[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE HEARING ON VIN DATABASE AND AUTO WHISTLEBLOWER BILLS
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HEARING
BEFORE THE
SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 25, 2015
__________
Serial No. 114-78
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
______
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Chairman Emeritus Ranking Member
ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania ELIOT L. ENGEL, New York
GREG WALDEN, Oregon GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington KATHY CASTOR, Florida
GREGG HARPER, Mississippi JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
PETE OLSON, Texas BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia PAUL TONKO, New York
MIKE POMPEO, Kansas JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida KURT SCHRADER, Oregon
BILL JOHNSON, Missouri JOSEPH P. KENNEDY, III,
BILLY LONG, Missouri Massachusetts
RENEE L. ELLMERS, North Carolina TONY CARDENAS, California7
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
Subcommittee on Commerce, Manufacturing, and Trade
MICHAEL C. BURGESS, Texas
Chairman
JANICE D. SCHAKOWSKY, Illinois
LEONARD LANCE, New Jersey Ranking Member
Vice Chairman YVETTE D. CLARKE, New York
MARSHA BLACKBURN, Tennessee JOSEPH P. KENNEDY, III,
GREGG HARPER, Mississippi Massachusetts
BRETT GUTHRIE, Kentucky TONY CARDENAS, California
PETE OLSON, Texas BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas G.K. BUTTERFIELD, North Carolina
ADAM KINZINGER, Illinois PETER WELCH, Vermont
GUS M. BILIRAKIS, Florida FRANK PALLONE, Jr., New Jersey (ex
SUSAN W. BROOKS, Indiana officio)
MARKWAYNE MULLIN, Oklahoma
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 1
Prepared statement........................................... 2
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 3
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 52
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, prepared statement........................ 53
Witnesses
John Bozella, President and CEO, Association of Global Automakers 5
Prepared statement........................................... 7
Answers to submitted questions............................... 64
Joe LaFeir, Senior Vice President, Automotive IS&S, Inc.......... 13
Prepared statement........................................... 15
Answers to submitted questions............................... 68
Cleveland Lawrence, III, Co-Director, Taxpayers Against Fraud.... 18
Prepared statement........................................... 20
Answers to submitted questions............................... 70
William C. Wallace, Policy Analyst, Consumers Union.............. 29
Prepared statement........................................... 31
Answers to submitted questions............................... 75
Shane Karr, Vice President, Federal Affairs, Alliance of
Automobile Manufacturers....................................... 38
Prepared statement........................................... 40
Answers to submitted questions............................... 77
Submitted Material
Statement of LKQ Corporation, submitted by Mr. Butterfield....... 54
Statement of the American Car Rental Association, submitted by
Mr. Butterfield................................................ 56
Statement of the American Association of Motor Vehicle
Administrators, submitted by Mr. Butterfield................... 60
Statement of Experian, submitted by Mr. Burgess.................. 61
LEGISLATIVE HEARING ON VIN DATABASE AND AUTO WHISTLEBLOWER BILLS
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FRIDAY, SEPTEMBER 25, 2015
House of Representatives,
Subcommittee on Commerce, Manufacturing, and Trade,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
room 2322, Rayburn House Office Building, Hon. Michael C.
Burgess, M.D., (chairman of the subcommittee) presiding.
Present: Representatives Burgess, Lance, Guthrie,
Bilirakis, Brooks, Mullin, Schakowsky, Kennedy, Butterfield,
and Pallone (ex officio).
Staff Present: James Decker, Policy Coordinator, CMT;
Melissa Froelich, Counsel, CMT; Kirby Howard, Legislative
Clerk, Paul Nagle, Chief Counsel, CMT; Olivia, Trusty,
Professional Staff, CMT; Dylan Vorbach, Staff Assistant;
Michelle Ash, Minority Chief Counsel, Commerce, Manufacturing,
and Trade; Jeff Carroll, Minority Staff Director; Lisa Goldman,
Minority Counsel; Rick Kessler, Minority Senior Advisor and
Staff Director, Energy and Environment; and Adam Lowenstein,
Minority Policy Analyst.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. The subcommittee on Commerce, Manufacturing,
and Trade will now come to order. The chair will recognize
himself for 5 minutes for the purpose of an opening statement.
And I do want to welcome everyone to our hearing this
morning on the draft companion legislation to the Motor Vehicle
Safety Whistleblower Act, and the discussion draft of the
Improving Recall Tracking Act.
In 2014, there were over 63 million vehicles recalled in
the United States due to safety concerns. This represents the
highest number of vehicle recalls in more than three decades.
Under current law, vehicle manufacturers are required to
report defects and noncompliance to the National Highway
Traffic Safety Administration. The chairman of the full
committee, Mr. Upton, has seen to it with the good work he did
on the TREAD Act, but there have been times when the reporting
has been slow.
The Motor Vehicle Safety Whistleblower Act is intended to
foster greater attention and greater responsiveness to vehicle
safety defects. It does so by providing an incentive to
automotive employees and to contractors who report potential
safety violations to the United States Department of
Transportation that otherwise would be concealed or unreported.
The bill encourages employees to report safety problems within
their companies first to allow the automaker the opportunity to
address safety issues. This is an important point because it
keeps the incentive to work within the system. The bill is
meant to enhance current early reporting systems that have
already been instituted by Congress. Furthermore, the bill is
designed with the express purpose of exposing and stopping
instances of wrongdoing and protecting the safe and well-being
of the public.
In addition to the Motor Vehicle Safety Whistleblower Act,
we have an opportunity to examine the discussion draft of the
Improving Recall Tracking Act. This proposal would direct the
Department of Transportation to establish a national database
of vehicle identification numbers and driver registration
information. It is intended to facilitate the consumer
notification process in the event of a safety recall.
In light of recent recalls, it has become apparent that one
of the main challenges of removing defective vehicles from the
road is making certain that the right consumers are notified of
the defect in a timely manner. This hearing will give us an
opportunity to discuss how a national database housing current
driver registration information and current vehicle
identification numbers could help improve the consumer recall
notification process beyond that which is in place today. We
will also hear how the industry is currently responding to
these challenges so we can factor in improvements of the
system.
Vehicle safety is a serious issue. It continues to be a
concern for this subcommittee and for the driving public. In
past hearings on this subject, I have said that Americans
deserve better, Americans deserve more. The legislative
proposals we will consider today are a step in the right
direction toward providing the driving public with confidence
that the vehicles they are driving are safe and that the recall
process works. I will, in anticipation, thank the witnesses for
their testimonies. And I look forward to an engaging discussion
on these measures.
