hollings. Is there some dispute about that 
inflation, that should have been in these rollover deaths or 
claims or injuries? Is there a difference between you and Ford 
with respect to that tire pressure?
    Mr. Lampe. Sir, when the original tire pressure was 
established and it was selected by the manufacturer, we as a 
tire manufacturer agreed with that inflation pressure. And we 
started to see some----
    Senator Hollings. What was that?
    Mr. Lampe. It was on the Ford Explorer specifically, sir. 
It was 26 pounds front and rear. When we began to see, looking 
at the claims data, the number of incidents, the number of 
rollovers and so forth, we went to Ford and told them that we 
would like to recommend 30 pounds of air pressure which we 
think give a better safety margin. And Ford did agree to have a 
range of inflation between 26 and 30 pounds.
    Senator Hollings. Thank you, Mr. Chairman.
    The Chairman. Thank you, sir. Senator Snowe.
    Senator Snowe. Thank you, Mr. Chairman. Mr. Lampe, does 
Firestone still maintain that the defective tires are 
essentially manufactured in Decatur's plant?
    Mr. Lampe. I am sorry, Senator Snowe. That the defective 
tires are manufactured----
    Senator Snowe. Right.
    Mr. Lampe. There were two sets, two parts, of the recalled 
tires, Senator Snowe. One was ATX's that were produced in a 
number of plants primarily in Decatur, but in a number of 
plants. Those are all being recalled. And then specifically, 
the Wilderness AT that was produced in the Decatur plant is 
also part of that being recalled.
    Senator Snowe. There are a number of plants involved.
    Mr. Lampe. In the ATX, the older tires, yes, ma'am.
    Senator Snowe. A report that was issued yesterday indicated 
the Wilderness tires that the tread separation increased 194 
percent between 1998 and 1999. Is that something that your 
company would have been aware of at the time?
    Mr. Lampe. Yes, it should have been--it was something that 
our company was aware of at the time. Again, and it is hard to 
put it in perspective unless we measure--and I wish I had that 
information for you. And I will provide it for you. If we could 
measure and show you the amount of separations on the 
Wilderness compared to our sales or compared to our production, 
that line, that Wilderness line, was introduced in 1996. It is 
one of the biggest lines we have ever made and sold. It went on 
the Ford Explorer. It is a huge population of tires. For our 
absolute numbers to have increased 196 percent to me does not 
say anything if we do not compare it to what the population 
was. And I will get you that information.
    Senator Snowe. How do fatalities figure into that 
decisionmaking with respect to tread separation?
    Mr. Lampe. Fatalities are a tragedy. One is not acceptable. 
One is not acceptable. And we had individual cases of 
fatalities that we looked at. We examined the tire. We did 
everything we could to make sure that tire did not have a 
problem that could have contributed to that. But obviously, 
Senator Snowe, as I said, we have made some bad tires. And we 
take full responsibility for that.
    Senator Snowe. It was indicated in one story that more than 
4 years before Firestone gave Ford Motor Company or Federal 
regulators any hint of a problem with its tires for sport 
utility vehicles, the company's engineers had been alerted by 
the State of Arizona that their tire treads tended to separate 
in hot weather.
    Mr. Lampe. Senator McCain, I thought you might be 
interested in the State of Arizona. You want me to write the 
answer?
    The Chairman. And I am also interested in salvaging my 
tattered voting record. So I will be back.
    Mr. Lampe. We can repeat the answer for Senator McCain. 
Yes, there was in 1996, Senator Snowe, there was a request by 
the Fish and Game Department or Wildlife and Park Department in 
Arizona to come out and look at a number of tires that they 
were not happy with. We did go out and we surveyed a number of 
tires. We sent out six engineers. Senator Snowe, in the case 
of--in the 1996 case, we found many, many passenger tires, 
regular passenger service tires on their vehicles which as 
their name would imply, Wildlife and Parks, were used in much 
off the road conditions. We went through a number of tires and 
found not one tire, not one tire, that had a defect that would 
have been adjusted. The tire was not proper for the 
application. We took those tires off. We gave them credit. And 
they used that credit to buy a special service truck tire from 
us to put on their vehicle. I do not believe that the 1996 
thing had anything to do with--to the best of my recollection 
of what I've been informed--has nothing to do with tread 
separation.
    Senator Snowe. Has the company responded to NHTSA's 
requests for all of the documents?
    Mr. Lampe. Yes, ma'am. It has. And I heard Dr. Bailey 
mention that she does not have the Arizona document. And I have 
made a note. And I will commit to you and the committee that if 
she does not have that, if that was not in our submission, that 
we will get that information--if that information is available, 
we will get that to her.
    Senator Snowe. So the company's not withholding any 
documents that have been requested by NHTSA.
    Mr. Lampe. Absolutely not, Senator Snowe.
    Senator Snowe. None whatsoever.
    Mr. Lampe. Absolutely not.
    Senator Snowe. So it is not necessary for them to use their 
subpoena power?
    Mr. Lampe. Absolutely not, Senator Snowe.
    Senator Snowe. Thank you.
    Senator Bryan. Thank you very much, Senator. Let me try to 
get a handle on the term, ``We made some bad tires.'' I believe 
that is the language you used, Mr. Lampe. Am I correct on that?
    Mr. Lampe. Yes, Senator.
    Senator Bryan. And are bad tires to be equated with tires 
that have defects of some kind?
    Mr. Lampe. Yes, sir.
    Senator Bryan. Now, what tires do you acknowledge have 
defects?
    Mr. Lampe. Sir, we made a very small percentage of tires in 
our Decatur facility with the Wilderness AT that we believe 
could pose a safety problem.
    Senator Bryan. Now, are the ATX, the ATXII, different than 
the Wilderness tires? We have been led to believe that there 
may be some difference. Help us to understand what we are 
talking about.
    Mr. Lampe. Yes, sir. The ATX--and I am sorry, the whole 
ATX, ATXII thing got confused. We only have one tire, the ATX. 
We at one point in time changed the designation internally for 
ATXII, but it still says ATX on the tire. So there is really 
one tire. That tire was introduced in mid- or late 1980's and 
was produced and supplied as original equipment up through 1995 
and the beginning of 1996. It was discontinued for original 
equipment, replaced by the Wilderness. We did continue to 
produce smaller amounts of the ATX in our plants for the 
replacement market.
    Senator Bryan. So again, ATX and ATXII are one and the same 
tire.
    Mr. Lampe. ATX and ATXII are one and the same tire, sir.
    Senator Bryan. And Wilderness, that would be a separate 
tire run? Is that correct?
    Mr. Lampe. Yes, the Wilderness AT was a separate tire.
    Senator Bryan. So we are really dealing with two different 
tires.
    Mr. Lampe. Two different tires, one size.
    Senator Bryan. Now, do you acknowledge that there are 
defects in the Wilderness tires?
    Mr. Lampe. Sir, we acknowledge safety problems and defects 
in a very small percentage of the Wilderness tires that were 
produced in Decatur, yes sir.
    Senator Bryan. So there is some agreement that there are 
defects in the ATX and the Wilderness tires.
    Mr. Lampe. Yes, Senator.
    Senator Bryan. Now, safety advocates have urged that there 
be a recall of all of these tires in light of the uncertainties 
and the concern of the public. Let me just say people are 
really frightened, Mr. Lampe. They have read these articles. 
They have seen television accounts. They know generally that 
people have died as a result of problems and others have 
received injuries on an ongoing basis. Would it not be the 
corporate responsible thing to do to simply issue a recall of 
all of these tires, both the 15 inch as well as the 16 inch.
    Mr. Lampe. Sir, I would not think that--I do not believe 
that would be responsible. And, sir, I think it would be 
counterproductive to be replacing good tires with good tires. 
Right now we have a task ahead of us to replace 6.5 million 
tires. We have only replaced two million. I say only even 
though it has been a month. We have four million tires to 
replace. Anything that would interfere with that task before us 
to replace those four million tires to me, sir, would be an 
injustice.
    Senator Bryan. And so it is Bridgestone/Firestone's 
position that they are not going to expand the recall.
    Mr. Lampe. At this time, no sir.
    Senator Bryan. Now, I think I understood you to say, and 
correct me if I'm wrong, Mr. Lampe, that you first became aware 
of the defects in July of this year? If I have mischaracterized 
your testimony, let me make sure that I give you an opportunity 
to correct my statement. I thought I understood you to say, if 
I heard you incorrectly, tell me when you first became aware of 
the defects.
    Mr. Lampe. Sir, we first became aware of the safety problem 
when Ford analyzed our claims data, statistically analyzed it. 
And they spent a lot of time and a lot of resources to do this.
    Senator Bryan. And when was that?
    Mr. Lampe. This was to the best of my recollection, sir, it 
was early August. Early August.
    Senator Bryan. Of this year.
    Mr. Lampe. Of this year, sir.
    Senator Bryan. Well, I think what we find so incredulous 
about that is that we have had a whole series of recalls 
beginning in Saudi Arabia in 1999 in August. Let me ask you in 
terms of knowledge, were you aware of those recalls that 
occurred in August 1999 in Saudi Arabia?
    Mr. Wyant. Might I answer that question?
    Senator Bryan. Yes. I think the answer could be yes or no. 
If you did not know, that is fine. But, yes sir. Mr. Wyant, I 
think it is. Were you aware of that?
    Mr. Wyant. The Saudi Arabia action was known to us. We in 
fact had joint studies.
    Senator Bryan. Again, my time is limited. So the answer 
would be yes, sir, that you did know about the recall.
    Mr. Wyant. Yes.
    Senator Bryan. And that was August 1999. And again, I take 
it that you may have been aware then of the Malaysia, Thailand, 
Venezuela, Columbia, Ecuador recalls all of which predated the 
August, 2000 recall notice here in the United States. Would 
that be correct as well?
    Mr. Wyant. Well, first of all, these customer actions were 
actually generated by the Ford Motor Company.
    Senator Bryan. I understand that. But, Mr. Wyant, we are 
trying to get the facts. I mean, you were aware of it.
    Mr. Wyant. Yes.
    Senator Bryan. So as the lawyers would say, you would be 
charged with--there was a whole series of recalls, whether you 
did it or Ford did it, but these tires are being recalled. And 
you did have knowledge of each of these I take it.
    Mr. Wyant. We had knowledge of these, but very limited 
knowledge in the Malaysia area. But the other two, we had 
knowledge. And those actions on the part of Ford were because 
of the local service conditions.
    Mr. Lampe. Senator Bryan, we were aware that Ford was 
making a customer satisfaction exchange.
    Senator Bryan. Well, let me just simply say that I think I 
would charge you with notice that there is a serious problem. 
There are a half a dozen countries that are involved here. And 
what we find to be troublesome, and I want to give you an 
opportunity to respond. You are all aware of this Ford 
memorandum that has been produced which would indicate if 
true--and we want to get your response to this--that at the 
time these recalls were being discussed, Firestone objected 
because they were concerned that to issue such a recall would 
impose upon them a burden to notify U.S. DOT or NHTSA. Now, the 
clear inference of that is that you were trying to conceal and 
hide this information.
    This is Ford's memo. Let me understand what your 
interpretation of your actions are.
    Mr. Wyant. Senator, that particular notification that you 
read dealt with an engineering judgment in Saudi Arabia. After 
the surveys and analysis of the data and these extreme 
conditions in Saudi Arabia, it was an engineering judgment that 
there was not a tire defect involved with it.
    Second, the conversation that you referred to with 
conversation in our organization to the sales company that that 
was an issue that should be discussed. That was not a warning 
sign or anything of that sort to the Ford Motor Company.
    Mr. Lampe. Senator Bryan, if I may too, just one quick 
comment to point out.
    Senator Bryan. Yes.
    Mr. Lampe. The survey that we did in Saudi Arabia, we did 
it jointly with Ford. And it was jointly agreed that the tires 
in Saudi Arabia that we were looking at were failing--the ones 
we saw were failing due to the extreme conditions--extreme 
conditions. And that was agreed upon with Ford.
    Senator Bryan. Mr. Lampe, I guess the question did 
Bridgestone/Firestone agree that the tires should be recalled?
    Mr. Lampe. No, sir. We did not.
    Senator Bryan. They did not. So Ford took a position with 
which you disagree.
    Mr. Lampe. Yes, sir.
    Senator Bryan. And is that true with respect to the other 
recalls that we have in Malaysia, Thailand, Venezuela, Columbia 
and Ecuador?
    Mr. Wyant. We have no knowledge of the basis of that in 
that--well, in the Malaysia, Thailand area, we had very limited 
information. We did have some knowledge of it certainly. But I 
do not know the basis of that particular action. In the 
Venezuela arena, they did take action similar, I believe, to 
what was taken in Saudi Arabia.
    Senator Bryan. Would it be correct to assume that in some 
instances you are saying you had no knowledge with respect to 
Venezuela? You did not know the date upon which they based it. 
But in any event, you did not affirmatively as a company concur 
or agree with the recalls in these other countries.
    Mr. Wyant. That's correct.
    Senator Bryan. Well, I mean, you have got a company like 
Ford Motor Company? They are in business to make a profit. And 
that is not a dirty word in America. Would that not suggest to 
you that if they were initiating these recalls, that we have 
got now several countries that you were aware of. Does that not 
elevate or heighten your concern that, ``Hey? We may have a 
problem here?''
    Mr. Wyant. Senator, I am trying to clarify that in those 
two arenas, Saudi Arabia and Venezuela, we did not participate 
because there was no indication of a tire defect.
    Senator Bryan. I understand you didn't participate. But 
that is not my question. My question is that Ford Motor Company 
decided to recall those tires. They do not just do that without 
some great reason for doing so, one has to conclude. My point 
is does that not place the company with some affirmative 
responsibility to say, ``wait a minute if Ford is recalling 
these tires, even though we may not disagree, we have got a 
real problem here.''
    Mr. Wyant. Sir, due to the local conditions, there is 
always the question of ``Is this an appropriate tire?'' The 
tires that were removed from the market, are those appropriate 
tires for that market? And that is part of the consideration or 
issue that Ford has to deal with.
    Senator Bryan. But I take it that these tires were sold in 
American markets, am I correct? The tires that were sold in 
Saudi Arabia. The tires that were sold in Venezuela that you 
acknowledge that you had some knowledge of. Those were the same 
tires that were sold in the U.S. were they not?
    Mr. Wyant. The Venezuelan situation, the tires there that 
were from the U.S. market were extremely small.
    Senator Bryan. Not the same tires.
    Mr. Wyant. Pardon?
    Senator Bryan. Not the same tires then.
    Mr. Wyant. Most of those tires are actually produced in 
Venezuela for the local Venezuelan market.
    Senator Bryan. But, Mr. Wyant, I think, you know, let us 
not go into these nuances. Are they the same tires or not? If 
they are not the same tires, then we have got a different 
situation. It is not a question of where they are produced. Are 
they the same tires, the ATXs or ATXII, which I understand is 
one and the same, the Wilderness, are those the same tires that 
were being sold in the U.S.?
    Mr. Wyant. In the case of Venezuela, they are not the same 
tires.
    Senator Bryan. They are not the same tires. How about Saudi 
Arabia?
    Mr. Wyant. In Saudi Arabia, the tires and vehicles were 
exported to Saudi Arabia and they are USA produced tires.
    Senator Bryan. My point being we do live on one planet. I 
happen to come from a State, as does our distinguished 
Chairman, in which we get temperatures in the summertime that 
very closely approximate the kind of driving conditions that 
one would have in Saudi Arabia. My point being it strikes me 
that we had some affirmative obligation on your part. I know we 
have gone into this. My last question, Mr. Chairman, because I 
am going to have to slip away and vote too, is you have 
indicated, I think, Mr. Wyant, that you have provided all 
documents that NHTSA has requested. My question is a little 
different. Are you prepared at this point to disclose all 
documents, memos, correspondence, any type of communication, 
that you have had either internally with Ford or any other 
company, or with your customers that you have in your corporate 
files?
    Mr. Wyant. That is certainly correct. If I may clarify one 
issue if you will, sir.
    Senator Bryan. Yes.
    Mr. Wyant. Particularly on the Saudi Arabia situation, I do 
not believe that those conditions of operation there are 
comparable to the United States. It is common practice in Saudi 
Arabia to let substantial amounts of air out of your tires when 
you go out into the desert. And there is not too much 
availability of air when you come back in. There is also 
substantial puncture. And there are tire failures, substantial 
tire failures, in that environment. But the environment is much 
more severe than it is in the United States.
    Mr. Lampe. Senator Bryan, to answer your question, we will 
make all documents available to NHTSA.
    Senator Bryan. And will you do so voluntarily?
    Mr. Lampe. Yes, sir.
    Senator Bryan. In other words, it is not a question of 
whether or not the question is precisely asked. You are saying 
any document, any kind of correspondence, memorandum, you will 
make that available and do so. And would you also make that 
available to the Committee?
    Mr. Lampe. Yes, Senator.
    Senator Bryan. And I thank you very much, Mr. Lampe, Mr. 
Wyant, Mr. Ono. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Bryan. You wanted to tell 
me about Arizona.
    Mr. Lampe. The question was asked as you were leaving, 
Senator, about Arizona. There was a report that in 1996, we had 
a request from one of the government agencies in Arizona--I 
think it was the Arizona Parks and Recreations Department--to 
come out and take a look at some tires that they were not happy 
with. We went out, surveyed the tires. We sent out six 
engineers and found that the majority of the vehicles were 
using passenger, normal passenger type, product. Even though 
they did a lot of off the road and fairly heavy service type 
duty. We examined the tires, did not find one single tire that 
would be adjustable under material defect or workmanship. But 
we went ahead and we replaced the tires. We gave credit to the 
department. And they turned around and used that credit to buy 
heavy duty special service tires from us for their vehicles. 
And that was the 1996 Parks and Recreations Department event.
    The Chairman. Well, I thank you for that. I think that many 
automobile owners in Arizona who were using Bridgestone/
Firestone tires would have liked to have known about your 
recall in Saudi Arabia as well. I thank you for appearing. 
Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. I appreciate it. My 
apologies to the witnesses since we had a vote. One followup 
question if I might, Mr. Lampe. You told Senator Hollings that 
Firestone only seeks confidentiality for trade secrets and the 
size of the verdicts. Therefore, would Firestone support a 
requirement that NHTSA be notified of lawsuit settlements 
involving claims of safety problems with your tires?
    Mr. Lampe. Yes, Senator. We would.
    Senator Wyden. Question for Mr. Ono if I might. And I 
understand that we have assistance for this. Mr. Ono, only 
about 2 million of the 6.5 million tires covered by the recall 
have now been replaced. So there is a recall that has been 
going on for a month now. Do you find it acceptable that after 
a month we still have potentially millions of tires that may be 
deadly still on the roads?
    Mr. Ono. As far as replacing two million tires in 1 month, 
I am not satisfied with that. We have doubled the production 
capacity of our factories domestically. And we have--that is 
over the production level at the beginning of August. And also, 
we have doubled the production of tires in Japan so that 
customers can receive the replacement tires. We are airlifting 
tires from Japan. So we are doing all that we can. And there is 
no precedence to this, but in our industry we are having 
customers replace their tires with our competitors' tires such 
as Goodyear, General and Michelin.
    Mr. Lampe. Senator Wyden, if I could, sir. I think the 
point about the competitors' tires, it was after the recall was 
announced when certainly we knew we did not have enough local 
production on our own and Mr. Ono asked me the next day after 
August 10 in fact to contact our competitors. And I personally 
contacted a number of our major competitors who were very 
supportive, and increased their production tremendously on this 
size. And we can avail ourselves to the competitor tires as 
well.
    Senator Wyden. Well, I will say, as I did in my opening 
statement, I'm especially concerned about this. My State is one 
of those in the rear with respect to the recall. And Oregonians 
are very troubled about the prospect that it may be well into 
next year. It is just critically important to me that this be 
expedited. I want to hear about a time table that is 
considerably sped up.
    Mr. Lampe. Senator Wyden, I agree with you. But believe me, 
Oregon is not being snubbed. We started replacing tires in 
every state the day we made the announcement. We did not say 
that we were going to do these states and these states and 
these states. All we said was we were going to try to 
prioritize some of the production for the states that had the 
highest incidence. You, Senator, are very fortunate. You have a 
very large, very successful dealer in Oregon. And in 
Washington, Senator Gorton had the same question. Les Schwab, 
who has told us last week that he alone--he alone--in his 
stores has changed over 120,000 tires just that one dealership. 
So I think we are making good progress. Is it good enough? It 
will never be good enough, Senator. But good progress in the 
State of Oregon.
    Senator Wyden. Because I was out of the room, I am not sure 
if this question was raised. But, as you know, the newspapers 
this morning talked about significant management changes in the 
United States with respect to Firestone. Can you tell us any 
more about what is going to be pursued in that area?
    Mr. Lampe. Senator, I cannot. I read that myself this 
morning and I will have to get back to my office just to make 
sure it is still there.
    Senator Wyden. Mr. Chairman, thank you.
    The Chairman. Thank you. Thank you for appearing before the 
Committee today.
    Mr. Lampe. Thank you, Senator McCain.
    The Chairman. Now we would like to hear from Mr. Jac Nasser 
who is the Chief Executive Officer of Ford Motor Company. Mr. 
Nasser, thank you for your patience. I apologize for the breaks 
required by roll call votes. Your complete statement will be 
made part of the record. But please take as much time as you 
wish to illuminate the committee. Welcome.

 STATEMENT OF JAC NASSER, CHIEF EXECUTIVE OFFICER, FORD MOTOR 
                            COMPANY

    Mr. Nasser. Thank you, very much. Good afternoon, Chairman 
McCain, Senator Hollings, and Members of the Committee. I 
appreciate this opportunity to update you and the American 
people on the Firestone tire recall. But before I discuss the 
Firestone tire recall, I would like to say a brief word about 
the Ford Motor Company if I may.
    Ford Motor Company is a company that throughout its history 
has in its strength been its employees and its customers. I 
have been with the Ford Motor Company for over thirty years. I 
started as a trainee in Fort Australia. And I am honored to 
lead this company into the 21st Century as we look after our 
customers going forward.
    I think as we have heard this morning in particular and 
last week, you and the public have questions regarding the 
Firestone recall. I am here to answer those questions. And I 
will remain here until the Committee is satisfied.
    We have had some good discussion this morning. And I think 
it did get to the heart of the issue. And that is when did 
people know there was a problem with the Firestone tires? What 
have we done about it so far? And where are we heading in the 
future? And I appreciate the comments from many of the Senators 
who really concentrated on what do we all do collectively going 
forward?
    Let us start with when did Ford know that there was a 
problem with the Firestone tires. I think it is worth repeating 
that because tires are the only component of any vehicle that 
are separately warranted, Ford did not know that there was a 
defect with the tires until we virtually pried the claims data 
from Firestone's hands in late July, early August, and analyzed 
it ourselves.
    It was only then--and that was only a few days before the 
recall was announced--that Ford engineers found conclusive 
evidence at that point that the tires were defective. We then 
demanded that Firestone pull the tires from the road.
    I must say that as we look back, the first signs of this 
problem developed in Saudi Arabia when our dealers reported 
complaints about certain Firestone tires. At that time, we 
immediately asked Firestone to investigate. Firestone did so. 
And they told us that the tread separations were caused by 
improper maintenance and road hazards. And I think you heard 
some of that earlier in the discussions with the Committee. And 
they said that those particular complaints were unique to that 
environment.
    At that point, we weren't convinced by those explanations. 
So we asked Firestone to conduct additional tests on the tires. 
And I must say that after each and every test, Firestone 
reported that there was no defect in the tires. This did not 
satisfy our Saudi customers. So we replaced the tires about a 
year ago.
    I should add that at about the same time, we wanted to know 
if our U.S. customers were having similar tire problems. And 
earlier last year, we asked Firestone to review its U.S. data 
in general. And we were assured by Firestone that there was no 
problem in this country regarding Firestone tires.
    When he went back, our data, the government safety data and 
you heard from Mr. Slater and Ms. Bailey this morning, did not 
show anything either. Despite this, we asked Firestone for one 
more test. And Firestone examined tires in a special study in 
Texas, Nevada and Arizona. And they reported back as before 
that there was no defect to be found.
    As you know, contrary to those repeated assurances, we 
later learned a very different story from Firestone's 
confidential claims data. And when we did, at that point in 
August of this year, we insisted that Firestone recall the 
defective tires.
    Although I take no personal or professional pleasure in 
saying it, Firestone failed to share critical claims data with 
Ford that might have prompted the recall of these bad tires 
sooner. And I should say that last week I listened in disbelief 
as senior Firestone executives not only acknowledged that 
Firestone had analyzed its claims data, but also identified 
significant pattern of tread separations as early as 1998.
    Yet, Firestone said nothing to anyone, including the Ford 
Motor Company. This is not the candid and frank dialog that 
Ford expects in its business relationships. And after 
Firestone's testimony last week, we expressed Ford's profound 
disappointment to the head of Bridgestone/Firestone in Japan.
    It has been said before this morning, my purpose is not to 
finger point, but simply to tell you that at each step Ford 
took the initiative to uncover this problem and find a 
solution. We agree that we--everyone--needs to do a better job 
in this area. And looking back if I have one regret, looking 
back on all of this, it is that we did not ask Firestone the 
right questions sooner.
    What have we done so far? As I said earlier, we started by 
insisting that Firestone recall the bad tires. And to encourage 
and even prod Firestone to take immediate action, Ford offered 
to share the cost of the recall. And we also requested the use 
of competitors' tires.
    I then made a public commitment to our customers that Ford 
would dedicate its resources to support the Firestone recall. 
And in just 4 weeks--this is probably one of the fastest 
recalls in history--in just 4 weeks, over two million tires 
have been replaced. And we have worked very closely together 
with the rest of the global tire industry to increase tire 
availability.
    As mentioned earlier, we shutdown production at three Ford 
plants to free up replacement tires that can be sent to our 
dealers for our customers. And just days ago, I extended the 
shutdown to free up even more replacement tires. This is all 
encouraging, but it is not good enough because we need to look 
forward.
    And what do we need to do as we go forward? Mr. Chairman, 
there are almost three million Goodyear tires on Ford Explorers 
that have not had a tread separation problem here in the U.S. 
market. And data compiled by the Department of Transportation 
shows that the Explorer has a safety record that is second to 
none, particularly when you compare it to the average passenger 
car and competitive sports utility vehicle.
    So based on these facts, and that's what we need to be 
driven by here, based on these facts, we know that this is a 
Firestone tire issue, not a vehicle issue. But regardless, we 
have got to all prevent this from happening again.
    Last week, I announced that Ford would develop an early 
warning reporting system with tire companies that provides 
information on real world performance of tires. Since last 
week, we have actively pursued this particular idea with our 
tire suppliers and we have been very encouraged by their 
reaction.
    I also announced that Ford would provide the Federal safety 
agency and its counterparts in other countries information on 
our safety actions around the world. And we will do this in 
advance of legislation that is pending. And from this point 
forward, when we know something, so will the world in terms of 
safety defects.
    In addition, this was mentioned also earlier, I have 
requested that Ford's product development experts look into the 
feasibility of a dashboard indicator for future models which 
would alert customers to a potential tire problem. I can also 
announce to you today that later this year, beginning with our 
new Explorer, we will offer our customers a choice of tires.
    Mr. Chairman, I want you and our customers to know that we 
at Ford will not rest until every bad tire is replaced. And I 
will do everything in my power as President of the Ford Motor 
Company to maintain the confidence and trust of our customers. 
Thank you. And I would be pleased to answer any questions at 
this time.
    The Chairman. Thank you, Mr. Nasser. According to a New 
York Times article yesterday, Ford was informed of this problem 
as early as September 1998 by one of its own executives in a 
memo detailing problems with tread separation, Saudi Arabia, 
Oman, Venezuela. Then there was another memo--written by an 
executive in Venezuela, January 12, 1999 that suggests Ford 
officials in that country were aware of the problem of 
Firestone tires shedding their tread and causing accidents. The 
existence of these memos raises questions about when Ford Motor 
Company knew of this problem. I would like you to respond to 
that.
    Mr. Nasser. Mr. Chairman, let me take the Middle East 
market and Venezuela because they are very different. They are 
different tires, different markets, different vehicles. In 
Venezuela, a very confused situation. Seventy-five percent of 
the tires in Venezuela are locally manufactured. They are a 
different tire as Firestone had indicated. There was 
mislabeling of tires, tires that did not meet the appropriate 
specification. And in Venezuela, the accident data base is 
very, very poor.
    Despite all of that, we found that there were problems in 
terms of the Firestone tires. And we wanted Firestone to come 
along with us in terms of a recall. And they refused to do so. 
We went ahead because we knew there was a particular problem 
around the Venezuelan situation and the defects of those tires 
made in Venezuela. It had nothing to do with what was going on 
in the U.S. market.
    In Saudi Arabia, these were 16 inch tires. And they were on 
a variety of vehicles. Test after test we did together with 
Firestone and independently. And in every case, when we went 
through and asked the question what was going on in the Saudi 
market, we at the same time went back and asked Firestone to 
check the U.S. data, every time, including the----
    The Chairman. So you are saying you knew about it and you 
did something about it.
    Mr. Nasser. Not only did we do something about it, but we 
actually examined all the data. And perhaps now is a good time 
to look at if you could look at the shot that is on Firestone 
tires in the U.S., that is the one that shows the cross hatches 
in terms of the bar. What this chart shows is that the number 
of reports of tread separations on a variety of Firestone 
tires--and it is based on the claims data that we received from 
Firestone on July the 28th of the year.
    And if you look at the cross hatch which is the longest 
bar, the worst tires are the ATX tires produced at Decatur. And 
these show defects per million tires. And their failure rate, 
the Decatur tires, is ten times more than any other tire shown 
on this chart. In Venezuela, they were local tires. In Saudi 
Arabia, they were the tires that were actually on the right 
hand side of that chart. So we had no reason to believe at that 
point that we had a problem. And all the Firestone data that we 
were shown would indicate very similar trends.
    The Chairman. There is an internal document, which I will 
give you a copy of, Algizira vehicles. It is to John Thompson 
who is the Director of Operations and Marketing in Ford Motor 
Company saying, as you know, ``this concern goes back to mid-
1997 when we first notified you of this concern. I have to 
state that I believe the situation to be of key concern which 
could endanger both the vehicle and more importantly user 
vehicles. So I am asking what is going on. Do we have a 
fatality before any action is taken on this subject?'' Are you 
aware of this?
    Mr. Nasser. I am aware of it and I am proud of employees 
like that. Because in the Ford Motor Company, we actually 
encourage people to come out and talk about issues as they come 
out. And what we did there is in Saudi Arabia we went ahead and 
replaced the tires. Because as Firestone mentioned earlier, 
conditions are different. By the way, when we went to the 
Goodyear tires in Saudi Arabia, we have not had any problems.
    The Chairman. Well, again, I am glad you are proud of this 
individual, but he says, I have to say it again, ``I am very 
disappointed that no one has had the decency to send me a 
letter explaining what is happening.'' Was he responded to?
    Mr. Nasser. I am not aware of the response, but the fact 
that he felt that it was an environment where he could speak 
about it and talk about it I think it's something that we 
should encourage. We went back in Saudi Arabia and we replaced 
those tires----
    The Chairman. Should you also encourage that he be 
responded to?
    Mr. Nasser. Senator, we replaced all the tires in Saudi 
Arabia.
    The Chairman. All right. I thank you. I have two more brief 
questions. There is going to be a witness. And I see you have a 
chart there that I cannot quite see. It says Explorer's safer 
than passenger cars. A witness on the next panel is going to 
make the case that the combination of these tires on an SUV 
like the Explorer can lead to a fatal rollover. Obviously, you 
do not agree with that.
    Mr. Nasser. We do not. But you can accuse us of being 
biased and you are probably right. But let us deal with the 
facts. This is government data based on Department of 
Transportation. And the data clearly shows that over a 10-year 
period, and there have been almost four million explorers sold 
over that period, the Explorer has a better record and serious 
accidents than the average passenger vehicle and also the 
average compact sports utility vehicle.
    In addition to that, the government data shows that not 
only is the Explorer safer than the average sports utility 
vehicle in serious accidents, it is also safer in rollover 
accidents by a substantial number. Both those percentages, 
Explorer is safer by almost 30 percent. And this has been true 
since 1991 when Explorer was introduced.
    The Chairman. Going back to our previous conversation, the 
recall in Saudi Arabia took place in August 1999, is that 
right?
    Mr. Nasser. That is true.
    The Chairman. And this letter was written in 1997.
    Mr. Nasser. Senator, I could take you back in terms of a--
letter-by-letter, customer-by-customer. In every single case, 
we kept going back to Firestone saying is there a problem? 
Every time we went back, the answer was no defects, customer 
abuse, unusual conditions. Every time we came back to the U.S. 
market and asked the same question. Are there any defect trends 
in the U.S.? Should we be doing something in other markets? And 
I think you heard earlier the Firestone reaction was we don't 
have any defects. We should really not go ahead with the 
replacement program.
    The Chairman. Finally, in his testimony this morning, 
Secretary Slater urged the conferees of the Transportation 
appropriations bill to remove provisions that would prohibit 
the implementation of a consumer rollover rating system until a 
study is conducted by the National Academy of Sciences. It is 
my understanding that the study requirement was put into the 
bill at the behest of the automotive industry. Many believe 
that the rollover propensity of the Explorer contributes to the 
severity of these accidents. Would Ford commit to working with 
NHTSA to implement an appropriate rollover rating system 
without the further delay of a study by the National Academy of 
Sciences?
    Mr. Nasser. I am not a legislative expert clearly, Senator.
    The Chairman. You have some very high priced help here, 
sir.
    Mr. Nasser. We would support that proposal.
    The Chairman. Thank you. I appreciate that. Senator Bryan.
    Senator Bryan. Thank you very much, Mr. Chairman. Mr. 
Nasser, you say in your prepared remarks that Ford did not know 
that there was a defect with the tires until they received 
confidential claims data from Firestone in July of this year, 
being 2000. I must say to the layman, this strains Ford's 
credibility. Because we have had recalls in Saudi Arabia, 
Malaysia, Thailand, Venezuela, Columbia and Ecuador. And if the 
testimony of Firestone is correct, they did not agree with 
those recalls, but those were initiated by Ford. My first 
question is did Ford initiate those recalls which I have 
referenced without the concurrence of Firestone?
    Mr. Nasser. We did.
    Senator Bryan. You did. So you have got at least a half a 
dozen countries and maybe more. Give me the benefit of Ford's 
thinking. I mean, I cannot believe that a company that is as 
prestigious with all of its history and part of the American 
automobile icon is saying to Americans that their safety is of 
less importance than the safety in these other countries. What 
was Ford's thinking in terms of not initiating a recall much 
more timely than it did in these other countries?
    Mr. Nasser. Senator, when you start to look at the recall 
actions in Saudi Arabia and in South America, they were very 
different markets, very different products in the case of 
Venezuela and Columbia and Ecuador. As you heard from 
Firestone, they were different tires. And in the case of Saudi 
Arabia, every time we came back and we asked--and I think it 
might be appropriate at this point if I can show you some of 
the data and just indicate to you that every single accident to 
us is very important. And we react to every single one. So it 
is not that we knew of a problem and did not react. We just did 
not know that there were issues here in the U.S.
    Senator Bryan. Let me follow up if I may with that. All 
right. You say you did not know. Now you do know that there is 
a problem. And literally millions of people are concerned about 
the ATX, the ATXII and the Wilderness. And yet, the recall 
effort has been limited. There are many in the safety advocacy 
field who say, look. All of those tires have been recalled.
    Now, your premise is, look. We did not know. Information 
was not provided to us. Now we know there is a problem. Would 
it not be the prudent and responsible sort of thing? Would it 
not be in the best interest of Ford Motor Company as a 
responsible corporate citizen to say, look. We are not going to 
take any chances with the health and safety of our customers. 
We are going to recall them all and give an opportunity for 
replacement. What would be wrong with that approach?
    Mr. Nasser. That is exactly the right approach. And that is 
exactly what we are doing. Because if you look at that chart 
which talks about Firestone tires in the U.S., we are 
concentrating on those bad tires. There is not much point 
replacing good tires with good tires. And as Firestone 
indicated, and the tire industry would tell you, it would 
actually get in the road of getting bad tires off the vehicles 
in the industry at this point.
    Senator Bryan. Let me just say, Mr. Nasser, I do not think 
the public sees it that way. I mean, we are quibbling now with 
what the engineering data might indicate. There is a concern on 
the part of the average citizen who does not have the benefit 
of all of the sophisticated engineering that Ford Motor Company 
can engage and say, look. I have a serious question as to 
whether the automobile I am driving, the Ford Explorer, with 
these tires, is safe. It just strikes to me that in light of 
what many of us would say would be a very slow response to the 
situation by both Ford and Firestone that you want to be a 
proactive and say, look. We are going to replace all of those 
tires, admittedly establishing a priority for doing so of those 
categories that you previously outlined.
    Mr. Nasser. Senator, I think we spent the whole morning, 
particularly with Ms. Bailey and Mr. Slater, talking about 
using facts to manage safety, using technical input to be able 
to make sure that not only are we making the right decisions, 
but that we have our priorities set. And if you look at the 
data there, the tires that are not being recalled are world 
class tires. You just can't get any better. So I do not really 
see the point at this point in replacing those good tires with 
further good tires and taking the tire industry's capability to 
change over the bad tires.
    Senator Bryan. Let me just ask, because my time is running 
out. There have been a number of suggestions that would be made 
to strengthen the role of NHTSA. One of those is to require by 
law notification whenever a company issues a recall in a 
foreign country. Would Ford agree or disagree with that?
    Mr. Nasser. We would agree with that.
    Senator Bryan. And how about extending the period of record 
retention which apparently is only 5 years now. There is a 
sense that that ought to be a longer period of time. Would Ford 
agree or disagree with that?
    Mr. Nasser. Not only do we agree, but we actually continue 
with record retention way beyond the legislative period.
    Senator Bryan. And increasing the amount of civil penalties 
which many believe is not adequate, would Ford agree or 
disagree with that proposal?
    Mr. Nasser. We would agree to the extent that it can put 
more teeth into the legislation and that it actually improves 
real world safety.
    Senator Bryan. Do you agree that there may be 
circumstances--and I am not asking you to indicate that the 
circumstances in this case would be one of those. But that the 
situation could be so egregious that indeed criminal penalties 
would be appropriate.
    Mr. Nasser. We agree with that.
    Senator Bryan. You agree with that. And to increase the 
statute of limitations on recalls, would Ford agree or disagree 
with that?
    Mr. Nasser. We agree.
    Senator Bryan. And to amend the rule regarding the statute 
of limitations on reporting of defects, would Ford agree or 
disagree with that?
    Mr. Nasser. We agree. And we presently abide by a longer 
statute.
    Senator Bryan. And would you agree or disagree with 
requiring manufacturers to report lawsuits?
    Mr. Nasser. That's part of our proposal. We think that was 
part of the missing information link that the Federal agency 
and the automotive manufacturers were not sharing.
    Senator Bryan. And let me say that I complement Ford on 
that. The final question is that there has been some question 
about document withholding and all of that sort of thing. My 
question to you, Mr. Nasser, is Ford prepared to make available 
to NHTSA, to our Committee, all internal memorandums, 
documents, letters, any information that relates to this issue 
without being specifically requested by NHTSA or our Committee 
to identify the particular document? What I am asking is a full 
and complete disclosure of all information that the Ford 
automobile company has that deals with this issue. Are you 
prepared to make that commitment?
    Mr. Nasser. We are. And we have done that. And the last 
time I looked, we had supplied 100 pages of correspondence and 
information and technical data.
    Senator Bryan. I thank you for your answer. And I thank 
you, Mr. Chairman, for letting me go over a couple of minutes.
    The Chairman. Thank you, Senator Bryan. Senator Abraham.
    Senator Abraham. Thanks, Mr. Chairman. Mr. Nasser, you 
commented on the chart here to the left. I was wondering if you 
would talk a little bit about the other chart that has been put 
up here?
    Senator Bryan. I think as we have been following this over 
the last couple of weeks, there has been at least the 
impression created that your company was inundated with claims 
and complaints that were unheated. And I am wondering--I am 
having a little bit of trouble understanding some of the 
numbers up there and what they refer to. But this seems to 
address that question. And I am wondering if you might tell us 
a little bit about the magnitude of these so-called charges, 
claims, whatever, that you want to lump them together. But the 
combination, how much had you previously heard from these 
sources prior to your actions?
    Mr. Nasser. We have really been looking at tread 
separation. I think the whole industry looks at it for many, 
many years. And interestingly enough, I was reading in the 
newspaper that we have known about these tread separations for 
years and years and they have been a problem in the industry. 
And that there have been lawsuits and so on.
    And what I have here on this chart--and it is not even 
additive--but we added them all together just to get an impact. 
We added up all the lawsuits, all the property damage claims, 
all the reports that owners had sent to us, all the dealer 
reports, all the customer goodwill actions that we had taken. 
And we put them all together. And we tracked them from 1991 
through to the year 2000. And when you add all of those 
together, you get two reports per year for every million tires 
in service.
    So it is a very, very small number. We review this on a 
regular basis. We also review the NHTSA data on a regular basis 
as Mr. Slater and Ms. Bailey indicated this morning, their 
numbers were equally small. And this is in contrast by the way 
to the chart on the left hand side. Because the scale--this is 
defects per million and we were not getting more than two per 
million in any year. If you go over to the left, the Decatur 
ATX tires were at 241 defects per million. So you had 240 
compared to two. And that's a dramatic difference in terms of 
the issues.
    I would also like to point one other thing out. When you 
look at the Firestone tires in the U.S., that is a combination 
of 26 PSI, 32 PSI and interestingly enough, even if you go over 
to the right hand side there, there are 26 PSI tires that are 
world class that are not included in this recall. And that is 
further evidence that it is a tire defect issue.
    Senator Abraham. In other words, those numbers there 
indicate the amount of complaints total all those sources that 
are listed above per million tires.
    Mr. Nasser. Yes.
    Senator Abraham. So in the year 1999, it was 1.2 complaints 
per million. OK. Will you supply the Committee with all of that 
information? Because I think it is pretty interesting.
    Mr. Nasser. We will do that.
    Senator Abraham. Second question I had. The question that 
was just posed to you by Senator Bryant concerned trying to 
address tires that had not--did not have problems as a matter 
of broadening your efforts. I was at the truck plant in Wayne, 
Michigan a couple of weeks ago before the original issues came 
forward and talked to a lot of people on the line there. I then 
read just a few days later that that facility had been 
converted over to help address this issue. And I wondered if 
you might explain to the committee some of the other actions 
that are being taken by the company to try to address just the 
tire problems that we know about as opposed to situations where 
the tires on vehicles are good and will be replaced by other 
good tires. What are you doing cumulatively to try to do that 
in addition to that one facility? And you might just mention 
that facility because it is obviously one of our significant 
employers in the State.
    Mr. Nasser. We have close down three of our facilities on a 
temporary basis so we can convert production tires to tires 
that can be used for replacement tires for our customers to 
replace bad tires. And that will be 3 weeks and 3 plants.
    Our whole attitude, strategy, everything that we are doing 
in the Ford Motor Company today is aimed at improving the 
situation for our customers. You do not close plants down 
lightly, Senator, as you know. And you certainly don't close 
plants down that have got products lightly. But we did that 
because we felt it was important that we do everything possible 
to get as many good tires out in the hands of our customers to 
replace bad tires. Now, I personally spoke to the CEOs of all 
of the tire companies so that we could not only encourage them 
to increase production, but to actually assist them into 
putting additional molds into production. And that is 
happening. We feel confident at this point that by the end of 
November, you probably heard when the recall was first 
announced that it was going to be spring of next year. We went 
berserk when we heard that. That was just unacceptable. And the 
Ford Motor Company, and I must say the tire industry in total 
including Firestone, have been working together to accelerate 
that rectification program as quickly as possible.
    Senator Abraham. Have the other companies been responsive 
to these requests?
    Mr. Nasser. They have been very responsible.
    Senator Abraham. And do you feel that you can obtain an 
adequate amount to continue to conduct the recall at an 
acceptable pace?
    Mr. Nasser. We have been so far. And I think it will 
actually improve as we look out over the next 3 or 4 weeks.
    Senator Abraham. Well, the Wayne plant manufacturers, the 
expedition I think along with some other vehicles, what is the 
impact on the production of those other vehicles then? What do 
you foresee this year in terms of vehicle production levels as 
a result of the transfer over to these activities?
    Mr. Nasser. Well, we have clearly lost some production, 
several thousand in each of those plants. But that is not what 
is our focus at the moment. Our focus is how do we get out our 
customers more peace of mind with good tires?
    Senator Abraham. Thank you. I was actually going to ask 
some of the questions Senator Bryan did about your response to 
or consideration of some of the legislation or proposals that 
we have had before us. But he kind of covered the entire list. 
So, Mr. Chairman, I notice that my light is on. And I thank you 
for giving me a chance to ask these questions.
    The Chairman. Thank you, Senator Abraham. I am sorry for 
the late hour, Mr. Nasser. Thank you for your patience. And we 
will obviously solicit your input between now and next 
Wednesday when we propose legislation before the Committee to 
be marked up. And I thank you for appearing today.
    Senator Abraham. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Nasser follows:]