With that, the chair yields back and recognizes the
subcommittee ranking member, Ms. Schakowsky, for 5 minutes for
an opening statement.
[The prepared statement of Mr. Burgess follows:]
Prepared statement of Hon. Michael C. Burgess
Good morning. I want to welcome everyone to today's hearing
on the draft companion legislation to the Motor Vehicle Safety
Whistleblower Act, and the discussion draft of the Improving
Recall Tracking Act.
In 2014, there were over 63 million vehicles recalled in
the United States due to safety violations. This represents the
highest number of vehicle recalls in more than three decades.
Under current law, vehicle manufacturers are required to
report defects and noncompliance to the National Highway
Traffic Safety Administration. Our Chairman has seen to it with
the good work he did on the Tread Act. But there still have
been times when the reporting has been too slow.
The Motor Vehicle Safety Whistleblower Act is intended to
foster greater attention and responsiveness to vehicle safety
defects. It does so by providing an incentive to automotive
employees and contractors who report potential safety
violations to the U.S. Department of Transportation that are
concealed or go unreported. The bill encourages employees to
report safety problems within their companies first to allow
automakers the opportunity to address possible issues. This is
an important point because it keeps the incentive to work
within the system. The bill is meant to enhance current early
reporting systems that have already been instituted by
Congress. Furthermore, the bill is designed with the express
purpose of exposing and stopping instances of wrongdoing, and
protecting the safety and wellbeing of the public.
In addition to the Motor Vehicle Safety Whistleblower Act,
we will have an opportunity to examine the discussion draft of
the Improving Recall Tracking Act. This proposal would direct
the Department of Transportation to establish a national
database of vehicle identification numbers and driver
registration information. It is intended to facilitate the
consumer notification process in the event of a vehicle safety
recall.
In light of recent recalls, it has become apparent that one
of the main challenges of removing defective vehicles from the
road is making sure that the right consumers are notified of
the defect in a timely manner. This hearing will give us an
opportunity to discuss how a national database housing current
driver registration information and vehicle identification
numbers could help improve the consumer recall notification
process beyond the processes that are in place today. We will
also hear how the industry is currently responding to these
challenges so we can figure out how to improve the system.
Vehicle safety is a very serious issue that continues to be
a concern for this subcommittee and the driving public. In past
hearings on this subject, I have said that Americans deserve
more. The legislative proposals we will consider today are a
step in the right direction towards providing the driving
public with confidence that the vehicles they are driving are
safe and the recall process works. I thank the witnesses for
their testimonies and I look forward to an engaging discussion
on these measures.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Thank you, Mr. Chairman. It is so nice to
meet on a quiet day where there is no real news to be talking
about except for this. But even in connection with this, I did
want to mention that I think this committee can also be
focusing on very big issues and big news. And I look forward, I
hope, to focusing on Volkswagen and their fraudulent emissions
testing, cheating, that was revealed earlier this month.
As you pointed out, that the law already does require auto
manufacturers to report defects. And here we have a situation
of deliberately building in a defect. And we need to talk about
that. I have a piece of legislation, the Vehicle Safety
Improvement Act, which I think would actually do the real deal
in terms of making sure that we deal with auto safety.
I want to recognize and welcome a friend of mine, Will
Wallace, and a friend of this committee, who is testifying
today on behalf of Consumers Union. He is an outstanding former
staffer of the subcommittee and I know will bring important
insight to this issue.
With more than 95 million American vehicles subject to
safety recall over the past 2 years, we obviously have to
improve the oversight of the auto industry and the efficacy and
timeliness of recalls. I believe, unfortunately, that these
bills miss the mark. While I support efforts to enhance the
communication between auto companies and drivers whose cars are
subject to recall, I don't believe that the vehicle
identification number, VIN Database, discussion draft would
achieve this goal.
Manufacturers are already able to access the names and
addresses of drivers whose vehicles are subject to a recall.
The difference in the discussion draft is that those records
would be free of charge to the auto companies. And, yet, the
bill would impose significant costs on NHTSA and the States
with no funding provided to implement the new database. The
Illinois Secretary of State's Office has communicated to us
that he has serious concerns about the lack of financial
support.
The second bill is intended to encourage auto industry
whistleblowers. And while I appreciate the inclusion of
language allowing whistleblowers to receive compensation and
anonymity for coming forward, I have concerns about the bill's
stipulations. Mr. Chairman, you said that it is good that the
whistleblower has to report their concerns directly to the
company first internally. And while one could make an argument
that this might speed things up, I also really worry that
provisions would discourage whistleblowers from acting and put
them at professional risk for doing so, which really has been
the history of whistleblowers. They have not done well vis-a-
vis the companies that they work for.
There is a broader and more impactful legislative
alternative to improve auto safety, as I said. My Vehicle
Safety Improvement Act, which is cosponsored by Ranking Member
Pallone and nine other members of this committee, is the
alternative. It increases the amount and accessibility of
information auto manufacturers must share with NHTSA and the
public, and the public, about vehicle safety issues, and
provides new authority to expedite auto recalls if they pose an
imminent hazard of serious injury or death.
So that is what I am hoping that we are going to be able to
do rather than I believe these bills, which kind of nibble
around the margins. I am not just disappointed, I am actually
frustrated. And I again urge the subcommittee to take up the
Vehicle Safety Improvement Act. And I look forward to a
discussion about what Volkswagen has been doing. And I yield
back.
Mr. Burgess. The chair thanks the gentlelady. The
gentlelady yields back.
Does anyone on the Republican side seek time for an opening
statement? Seeing none. Any further members on the Democratic
side that seek time for an opening statement? Seeing none.
Again, we want to thank our witnesses for being here today
and for being willing to take time to give testimony before the
subcommittee. Our witness panel for today's hearing includes:
Mr. John Bozzella, the President and CEO for the Alliance of
Global Automakers; Mr. Joe LaFeir, Senior Vice President at IHS
Automotive; Mr. Cleveland Lawrence, III, the Co-Director of
Taxpayers Against Fraud; Mr. William Wallace, the Policy
Analyst at the Consumers Union; Mr. Shane Karr, Vice President
for Federal Affairs at the Alliance of Automotive
Manufacturers.
We do appreciate all of you being here today. We will begin
the panel with Mr. Bozzella. He will be recognized for 5
minutes to summarize his testimony. Mr. Bozzella, you are
recognized for 5 minutes. Thank you.
STATEMENTS OF JOHN BOZELLA, PRESIDENT AND CEO, ASSOCIATION OF
GLOBAL AUTOMAKERS; JOE LAFEIR, SENIOR VICE PRESIDENT,
AUTOMOTIVE IS&S, INC.; CLEVELAND LAWRENCE III, CO-DIRECTOR,
TAXPAYERS AGAINST FRAUD; WILLIAM WALLACE, POLICY ANALYST,
CONSUMERS UNION; AND SHANE KARR, VICE PRESIDENT, FEDERAL
AFFAIRS, ALLIANCE OF AUTOMOBILE MANUFACTURERS
STATEMENT OF JOHN BOZELLA
Mr. Bozzella. Thank you, Mr. Chairman, Ranking Member
Schakowsky, members of the subcommittee, thank you very much
for the opportunity to testify today.
I am John Bozzella, CEO and President of the Association of
Global Automakers. As the ranking member has mentioned, the
very troubling facts that have come to light involving
Volkswagen will likely have significant implications for the
industry. And I look forward to working with the subcommittee
and discussing these issues as we move on.
I have been asked for our perspective on two bills, the
Motor Vehicle Safety Whistleblower Act and the Improving Recall
Tracking Act. In 2012, Congress included strong whistleblower
provisions in MAP-21. We agree that whistleblower protection is
a valuable tool for ensuring that safety concerns will be
promptly identified, investigated, and remedied. The bill
before the subcommittee builds on this law. Whistleblower
protections have been incorporated into the safety practices of
our members because they recognize that the manufacturer and
its employees are the first line of defense in identifying and
remedying safety concerns. Our member companies have instituted
internal controls that empower employees to communicate with
their employer about any problem they observe that could impair
product quality or safety. For example, manufacturers train
their employees specifically on product defect and safety
issues and have dedicated safety officers who are responsible
for following up on concerns raised by employees.
In addition, manufacturers have established hotlines that
empower employees to communicate potential problems. Such
systems allow the company to take appropriate remedial steps,
in many cases before the affected vehicles leave the factory.
But no system is foolproof. We recognize that whistleblower
statutes can play an important role in improving motor vehicle
safety.
The implementing regulations should give companies every
reason and incentive to be informed of the problems promptly so
that they can investigate the issues and make any repairs that
are needed. While it is important for whistleblowers to be able
to report safety issues directly to NHTSA, the process should
ensure that employees are not incentivized to shortcut or
circumvent internal systems that would result in quicker
problem resolution. Our shared goal is to address defects, find
remedies, and take care of the customer as quickly as possible.
This is why the manufacturer needs to be a critical part of the
process from the beginning.
The second bill before the subcommittee would establish a
national VIN database using registration data collected by
State DMV offices. We agree DMVs could help improve recall
completion rates. This bill would allow manufacturers access to
the most up to date information from the DMVs, which they could
use to more effectively communicate recall notices to vehicle
owners. In addition, DMVs could be encouraged to notify
everyone who registers a motor vehicle about the recall status
of their vehicle.
This bill also directs NHTSA to enable batch searching and
processing of VINs on its SaferCar.gov Web site. We are aware
that the current NHTSA system has limitations. But it is our
understanding that some vendors have developed tools that
enable batch processing. We believe the subcommittee should
ensure that the processes created by this bill are not
unnecessarily duplicative.
Increasing recall completion rates is a priority for Global
Automakers. That is why we are conducting research along with
the Auto Alliance to help understand what drives consumers to
respond to recall campaigns. We look forward to briefing the
subcommittee on the research findings soon.
Thank you again for the opportunity to appear before you
today. And I would be happy to answer any questions that you
might have.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman.
[The prepared statement of Mr. Bozella follows:]
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Mr. Burgess. Mr. LaFeir, you are recognized for 5 minutes
to summarize your testimony please.
STATEMENT OF JOE LAFEIR
Mr. LaFeir. Chairman Burgess, Ranking Member Schakowsky,
thank you for allowing me to testify, and members of the
subcommittee.
I am Joe LaFeir, Senior Vice President, Information Systems
and Solutions for IHS, where I lead the company's automative
data solutions business, which includes recall processing.
IHS's foundation in the automotive industry reaches back to the
advent of the automobile. Since then, IHS has worked with
nearly all manufacturers to facilitate the recall process.
IHS remains an industry leader in vehicle recall data
processing and provides this service to most manufacturers
today. The draft Improving Recall Tracking Act proposes to
establish a national VIN database and driver information to aid
in recall notification. In addition, the bill requires batch
searching of the current SaferCar.gov.
To be clear, we do not oppose the batch searching
provision. We are here today to express our opposition to the
proposed new database. As with any good idea, the private
sector has already developed a highly effective and robust
solution. So the legislation simply directs the Federal
Government to attempt to replicate what already exists. If
enacted, the legislation will limit innovation and use taxpayer
funds to create a Federally-run database that would be less
efficient and likely less capable than current market
solutions.
Today, the private sector's real time data processing is
accomplished utilizing best in class system technologies. Using
processes developed over decades, companies like IHS process
billions of records each year from tens of thousands of sources
and thousands of file formats. Companies like IHS also employ
thousands of people, many of whom are devoted to data
processing to support recall.
IHS acquires, standardizes, assembles data to create
mailing lists to provide notice to affected consumers. We
assist with the fulfillment of recall notices, measurement of
campaigns through their completion. We provide real time
reporting to our OEM customers. Further, following completion
of recall notice mailings, we gather open recall information
and provide that to the public through our subsidiary CARFAX
and its vehicle history report service.
This bill would require registration information to be
gathered from each state. Automotive data companies use
registration as just one data point and many proprietary
sources to determine the best possible address to contact the
owner of a recalled vehicle. As proposed, this database would
not provide the same level of data that we can provide today in
the private sector. Using private sector data solutions, we can
identify and provide addresses for the vast majority of car
owners. While there are a few exceptions, recall notification
return mail rates typically range in the single digits. And the
private sector continues to innovate further to reduce these
numbers. Given the private sector's success in providing
notice, perhaps the focus should be placed on addressing why
some notified consumers get their cars remedied and others do
not.
In conclusion, the legislation, while well-intended, does
not create a better solution than what exists today. In an era
where Federal budgets are limited, this bill would direct NHTSA
to attempt to duplicate a product and service that the market,
using private capital, has created decades ago. The private
sector continues to innovate, going well beyond the
requirements of this legislation.
I appreciate the invitation to testify, and look forward to
your comments.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman.
[The prepared statement of Mr. LaFeir follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Burgess. The chair recognizes Mr. Lawrence for 5
minutes for a summary of your testimony please.