    Prepared Statement of Jac Nasser, President and Chief Executive 
                      Officer, Ford Motor Company
    Good morning, Chairman McCain and Members of the Committee. I am 
Jac Nasser, President and CEO of Ford Motor Company. I appreciate the 
opportunity to be here today to discuss Firestone's tire recall. At 
Ford, we are very concerned that there are defective tires on some of 
our vehicles and we will not rest until every bad tire is replaced. I 
am here today because I know that you and the public have questions 
about the tire recall, and I want to make sure your questions are 
answered.
    I have been with Ford Motor Company for more than 30 years. I am 
proud of the great contributions Ford Motor Company has made to improve 
the standard of living of millions of people around the world. We are 
deeply committed to our customers, and clearly their safety is 
uppermost on our minds.
    As you know, Firestone manufactured and warranted the recalled 
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. We are 
working relentlessly to find and replace bad tires with good tires. 
That includes making sure that we understand the scope of the problem 
and finding the root cause. And we continue to be open about any data, 
statistics or information that we have--and will share any new 
information as soon as we get it. Ford Motor Company is absolutely 
committed to doing the right thing to protect our customers and to 
maintain their trust.
Why This is the Right Action
    We believe Firestone's recall is the right action. First, we 
strongly support Firestone's decision to recall 15'' ATX and Decatur-
built Wilderness AT tires. Based on the Firestone data we have 
analyzed, we've determined that these tires are the problem tires. 
Charts summarizing our detailed analysis of the Firestone data are 
included in Attachments 1 through 9.
    We felt so strongly that this was the right action that we agreed 
to share the cost of the recall with Firestone--as an incentive for 
them to do the recall immediately and to allow our dealers to use makes 
other than Firestone as replacement tires.
    What we still don't know is why these tires fail. We are working 
hard on that.
Tire Issue
    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, including 26 psi--and they 
haven't experienced these problems. Furthermore, non-Decatur made 15'' 
Wilderness tires operate at 26 psi and have not demonstrated tread 
separation problems.
    Ford products--particularly the Explorer--have been highlighted in 
this recall because most of the recalled tires were used as original 
equipment solely on Ford products. The Explorer was introduced to the 
public in 1990 with Firestone ATX tires, which stayed in production 
until mid 1996, when the new Wilderness tire was introduced. During the 
1996-1998 model years about 500,000 Explorers were produced with 
Goodyear tires. The 15'' ATX and Wilderness tires were also installed 
as original equipment on Ford Ranger and F-150. No other vehicle 
manufacturer used this type of ATX or Wilderness tire as original 
equipment.
    I would like to emphasize that there is nothing unique about the 
Explorer that is related to tread separations. The documents we 
provided to NHTSA conclusively show that prior to going into 
production, the Explorer met exceedingly stringent performance and 
safety standards.
    The Explorer has had an 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 10. 
Additionally, Explorer's fatality rate in rollover accidents is 26 
percent lower than other compact SUVs (Attachment 11).
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.
    I want to emphasize that Ford did not know there was a defect with 
the tires until we received the confidential claims data from Firestone 
in July of this year. It has been standard practice in the automotive 
industry that tires are the only part of the vehicle not warranted by 
the vehicle manufacturer. Because tires are separately warranted, they 
are the only part for which vehicle manufacturers do not receive field 
performance data.
    Looking back, the first signs of trouble came in Saudi Arabia. When 
reports of tread separation first came to our attention, we asked 
Firestone to investigate. This included shipping problem tires back to 
the U.S. for evaluation as well as rigorous high speed testing. 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 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 of this year, we began 
replacing all the Firestone tires on Ford Explorers and certain light 
trucks in Venezuela. As the old tires were returned to us, we examined 
them and found that 15% of the Venezuelan-made tires had evidence of 
tread separation.
    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. As early 
as April of 1999, we were searching all available databases--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 Texas, Arizona and Nevada. No defect 
trend was found.
    Because there have been a number of questions regarding our 
investigation of data on tread separations, I would like to explain the 
data available to Ford and our review of these data. We receive data 
which track quality issues from owners, dealers and our warranty 
claims. These data are monitored regularly. We also watch property 
damage claims, personal injury claims, and lawsuits filed against Ford. 
In conjunction with our investigation of overseas issues, we reviewed 
all of these data sources and found no trend of tread separation issues 
on Firestone tires in the U.S.
    We also looked at two government databases. NHTSA's Vehicle Owner 
Questionnaire (VOQ) reports track consumer complaints filed with NHTSA. 
Also, the Department of Transportation maintains data on vehicle 
fatalities (FARS). Again, neither of these government sources revealed 
an obvious defect trend.
    It is important to clarify that there are several types of 
performance data maintained by tire manufacturers that are not 
regularly available to auto companies. First, tire manufacturers keep 
adjustment data, similar to what we call warranty data in the auto 
industry. Adjustments may cover issues ranging from manufacturing 
defects to abnormal wear or tire appearance issues. Tire makers also 
keep claims data, which represent customer requests for payment 
resulting from property damage or personal injury. Finally, tire 
companies also keep track of lawsuits filed against them claiming 
injury related to tire defects. None of these data sources are 
available to automakers on a regular basis.
    Because the tires are warranted by Firestone, much of the quality 
and performance data is included in Firestone's internal databases, but 
not Ford's. Additionally, property damage, personal injury and legal 
claims would most often be filed with the tire maker, not the auto 
manufacturer. For example, while there were over 2,700 claims included 
in Firestone's data, a review of Ford's records show that as of May 10, 
2000, approximately 50 claims had been filed with Ford.
    When NHTSA opened their investigation, and required Firestone to 
assemble and provide data on property damage, personal injury, and 
lawsuits, Ford insisted on obtaining that 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.
Customer Focus
    As I said, our top priority is to replace faulty tires as fast as 
possible. As of September 7, about 1.8 million tires have been 
replaced--about 28 percent of the total population of affected tires. 
We worked with the tire industry to increase production of 15-inch 
tires which will increase supply by more than 250,000 tires per month 
by the end of September. We suspended production at three assembly 
plants for two weeks beginning at the end of August, adding 
approximately 70,000 tires to the replacement population. On Friday of 
last week, I extended the suspension for another week. We have engaged 
over 3,200 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.
    Our support of this recall extends to our full cooperation with 
NHTSA. We have provided extensive disclosure to NHTSA in regards to 
this action. Our policy is to be as open as possible, sharing what we 
know, when we know it.
Conclusion
    Last week I made a commitment to work with the industry to 
implement an ``early warning system'' to detect the first signs of tire 
defects on vehicles already on the road. This system must utilize 
comprehensive real world data that--we now know--is so critical to 
spotting defect patterns. I also committed that Ford will advise U.S. 
safety authorities of safety actions taken in overseas markets and 
vice-versa.
    This has been a difficult situation. Our first priority is 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.
Testimony of Ford Motor Company
Index of Attachments to Written Testimony
    1. LTread Separation Claims Rate for Firestone 15-inch and 16-inch

    2. LClaims Data--Claims for Firestone Tires by Tire Size

    3. LClaims Data--Claims for Firestone P235/75R15 ATX and Wilderness 
Tires by Type of Claim

    4. LClaims Data--Tread Separation Claims for Firestone Tires by 
Tire Size

    5. LClaims Data--Tread Separation Claims Rate for Firestone P235/
75R15 ATX and Wilderness Tires for 1996 Tire Production Year

    6. LClaims Data--Tread Separation Claims Rate for Firestone P235/
75R15 Wilderness Tires by Tire Production Year and Plant

    7. LClaims Data--Tread Separation Claims Rate for Firestone P235/
75R15 ATX by Time in Service at Claim, Tire Production Year, and Plant

    8. LClaims Data--Tread Separation Claims Rate for Firestone P235/
75R15 Wilderness by Time in Service at Claim, Tire Production Year, and 
Plant (Scale 0 to 700)

    9. LClaims Data--Tread Separation Claims Rate for Firestone P235/
75R15 Wilderness by Time in Service at Claim, Tire Production Year, and 
Plant (Scale 0 to 70)

    10. LFatality Rate Comparison--Explorer Compared to Passenger Cars 
and Compact SUVs

    11. LFatality Rate Comparison--Explorer Compared to Other SUVs--All 
Accident Types and Rollover Accidents























    The Chairman. Thank you very much. Finally, we will hear 
from Ms. Joan Claybrook, who is the President of Public 
Citizen, and Mr. Clarence Ditlow, who is the Executive Director 
of the Center for Auto Safety. It is nice to see you again, Ms. 
Claybrook. Thank you. And obviously proceed with your 
testimony. And I want to thank both of you for your patience 
this morning. I apologize for the delay. But I am sure you 
probably expected that given the interest that is focused on 
this issue. Ms. Claybrook, welcome back.

                 STATEMENT OF JOAN CLAYBROOK, 
                   PRESIDENT, PUBLIC CITIZEN

    Ms. Claybrook. Thank you very much, Mr. Chairman. I would 
like to say that I am going to summarize my rather extensive 
testimony. I would like to submit it for the record and also 
some attachments.
    The Chairman. Yours too, Mr. Ditlow.
    Ms. Claybrook. We have prepared for the committee a 
chronology of the case that we have before us, looking at a lot 
of documents from inside the companies that have now come to 
light, and also integrating that information with the lawsuits 
that have been filed and with other events to try to establish 
what really happened here.
    It is my belief that the companies have known about this 
for longer than they should have, and that they have kept it 
secret when they should not have done so. Additionally, I would 
say that there are some unknown facts still today. While a 
hundred boxes have been delivered to the Department of 
Transportation, they are not yet publicly available. The DOT in 
rulemaking puts all of the documents immediately on the web. 
But for an investigation such as this, they do it much more 
slowly. And you have to go down there and personally get 
documents. I would hope that one of the things you could 
encourage the department to do with some of the review that is 
now going on is to put all of the investigation documents on 
the web so that we can all be more effective in evaluating what 
is going on.
    The Chairman. We will do that. My staff informs me we will 
do that.
    Ms. Claybrook. Thank you very much. I appreciate that. I 
would say that the major concern that we have here with this 
defect is that in the course of designing the Explorer, the 
manufacturer had some problems with rollover tests and decided 
to lower the PSI, the pounds per square inch, of this tire to 
26, rather than making some design changes in the vehicle. I do 
understand that they have made some design changes in the year 
2000 to the vehicles that are coming up, but we believe that it 
is most unfortunate that they did not do so at an earlier time.
    In 1996 when Ford was producing its vehicles and the tires 
were being produced in Venezuela, I just wanted to make sure 
that the Committee was aware that Ford instructed that the 
tires in Venezuela be upgraded from the U.S. tires and that a 
nylon ply be added to the tires manufactured in Venezuela. And 
also, there was a stiffer shock absorber and some reinforcement 
added to the suspension.
    I agree with the lawyers inside Firestone and Ford that 
they did have an obligation under current law to notify the 
Department of Transportation of foreign recalls. There is a 
provision in the statute that says they have to supply DOT all 
notices to dealers. But there's sort of an overarching, extra 
territoriality provision in U.S. law that says that U.S. law 
cannot govern foreign operations. But this was a U.S. 
manufacturer with a U.S. made product notifying dealers abroad 
of concerns about what they were selling in the United States.
    There are a number of documents also that have come to 
light, some of which you have highlighted which show that there 
was quite a bit of data available to these companies along the 
way. I compare this recall to the Firestone 500--and I brought 
a picture of it. This was an investigation of 20 years ago. It 
looked similar to what is happening today. There are many other 
similarities, including a coverup by the company then. When 
everything was said and done, those top officials were all 
removed from the company. And we thought it was a new day at 
Firestone. But apparently it was not.
    Also, the company accused owners of not properly inflating 
their tires or of abusing their tires then as they have today. 
Except for in testimony this morning when they discounted that.
    To me the most important thing to come out of all of this, 
this tragedy for the American public, is new legislation. And I 
commend the Chair and his efforts in announcing the markup next 
week. We are very enthusiastic about this. We will do anything 
that we can to help the committee to raise that maximum 
penalty, now $925,000, which is a joke. And we would urge that 
there be criminal penalties included here as there are for the 
Food and Drug Administration, the Environmental Protection 
Agency, and the Consumer Product Safety Commission. NHTSA is 
one of the few agencies that does not have authority to bring 
criminal penalties.
    Also, we support the extension of time for the retention of 
documents, statute of limitations and for self-certification. 
Right now, Mr. Chairman, if a company certifies its product to 
meet NHTSA standards, it need not test it ahead of time. Such 
testing should be a mandatory requirement.
    I took a brief look at the proposal by the Secretary which 
they are sending up to Congress today. And I certainly endorse 
the additional authorities that he has proposed.
    I would like to say one thing about the budget. I think we 
ought to look at it this way, just as an example for someone 
such as yourself who is so knowledgeable about the Defense 
Department: We spend billions of dollars on defense, but more 
members of the military are killed in motor vehicle crashes 
than are killed during military duty. And that seems to drive 
the point home to me.
    I do believe that there are----
    The Chairman. I think you make a good point. My point was 
that every year at the end of the year, and we are about to 
reach that point again, where in a smoke filled room somewhere, 
there's billions--billions--maybe tens of billions--added in 
all kinds of pork barrel projects, all kinds of obscene and 
outrageous things. At least you would think that with those 
tens of billions perhaps, maybe a few million could have been 
added to NHTSA's budget in their zeal to increase all of the 
spending. See my point? That was my point.
    Ms. Claybrook. Oh, I know. I know your point. And I 
completely agree with it. But the problem for NHTSA is that it 
is a regulatory agency. It is Uncle Sam, not Uncle Sugar. There 
are two different entities up here unfortunately.
    The third point I would make is that we believe that there 
should be consideration of an expanded recall. But all of the 
data is not yet on the public record, and I will not go into 
all of the particulars. I brought two tires here today. One is 
the 15 inch and one is the 16 inch. The 16 inch is not being 
recalled. The 15 inch is. You can see that they have a very 
similar pattern of failure. One of the patterns is that these 
tires do not fail in the early years of production, but in the 
later years after they are on the road for some time, the 16 
inch Wilderness, this one, was not manufactured--the Wilderness 
tire was not manufactured and on the road until 1996.
    And since data is usually a year or 2 years behind an 
evaluation, we do not yet have all the data on the Wilderness 
tire. We certainly do not have the most current information. 
The evaluation by Ford Motor Company of the Firestone data, 
claims data, to define this recall was current as of the 1st of 
May only. That brings me to a point that I emphasize and that 
is the system of data and evaluation and the process that 
sparks a recall inside of NHTSA.
    Any statistical analysis is flawed if the data set that you 
are using is flawed. Unfortunately, if you base conclusions on 
claims or from consumer complaints, you must be aware they are 
a small portion of what is actually happening out there on the 
road. And to measure it from the tires as they did at DOT, 90 
claims or 46 claims or complaints against the 40 million tires 
that were manufactured is totally irrelevant. You have to look 
at factors like: are there deaths? Are there injuries? Is there 
a catastrophic problem? In this case, the accidents were a 
catastrophic type of event where people were doing what they 
are supposed to do and then find themselves terribly injured or 
their familiy members dead.
    One of the things that is missing right now on the record 
is information about what tests Firestone did and what tests 
Ford did of the 26 PSI-inflated tire. I do not think that that 
data is publicly available yet. I do not think that it is 
available to your Committee. I would suggest that it be 
subpoenaed if you do not get it. You have asked them to give it 
to you voluntarily. This data should be submitted because, 
under current law, companies do not have to test the exact tire 
or product before they certify it.
    I do not believe, as it was revealed in the House side, 
that Ford ever did tests at 26 PSI, which is a very low PSI for 
this vehicle. I do not know about Firestone. But I think that 
you ought to demand that they submit that information to your 
committee immediately. Without it, we do not really know the 
extent to which these tires were first tested or what the tests 
showed. That information would greatly help to define this 
recall.
    The Chairman. We will ask for it.
    Ms. Claybrook. Thank you. We have been through the 
discussion of NHTSA. So I will not raise that issue other than 
as a concern about the way that they evaluate statistical data. 
I certainly endorse your call to have an Inspector General 
investigation of this. I would ask that the IG look in 
particular at this whole issue of statistical evaluation, 
because sometimes when NHTSA is doing investigations of 
defects, they close their investigation because they cannot 
find a statistical correlation. An example is a door lock case 
I had suggested that they look at. And they closed the 
investigation. But you cannot find statistics on whether a door 
lock does not work in the statistical data base where the doors 
pop open but do not stay broken after an accident.
    Finally, I would ask that in your legislation, Mr. 
Chairman, that you consider giving NHTSA the charge of issuing 
an upgraded tire standard by a certain date, an upgraded roof 
crush standard by a certain date. I do not know whether you are 
aware, but the roof crush standard is also 32 years old. And 
when you look at the rollovers, look what happens to the roof. 
That should not happen to a roof in a rollover. And what the 
standard says is that on a static basis, you put onto a car, 
one and a half times its unloaded weight and that is the 
standard for rollover. It is ridiculous that it is not a 
dynamic standard.
    Furthermore, the tire quality grading standard applies only 
to car tires, not to SUV and truck tires. Also, there needs to 
be a rollover prevention standard. Right now, the arguments in 
the appropriations committee are over consumer information 
requirements. But there also needs to be a minimum standard, at 
least for SUVs that have a propensity to roll over.
    I had to laugh as I listened to the testimony about the 
tire inflation indicator device because I proposed this in 1978 
after the first Firestone recall. All of the industry then 
opposed this measure to tell the consumer when there is low 
tire inflation, and to put it on the dashboard.
    I have several other minor proposals for inclusion in the 
legislation. We appreciate very much the work you are doing, 
your willingness to move very quickly. I do not think that this 
Congress should go home and ask people to vote for them until 
they fix this problem and can assure their consumers and 
constituents that this will not happen again. Thank you, very 
much.
    [The prepared statement of Ms. Claybrook follows:]

                 Prepared Statement of Joan Claybrook, 
                       President, Public Citizen
    Mr. Chairman and Members of the Committee:
    I am pleased to accept your invitation to testify today on the 
Firestone tire defect that has killed at least 88 and injured 250 
people, most of them in Ford Explorers. I am President of Public 
Citizen, a national public interest organization founded by Ralph Nader 
in 1971 with 150,000 members nationwide. I served as Administrator of 
the National Highway Traffic Safety Administration in the U.S. 
Department of Transportation from 1977 to 1981. This agency is 
responsible for administering the recall of the Firestone tires. The 
Firestone 500 recall occurred in 1978 when I was Administrator.
    Much has been written and broadcast in the past month about the 
lethal combination of Ford Explorers and Firestone tires. This is a 
design defect exacerbated by the fact that Ford required a low 
inflation pressure of 26 psi to mitigate rollover problems with these 
vehicles. Firestone ATX, ATX II and Wilderness tires on Ford Explorers 
are overheating with highway use, causing the tread to separate and the 
SUVs to experience catastrophic crashes, not infrequently rolling over 
and causing fatal injuries. At least 135 people world-wide have died. 
This tragedy is teaching the public as well as policy makers a number 
of lessons. I would like to comment on five issues and make 
recommendations for more effective enforcement of the nation's motor 
vehicle safety defect laws.
1. LFord and Firestone covered up safety problems with the tire/SUV 
        combination for a decade. Coverups will continue without 
        corrective action by NHTSA.
    The Ford Explorer was first offered for sale in March 1990. 
Numerous Ford internal documents show the company engineers recommended 
changes to the vehicle design after it rolled over in company tests 
prior to introduction, but other than a few minor changes, the 
suspension and track width were not changed because this would have 
delayed the introduction date by as much as ten months. Instead, Ford, 
which sets the specifications for the manufacture of its tires, decided 
to remove air from the tires, lowering the recommended psi to 26. It 
appears Ford never fully tested the tires at this level. The Firestone-
recommended psi molded into the tire for maximum load is 35 psi.
    Within a year of introduction, lawsuits against Ford and Firestone 
were filed for tire failures that resulted in crashes and rollovers. At 
least five cases were filed by 1993, and many others followed in the 
early 1990s. Almost all were settled, and settled with gag orders 
prohibiting the attorneys and the families from disclosing information 
about the cases or their documentation to the public or DOT. When 
lawsuits are filed against a company about a safety defect, the company 
organizes an internal investigation to assemble information and 
analysis about the allegations. Top company officials are kept informed 
about all lawsuits against the company, particularly when they 
accumulate concerning one problem. There is no question the companies 
knew they had a problem. But they kept it secret.
    During the early 1990s, Ford was concerned with improving the 
rolling resistance of the tires to be used on the 1995 model Explorer, 
apparently because of the reduced fuel economy with the low 26 psi 
inflation level. Changes were made to the 1995 model's suspension 
system, but these did not lower the center of gravity, an essential 
element in rollover susceptibility.
    In 1996, several state agencies in Arizona began having major 
problems with tread separations on Firestone tires on Explorers. 
According to news reports, various agencies demanded new tires, and 
Firestone sent six engineers to Arizona to conduct an investigation of 
the complaints, tested the tires and asserted that the tires had been 
abused or under-inflated.
    By the end of 1996, at least 15 lawsuits had been filed.
    The Ford Explorer and its sister vehicles with Firestone tires were 
sold across the globe. In 1998, Ford and Firestone exchanged 
correspondence and had discussions about tire failures in Middle 
Eastern, Asian and South American countries. Tires were tested and 
analyzed. Dealers complained bitterly to Ford and Firestone from 1997 
to 2000 about deaths and injuries in Ford Explorers, the adverse effect 
these were having on sales and delays in getting any relief.
    In January 1998, Glenn Drake, Ford's regional marketing manager in 
the United Arab Emirates e-mails other Ford officials: ``If this was a 
single case, I would accept Firestone's response as they are the 
experts in the tire business, case closed. However, we now have three 
cases and it is possible that Firestone is not telling us the whole 
story to protect them from a recall or a lawsuit.''
    In 1996, Ford instructed Firestone to upgrade the tires in 
Venezuela by adding a nylon ply to the tires it manufactured there for 
additional strength, and Ford made suspension changes to the Explorer, 
adding a stiffer shock absorber and reinforcement of the suspension. 
But Ford did not specify adding the nylon ply for U.S.-made Firestone 
tires nor did it change the U.S. made Explorer suspension at this time.
    Ford eventually decided to conduct its own recall without Firestone 
and replace the tires in the various foreign countries in 1999 and 2000 
(called a ``customer notification enhancement action''). Ford did this 
without Firestone because the tire company was fearful a recall would 
require notification of NHTSA. A March 1999 Ford memo reveals 
``Firestone legal has some major reservations about the plan to notify 
customers and offer them an option . . . They feel that the U.S. D.O.T. 
will have to be notified of the program, since the product is sold in 
the U.S.''
    In May 2000, a top Ford official in Venezuela was quoted in the 
press as saying the company was replacing the tires there because in 
Venezuela ``the highways allow drivers to travel at high speeds for a 
sustained period of time, leading to the loosening of the rolling 
surface of the tire, its consequent blowout and the accident.''
    On August 30, 2000, the Venezuelan safety regulatory agency, 
Indecu, concluded after an investigation that Firestone and Ford ``met 
to plan ways out of a situation that was affecting their commercial 
interests, at the price of causing damage, destruction and death,'' and 
announced it is recommending possible criminal enforcement for 
involuntary manslaughter. Neither Ford nor Firestone informed the 
National Highway Traffic Safety Administration of this recall, 
euphemistically labeled a ``No Charge Service Program Award 
Notification.''
    Recently numerous Firestone documents have become available 
revealing the company had reason to know since 1997 from property 
damage and injury claims and tire performance data such as warranty 
adjustments and financial analysis of such claims that its tires were 
failing. Several documents show a large jump in claims involving tread 
separations in 1997 and 1998. During all these years the company 
disclaimed any problem--to consumers, to state government officials and 
to Ford. One company chart reveals that tread separations for the 
Wilderness tire increased 194 percent in 1999 from 1998. Test data on 
the tires by Ford and Firestone are still not available.
    By the end of 1999, four months before NHTSA opened its 
investigation, at least 59 lawsuits had been filed. A total of at least 
35 deaths and 130 injuries were involved in the lawsuits or notice of 
lawsuits to the companies by May, 2000.
    Incidentally, there are a number of parallels between this recall 
in 2000 and the 1978 recall of the Firestone 500. Most particularly, 
there was a documented coverup by Firestone of the 500 defect, spurred 
by the lack of a Firestone replacement tire. When the coverup was 
disclosed, the top management of the company was replaced. Firestone 
was severely damaged financially and in reputation. But a key 
difference is that the Firestone 500 was used on passenger cars, which 
rarely rolled over with tire failure. NHTSA documented 41 deaths with 
the Firestone 500 case, which involved about seven million tires 
recalled.
    Once again, when confronted with accusations about the performance 
of the tire, Firestone has misleadingly claimed owner abuse (i.e. 
under-inflation, rough use or improper fix). Neither Ford nor Firestone 
designed a margin of safety into its vehicles and tires.
2. LThe National Highway Traffic Safety Administration needs additional 
        legislative authority to assure that manufacturers obey the 
        law, report safety defects and recall unsafe products.
    To prevent coverups of safety defects in the future, the National 
Traffic and Motor Vehicle Safety Act should be amended. In March 2000 
the agency sent legislation to the Congress which would make some 
improvements, but additional authority is needed. The Congress should:

    a. LIncrease civil penalties for failure to recall a defective 
vehicle or part or withholding information from the agency. Now the 
maximum penalty is $925,000, hardly a deterrent for multinational 
corporations. The penalty for each violation should be increased from 
$1,000 to $10,000 (as at the Environmental Protection Agency); the 
violation for withholding documents should be per day rather than per 
document as it is now (no matter how long it is withheld). There should 
be no maximum penalty.

    b. LAs in the Food and Drug Administration and the Environmental 
Protection Agency laws, there should be criminal penalties for reckless 
endangerment and knowing and willful refusal to recall a defective 
vehicle or part or for withholding information that results in deaths 
and injuries. Chairman John Moss, after reviewing the Firestone 500 
debacle in 1978, recommended criminal penalties be added to the NHTSA 
statute.

    c. LAs recommended by NHTSA's proposed bill, a company should be 
required by law to test its products before self-certifying for 
compliance with the agency's standards. Such testing is not now 
required by law.

    d. LThe statute of limitations for NHTSA to mandate a recall is now 
eight years for vehicles and three years for tires from the date of 
manufacture. It should be extended, as the agency recommends, to 10 
years for vehicles and five years for tires. The statute should be 
tolled, however, when companies conceal defects. The agency should have 
authority to require a company to purchase replacement parts from a 
competitor if necessary where there is an imminent hazard and be able 
to require reimbursement to consumers who made repairs or bought 
replacements prior to the recall.

    e. LThere is disagreement about whether the current law requiring 
manufacturers to send NHTSA copies of all notices sent to dealers and 
owners about a defect is applicable in this case. Ford sent notices to 
foreign dealers about a defect in a product made and sold in the U.S. 
and also sold abroad. Does the fact that the notice was sent to foreign 
dealers negate Ford's responsibility to notify NHTSA? I don't think so, 
but certainly the law should be clarified that this is a company's 
responsibility in this age of globalization. Companies should also have 
a duty to give NHTSA early warnings based on fatality, injury, warranty 
or other data it gathers, and the agency should be able to get relevant 
information from insurers.