STATEMENT OF CLEVELAND LAWRENCE, III
Mr. Lawrence. Good morning, Mr. Chairman, Ranking Member
Schakowsky, Ranking Member Pallone, and members of this
subcommittee. And thank you for inviting me to testify at
today's hearing on the proposed Motor Vehicle Safety
Whistleblower Act. My comments will be restricted to that bill
only.
My name is Cleveland Lawrence, III. I am a Co-Executive
Director of Taxpayers Against Fraud and its sister
organization, TAFEF Education Fund, which are two non-profit
public interest organizations dedicated to combating fraud
against taxpayer dollars through the promotion and protection
of False Claims Act laws and qui tam provisions, which allow
whistleblowers with evidence of fraud against government
entities, to file suit on behalf of the government in exchange
for financial rewards of at least 15 and up to 30 percent of
the government's recovery if their suits are successful.
My organizations also support the goals of the IRS, SEC,
and CFTC whistleblower programs, which do not have qui tam
provisions but still offer monetary rewards to whistleblowers
in exchange for original information about significant tax,
securities, and commodities fraud.
I first joined TAF in 2008 and became co-executive director
in 2013. I am an attorney by training and spent the first 6
years of my career as an associate at the international law
firm of Weil, Gotshal & Manges, where, among other things, my
practice included defending whistleblower claims brought under
the False Claims Act. Having examined whistleblower claims from
both sides over the past 15 years, I can say without
reservation that the Federal False Claims Act is the model
statute for any effective whistleblower law or program.
Since that law was overhauled in 1986, the False Claims Act
has returned more than $40 billion to the U.S. Treasury. This
result is in large part due to the significant role that
whistleblowers have played in exposing fraud on the Federal
fisc. For example, according to the U.S. Department of Justice,
False Claims Act cases have recovered $5.69 billion for the
Federal Government just last fiscal year alone, with nearly $3
billion of that total resulting from lawsuits filed by
whistleblowers. The success of the False Claims Act over a near
30-year period should not and has not been ignored. More than
half of the States have False Claims Act statutes now. And at
the government's urging, most of these laws mimic the Federal
statute.
Similarly, the IRS, SEC, and CFTC now have provisions that
reward whistleblowers, all of which are modeled on the False
Claims Act. While I applaud and fully endorse the effort to
enact whistleblower legislation to make automobiles and road
travel safer, I cannot support the proposed Motor Vehicle
Safety Whistleblower Act in its current form, as it suffers
from many of the deficiencies that have already been corrected
under the False Claims Act, IRS, SEC, and CFTC arenas. I will
discuss two of the primary weakness of the bill, either of
which is enough to significantly derail the program.
First, the bill lacks guaranteed minimum rewards and gives
the Secretary of Transportation unfettered discretion over the
amount of an award up to a maximum to give to whistleblowers
whose information resulted in monetary sanctions recovered by
the government from an automobile manufacturer, parts supplier,
or dealership, including the option to award no award at all.
Decades of experience make clear that any whistleblower program
will inevitably fail unless it guarantees minimum rewards for
those who risk their careers to come forward.
Before the False Claims Act was overhauled in 1986, it did
not guarantee minimum rewards either. And the program did not
effectively remedy fraud, bringing in only about $54 million
dollars in the year before it was amended. But since then, we
have seen the outstanding success of the statute, bringing in
billions of dollars each year in the recent years.
Whistleblowers are simply unable to risk their livelihood
without the assurance of some compensation for doing so and
reporting fraud or misconduct by their companies to the
government. The SEC and CFTC, similarly, have guaranteed
minimum rewards to whistleblowers for their information, as has
the IRS. The concept of incentivized integrity works. But a
whistleblower program that does not ensure minimum rewards can
offer little more than an illusory promise.
The second issue with the bill is the internal reporting
requirement. I can think of no other effective law enforcement
paradigm that requires that the target of the investigation is
notified before the government can investigate. In my
experience, whistleblowers often prefer to report internally.
But since not all internal compliance programs are equal, they
have to make the choice about whether or not reporting
internally to the company will target them for retaliation. In
addition, by requiring a whistleblower to report internally,
the government effectively cuts off access to continued
information about the misconduct within the company, giving the
company an opportunity to coach further witnesses, destroy
evidence, or otherwise thwart what could be an effective secret
government internal investigation.
I urge the committee to correct these two issues, because
without these corrections the program is doomed to failure. I
am happy to answer your questions. Thank you.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman.
[The prepared statement of Mr. Lawrence follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Burgess. Mr. Wallace, you are recognized for 5 minutes
for your testimony. Thank you.
STATEMENT OF WILLIAM C. WALLACE
Mr. Wallace. Good morning, Chairman Burgess, Ranking Member
Schakowsky, and members of the subcommittee.
I am Will Wallace, a policy analyst for Consumers Union,
the advocacy arm of Consumer Reports. We are an independent,
non-profit organization that works with consumers and for
consumers for a fair, just, and safe marketplace, and to
empower consumers to protect themselves. Consumers Union and
Consumer Reports have fought for decades to make cars safer and
hold companies accountable for the products they sell. We have
pushed for effective rules and laws and for safety features
such as seatbelts, air bags, and electronic stability control.
Our auto test center works every day to evaluate safety
technologies. And we communicate with millions of consumers to
help them make informed choices and stay safe. We appreciate
the opportunity to testify.
Today's hearing is timely, given the news lately about auto
safety and corporate wrongdoing. The Federal settlement with
General Motors over ignition switches linked to at least 174
deaths was very disappointing because it didn't nearly go far
enough to hold auto companies accountable for hiding the truth.
Right on its heels came the news that Volkswagen had cheated on
emissions control testing for some 11 million diesel vehicles
and covered it up. These news items are sending shock waves
through the industry, our government, and the public. The
resulting erosion of confidence can't be overstated. And
lawmakers need to take action to address this corporate
accountability crisis.
The discussion draft and bill before you today attempt to
address pieces of the problem. One, the Improving Recall
Tracking Act aims to tackle low recall completion rates, while
the other, the Motor Vehicle Safety Whistleblower Act, seeks to
root out concealed defects. While we are pleased that the
subcommittee is pursuing these worthy goals, Consumers Union
believes that the two proposals fall far short both in terms of
meeting their objectives and in terms of improving the flawed
system that is supposed to ensure safety defects are identified
and repaired before people get hurt.
The GM fiasco, along with crises involving defects in
Toyota, Takata, and Chrysler products among others, made clear
that auto companies must do far more to ensure their vehicles
are safe. And NHTSA must do far more to hold auto companies
accountable. Yet, the drafts before the subcommittee today are
strikingly limited in their ambition.