    f. LNHTSA's budget needs to be larger, much larger, particularly 
for enforcement. Ninety-four percent of transportation deaths occur on 
the highway, yet NHTSA has only a tiny percentage of the transportation 
budget. Although it has been increased in recent years, and I thank the 
Appropriations Committees for that, it is still 30 percent below, in 
real dollars, what it was when I left the agency at the beginning of 
1981. Its enforcement budget is about one-half of the 1980 budget. It 
has fewer than 20 engineer/investigators working on vehicle safety 
defects for the entire country. The Congress should add at least $20 
million to the agency's 2001 budget for additional staff and capacity. 
Look at it this way: We spend hundreds of billions of dollars for 
defense, but more members of the military are killed and injured in 
motor vehicle crashes than in military duty. The members of the 106th 
Congress should not be able to go home for election and tell the voters 
they have acted to prevent another future catastrophe without sending 
legislation to the President for signature.
3. LThe Firestone/Ford recall should be expanded to cover all ATX, ATX 
        II and Wilderness tires to protect the public from this 
        catastrophic defect, and all data and information should be 
        made public to restore public trust.
    Much of the data on which Ford based its analysis of Firestone 
claims data is still not public or subject to outside scrutiny (such as 
how many tires were made at each plant and when--an important factor 
since the defect appears to emerge after two to four years of use), and 
it is based on information only through April 2000. None of the recent 
information that has been pouring into the companies and NHTSA as the 
public is getting informed about the problem is included. It also 
covers only claims data--claims for compensation for injury or property 
damage. It does not cover warranty claims or adjustment data for tire 
failures. It does not cover any information known to Ford (although 
there will be duplication between Ford and Firestone data) such as tire 
test data, including at 26 psi. It also does not cover new information 
now known by NHTSA about claims.
    On September 1, after analyzing recent data (complaints, lawsuits, 
injuries, including information submitted to date from Ford and 
Firestone), NHTSA determined that the recall should be enlarged to 
cover another 1.4 million tires. NHTSA said it is still investigating 
to determine if the recall should be enlarged further. It issued a 
consumer advisory because Firestone refused to enlarge the recall, an 
indication of Firestone's attitude toward a safety defect that gives 
the consumer no warning and can result in death and severe injury when 
the vehicle is operated normally. This same attitude was evident in 
Firestone's offer made on August 16 in public newspaper ads that it 
would reimburse owners who bought other tires, but the offer also ended 
on August 16! Had it not been for a temporary restraining order issued 
by a federal judge in Louisville preventing the company from 
discontinuing the one-day offer, Firestone might have faced a massive 
consumer revolt, picket lines, more consumer lawsuits and more disputes 
with its largest customer, Ford Motor Company, which is pressing to get 
the tires replaced quickly with tires from other manufacturers as well 
as Firestone.
    There is every indication that this problem is a design defect that 
affects all the tires produced. In the Firestone 500 case, the company 
at first asserted that only 400,000 tires were defective, those 
produced in the Decatur plant. But during NHTSA's investigation, as 
more data were available and company documents were secured and 
analyzed, we found that the tread separation on the 500 was a design 
performance defect. The company knew about it for at least three years 
and never informed NHTSA, and it was at the same time making running 
changes on the production line to correct the problem in new tires.
    There are other indications that the companies should expand the 
recall. An analysis released September 1 of about 90 filed lawsuits or 
claims about to be filed showed that 37 percent covered non-recalled 
tires. In several of the foreign recalls, 16-inch tires were included 
(but are not recalled in the U.S.).
    There are a number of documents and data that are still secret. 
This undermines public scrutiny of the scope of the August recall, and 
many of the documents are missing information or poorly formatted and 
so hard to read they look like first drafts. Secrecy is found in 
submissions by the companies to NHTSA, in documents not yet submitted, 
or gag orders in lawsuits that should be made public. The agency rarely 
uses its subpoena power authority but could do so to secure these 
protected documents. This may be painful for the companies, but it is 
essential given the broad public debate about this safety defect and 
the need for the companies to regain public trust. This information 
will probably leak out over time anyway, so it makes sense to release 
it now.
4. LNHTSA failed to discover this defect because it lacks a proactive 
        program to discover safety defects.

    a. LNHTSA was caught flatfooted in this case because it rarely 
pushes companies to obey the law. The Department allowed GM to resist 
recalling its five million defectively designed 1973-1987 pickup trucks 
with side-saddle gas tanks that explode in side-impact crashes 
(approximately 800 people have died because of fire in crashes with 
these vehicles, according to NHTSA's Fatal Accident Reporting System). 
It allowed Ford to resist recalling its vehicles equipped with ignition 
modules that frequently failed, causing vehicles to stall. It allowed 
Chrysler to label its correction of its minivans with defective rear-
door latches that pop open in rear crashes, (throwing occupants 
outside), a ``service campaign'' and not a safety recall. I don't think 
its subpoena power has been exercised in 20 years, and it rarely 
imposes penalties when it learns companies have slithered around its 
request to produce documents, which unfortunately happens with some 
frequency.

      LAuto manufacturers roll the dice in attempts to avoid mandatory 
recalls and usually win. This time their coverup was revealed by an 
enterprising investigative reporter at KHOU in Houston on February 7 
and 10. This time they are the losers as the media spotlight forces the 
story of the sorry state of safety defect enforcement and manufacturer 
compliance with the law into the public consciousness.

    b. LNHTSA also has no early warning system in place and has not 
been proactive in requiring manufacturer warnings or in using sources 
of information that are on the pulse-beat of current real world 
information about vehicle performance. They can and should routinely 
get information from: auto repair facilities; fleet owners, including 
national, state and local fleets; lawyers representing deceased and 
injured family members who find out about defects through discovery and 
cross examination of manufacturers; insurance company data; and also 
from the companies themselves, as they are the first to receive 
consumer complaints and dealer concerns. The auto companies also know, 
as in this case, the design decisions they have made that could 
compromise safety.

    In this case, State Farm Insurance Co., the nation's largest 
insurer, sent an e-mail and called NHTSA in 1998 about 21 cases of 
Firestone tire tread separations, but the agency ignored it. The press 
reports that another 30 cases were discussed with the agency in 1999, 
and the agency ignored them as well. Finally, on April 25, 2000, in 
response to a NHTSA request, 70 reports covering 1996 through April 
2000 were sent. How could this happen? How often does the agency check 
complaints dutifully filed by consumers through its hotline and in 
letters to spot trends? They are all on a computer list by make, model 
and alleged defect. Even if this happens routinely, it's not enough--
because, as this case illustrates, most consumers don't bother 
contacting government agencies.
    The agency should require, as does EPA, that a company notify the 
agency if it gets 25 complaints about the same alleged defect, and 
require, as does the Consumer Product Safety Commission, that the 
company notify the agency if three or more lawsuits alleging the same 
safety defect are filed.
    The agency has also used a highly inappropriate system for 
evaluating whether a safety defect exists--looking at statistical data 
which are rarely adequate. If it cannot establish a statistical basis, 
the agency does not find a defect. Crash statistics are totally 
inadequate to justify such an approach. Yet, the Administrator admitted 
in testimony last week that NHTSA did something similar in this case--
comparing 46 complaint problems to 40 million tires manufactured and 
didn't act. But with a catastrophic, deadly failure, this is completely 
inappropriate. And the agency never did the simple analysis published 
on Friday, September 8, in The New York Times showing that fatal 
crashes in 1995-1998 Ford Explorers are ``nearly three times as likely 
to be tire related as fatalities involving other sport utilities or 
cars.'' The courts have held in a number of cases that if a safety 
element of the vehicle fails and can result in death or injury, there 
is a failure of safety performance sufficient to find a defect, and 
there is no need to look for dead bodies on the highway first.
    The 1994 Michelin tire case reported in the Akron Beacon Journal is 
a different example. It was opened by NHTSA on the basis of five 
complaints with no injuries. The agency said it launched the 
investigation as a courtesy to the Kentucky Attorney General but says 
the complaints alone did not warrant it. But in testimony last week, 
NHTSA Administrator Sue Bailey said one seat belt complaint would be 
enough to open an investigation. Clearly the various elements of a 
case, not just the numbers, must be evaluated.
    In short, NHTSA has not been the tough cop on the regulatory beat. 
When it is, the companies are more safety-conscious, the public is 
protected, and in the end it is less work for all parties. The 
Firestone/Ford case shows what happens when safety is not Job 1 in the 
companies or in the government.
5. LEssential safety standards are severely out of date, were scrapped 
        or delayed in the Reagan years, or are prohibited by law 
        because of industry lobbying.
    a. LThe tire safety standard is 32 years old and is not fully 
effective for testing radial tires. Both Ford and GM have recently 
stated that they favor an improved standard. The current standard tests 
for strength, endurance and how well the tire remains on the rim. 
Radial tires last much longer than bias ply tires and should be 
subjected to a tougher standard.

    b. LThe Uniform Tire Quality Grading standard applies only to car 
tires, not truck/SUV tires. It is a consumer information requirement 
rating tread wear, traction and heat resistance with the rating molded 
into the tire. It should be expanded to cover truck/SUV tires. As it 
happens, the Explorer/Firestone tire is rated because it is used on a 
large Buick station wagon. For heat resistance, it gets the lowest 
grade. But Ford official Jon Harmon dismissed the poor rating, 
indicating that if the tire meets Ford's performance standards the C 
rating is of no concern. But Ford's tests have not been produced to 
date.

    c. LThe roof crush standard is 30 years old. It is a static 
standard requiring weight to be placed on the roof of the vehicle 
(applied to SUVs beginning in model year 1994) equal to 1.5 times the 
maximum unloaded weight of the vehicle. In many of the Ford Explorer/
Firestone rollover cases, the roof crushes into the vehicle, severely 
enhancing the likelihood of injury and death. A dynamic rollover crash 
worthiness standard should be issued addressing roof crush, door lock 
and hinges, side glazing materials, side air bags, and head protection. 
Crash protection in rollovers must include effective safety belts with 
pretensioners.

    d. LThe first petition to NHTSA for a rollover prevention standard 
was filed by Representative Timothy Wirth 15 years ago. Others 
followed. In 1991 the Congress required NHTSA to conduct a rollover 
prevention rulemaking. The agency made an initial effort at developing 
a safety standard but then dropped it and instead proposed a consumer 
information requirement. The auto industry then got the Appropriations 
Committee to prohibit issuance of a consumer information rule until 
after a study by the National Academy of Sciences about the usefulness 
and presentation of consumer information. Finally in May 2000 the 
agency proposed to conduct New Car Assessment tests for rollover based 
on a static measurement of track width and center of gravity height, 
but once again the manufacturers objected and the Appropriations 
Committee bill requires yet another study by the NAS before it could be 
issued. This bill is now in conference.

      LOur coalition of consumer and health groups and insurers favors 
dropping the study and letting NHTSA proceed with its rulemaking on the 
consumer information test, even though we prefer a more comprehensive 
test. A 1998 Harris poll conducted for Advocates For Highway and Auto 
Safety shows 62 percent of the public wants such information. But we 
also want a rollover prevention standard. It is long overdue. About 
9,500 highway deaths annually occur in rollover crashes--almost 25 
percent of all highway deaths. This problem must be addressed, 
particularly with the large numbers of SUVs being used as family 
vehicles that are susceptible to rollover.

    e. LThe agency should issue a rule for a tire inflation indicator 
on the dashboard, as I proposed 22 years ago. It was eliminated by the 
Reagan administration. The companies complain that tires are not 
properly inflated but then lobby to undercut consumers' ability to 
properly maintain their tires with accurate information.

    f. LThe tire manufacturing information now molded into the black 
wall of the tire should be placed on the whitewall or outside of the 
tire so a consumer doesn't have to crawl under the car to find it to 
determine if their tire is subject to a recall. This was part of my 
rulemaking plan more than 20 years ago, but it was never issued after I 
left.

    g. LThe tire reserve load consumer information requirement 
eliminated in the Reagan years should be reestablished to inform 
consumers of the maximum rated load capacity of the vehicle, so they 
know when they should inflate their tires for maximum load carrying.

    h. LThe agency should be alert in this case to whether its 
requirement for record retention of only five years should be extended, 
since the critical evidence in this case extends over a decade.

    i. LThree elements of legislation are needed that are relevant to 
this case:

      LFirst, the 1982 legislation eliminating the responsibility of 
independent tire dealers to report the names and addresses of tire 
purchasers to the manufacturer for notification in the event of a 
recall should be changed back to requiring such record keeping as 
during the period from 1970 until 1982. Independent dealers with 
computers today can readily supply such names to the manufacturer. The 
current law only requires the independent dealer to give the consumer a 
card to mail themselves. A 1986 NHTSA report showed only 11 percent 
responded. Thus, in this case, most buyers from independent dealers 
will not be notified by mail.
      LSecond, the current law requires tire owners to return the tire 
within 60 days of a recall notification (which, I presume, means if a 
manufacturer has no contact information, a consumer would have to rely 
on news reports) or 60 days after tire replacement. Car owners in 
recalls don't have this limitation. It is confusing enough to get tires 
replaced without this added complexity. It should be eliminated.
      LThird, the current prohibition in the law on a NHTSA rule 
requiring a continuous buzzer to alert occupants to buckle up should be 
eliminated. Among car companies, only Ford, I believe, now has a 
continuous buzzer. The current law only permits NHTSA to require a 4-8 
second buzzer. Belt use is essential in rollovers. It should be 
encouraged in every way, including when the vehicle is in use.
    Mr. Chairman, we urge the Committee to immediately mark-up and pass 
new legislative authority for NHTSA so it can do its job. It must be a 
priority for this Congress. And such legislation should instruct the 
agency to upgrade and issue the safety standards referenced above that 
are long overdue.
    Thank you Mr. Chairman for the opportunity to testify on this 
important subject today.
                                 ______
                                 

                          Chronology of Firestone/Ford Knowledge of Tire Safety Defect
                                                                     1987
 
May 1, 1987                   A Ford internal memo states that the stability of the Explorer [UN46] is worse
                               than Bronco II and that it can be improved by widening, lowering and using a
                               smaller P215 tire.
 
June 11, 1987                 Ford internal memo on a meeting with Firestone reports that the ATX design is
                               approved by Ford.
 
                                                                     1988
 
Fall 1988                     Ford ADAMS reports states that the Explorer demonstrated ``performance issues'' at
                               35 psi but that they expected more favorable results at 26 psi.
 
November 25, 1988             An internal Ford Test Report shows Explorer lifts two wheels at 55 mph due to high
                               center of gravity, tires and front suspension system.
 
                                                                     1989
 
1989                          Internal Ford document states that the cornering capacity of the Explorer is
                               ``[n]ot to exceed current [Bronco II] levels. Limit cornering capacity with
                               larger tires through suspension revisions and tire pressure reduction.''
 
 
January 11, 1989              An internal Ford memo reports a meeting with Firestone to discuss front suspension
                               ``jacking'' on the Explorer and Bronco II, a phenomena that is ``undesirable from
                               a vehicle stability standpoint.''
 
January 26, 1989              In an internal Ford memo, Ford engineers state the design goal [no two wheel lift]
                               has not been met with the P235 ATX tire.
 
February 9, 1989              Ford hires Arvin Calspan to test the P245 tires. In a letter to James Avouris from
                               George A. Tapia of the Arvin Calspan Tire Research Facility, Tapia reports that
                               ``[t]he P245 test tires at the 29 psi pressure condition showed a severe `tread
                               package' separation from the tire carcass.''
 
February 20, 1989             In an internal Ford memo, Ford engineers recommend use of 26/26 psi along with
                               various other spring changes due to stability testing showing two wheel lift with
                               35 psi.
 
March 2, 1989                 Internal Firestone memo to Ford states that ``in light of Ford's decision to
                               specify 26 psi in the P245 tire for the Explorer, Firestone has tested the
                               vehicle at 26 psi front and 35 psi rear'' . . . ``Calspan testing showed severe
                               tread separation, but our testing used a more realistic procedure and we don't
                               think it will be a problem.''
 
April 5, 1989                 An internal Ford memo reports that Consumer's Union told Mr. Sloan, Ford Vice
                               President of Public Relations: ``You have a real problem'' with your Bronco II.
 
April 11, 1989                Failure Analysis memo [Roger McCarthy] makes a proposal to Ford's lawyers to
                               conduct Consumer's Union testing.
 
April 21, 1989                An internal Ford memo from Sloan to upper management (including Red Poling)
                               following meeting with Consumer's Union reports that Ford staff has ``clouded
                               their minds.''
 
May 10, 1989                  Ford Test Report reveals that J-turn results still show that the Explorer ``rolls
                               over'' in 5 of 12 tests. Blazer and Bronco II do not roll over!
 
May 16, 1989                  Internal Ford memo emphasizes the importance of how the Explorer performs in the
                               Consumer's Union (avoidance maneuver) test and the need to return to Arizona for
                               more testing.
 
May 17, 1989                  Memo from Ford Truck Operations Management authorizes Consumer's Union testing in
                               Arizona.
 
May 29, 1989                  Internal Ford memo tells management that there is a ``risk'' that the Explorer
                               ``won't pass'' the Consumer's Union test.
 
June 1989                     Consumer Reports article tells consumers they should ``avoid'' the Bronco II.
 
June 15, 1989                 In an internal Ford memo to Truck Operations Management, Ford engineer Jim Mason
                               recommends design changes to the Explorer:
                              *Lists eight possible changes
 
 
 
 
 
 
July 1989                     Ford memo indicating that Ford lowered the front of the Explorer half an inch and
                               stiffened the front springs to increase stability.
 
September 11, 1989            In an internal Ford email to Charles White, Roger Stornant states, ``I believe
                               that new info is that our competitors are recognizing CU Test as a requirement
                               and have designed their new utility vehicles to meet. OGC is concerned we will be
                               the only OEM with a vehicle that has a significant chance of failing the CU test.
                               I believe that management is aware of the potential risk w/P235 tires and has
                               accepted risk. CU test is generally unrepresentative of real world and I see no
                               `real' risk in failing except what may result in wave of spurious litigation.''
 
September 12, 1989            In an internal Ford email to Charles White, Roger F. Stornant expresses that OGC
                               is concerned that the UN46 [Explorer] would fail Consumers Union tests with the
                               P235 tires.
 
 
December 1989                 Internal memo states that Explorer with 235 tires set at 26 psi passed the
                               rollover test.
 
                                                                     1990
 
February 1990                 In order to meet the production deadline, Ford officials rejected some proposals
                               to improve the stability of the Explorer (i.e. widening the track width).
 
March 1990                    JOB 1: '91-'94 Explorer
 
May 1, 1990                   Ford asks Firestone in a letter from Jim Avouris to issue a dealer bulletin
                               regarding tire replacement, emphasizing the importance of using the correct size
                               tire and the correct air pressures on the Explorer [due to rollover sensitivity].
 
September 12, 1990            In an email from Mazzola (Firestone) to Staples (Ford), Ford requests that
                               Firestone (a) change the tire design to a low rolling resistance polymer and (b)
                               change the tire pressure to 30/35 psi for a 1.6 mpg improvement on CAFE. The
                               question is raised whether air pressure change will affect ``vehicle dynamics,''
                               [i.e., rollover].
 
                                                                     1991
 
February 12, 1991             FILED: Woodburn v. Firestone Tire and Rubber Co.; et al. [injuries unknown]
 
February 14, 1991             In a memo from Dave Wotton at Ford to Reichenbach at Firestone with tire
                               objectives for the 1995 model Explorer [UN105] shows that the goal is same
                               traction, better rolling resistance and better wear properties. Timing is
                               November 94.
 
December 19, 1991             Firestone memo from Reichenbach to Gibas at Ford saying it is ``increasingly
                               important'' that we know whether you will adopt the tire for the Explorer.
 