The Improving Recall Tracking Act could possibly help
companies reach owners of older vehicles in case of a recall if
it were fully funded. But the bill doesn't authorize that
funding, despite requiring NHTSA and the States to carry out a
substantial amount of new work. NHTSA, in particular, needs to
be able to hire more staff to protect the public the way we all
expect, not have them stretched more than they already are.
Similarly, the Whistleblower Act could incentivize auto
industry employees to give NHTSA information about concealed
defects. Just imagine how much suffering could have been
prevented if a GM engineer had reported the flawed ignition
switch to NHTSA in 2006 or 2007. However, we are concerned the
bill may not be as effective as it could be, primarily because
of the lack of an established minimum award that at least
covers the loss of earnings a whistleblower could face by
sacrificing his or her career.
More broadly, though, the discussion draft and bill today
don't do nearly enough for consumer safety. Instead, we urge
you to take up bolder legislation, such as H.R. 1181, the
Vehicle Safety Improvement Act. That bill would address
shortfalls in current law, such as NHTSA's inadequate civil
penalties authority and the loophole that allows dealers to
sell recalled used vehicles before they are repaired. In
addition to these measures, Consumers Union also encourages the
enactment of a criminal penalties provision to deter executives
from hiding defects.
The bill would strengthen NHTSA by authorizing the
additional funding it badly needs, giving it imminent hazard
authority like CPSC and FDA have, and making sure it receives
more detailed information from manufacturers through early
warning reporting. The bill would empower consumers by giving
them free access to more safety information and by making
NHTSA's existing databases, which can be clumsy, confusing, and
hard for an ordinary consumer to use, more timely and more
readily searchable. The Vehicle Safety Improvement Act would
create an auto safety system that is proactive, identifying
defects before they reach epidemic proportions. And we urge
members to advance it. We also urge members to create a strong
safety title for a possible highway bill. In addition to
requiring that rental car companies fix recalled vehicles
before they offer them to consumers, as the Senate
transportation bill does, such a safety title should include
the needed reforms just outlined. Thank you.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman.
[The prepared statement of Mr. Wallace follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Burgess. Mr. Karr, you are recognized for 5 minutes for
your testimony please.
STATEMENT OF SHANE KARR
Mr. Karr. Thank you, Mr. Chairman, Ranking Member
Schakowsky, Ranking Member Pallone. I appreciate the
opportunity to testify on behalf of the Alliance of Automobile
Manufacturers today.
I know that our time is limited. And my complete statement
is submitted for the record. So I will limit my remarks here
and try to focus on the big picture. You have asked me to
testify about these two--the discussion draft and a bill today.
Let's talk first about the Improving Recall Tracking Act. Auto
manufacturers are committed to keeping their products safe. And
when a safety defect is identified, we want to undertake a
recall. And we want all of the recalled vehicles to be
repaired.
There are at least two challenges to completing repairs on
recalled vehicles. One, of course, is consumer motivation. In
this country, consumers make the choice whether or not to get
their vehicles repaired. We want them all to get their vehicles
repaired. We urge them to get their vehicles repaired. You all
have done that from the dais over the course of the last couple
of years. But, at the end of the day, consumers make that
choice.
In an effort to sort of understand why people wouldn't get
their vehicles repaired, my CEO, when he was testifying in
front of the committee earlier this summer, noted that we were
undertaking the first of its kind comprehensive study into
consumer motivations. Global Automakers and the National
Automobile Dealers ended up joining us. And we have been
working together. And, as Mr. Bozzella stated, we are close to
wrapping that up and look forward to briefing you all. We have
actually been in touch about setting up a briefing for you all
next month.
But putting consumer motivation aside, we know and you all
saw over the last year or two that reaching all consumers in
the first place is a significant challenge. It just is. One of
the great things about the U.S. is we are a highly mobile
economy. People move at the rate of about 17 percent a year.
NHTSA, in analyzing vehicle completion--recall completion
rates, has said that for those new vehicles in the sort of zero
to 4 year-old time frame, about 83 percent of those get
repaired. It is a very high percentage. But as soon as you
start tracking further out, the completion rate numbers fall
off dramatically.
Five to ten years, 44 percent completion rate. Over 10
years, 15 percent completion rate. At least part of the
explanation for that is the challenge associated with actually
reaching subsequent owners of vehicles. Mr. LaFeir's testimony
is terrific. My companies, I think all of them probably use his
service to contact consumers. But in reading his testimony,
they admit that part of the problem is there is not uniformity
among the states in the records they keep with regard to
registration, how quickly those are updated. That is part of
the reason why his company is so effective and why my companies
use it is because they reach all these different data points
beyond registrations so that we can notify consumers. The draft
not only requires this information to be submitted into a
national VIN database that would be accessible for recall
purposes, but it effectively standardizes the information that
would be collected and the timetables.
So it would, in fact, ensure that when we go to undertake a
recall, we have a comprehensive set of timely contact
information to work from and try to reach these owners of older
vehicles who are still required to register those vehicles in
the States. My testimony notes some other technical issues with
the bill. But I think from the big picture standpoint, that is
the issue that we are focused on. And it's worthy of further
consideration.
With regard to the Motor Vehicle Safety Whistleblower Act,
I would say just very briefly, that bill was introduced in the
Senate last fall. The Alliance immediately reached out to staff
on both sides of the aisle and Members. That bill had very
strong bipartisan support. We expressed our concerns and worked
through them. I never heard, frankly, in that time the issues
that are being raised here today. That bill obviously passed by
unanimous consent in the Senate. And we wouldn't object to you
all taking it up and passing it over here. And with that, I
will let myself open for questions.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman.
[The prepared statement of Mr. Karr follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Burgess. It occurs to the chair that I omitted to
announce to the subcommittee that members, pursuant to
committee rules, all members' opening statements will be made
part of the record.
And then I do want to thank all of you for your testimony
this morning and sharing your observations with us. We will
move into the question portion of the hearing. I will start by
recognizing myself for 5 minutes.
And, Mr. Karr, let me come back to you. You mentioned in
your testimony that the Auto Alliance, joined by the Global
Automakers and the National Automobile Dealers Association,
announced that it was conducting the study on what motivates
consumers to have their recalled vehicles remedied and you
mentioned that you were going to be having a briefing in the
near future.
Can you pull back the curtain just a little bit and share
with the subcommittee this morning some of the insights you may
have gained as to what motives a consumer to have a defect
remedied?