                                                                     1992
 
March 24, 1992                FILED: Johnson v. Nissan, et al. [injuries unknown]
 
April 23, 1992                FILED: Cherinka v. Ford; et al [Explorer/ATX tread separation; injuries unknown]
 
April 29, 1992                FILED: Roberston v. Firestone/Bridgestone, Inc.; et al. [injuries unknown]
 
May 10, 1992                  Letter from T.A. Mast & R.M. Campbell of Ford to Bridgestone/Firestone, Michelin,
                               Goodyear, and General Tire to revise UPN105 Tire Targets. The primary objectives
                               were to maintain tire wear, traction, and maximize rolling resistance.
 
June 16, 1992                 Internal Ford memo entitled ``Targets--UN105'' contains:
 
 
 
 
 
August 27, 1992               Memo from J.E. Behr of Firestone to R.D. Bacigalupi, Ford Light Truck Engineering,
                               answering questions from Ford about changing the design of the ATX to use a
                               different tread compound for rolling resistance improvement.
 
                                                                     1993
 
September 28, 1993            A memo from Reichenbach at Firestone to Skyner at Ford asks to evaluate a tire
                               wear concern on the 10K testing as the '95 Explorer is exhibiting right front
                               inside shoulder wear.
 
December 22, 1993             FILED: Blackaller v. Ford; Firestone; et al. [2 injuries, 2 deaths]
 
                                                                     1994
 
April 12, 1994                Ford Light Truck Operations Tire Construction Detail Sheet specifies the P235/
                               75R15 tire at a maximum psi of 35.
 
September 9, 1994             FILED: Dreher v. Ford, et al. [injuries unknown]
 
1995                          Ford/Firestone begins shipping 16" Wilderness tire to Saudi Arabia.
 
                                                                     1995
 
February 23, 1995             FILED: Greenwald v. Bridgestone/Firestone, Inc.; Ford; et al. [Explorer/ATX
                               separation; injuries unknown]
 
August 7, 1995                FILED: Ellis v. Bridgestone/Firestone, Inc.; Ford; et al. [Explorer/ATX; injuries
                               unknown]
 
August 7, 1995                FILED: Dickson v. Bridgestone/Firestone, Inc.; et al. [Explorer/ATX separation
                               from Wilson, NC plant; injuries unknown]
 
                                                                     1996
 
January 4, 1996               FILED: Combs v. Ford [Bronco II/ATX separation; 1 fatality]
 
March 13, 1996                Welch v. Ford; et al. [Explorer/ATX separation; 3 injuries] (incident date)
 
June 20, 1996                 A memo from Arizona Game and Fish Department wildlife manager Lowell Whitaker to
                               his regional supervisor describes two blow outs of Firestone tires. ``During the
                               past few months I have been cautioned as a user of Firestone tires by DPS
                               (Department of Public Safety) that there have been a series of accidents caused
                               by the separation of the tread from the tire on Firestone tires.''
 
July 1996                     FILED: Rogers v. Ford; et al. [Explorer/ATX separation; 1 injury, 1 fatality]
 
July 12, 1996                 A memo from Deputy Yuma County (Arizona) Attorney John K. White regarding
                               Firestone Firehawk ATX tires reported:
 
 
 
 
July 22, 1996                 Letter from Robert J. Descheemaker at the Arizona State Procurement Office to
                               Roger Abrams of Bridgestone/Firestone requesting replacement of all Firehawk ATX
                               tires bought under state contracts.
 
August 19, 1996               Ford CQIS computer report on Explorer with 20k miles--Colonial Ford dealer in
                               Danbury, Connecticut has 16 Explorers with distorted tires like this--belt is
                               obviously distorted and about to separate
 
August 26, 1996               FILED: Gauvain v. Bridgestone Corporation; et al. [Explorer/ATX separation; 1
                               fatality]
 
September 23, 1996            FILED: Brizendine v. So. New. T.B.A. Supply Co., et al. [injuries unknown]
 
December 27, 1996             FILED: Guara v. Ford, et al [Bronco II/ATX separation; injuries unknown]
 
                                                                     1997
 
January 17, 1997              FILED: Kehm v. Bridgestone/Firestone, Inc.; et al. [Bronco/ATX separation; 3
                               injuries]
 
February 21, 1997             FILED: Spivak v. Bridgestone/Firestone, Inc.; et al. [Explorer/ATX separation;
                               injuries unknown]
 
June 1997                     Speed rating on tires in Venezuela changed from R [106 mph] to S [112 mph], with
                               tires to be made in Venezuela.
 
June 1997                     FILED: State Farm Mutual Automobile Insurance Company v. Bridgestone/Firestone,
                               Inc. [injuries unknown]
 
June 2, 1997                  FILED: Stephens v. Catherine A. Broome and Christopher D. Kehm; Bridgestone/
                               Firestone; et al. [Bronco/ATX separation; 3 injuries]
 
June 11, 1997                 Fax from Daryl G. Parma of Firestone to Luis Abreau states that tests show ``how
                               much better'' the Wilderness AT (ST381J) is than the ATX II (SR897J) which would
                               replace the ATX II.
 
July 28, 1997                 FILED: Jackson v. Bridgestone/Firestone, Inc.; Ford; et al. [Explorer/ATX
                               separation; 3 injuries, 1 fatality]
 
August 1997                   An undated memo states Ford and Firestone are notified of tire problems in Saudi
                               Arabia [from the Congressional notebooks]
 
August 7, 1997                FILED: Lazarus v. Bridgestone/Firestone, Inc.; et al. [Explorer/ATX separation;
                               injuries unknown]
 
September 16, 1997            FILED: Silva v. Ford; et al. [Explorer/ATX separation; injuries unknown]
 
September 22, 1997            FILED: Carrillo v. Bridgestone/Firestone, Inc.; et al. [Blazer/ATX separation; 2
                               fatalities]
 
October 7, 1997               FILED: Flores v. Ford; Bridgestone/Firestone, et al. [Explorer/ATX separation;
                               injuries unknown]
 
October 21, 1997              FILED: Chinichian v. Bridgestone/Firestone, Inc.; et al. [Explorer/ATX separation;
                               injuries unknown]
 
December 1, 1997              FILED: Ortiz v. Bridgestone/Firestone, Inc.; Ford; et al. [Explorer/ATX
                               separation; 1 fatality]
 
                                                                     1998
 
January 1998                  Glenn R. Drake, regional marketing manager in the United Arab Emirates for Ford
                               expresses concern about Firestone's response to the tire problems in an email to
                               other Ford executives: ``If this was a single case, I would accept Firestone's
                               response as they are the experts in the tire business, case closed. However, we
                               now have three cases and it is possible that Firestone is not telling us the
                               whole story to protect them from a recall or a lawsuit.''
 
January 9, 1998               FILED: Haffey v. Ford; et al. [Explorer/ATX separation; 2 injuries, 1 fatality]
 
January 22, 1998              FILED: Huffman v. Ford; et al [Explorer/ATX separation; 2 injuries, 1 fatality]
 
January 28, 1998              FILED: Bragg v. Bridgestone/Firestone, Inc.; et al. [1 injury]
 
April 23, 1998                FILED: Van Etten v. Bridgestone/Firestone, Inc.; Ford [Explorer/ATX separation; 3
                               injuries, 1 fatality]
 
April 24, 1998                FILED: Parra v. Ford; et al. [Explorer/Wilderness HT; 2 injuries]
 
May 15, 1998                  FILED: Kim v. Ford; et al. [Explorer/ATX separation; 2 injuries, 2 fatalities]
 
June 24, 1998                 In an internal Bridgestone/Firestone interoffice memo to M. Hamaya Firestone, K.
                               Ball acknowledges that P235/75R15 ATX II separation is 92.8% of all ATX II claims
                               and 53.6% of all Firestone light truck claims for the year of 1997. Additionally,
                               warranty claims on ATX II tires jumped from 42 in 1995 to 279 in 1997, a sixfold
                               increase. 1998 light truck claims are 469 for separations and 8 for road hazards.
 
 
July 13, 1998                 FILED: Simmons v. Ford; et al [Explorer/ATX separation; 2 injuries]
 
July 22, 1998                 In an email to William Duckwitz at NHTSA from State Farm Associate Research
                               Administrator Samuel Boyden, Boyden advises NHTSA of 21 Firestone ATX P235/75R15
                               tire failures causing injuries. Fourteen cases were in 1991-1995 Ford Explorers.
                               The problem was dismissed as ``unremarkable'' by NHTSA.
 
July 31, 1998                 FILED: Gutierrez v. Bridgestone/Firestone [Explorer/ATX separation; injuries
                               unknown]
 
August 27, 1998               FILED: Lockwood v. Bridgestone/Firestone, Inc.; Ford; et al. [Explorer/ATX
                               separation; 1 fatality]
 
September 17, 1998            FILED: Alvarez v. Bridgestone/Firestone, Inc.; et al. [Explorer/ATX separation;
                               injuries unknown]
 
October 24, 1998              Ford Dealer Paul Wright, Technical Branch Manager, Al Jazirah Vehicles, expresses
                               concern and frustrations in a letter to John W. Thompson, Tamimi Company
                               Commercial Division that despite his warning about the safety of the tires, he
                               did not receive a response and was being ``kept in the dark to what is
                               happening.''
 
 
 
1999                          Federal data from the Fatal Accident Reporting System for 1995-98 was available to
                               Ford, Firestone, and NHTSA showing that Explorer fatalities were almost three
                               times as likely to be tire related as those with other SUVs or cars and that
                               Explorer crashes increased significantly in the late 1990s compared with other
                               SUVs.
 
                                                                     1999
 
January 1999 or after         Explorer Tire DNP--Exposed Findings of Tire Explosion and Car Rolling Due to Tire
                               Inflation. Notes report of 22 Firestone and 10 Goodyear tread separations and
                               rollover crashes.
 
January 12, 1999              FILED: Hill v. Bridgestone/Firestone, Inc. [5 injuries]
 
January 19, 1999              FILED: Wieters v. Bridgestone/Firestone, Inc.; et al. [injuries unknown]
 
January 22, 1999              An email from D.J. Candido, to Firestone colleagues concluded that for countries
                               prone to heat induced separation, the Wilderness HT, with European specs, was the
                               best application choice. However, they also acknowledged that this model is more
                               prone to chip and tear. The best choice is to develop a new tire with similar
                               heat specs to the European model and similar chip/tear specs to the Australian
                               model.
 
January 27, 1999              In an interoffice Bridgestone/Firestone memo entitled P255/79R16 Wilderness AT
                               Adjustment Data to Bruce Halverson, Market Quality Engineer, Nashville, Luis E.
                               Abreu, Technical Service Manager, Firestone Venezuela, indicates that 47 tires in
                               Venezuela had tread or belt separation. Of these 47, 34 had international serial
                               codes and 13 had DOT (USA) code.
 
 
January 28, 1999              In an email to Melanie Gumz, Glenn Drake of Ford reports that he is suspicious of
                               Firestone's response to the problem and suggests that Firestone is not telling
                               the entire story in order to protect themselves from lawsuits and a recall. Drake
                               also questions the durability of the product and the fact that Ford is about to
                               change the tire on all Explorers and Mountaineers to a tire that has better high
                               speed durability. Drake recommends that Ford conduct its own analysis in order to
                               protect Ford and give the dealers and customers an independent opinion. ``[W]e
                               owe it to our customers and our shareholders to investigate this for our own
                               peace of mind.''
 
January 1999                  In a memo to Firestone Distribution entitled Ford Explorer--Concerns in the Middle
                               East (P255/70R16), John E. Behr, Account Executive for Original Equipment Tire
                               Sales, reported, ``I attempted to assure the Ford people that we are not aware of
                               any defect with these tires, and that we've supplied over 1.1 million of the same
                               tires to Ford over the past three years (1996 thru 1998) for usage in North
                               America, with excellent field performances.''
 
January 29, 1999              In a memo to Bridgestone/Firestone Distribution, John E. Behr, OE Sales, expresses
                               that Ford is concerned that the tires in the Middle East are defective.
 
 
February 8, 1999              FILED: Menendez v. Ford, Bridgestone/Firestone, Inc.; et al. [Explorer/ATX
                               separation; injuries unknown]
 
February 14, 1999             In a letter to Keshav Das, Technical Service Department of Firestone at Dubai,
                               John Garthwaite, Ford National Service Director, Al Jazirah Vehicles (Ford Dealer
                               in the Middle East), warns Bridgestone/Firestone of the serious nature of the
                               problem with P255/70/R16 AT tires. Garthwaite indicates that an accident occurred
                               with a tire at 30 psi. The tread separated completely and the tire remained
                               inflated. Garthwiate expressed his strong conviction that there is a ``distinct
                               problem with all or at least a certain production run of this particular tyre.''
 
February 25, 1999             Garthwaite continues to question the safety of the P255/70/R16 tire in a
                               subsequent letter to Keshav Das. ``These incidents involving Firestone P255/70/
                               R16 tyres is beginning to become an epidemic.'' He further states that ``Nothing
                               in your reply has done anything to re-assure me that there may not exist a defect
                               in a particular batch of your product . . .''
 
March 11, 1999                An internal Bridgestone/Firestone Letter to S. Katsura, et. al. from Firestone
                               Account Executive, John E. Behr expresses concern over the result of Ford's
                               proposed consumer notification program and its potential effects and
                               ``perception'' it would convey in Saudi Arabia as well as ``complications it
                               could create in North America.'' The letter also indicates that other Ford people
                               also disfavored the notification program.
 
 
March 12, 1999                An internal Ford memo to Dave MacKinnon from Church Seilnacht states the
                               following:
 
 
 
 
 
April 27, 1999                FILED: Glick v. Firestone Tire and Service Center, et al. [Explorer/ATX
                               separation; injuries unknown]
 
April 28, 1999                Ford memo on Firestone Tire Tread Separations states that Ford will ``address the
                               issues related to the rollovers on a case-by-case basis.''
 
May 4, 1999                   FILED: Healy v. Bridgestone/Firestone, Inc. [Explorer/ATX separation; 1 injury]
 
May 4, 1999                   FILED: Patterson (Elroy) v. Bridgestone/Firestone [injuries unknown]
 
May 4, 1999                   In a fax from Arabian Car Marketing to Ford Middle East and North Africa Company,
                               Oman Ford advises Ford Middle East that it is replacing Firestone tires with
                               Michelin tires prior to delivery because Explorer users are becoming aware of
                               (through the internet) the off-road limitations of the Explorer.
 
June 24, 1999                 FILED: Jenkins v. Bridgestone/Firestone, Inc. [injuries unknown]
 
June 30, 1999                 Fax labeled ``Top Urgent & Very Important'' to Ford Middle East from Arabian Car
                               Marketing Company warns Ford Middle East and North Africa that the tires are
                               failing: ``news of fatal accidents on Explorer is spreading rapidly.'' ``The tire
                               problem has already resulted in a severe decline in Explorer sales.'' ``We are
                               also worried about further fatalities and possible lawsuits.''
 
July 2, 1999                  FILED: Jenkins v. Bridgestone/Firestone, Inc. [injuries unknown]
 
July 7, 1999                  FILED: Meza v. McCombs HFC Limited D/B/A Red, et al. [Explorer/ATX separation;
                               injuries unknown]
 
July 16, 1999                 FILED: Progressive County Mutual Insurance Company v. Bridgestone/Firestone, Inc.
                               [Explorer/ATX separation; injuries unknown]
 
July 28, 1999                 FILED: Jarvis v. Bridgestone/Firestone, Inc. [Explorer/ATX separation; injuries
                               unknown]
 
July 30, 1999                 FILED: Taylor v. Bridgestone/Firestone, Inc. [Explorer/ATX separation; injuries
                               unknown]
 
August 2-5, 1999              Teams from Ford and Bridgestone/Firestone recognize Ford Explorer rollover due to
                               tread leaving casing in the Venezuelan Tire Survey of problem tires. Suggested
                               possible causes are excessive speed (173 Km/hr (26 Km in 9 minutes)), heavy load
                               (8 passengers plus luggage), and high pavement temperature (55 degrees Celsius at
                               1:20 pm). Suggested possible results were tire fatigue and separations. 132 tires
                               inspected at dealers in 4 locations revealed 8 underinflated tires (Wilderness
                               P255/70R/16AT and P235/75R/15ATX)
 
 
August 6, 1999                FILED: Aoyagi v. Bridgestone/Firestone, Inc.; et al. [injuries unknown]
 
August 9, 1999                Letter from B.V. Halverson to Mr. J. Gonzalez of Bridgestone Firestone
                               acknowledges that ``sustained high speed driving must be considered as a normal
                               input in the performance of vehicles and tires in Venezuela.'' Mr. Carlos Maren
                               ``really wanted a BFS recommendation that would guarantee that a tire would never
                               have a separation.''
 
August 12, 1999               FILED: Romero v. Bridgestone/Firestone, Inc.; et al. [Explorer/ATX separation;
                               injuries unknown]
 
August 13, 1999               FILED: Jimenez v. Bridgestone/Firestone, Inc. [Explorer/ATX separation; injuries
                               unknown]
 
August 17, 1999               Ford begins replacing tires on Saudi Explorers through a ``customer notification
                               enhancement action'' and not a ``recall.''
 
 
 
 
 
August 19, 1999               FILED: De Leon v. Bridgestone/Firestone, Inc.; et al. [injuries unknown]
 
August 23, 1999               In a letter to owners of light truck vehicles, Bridgestone/Firestone offers free
                               tire inspection and free rotation service as a special offer to Venezuelan owners
                               of light truck vehicles.
 
August 27, 1999               In a letter to C.E. Mazzorin, Ford's L.A. Klein indicates that the tire problems
                               in the Middle East are largely due to the fact that the tire was not designed for
                               the Middle Eastern market. The tire's speed rating is ``S'' which allows for
                               speeds up to 112 mph. The Middle East requires higher speed ratings.
 
September 1999                In a letter to it's GCC dealers, Ford stated: ``Ford and Firestone have been
                               working to identify a Firestone tire that we can recommend that may offer a
                               greater margin of resistance to puncture and or tread separation for the
                               conditions unique to the GCC region than the current tire. That tire has been
                               identified as the `special service' tire currently available only in the Saudi
                               Arabian market. This tire is more puncture resistant than the current production
                               tire.''
 
Fall 1999                     Ford began replacing Firestone tires on Explorers in ten Middle East countries.
 