Mr. Karr. I would like to be able to do that, but I just
saw the preliminaries myself. And, you know, I wouldn't want to
mischaracterize anything off the top of my head. We will
schedule a full briefing and get the folks who actually
conducted the survey in here as well, so you will all have the
opportunity to ask them questions as well.
I guess one thing that is relevant to this hearing that we
learned is that the vast majority of people who knew that they
had had a vehicle recalled within the past 2 years, the vast
majority of those people knew because they were contacted by
the manufacturer. Even more than we expected. Given all the
news media and social media and everything else, the vast
majority of people----
Mr. Burgess. Let me ask you a question about that if you
are at liberty to answer it. So they had already been
contacted. Had they done the follow through to actually
schedule an appointment or had their vehicle defect remedied at
that point?
Mr. Karr. Remember, part of the reason for doing the survey
was to find out really why people who didn't get their vehicles
repaired, you know, why they didn't--why that didn't happen. So
we talked to a lot of people who had gotten their vehicles
repaired. We talked to a fair number of people who intended to
get their vehicles repaired in short order. And, interestingly,
there was a group of people who said, ``I know my vehicle is
under recall, but I don't intend to get it repaired.'' That was
a small minority of the folks that we talked to. But, yes, we
talked to all of those people.
Mr. Burgess. Well, this is, of course, with other hearings
into the air bag issues, one of the things that has really
concerned the subcommittee; how to get the word out to people
to get their vehicles repaired, and the very dangerous
situation that may exist in some vehicles.
Apparently the older the vehicle, the greater the risk. And
the real problem of once you are on the third or fourth owner
of a vehicle, it becomes very difficult to track them down. And
then, as you point out, the compliance rate may be lower. You
would think with a severe safety defect, something that could
blow up in your face, your family's face, you would want it
fixed, and it is a little concerning that we haven't been able
to do better with that.
I am going to assume, and correct me if I am wrong, that
the manufacturers themselves, we can legislate all we want up
here, but is there any place for the manufacturer placing an
incentive out there before the consumer public, hey, we would
like to see your vehicle in here and we will make it worth your
while to do so, half price on an oil change or vacuum the floor
mats. Are there incentive programs that are being looked at?
Mr. Karr. Yes, I think that there actually are even
examples of incentive programs that have been undertaken by a
couple of my members surrounding the recent recalls. So,
absolutely, I think that that is something to look at.
Interestingly enough, for a lot of consumers, they
apparently have concerns if they bring their vehicle in to be
recalled, that they will be upsold on other things. So part of
this may be assuaging those concerns going forward. There are a
lot of different reasons. And it will be interesting, I think
you all will find it interesting to unpack why people do or
don't do what they do.
Mr. Burgess. Well, we anxiously look forward to those
briefings and perhaps have an opportunity to have you back and
discuss those. You mentioned in your testimony, the
manufacturers are committed to keeping their products safe. And
you believe that, right?
Mr. Karr. Absolutely.
Mr. Burgess. And, Mr. Bozzella, I spent my productive years
in the healthcare industry, and we talked about something in
the healthcare industry called continuous quality improvement.
You all do that in the manufacturing process. Is that just a
matter of course?
Mr. Bozzella. Yes, it is.
Mr. Burgess. And it just seems like it would fit in a
culture of continuous quality improvement that if someone sees
something that is not right, you would want them to bring it
forward. I can't imagine a culture where an employee would say
this is going to be a real problem. If I just hang onto this
for a while, it might be a very valuable lawsuit for me in the
future. Nobody wants that kind of environment, do they?
Mr. Bozzella. No. No. You are exactly right. And I think
the key there is not only to create that environment but to
continue to enhance and develop it through more training,
hotlines, both internal and third-party hotlines, the kinds of
things that I think you are hearing our members' companies are
doing. I think it is critical.
Mr. Burgess. Great. Thank you. My time has expired. The
chair will recognize the ranking member of the subcommittee,
Ms. Schakowsky, 5 minutes for your questions, please.
Ms. Schakowsky. Thank you, Mr. Chairman. Mr. Karr, with all
due respect, if Ford or GM said to their stockholders, you know
what, consumer motivation just isn't there. This is a free
country and people are free not to buy our cars. I am having to
assume that in marketing automobiles, which you can hardly turn
on the television, it is either a drug ad or it is a car ad,
that consumer motivation is deeply researched and figured out
and a lot of money is spent to do that.
So don't you think that if the manufacturers were really
serious about getting unsafe cars off the road--I look forward
to your research. But this idea that, well, consumers, they
just don't really want to do it. Really? They want to drive
unsafe cars?
Mr. Karr. So, I absolutely agree with you that we need to,
and I think my companies are very clearly demonstrating, and
actually one of my comments, I should say, in the testimony to
the draft bill is actually that, the way the draft bill is
written, it actually only would allow us access to that
database for the owner notification letters that are required
under Title 49. And my guys are doing kind of creative and
innovative things to reach out and motivate consumers.
And so we would like you all to consider allowing us to use
contact information for these more creative means. Having said
that, I do just want to say that the owner notification
letters, they are, NHTSA fairly strictly lays out for us what
we can say.
Ms. Schakowsky. I get them. I get it. And I get them. And
there has to be a better way. And I wanted to ask Mr. LaFeir,
one of the things that we know is that nearly 20 percent of
recalled cars are never repaired, recall completion, 44 percent
for vehicles 5 to 10 years old, 15 percent for vehicles over 10
years old. And, in fact, the average age of cars on the road is
11.4 years.
So what can we do? I know you have this private sector
database which in my testimony I said I thought, it is sort of
unusual for me, I am saying let's not have a government
solution, let's have a private sector solution, sort of a
reversal here. Anyway, so how do we get to the drivers of older
cars?
Mr. LaFeir. I think we have good tools to get the contact
and to get the notification out. I think the motivation changes
as the vehicles get older. I think data and data analytics are
advancing to the point where we can probably put more energy
into understanding are there particular groups that are
behaving differently than others? And that may be an area to
focus on.
Ms. Schakowsky. OK. Mr. Lawrence, this is speculation but
it seems to me since Volkswagen quite deliberately built into
their cars this fraudulent emissions switch, whatever they call
it, do you think that if a whistleblower internally had said,
oh, this is really bad and you have got to fix it, that that
would have done the trick?
Mr. Lawrence. Certainly not. In our experience, most
whistleblowers actually do report the misconduct of their
company up the chain of command and, generally speaking, only
contact the government after they have suffered the retaliation
from the company for bringing their concerns to management.
The False Claims Act takes the exact opposite approach and
does not require whistleblowers to bring their information
directly to the fraud feasors. Instead, it requires
whistleblowers actually to submit their information under seal
and only provide it to the government so as not to tip off the
target that the government might be investigating potential
wrongdoing or fraud.