September 1, 1999             FILED: Hendricks v. Bridgestone/Firestone, Inc. [Explorer/ATX separation; injuries
                               unknown]
 
September 3, 1999             FILED: Bean v. Bridgestone/Firestone, Inc.; et al. [Explorer/ATX separation;
                               injuries unknown]
 
September 9, 1999             FILED: Porsche v. Ford, Bridgestone/Firestone, Inc. [3 injuries]
 
September 12, 1999            In a letter from John Garthwaite, National Service Director, Al Jazirah Vehicles,
                               Saudi Arabia, to David MacKinnon, Director of Ford Customer Service, Dubai,
                               Garthwaite once again advises of tread separation problems in Saudi Arabia. He
                               suggests an in-depth Firestone tire investigation. ``I am afraid that I can see a
                               pattern emerging here. The tyre in this second case is totally destroyed but it
                               is clear to me that the body damage is indicative of tread separation in the
                               first instance.''
 
September 13, 1999            FILED: Smith v. Bridgestone/Firestone, Inc.; et al. [injuries unknown]
 
September 14, 1999            Ford memo entitled ``1995/99 Explorer/Mountaineer Firestone P255/70R16 Tire
                               Separation in the United States'' states:
 
 
 
September 15, 1999            Internal Ford memo from Carlos Mazzorin to Jac Nasser and others:
 
 
 
 
September 17, 1999            FILED: Douglas v. Ford; Bridgestone/Firestone; et al. [Explorer/ATX separation;
                               injuries unknown]
 
October 1, 1999               Interoffice memo from L.A. Klein to C.E. Mazzorin reveals Ford's admission that it
                               was responsible for choosing to use the North American tire in the GCC (Gulf
                               Countries) market and determines the tire was not suitable for this area.
                               Firestone was not part of that decision.
 
 
 
 
October 19, 1999              Report entitled 1999 Firestone Quarterly Meeting: Critical Performance Issues,
                               Aiken, SC indicates that tire separations were up to 3365 from 2929. Belt edge
                               separation up 18.3%, belt leaving belt was up 10.1%, and SW separation--rubber
                               from casing was up 63.6% for 1999 third quarter compared to 1998. This report
                               does not separate out the individual tires.
 
 
 
 
October 19, 1999              The Radial ATXII also experienced a 5.2% increase in belt edge separation.
 
 
November 10, 1999             FILED: Guillen v. Bridgestone/Firestone, Inc., et al. [injuries unknown]
 
December 21, 1999             FILED: Gilmore v. Bridgestone/Firestone; et al. [injuries unknown]
 
                                                                     2000
 
2000                          1999 vs. 1998 Adjustments data, Firestone revealed that Wilderness tire
                               separations increased 194% and Wilderness adjustments are ``growing quickly.''
 
2000 est.                     In a Firestone document ``Explorer Tire DNP'' giving status report: ``In July 1997
                               FoV representatives were called to a meeting in Caracas with a group of
                               independent lawyers representing four (4) customers. The objective of this
                               meeting as expressed by these lawyers, was to draw Ford attention to a situation
                               related to their customers, but that they felt could be greater.''
 
 
January 1, 2000               In a Bridgestone/Firestone 1999 Year End Minor Profit Loss Report from William
                               Thomas to Dave Laubie, attached charts show 1998 and 1999 data on tire tread
                               separations by tire type and plant indicating large numbers of tread separations
                               in tires manufactured at Decatur plant and with 235/75R15 tire. Also shows
                               increasing claims for SXR4S Tire in 1999. Overall separation are up 10 in 1999
                               over 1998. 25% of total separations in 1999 were ATX II.
 
February 2000                 Ford offers free replacement tires for vehicles in Malaysia and Thailand.
 
February 2000                 Officials from Bridgestone/Firestone were briefed as early as February about
                               rising warranty costs for the now recalled tires according to internal
                               Bridgestone/Firestone documents including a series of charts distributed at a
                               sales meeting in February, 2000. One chart tracking ``separations increasing''
                               revealed that the number of warranty claims for tread separation had risen from
                               4,200 in 1998 to 4,694 in 1999 (an increase of 11.8 percent). Another chart
                               stated that ``Wilderness AT needs improvement.'' While still other charts
                               analyzed patterns in tread separations emphasizing tires for light trucks. These
                               charts revealed that the number of tread separations involving Wilderness tires
                               had risen 144 percent from 1998 to 1999.
 
February 7, 2000 & Feb. 10,   KHOU, CBS affiliate station in Houston, breaks story of significant numbers of
 2000                          deaths and lawsuits with Firestone tires on Ford Explorers. Firestone Statement
                               on February 4 before the programs aired says: ``The Radial ATX has proved to be a
                               reliable workhorse for U.S. consumers. Our experience with the Radial ATX
                               indicates high consumer satisfaction with the quality and reliability of these
                               tires. No court or jury has ever found any deficiency in these tires.''
 
February 10, 2000             In a letter from Christine Karbowiak, Vice President, Public Affairs, Firestone,
                               to Robert Decherd, Chairman, President and CEO of A.H. Belo Corp., and Peter
                               Diaz, President and General Manager of KHOU-TV, Firestone states that KHOU-TV's
                               broadcast series regarding its tires, ``contains falsehoods and
                               misrepresentations that improperly disparage Firestone and its product, the
                               Radial ATX tire.'' It further asserts, ``This series has unmistakably delivered
                               the false messages that Radial ATX tires are dangerous, that they threaten the
                               safety of anyone using them, and that they should be removed from every vehicle
                               on which they are installed. Each of these messages is simply untrue.''
 
February 25, 2000             Bridgestone/Firestone report indicates that separations in Wilderness tires are on
                               the rise, but ATX are decreasing.
 
March 5, 2000                 NHTSA ODI resume (IE00-016=different from current investigation file number)
                               indicates 22 complaints, 8 crashes, and 4 fatalities due to tire tread
                               separation. (All ODI complaints are sent to company when received.)
 
March 6, 2000                 NHTSA opens preliminary inquiry after KHOU-TV programs prompted consumer
                               complaints.
 
March 22, 2000                Firestone survey of 243 tires on 63 vehicles that were trade-ins or lease return
                               vehicles shows that 31% of the 15" tires were under-inflated and 51% of the 16"
                               tires were under-inflated and at total of 9 tires had less than 20 psi.
 
April 25, 2000                In response to a request from NHTSA, Samuel Boyden, State Farm Associate Research
                               Administrator, emailed a breakdown by calendar year and tire type (Firestone ATX,
                               ATX II, and Wilderness tires) for the period covering 1996 to April 2000. This
                               contained information on 70 reports.
 
May 2000                      Ford offers to replace tires for customers in Colombia, Ecuador and Venezuela.
 
May 2000                      Ford shifts to Goodyear tires in Venezuela as it waits for a U.S. Firestone
                               response. Ford's action covers about 39,800 vehicles.
 
May 2, 2000                   NHTSA opens investigation of 47 million ATX, ATX II, and Wilderness Firestone
                               tires (investigation number PE00-020) with 90 complaints reporting 33 crashes
                               including 4 fatal crashes and 17 injury crashes resulting in 27 injuries and 4
                               fatalities.
 
 
May 8, 2000                   NHTSA sends a list of interrogatories to Bridgestone/Firestone as part of its
                               investigation of the tire failures. NHTSA requests that Firestone respond by June
                               19th.
 
May 10, 2000                  NHTSA sends a list of interrogatories to Ford as part of its investigation of the
                               tire failures. NHTSA requests that Ford respond by June 23rd.
 
June 6, 2000                  Internal Ford Memo lists 21 vehicles sold in Gulf Countries. Lists Explorer (in
                               Venezuela) psi at 28/28 for the 15" tire. The new 15" tires are listed at 30/30.
 
June 16, 2000                 Ford requests an extension of the deadline to respond to NHTSA's interrogatories
                               with an anticipated completion date of October 13th.
 
June 19, 2000                 Ford requests extension from NHTSA for full response.
 
June 20, 2000                 In response to NHTSA's interrogatories, Bridgestone/Firestone submits a partial
                               response.
 
June 22, 2000                 NHTSA grants Bridgestone/Firestone an extension until August 14th to provide
                               information in response to its interrogatories.
 
July 24, 2000                 In response to NHTSA's interrogatories, Ford submits a partial response.
 
July 25, 2000                 After a story aired on KCBS regarding Ford Explorers and ATX tires, Firestone
                               instructed dealers to replace tires with Bridgestone or Firestone tires of the
                               customer's choice. However, ``[t]his sale should be a regular sales ticket. Do
                               not use an adjustment ticket.'' [Adjustments (warranties) are used by NHTSA and
                               industry to track defects.]
 
July 31, 2000                 Public learns of Ford's replacement of Firestone tires on Explorers in Venezuela.
 
July 31, 2000                 Public learns of Ford's replacement of Firestone tires on Explorers overseas.
 
July 31, 2000                 Ford submits another partial response to NHTSA's original interrogatories.
 
August 2, 2000                NHTSA reports it is probing 21 deaths in crashes of pickup trucks and SUVs where
                               tire failure may have played a role.
 
August 4, 2000                Sears, Roebuck & Co., the No. 1 tire retailer, stops selling certain Firestone
                               tires.
 
August 4, 2000                Ford submits another partial response to NHTSA's original interrogatories.
 
August 6, 2000                Firestone announces a ``customer information notice'' in Venezuela in which
                               certain models of tires would be replaced.
 
August 7, 2000                NHTSA announces investigation of 46 deaths related to the Firestone tires.
 
 
August 9, 2000                Firestone/Bridgestone voluntarily recalls 6.5 million 15" ATX, ATX II, and
                               Wilderness AT from the Decatur plant. (14.4 manufactured)
 
August 14, 2000               Bridgestone/Firestone asks NHTSA to again extend its deadline to respond to
                               NHTSA's initial interrogatories until September 5th.
 
August 15, 2000               NHTSA raises the number of traffic deaths linked to Firestone tires from 46 to 62.
                               It is also looking into reports of 100 injuries.
 
August 18, 2000               Ford's partial response to NHTSA's inquiries.
 
August 28, 2000               Bridgestone announces a boost in replacement production to 650,000.
 
August 29, 2000               NHTSA requests supplemental information from Ford as part of its ongoing
                               investigation of the Firestone tire failures. NHTSA requests that Ford respond by
                               September 31st.
 
August 31, 2000               Venezuela's consumer protection agency asked prosecutors to bring criminal charges
                               against both Bridgestone/Firestone and Ford. Ford's Jac Nasser responded by
                               stating, ``The accusation from the Venezuelan government that Ford Venezuela lied
                               is absolutely unfounded.'' Venezuelan authorities contend that Ford and Firestone
                               held secret meetings to determine what was wrong following the first reports of
                               incidents in 1998. Instead of instituting a recall, officials allege that Ford
                               asked Firestone to redesign the Wilderness tire.
 
August 31, 2000               NHTSA raises to 88 from 62 the number of deaths associated with the Firestone
                               tires.
 
 
September 1, 2000             Firestone declines NHTSA's request to voluntarily expand recall to 1.4 million
                               tires not included in the original recall.
 
 
September 4, 2000             Bridgestone/Firestone issues a recall in Venezuela of 62,000 Venezuelan-made 15-
                               inch and 16-inch Wilderness tires. Previously, only US-manufactured tires were
                               being replaced.
 
September 4, 2000             Bridgestone/Firestone reaches agreement with union to settle labor disputes and
                               avert a strike at nine U.S. plants.
 
September 6, 2000             Mr. Wyant, Firestone Vice President of Quality Assurance, testified that, ``They
                               [Ford] see every bit of the field performance data that is devoted to approving a
                               tire.''
 
September 6, 2000             The Senate Appropriations Committee and House Commerce Sub Committees conduct
                               separate hearings on the Bridgestone/Firestone-Ford tire recall.
 
September 8, 2000             Ford states in a filing with the Securities and Exchange Commission that ``we have
                               preliminarily agree to bear a portion of the costs of Firestone's recall.''
----------------------------------------------------------------------------------------------------------------


    The Chairman. Thank you very much, Ms. Claybrook. We will 
be working with you and Mr. Ditlow as we put this legislation 
together. Thank you. Welcome, sir.

                 STATEMENT OF CLARENCE DITLOW, 
           EXECUTIVE DIRECTOR, CENTER FOR AUTO SAFETY

    Mr. Ditlow. Thank you, Mr. Chairman. I ask that my entire 
statement be in the record. I want to touch on one aspect of 
the defect. And then I want to turn to the process. When the 
Center for Auto Safety was seeking to get the Firestone 500 
recalled, the first recall was cut off at a certain date 
because Firestone claimed that the later made 500's had a lower 
failure rate and were not defective. Just as today they are 
claiming that the Wilderness AT has a lower failure rate and it 
is not defective. We continued our efforts as more and more 
miles accumulated on the 500's. The later made 500's were 
proven to have the same failure rate, just as I am sure that 
the Wilderness ATs will in the future.
    So unless there is clear and convincing evidence, and there 
certainly is not that to date. In the interest of public 
safety, we need to recall all the ATXs and all the Wilderness 
ATs, regardless of size and regardless of plant.
    But as the tragic toll of 88 known deaths and 250 injuries 
continues to climb and more information adds to the record, it 
becomes clearer and clearer that both Ford and Firestone knew 
more earlier, but failed to act until there were too many 
complaints, too many deaths and too many injuries to conceal 
Firestone tire failures on Ford Explorers from public 
attention.
    It is not coincidental that these two companies, Ford and 
Firestone, have been assessed the two largest finds in NHTSA's 
history, $500,000 by Ms. Claybrook in 1978 against Firestone 
over the 500, and $425,000 in 1999 against Ford for concealing 
defective ignition switches that caused fires. Covering up 
defects to avoid recalls is profitable for manufacturers. The 
worst case is they get caught and pay a token fine which is 
more than offset by the money they save in a delayed recall. If 
they do not get caught and the defect never becomes public, 
auto companies save hundreds of millions of dollars in recall 
costs at the expense of public safety.
    All manufacturers conceal information from NHTSA and the 
public. Mitsubishi concealed consumer complaints through a 
double record bookkeeping system. Volvo was fined for not 
providing dealer bulletins. Toyota was fined for concealing 
fuel tank defects. Honda was fined for concealing seatbelt 
warranty claims. Chrysler was just fined within the past few 
weeks $400,000 for concealing fuel system defects. GM concealed 
the most lethal defect in NHTSA's history, side saddle gas 
tanks on 1973 to 1987 pickups that burned to death over 800 
people and got away without a recall.
    But when it comes to concealing defects in violation of 
Federal and State laws, coverup is culture at Ford Motor 
Company. By concealing defects, Ford does profit by avoiding 
the cost of the recalls. Its vehicles pollute and its consumers 
ride at risk of highway crashes, deaths and injuries. EPA has 
fined Ford three times for emission violations. And one of 
those was a $3.5 million criminal fine when Ford kept a double 
set of books much as Mitsubishi did on a mission problem.
    In 1999, just to show how recall pays or fine pays, in 
ignition switches, Ford was fined $425,000 on a failure to 
recall 8 million vehicles earlier. That is a nickel a vehicle. 
No other auto company holds such a widespread reputation for 
lawlessness over the years as does Ford. And I want to point 
out a personal example. During the 1980's, NHTSA conducted five 
investigations into stalling and in Ford vehicles in which Ford 
withheld documents which would have shown a common cause of 
stalling, ignition module failure. And once again, hotter 
states like Arizona, Southern California, Texas, had greater 
frequency because it was a heat related problem. Those Fords--
and there are 14 million of them still on the road--have a 9-
percent higher fatal crash record. Because they stall 
unexpectedly at any time and at any speed.
    And just last week a California judge announced that he 
would order the recall of the Fords in California with 
defective ignition modules. And in the stinging indictment, 
Judge Ballachey found that Ford withheld responsive information 
from NHTSA that it was obligated to provide. It was not for 
Ford to decide what safety meant. But Ford fraudulently 
concealed vital information related to vehicle safety from the 
consuming public.
    And I cannot help but compare what Ford President and CEO 
Jac Nasser has repeatedly told the American public about 
Firestone tires. That your safety is our top priority. And yet, 
when Ford was asked in California what safety was, it said it 
did not know. And there was no written definition of what safe 
is within Ford Motor Company. Any motor company that has no 
definition of safety has no moral compass and it is why we have 
crises like the Firestone tires on Ford Explorers.
    Now, the case law on safety defects is very clear in 
establishing a per se theory of failure of any component which 
can lead to loss of control or mobility or fire. And it 
requires showing only that such a critical component failed. 
And there need not be any crashes, injuries or deaths, just the 
unreasonable risk of crashes, injuries or death. And I could 
not disagree more with Administrator Bailey, who is new on the 
job. But the very seminal and original defect case of Kelsy-
Hayes wheels which started based on a single complaint. If Mrs. 
Bailey was correct in that they do not open cases until they 
get multiple complaints, we would not have the Kelsy-Hayes 
wheels case decided by the U.S. Court of Appeals.
    Finally, the biggest single problem in the National Traffic 
and Motor Vehicle Safety Act is that it has no teeth if a 
manufacturer covers up a defect. Ford is a recidivist in 
covering up defects and avoiding recalls. And the best way to 
make Ford and other companies obey the law is to put criminal 
penalties into that law which the auto industry successfully 
lobbied against when the Safety Act was passed. Thank you.
    [The prepared statement of Clarence Ditlow follows:]

                Prepared Statement of Clarence Ditlow, 
               Executive Director, Center for Auto Safety
    Mr. Chairmen and members of the Committee, 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 and was the consumer group responsible for 
the recall of 19.5 million Firestone 500 steel belted radials in 1978-
80.
    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. The Explorer 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.
    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.
Firestone and Ford Early Knowledge Show Companies Covered Up Defect
    Emerging information show that both Ford and Firestone had early 
knowledge of tread separation in Firestone tires on Ford Explorers and 
other Ford vehicles but at no point informed the NHTSA or the American 
public. To the contrary, the companies concealed information on the 
lethal combination of Firestone tires on Ford Explorers. It is not 
coincidental that these two companies have been assessed the two 
largest fines in NHTSA's history--$500,000 in 1978 against Firestone 
over the 500 steel belted radial and $425,000 in 1999 against Ford for 
concealing defective ignition switches that shorted and started fires.
    Product liability lawsuits were filed in the early 1990's on 
Explorer rollovers caused by Firestone tire failures. Lawsuits 
settlements and discovery contained confidentiality agreements and 
document protective orders so information on tread separation on 
Firestone tires causing rollovers on Ford Explorers could be concealed. 
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 on Ford Explorers 
dating back to 1992. In late 1999, Ford began to replace Firestone 
tires on Explorers in other countries but failed to notify NHTSA 
despite a Ford internal memo showing both Ford and Firestone concerned 
about the duty to report this to NHTSA.
    Covering up defects to avoid recalls is profitable for 
manufacturers even if they get caught by NHTSA. The worst case is they 
get caught and pay a token fine which is more than offset by the money 
they save in a delayed recall which always has a lower completion rate. 
If they don't get caught by NHTSA and the defect never becomes public, 
auto companies save hundreds of millions of dollars in recall costs at 
the expense of public safety and lives.
    All manufacturers, conceal information from NHTSA and the public 
whether it's by secrecy agreements in product liability lawsuits or by 
withholding information directly from NHTSA. Mitsubishi was recently 
caught concealing consumer complaints through a double record keeping 
system. Volvo was fined $17,000 this year for not providing dealer 
bulletins to NHTSA as required by the Vehicle Safety Act. Volvo got 
caught only because one of the bulletin it withheld was on Joan 
Claybrook's Volvo. Toyota was fined for concealing fuel tank defects. 
Honda was fined for concealing seat belt warranty claims and not doing 
a recall until NHTSA began an investigation. Chrysler is under 
investigation for concealing fuel rail defects in its LH models. GM 
concealed the most lethal defect in NHTSA's history--side saddle gas 
tanks on 1973-87 pickups that burned to death over 800 people--for over 
20 years through confidential settlements that virtually all the trucks 
were beyond the 8-year statute of limitation for mandatory recall by 
the time NHTSA caught up to GM. If manufacturers get beyond the 8-year 
limit and there is no recall, the maximum fine is $1,000 (adjusted for 
inflation) per withheld document. If they get caught in time to do a 
recall, then the maximum fine is $1,000 per vehicle or tire which 
should have been recalled earlier capped at $800,000 (adjusted to 
$925,000 for inflation). Strictly peanuts. In the case of Ford which 
was fined $425,000 in the 8 million vehicle ignition switch recall, the 
fine came to a nickel a car.
Cover Up Is a Culture at Ford Motor Company
    When it comes to concealing defects and violations of federal and 
state laws, cover up is a culture at Ford Motor Company. By concealing 
defects Ford profits by avoiding costly emission and safety recalls. 
Its vehicles pollute and its consumers ride at risk of highway crashes, 
deaths and injuries. In the early 1970's the Environmental Protection 
Agency fined Ford twice for cheating on emission tests. In one case, 
the Department of Justice filed a criminal complaint against Ford that 
resulted in a record $7 million fine of which $3.5 million was an 
unprecedented criminal fine against an auto company for false reporting 
of emission information to the government.\1\ In that case, Ford kept a 
double set of book with the correct one for internal use and a false 
one for the US government, much the same as Mitsubishi did on consumer 
complaints.
---------------------------------------------------------------------------
    \1\ Department of Justice Press Release Announcing Settlement in 
United States v Ford Motor Co., Feb. 13, 1973.
---------------------------------------------------------------------------
    In the late 1970's, the Federal Trade Commission sued Ford for 
conducting secret warranties on engine and transmission problems.\2\ In 
the late 1980's, Ford withheld documents from the National Highway 
Traffic Safety Administration during investigations on stalling in Ford 
vehicles to avoid recalls.\3\ In 1999, NHTSA reached a settlement which 
required Ford to pay a $425,000 penalty for its coverup and failure to 
timely recall million of vehicles with defective ignition switches that 
set parked vehicles on fire.\4\ In 1998, the Environmental Protection 
Agency again fined Ford, this time $7.8 million in total payments 
including a $3.5 million fine, for cheating emission standards by 
illegally installing emission control defeat devices on its 
vehicles.\5\ No other auto company holds such a widespread reputation 
for lawlessness over the years. And this doesn't even consider the 
infamous exploding Ford Pinto which resulted in a criminal indictment 
against company. Even though Ford was narrowly acquitted in the Pinto 
criminal case, a model corporation would not come close to the edge of 
breaking the law.
---------------------------------------------------------------------------
    \2\ In the Matter of Ford Motor Co., 96 FTC 362 (1980).
    \3\ Letter from Frank Seales, NHTSA Chief Counsel, to Jay D. Logel, 
Office of Chief Counsel, Ford Motor Co., Jan. 26, 1998.
    \4\ Settlement Agreement Between Ford Motor Co. & NHTSA, March 11, 
1999.
    \5\ Department of Justice Press Release, June 8, 1998.
---------------------------------------------------------------------------
California Court Uncovers Ford's Latest Cover Up--Stalling In 14 
        Million Vehicles
    During the 1980's, NHTSA conducted five investigations into 
stalling in Ford vehicles. During those investigations, Ford withheld 
documents from NHTSA that would have shown a common cause of stalling--
failure of the Thick Film Ignition (TFI) module mounted on the 
distributor when its temperature rises above 125+C and cuts out, 
causing the vehicle to stall on the highway. There are over 14 million 
vehicles still on American roads today that suffer from the same 
readily-correctable design defect that can cause the engine to stop 
abruptly and unexpectedly, at any time and at any speed, leaving the 
driver without power-assisted steering or brakes and the vehicle 
disabled. Vehicles with the distributor mounted TFI module have a 9% 
higher fatal crash rate than those with a different module system.
    Ford Motor Company has known about this problem since it began, yet 
it has concealed it from consumers and government regulators for well 
over a decade. Just as in Firestone tires on Ford Explorers, a prime 
instrument in Ford's cover up is secrecy agreements in product 
liability lawsuits. Over 900 product liability lawsuits have been filed 
against Ford on these vehicles with protective orders and confidential 
settlement agreements entered in many.
    In a landmark decision on August 29, 2000, in Howard v. Ford Motor 
Co., (Case No. 763785-2, Alameda County Superior Court, California 
State Judge Michael Ballachey announced he would order the recall of 
1.8 million 1983-95 Ford vehicles in California with defective ignition 
modules that fail and cause dangerous stalls on highways. Judge 
Ballachey's ruling is the first court order of a recall in the United 
States outside NHTSA. In a stinging indictment of Ford Motor Co., Judge 
Ballachey found:

    LFord withheld responsive information from NHTSA that it was 
obligated to provide. [P. 5] It was not for Ford to decide what 
``safety'' meant, or what levels of warranty returns obligated it to 
report to the EPA. Ford's responsibility was to respond to legitimate 
government inquiries with appropriate information so that an 
independent evaluation could determine the presence or absence of a 
problem. [P. 6] Ford failed to meet its obligations to report safety 
related defect information to relevant governmental agencies and, by so 
doing concealed vital information related to vehicle safety from the 
consuming public. This fraudulent concealment . . . constitutes a 
violation of both Civil Code sections 1770(a)(5) and (7). [P.8]

    The problem is caused by the thick film ignition (``TFI'') modules, 
a key ignition-system component that Ford installed in more than 22 
million vehicles it manufactured and sold in the 1983 through 1995 
model years. The TFI module regulates the electrical current that fires 
the air-fuel mixture in each of the engine's cylinders. To reduce 
costs, Ford installed the TFI on the distributor, one of the hottest 
locations under the hood. But because the TFI module is sensitive to 
heat, its mounting location creates an inordinate propensity for the 
TFI module to fail due to thermal stress. Making the problem even more 
insidious is its phantom nature. A TFI module can fail on an 
intermittent basis when hot, then function again when the engine cools, 
without leaving a trace of physical evidence that the TFI module had 
failed.

    Rather than bearing the expense of moving the TFI module to a 
cooler location away from the engine--a solution that Ford engineers 
recommended to management for years--Ford decided to employ a less 
costly solution: to leave the module on the distributor, but make it 
last long enough to function during the warranty period, thereby 
forcing consumers to bear the cost of post-warranty failures that Ford 
knew would continue to occur in large numbers. As a result, over 13 
million replacement TFI modules (which are designed to last for the 
life of the vehicle without maintenance or repair) have been sold to 
consumers at a cost of nearly $2 billion.
    Despite an extraordinary number of complaints from consumers, Ford 
managed to conceal the TFI problem from government regulators. From 
1983 through 1989 the National Highway Traffic Safety Administration 
(NHTSA) conducted five separate investigations into stalling complaints 
by Ford customers. In response to these investigations, Ford concealed 
what it knew about the TFI problem and persuaded NHTSA to close each 
investigation without taking action. As a result of the class action, 
NHTSA opened an investigation in 1997, in which it concluded that Ford 
had withheld key documents during earlier investigations. By then, the 
8-year statute of limitations on NHTSA's authority to order a recall 
had expired, preventing NHTSA from taking any meaningful enforcement 
action.
    Ford continues to deny that TFI-related stalling causes a safety 
risk. According to Ford, TFI failure causes the vehicle to buck, 
hesitate, and experience other ``driveability'' symptoms that provide a 
warning that the TFI module is about to fail. But Ford took the exact 
opposite position when it attempted to excuse its failure to report to 
the Environmental Protection Agency and the California Air Resources 
Board over 1 million TFI modules (which EPA and CARB deem ``emissions-
related'' components) that were returned under warranty. In direct 
contradiction to Ford's contention that TFI module failure does not 
pose a safety risk because TFI-induced bucking and hesitation provides 
plenty of warning, Ford claimed that TFI module failure cannot affect 
air quality because such failure occurs suddenly and without warning.
    Having concealed the true nature and scope of the TFI defect from 
NHTSA, from EPA, and other regulatory agencies, Ford then used its 
bargaining power to keep secret the information about the TFI defect in 
the only other context in which the truth could air: private civil 
litigation. Given the intermittent, phantom nature of the TFI problem, 
few people ever discovered that TFI failure was the cause of their 
injuries, and even fewer sued because of it. When personal-injury 
plaintiffs did discover what Ford knew about the problem, Ford paid 
millions of dollars in settlements requiring lawyers to return hot 
documents, remain silent about what they learned from those documents, 
and refrain from assisting others in similar litigation against Ford. 
Just as in Firestone tires on Ford Explorers, the TFI product liability 
cases against Ford involve tragic injuries. In Phan v Budget Rent a Car 
& Ford Motor Co., there were two deaths, one quadriplegic and four 
other injuries when a 1990 Mercury Sable stalled at highway speeds.
    In the recall of Ford Explorers for Firestone tire tread 
separations, Ford President & CEO Jac Nasser has repeatedly told the 
American public that ``Your Safety Is Our Top Priority.'' Yet in Howard 
v Ford Motor Co., Ford told the court it didn't know what safety was. 
As Judge Ballachey observed after hearing the testimony of top 
executives including its former CEO Harold Poling, its former Vice 
Chairman Louis Ross and Vice Presidents Robert Transou and Helen 
Petrauskus among others:

    LFord's dissimulation reached its nadir in the testimony of Bob 
Wheaton, Ford's witness designated as most knowledgeable about safety 
issues when he insisted that ``safe is too subjective'' and denied 
knowledge of any ``written definition of what safe is within Ford Motor 
Company.'' Other Ford executives were similarly evasive when pressed on 
the question of whether or not a failed TFI module, under any 
circumstances, presented an unreasonable risk of safety. [P. 5].

    Yet the case law on safety defects is very clear in establishing a 
per se theory of failure of any component which can lead to loss of 
control or mobility or fire which requires showing only that such a 
critical component failed and that there need not be any crashes, 
injuries or deaths, just the unreasonable risk or crashes, injuries or 
deaths. The leading case on defects under the Vehicle Safety Act is 
United States v. General Motors, 518 F.2d 420 (DC Cir. 1975), which 
involved the recall of 200,000 GM pickups for Kelsy-Hayes wheel 
failures. NHTSA opened the investigation based on a report of a single 
failure from Ralph Nader and ultimately showed a failure rate of under 
0.2%. The US Court of Appeals decision upholding the recall established 
the key requirements for recalls:

   Non de minimis number of failures in use which normally will 
        not be a substantial percentage of components produced.

   Function of failure rate and severity of consequences.

   Ordinary owner abuse such as tire underinflation must be 
        anticipated by manufacturer.

   Need not show any deaths or injuries.
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.
Legislative Recommendations
    The biggest single problem in the National Traffic and Motor 
Vehicle Safety Act is that it has no teeth if a manufacturer covers up 
a defect. As shown above, Ford Motor Company is a recidivist when it 
comes to covering up defects and avoiding recalls. The best way to make 
Ford and other auto and tire companies obey the law is to put criminal 
penalties into the law which the industry successfully lobbied against 
when the Safety Act was passed in 1966.
    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 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. Other needed legislative changes include:

   Repeal the statutory limit on recalls.

   Toll the statute of limitation where auto and tire companies 
        conceal defects.

   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.

   Provide for reimbursement of repairs and replacements made 
        prior to recall.

   Require NHTSA to upgrade not only FMVSS 109 but also FMVSS 
        119 with specific direction to determine whether an 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.

    These legislative recommendations 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.

    The Chairman. Thank you very much, Mr. Ditlow. What can 
U.S. corporations and NHTSA and the Congress do to improve our 
ability to identify a consumer safety problem sooner? It seems 
to me that while we may not have issues of this magnitude, 
quite often we are sort of like the guy following the parade. 
How do we get out in front on these situations more 
effectively?
    Mr. Ditlow. Ford and Firestone are learning a terrible 
lesson. That when you cover up a safety problem and do not 
exercise leadership, it costs sales. But for the government 
agencies, their only way to do this is to have a stronger 
enforcement mechanism. Unfortunately, they have to use the 
bully pulpit. They have to expose these problems. But for the 
car companies----
    The Chairman. Is it instructive, the response to Senator 
Hollings' questions that there has been no initiated recall in 
the last 5 years by NHTSA?
    Mr. Ditlow. I think the auto companies over the last--not 
just the last 5 years, but the last 15 years, have recognized 
that NHTSA is not a strong enforcer and will not go to the mat 
for a mandatory recall.
    The Chairman. Do you share that view, Ms. Claybrook?
    Ms. Claybrook. I do. I think there are a number of things 
that NHTSA could do which include having relationships with 
auto repair facilities, independent auto repair shops, which we 
did in the 1970's, asking them to send in defective products, 
and working with insurance companies on a regular basis. And I 
think your legislation should cover, as the Secretary 
suggested, requirements for the companies to send NHTSA 
information on a regular basis. NHTSA also should get 
notification of lawsuits by the companies, and ask lawyers who 
have cases to resist protective orders or at least let the 
agency know that there is such a gag order. NHTSA should work 
with fleet owners. There are a lot of fleet owners who would be 
very cooperative. And state agency fleet owners, as in Arizona 
for example.
    The Chairman. Mr. Ditlow, please continue.
    Mr. Ditlow. I agree with Joan wholeheartedly. And I have 
detailed recommendations along those lines. And we need the 
cooperation of a wide sector to get defect investigations and 
recalls done. So I would just answer questions now.
    The Chairman. Let us talk about the foreign problem again. 
How do we do a better job if there is a recall in Saudi Arabia 
of tires--well, let us use Venezuela because the argument is 
that they were different kinds of tires. Venezuela problems 
arose there. And yet, apparently neither NHTSA nor anybody else 
that was in a position of authority knew about it. What do you 
do about that situation? I will begin with you, Mr. Ditlow.
    Mr. Ditlow. We have multi-national corporations who market 
in different countries. And with that goes an obligation to 
respond to report problems in foreign countries here. I mean, I 
think everyone now agrees that there should be reporting. But 
NHTSA should issue a regulation tomorrow requiring that 
reporting.
    The Chairman. Ms. Claybrook.
    Ms. Claybrook. NHTSA has issued something called ``The 
Global Agreement to Harmonize Motor Vehicle Standards'' that 
the auto companies have been pushing for for a long time, 
because they want to have the ability to sell a product in any 
country with the same standards. But they have never issued 
anything for international cooperation in any formal way on 
enforcement and defects as they have with standards to 
enforcement. If the companies are going to get the benefit of 
the standards being harmonized, I think that they should have 
the obligation and responsibility to also participate in 
reporting defects. And this can come from the companies as well 
as from foreign governments, from both.
    The Chairman. I want to thank both of you. We want to work 
with you as we develop this legislation. I want to make a 
caution though here to both of you who are committed public 
advocates. Too often, we try to make the perfect be the enemy 
of the good here. I think we ought to do what we can in the 
next several weeks and get legislation passed. And then I am 
committed to going back again next year and looking at 
additional legislation. Because we are going to have to build 
consensus on this if we expect to pass some important aspects 
of what clearly are a myriad of issues here concerning safety.
    So I look forward to working with you and hope that we will 
be able to come up with something very important, very 
substantive, but with the recognition that in this relatively 
short period of time, we are not going to be able to do 
everything. Deal?
    Ms. Claybrook. Deal.
    The Chairman. It is agreed. Thank you very much.
    Ms. Claybrook. So you put us on the hot seat just like the 
companies.
    The Chairman. Thank you for being here.
    [Whereupon, at 1:20 p.m., the committee was adjourned.]
                                APPENDIX

   Letter From John T. Lampe, Executive Vice-President, Bridgestone/
                            Firestone, Inc.,
                                                September 20, 2000.
Hon. John McCain,
Chairman,
Senate Commerce Committee,
Science and Transportation Subcommittee,
Washington, DC.

Hon. Olympia J. Snowe,
United State Senate,
Washington DC.
      Re: Hearing on Ford-Bridgestone/Firestone Tire Recall

Dear Chairman McCain and Senator Snowe:

    At the September 12, 2000 Commerce Committee hearing, I referred to 
a 1996 report pertaining to tire inspections that Bridgestone/Firestone 
conducted at the behest of the Arizona Game and Fish Department. A copy 
of that report was forwarded to you on September 19, along with a 
second, independent tire inspection report that Bridgestone/Firestone 
completed on April 16, 1997.
    I based my September 12 testimony on verbal reports from 
Bridgestone/Firestone personnel who relied on their recollection of 
those events. After reviewing the reports, I am writing to clarify my 
testimony, which regrettably contained some inaccuracies. The vast 
majority of the tires identified in the reports were ``LT'' (light 
truck) tires, not passenger tires as I originally believed, and the 
application of such LT tires in off-road conditions is not improper. I 
was, however, correct that a substantial majority of the tires were not 
the size recommended by the vehicle manufacturer for the Department's 
vehicles.
    The Arizona inspection revealed no defects pertinent to the sizes 
and types of tires subject to Bridgestone/Firestone's recently 
announced United States recall. The recall affects passenger-sized 
tires, not those tires sized for light trucks. Also, the types of most 
tires analyzed in the Arizona reports were of the Firehawk ATX and 
Steeltex lines, not the Wilderness AT and Radial ATX/ATXII tires 
subject to recall.
    I will continue to apprise you immediately of any new information 
related to this matter should I receive it. I remain dedicated to 
cooperating fully with you and your Committee.
        Sincerely,
                                             John T. Lampe,
                                          Executive Vice-President,
                                        Bridgestone/Firestone, Inc.

                                
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