Ms. Schakowsky. So it is possible that this requirement
could actually make cars more dangerous in the sense that it
would require this internal communication?
Mr. Lawrence. It certainly adds another step to the process
of getting the information to the appropriate government
officials. And that delay could certainly result in a more
dangerous environment.
Ms. Schakowsky. One quickie for Mr. Wallace, the limit on
violations and civil penalties for violations, it seems $35
million for GM was too little. What do you think we should do?
Mr. Wallace. Well, I think we desperately need to raise
those in order to provide an effective deterrent against
corporate wrongdoing. Especially because we just have to make
sure that this is not the cost of doing business. These
penalties cannot be considered merely the cost of doing
business. It must be a real deterrent.
Ms. Schakowsky. Thank you. I yield back.
Mr. Burgess. The gentlelady yields back. The chair thanks
the gentlelady. The chair recognizes the ranking member of the
full committee, Mr. Pallone, 5 minutes for questions, please.
Mr. Pallone. Thank you, Mr. Chairman. While this is a
hearing on legislative initiatives relating to safety, our
committee has direct oversight responsibilities regarding both
clean air and deceptive practices. And I would be remiss if I
didn't bring up the following issue. As you know, last week,
the EPA issued a notice of Clean Air Act violations to
Volkswagen and its related companies stating that Volkswagen
had manufactured and installed defeat devices in certain model
year cars that, ``bypass, defeat, or otherwise render
inoperable elements of the vehicle's emission control system.''
Volkswagen has not denied the EPA's assertion so far. In fact,
the EPA has said Volkswagen has admitted it designed and
installed defeat devices in these vehicles.
In my opinion, to think that one of the world's biggest and
most established automakers deliberately set out to perpetrate
this kind of scam on consumers is mind boggling and an outrage
that harms both consumers and producers. On the one hand, we
have consumers who trusted that Volkswagen played by the rules
and that purchased cars had the attributes the company said
they had. Dare to learn the truth about clean diesel was one of
Volkswagen's advertisements. The reality appears to be that its
diesel isn't clean and the ads are not true.
Nearly half a million U.S. consumers and millions more
around the world have been lured by the idea of a more
efficient, less polluting fossil fuel vehicle that now looks to
be neither. And those people who are now saddled with vehicles
that if repaired, and I am not sure that is the right word,
probably won't meet the fuel economy standards that these
consumers thought they were paying for. And the cars,
themselves, have probably lost a tremendous amount of their
resale value.
On the other hand, you have Volkswagen casting doubt on the
industry as a whole. The company hasn't just harmed itself, it
has harmed the entire industry. Volkswagen's actions, if
everybody is wondering whether Volkswagen is the only one with
this problem. So to that end, EPA released a letter being sent
to vehicle manufacturers notifying them that the agency is
adding new evaluations designed to find potential defeat
devices.
Mr. Bozzella and Mr. Karr, what do you say to the American
consumer, and how do we ensure that they are compensated not
just for the economic loss, but for the fraud that appears to
have been perpetrated on them? Let's start with Mr. Bozzella
and then Mr. Karr.
Mr. Bozzella. Ranking Member Pallone, thank you very much.
As I mentioned a few minutes ago in my testimony, the very
troubling facts that have come to light involving Volkswagen
will likely have significant implications for the industry. So
I do look forward to working with you and the committee
discussing these issues as we go forward.
Mr. Pallone. Mr. Karr, can you respond?
Mr. Karr. Thank you, Ranking Member. Unfortunately, I don't
have any more insight into the facts than have been publicly
recorded. I think this is a very unfortunate situation.
Volkswagen is a company that has shown its commitment to the
American market, including producing vehicles in the United
States. But these allegations are not good. And it will clearly
have ramifications going forward, as it should.
Mr. Pallone. Thank you. Mr. Wallace, representing Consumers
Union, the policy division of Consumer Reports, would you care
to comment?
Mr. Wallace. Yes. This is a very serious, calculated
violation of the law. We at Consumer Reports, we pulled our
recommendations of the diesel versions of the Passat and the
Jetta. And our CEO, Marta Tellado, recently called for the
company and the government response to this betrayal to be
significant enough to right the wrongs that have occurred and
to bring true justice to the consumer, because this is just
that egregious.
Mr. Pallone. It appears to be totally intentional. That's
the point.
Mr. Wallace. Exactly.
Mr. Pallone. That is the most important point. I don't know
what you say to people at Consumer Reports who are duped into
recommending some of these cars to the public and how you
convince all of us and our constituents that Volkswagen is an
anomaly and that we can afford to trust the industry at all.
Mr. Wallace, did you want to comment? The concern now is that
this isn't just one car manufacturer, there might be others.
Mr. Wallace. Well, I work here in our policy office in D.C.
But I know that we have a team of committed engineers and
technicians up at our test track. And I can tell you that as an
organization, Consumer Reports will absolutely put pressure on
the manufacturer to make sure that it makes things right.
Mr. Pallone. All right. Thank you very much. Thank you, Mr.
Chairman.
Mr. Burgess. The chair thanks the gentleman. The chair
would note to the gentleman that his concerns are not--they are
actually shared by both sides of the dais on the subcommittee
as to where the appropriateness of this investigation is. And
it is a work in progress. So watch this space. Mr. Butterfield,
you are recognized for 5 minutes for questions please.
Mr. Butterfield. Thank you very much, Mr. Chairman. And I
apologize for being in and out of the room. But the
developments this morning regarding the Speaker's impending
resignation has just caused a lot of telephone traffic in my
office both from the media and from constituents. And so I have
been back and forth.
But, Mr. Chairman, one of the laudable goals of the VIN
look-up registration legislation is to enable manufacturers to
reach more owners of recalled vehicles so that more vehicles
will get repaired. And so I would like to focus my questions
today on the rental car safety bill that I introduced with the
support of Ranking Member Schakowsky and Congresswoman Capps,
H.R. 2198. Companion legislation passed the Senate with
bipartisan support as part of the Senate's highway bill.
The legislation will help maximize the number of recalled
cars that get fixed. That bill is the Raechel and Jacqueline
Houck Safe Rental Car Act, which is supported by the rental car
industry. Yes, it is. Consumer organizations, General Motors,
Honda, and others. That is very impressive. It would ensure
that rental car companies fix recalled vehicles in their fleets
before, before renting or selling them. And so to you, Mr.
Wallace, what is the Consumers Union's position on 2198 if you
all have one?
Mr. Wallace. We strongly support the bill. We think it is
well past time that it passes this Congress and close this
safety gap that exists. We would also note that it has very,
very broad support. And it is only now, it is just up to
Congress to get it through.
Mr. Butterfield. Would it be correct to say that this
legislation is critical and it is important?
Mr. Wallace. Yes.
Mr. Butterfield. All right. And to you, Mr. Karr, does your
organization support 2198?
Mr. Karr. The Alliance does not support the bill as
introduced. We have had numerous conversations with staff,
primarily on the Senate side, where the counterpart originated,
and proposed a number of possible changes to address our
concerns, and would be happy to meet with you all and your
staff.
Mr. Butterfield. Can you quantify this for me? What
percentage of recalled vehicles are subject to a do not drive
warning?
Mr. Karr. Subject to an actual do not drive, it is a small
percentage, under 10 percent.
Mr. Butterfield. That is what we have been informed, yes.
Are there any Federal safety standards that dictate when
manufacturers must issue the do not drive warning?
Mr. Karr. There are not. However, manufacturers, when a
manufacturer issues a recall, before they do that, that has to
be basically approved through NHTSA. We submit the language and
the proposal for the recall to NHTSA. And they review it and
approve it before it goes out.
Mr. Butterfield. Thank you. I am standing between my
colleagues and votes on the floor.
Mr. Chairman, I ask unanimous consent that two letters be
submitted for the record, one from LKQ Corporation and the
other from the American Car Rental Association and others.
Mr. Burgess. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Butterfield. In addition, Ms. Schakowsky, as she was
leaving, asked that I present for the record a statement from
the American Association of Motor Vehicle Administrators. I ask
unanimous consent.
Mr. Burgess. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Butterfield. Thank you. I yield back.
Mr. Burgess. The gentleman yields back. The chair thanks
the gentleman. The chair does want to thank the panel for being
here this morning and for your time and the expert testimony
that you have provided to us.
Seeing no further members wishing to ask questions, I would
like to take a moment to recognize the contribution of our
clerk, Kirby Howard, who after many years of service to the
subcommittee on the staff is leaving for new career
opportunities. And we obviously wish him well in his future
endeavors.
And also before we conclude, I wanted to include the
following document to be submitted for the record by unanimous
consent, that will be easy, a letter on improving the Recall
Tracking Act submitted by Experian. Without objection, so
ordered.
[The information appears at the conclusion of the hearing.]
Mr. Burgess. Pursuant to committee rules, I remind members
they have 10 business days to submit additional questions for
the record. I ask the witnesses to submit their responses to
these questions within 10 business days upon receipt of the
question.
And, without objection, further proceedings of this
subcommittee are adjourned.
[Whereupon, at 11:00 a.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
Everyone knows I'm from Michigan--the auto state--and that
is something I take great pride in. Folks also know that I am
disappointed that this committee has been forced to hold
multiple hearings over the past few years on motor vehicle
recalls. But even when facing these issues, I remain an
optimist. I believe that cars are safer today than ever before
and the data shows that. The new technologies that are being
developed and deployed will make us even safer on the road.
Today, we continue our work to keep families in Michigan and
across the country safe on the roads by focusing on two bills
to improve safety.
The Motor Vehicle Safety Whistleblower Act goes great
lengths to ensure that safety violations don't go unreported.
Almost fifteen years ago, in the wake of the tragic
circumstances involving Ford-Firestone, I authored the
bipartisan TREAD Act to get automakers to identify and fix
defects earlier and remove flawed cars from the road
immediately. While that law has prevented several safety issues
from becoming serious disasters, the early warning reporting
regime is greatly dependent on the commitment of the auto
industry to make it a success. The safety incentives provided
in the Motor Vehicle Safety Whistleblower Act are meant to help
foster that commitment because as we know, reporting delays
cost lives.
The Improving Recall Tracking Act is another legislative
proposal we will review today. With any recall, consumers must
be notified of the defect so they can get their vehicles fixed.
It is unacceptable that there continue to be vehicle owners
that have not been notified of a defect or serious safety risk
because they cannot be located. Currently, we have 50 different
state systems to notify consumers of safety issues leading to
unfortunate delays in getting lifesaving information out to the
right people. I am also troubled that the challenge of
notifying consumers could get worse as the development of new
technology platforms enable owners to sell vehicles in
nontraditional ways.
Consumer notification is a key part of ensuring that the
recall process works. During today's review of the Improving
Recall Tracking Act, I look forward to hearing about how the
private sector is working with the auto industry to identify
consumers affected by a safety recall. I also look forward to
hearing how driver registration and vehicle identification
numbers are kept up to date in databases maintained by
manufacturers and commercial entities, and what considerations
are being made to improve the consumer notification process.
As I have said before, there can be no margin of error when
it comes to vehicle safety. Lives are on the line--and the
public deserves the peace of mind that they are safe every time
they get behind the wheel. I thank Chairman Burgess and this
subcommittee for its continued commitment to protecting the
driving public.
----------
Prepared statement of Hon. Frank Pallone, Jr.
Thank you Mr. Chairman. Today we are discussing two bills
related to automobile safety; one intended to help automakers
more easily find the current owners of recalled cars and one
intended to provide incentives for whistleblowers to submit
safety defect information to the National Highway Traffic
Safety Administration or NHTSA [NIT-suh].
While I appreciate the effort by this Committee to take
action on auto safety, these measures fall short.
According to NHTSA, more than 32 thousand people lost their
lives on U.S. roads in 2014. Much more needs to be done to
improve the system for detecting and reporting safety defects
to NHTSA, and to reduce the number of defective cars that reach
consumers in the first place.
Earlier this year, Subcommittee Ranking Member Schakowsky
and I, with a number of other members, introduced the Vehicle
Safety Improvement Act of 2015 (V.S.I.A.). Our bill would
address a number of urgent auto safety issues.
V.S.I.A. improves the Early Warning Reporting system by
making more reported information public and requiring
manufacturers to provide significantly more information about
any fatality involving a safety defect. It includes imminent
hazard authority for NHTSA, allowing the agency to expedite a
recall order, and increases fines for manufacturers that
violate vehicle safety laws.
In addition, it will eliminate geographically limited
regional recalls and require reviews of safety standards for
back seat passengers and pedestrians.
Regarding today's two bills, I am concerned that they will
have little impact on auto safety and divert scarce resources.
I cannot support them as currently drafted.
I hope that we can work together to ensure that these bills
will truly improve auto safety. And I also hope that together
we can take broader actions that will make a larger impact on
auto safety.
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