[Congressional Record Volume 140, Number 29 (Wednesday, March 16, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
              GENERAL AVIATION REVITALIZATION ACT OF 1994

  The PRESIDING OFFICER. Under the previous order, upon disposition of 
H.R. 820, the Senate resumes consideration of S. 1458, which the clerk 
will report.
  The legislative clerk read as follows:

       A bill (S. 1458) to amend the Federal Aviation Act of 1958 
     to establish time limitations on certain civil actions 
     against aircraft manufacturers, and for other purposes.

  The Senate continued with the consideration of the bill.
  Mr. DANFORTH. Mr. President, I am pleased to support S. 1458, the 
General Aviation Revitalization Act of 1993. This legislation will help 
to lift the weight of product liability lawsuits that has almost 
crushed our light aircraft manufacturing industry. I commend Senator 
Kassebaum for her leadership on this issue, which culminates with 
today's vote on this legislation.
  The general aviation industry has experienced a dramatic decline in 
production since 1978. In that year, the industry produced 18,000 
aircraft, of which 17,000 were piston-engine aircraft. Last year, the 
industry manufactured only 900 aircraft, including only 555 piston-
engine aircraft. According to the General Aviation Manufacturers 
Association [GAMA], a major reason for the dramatic decline in the 
light aircraft industry is the application of the doctrine of strict 
liability in product liability cases arising out of aircraft accidents. 
GAMA statistics indicate that claim and defense costs for light 
aircraft airframe and component manufacturers have risen from $24 
million in 1976 to $210 million in 1986. The three largest 
manufacturers of piston-engine aircraft are virtually out of that line 
of business. By 1986, Cessna, which has been the largest manufacturer 
of piston-engine models, had dropped completely out of that business. 
Last year, Beech manufactured only 18 percent of the piston aircraft 
they made in 1978, and Piper's production of piston aircraft has 
dropped to 2 percent of the 1978 level. Piper has been in bankruptcy 
since 1991.
  Beech compiled statistics on all product liability litigation it 
defended between 1983 and 1986. During that time, Beech was named in 
203 suits. The National Transportation Safety Board determined that a 
factor other than design or manufacturing error was the cause in each 
accident. Nevertheless, the average cost of each lawsuit, including 
defense costs and verdicts, was $530,000. Beech estimated that the 
costs of litigation added $70,000 to the price of each new aircraft.
  The industry's decline has led to severe job losses and a balance of 
trade deficit. According to Russell Meyer, president of Cessna, this 
decline has led to the loss of 100,000 jobs. Moreover, in 1978, the 
light aircraft industry ran a balance of trade surplus of $340 million. 
In 1981, the industry experienced a balance of trade deficit of $200 
million. That was the first deficit ever in the history of the 
industry. Last year, the balance of trade deficit reached $800 million.
  Current product liability law allows manufacturers to be held liable 
for defective design or manufacture decades after the aircraft is 
manufactured. The average piston-engine aircraft is over 27 years old 
and one-third of the fleet is over 32 years old and manufacturers 
continue to be held liable for the design and manufacture of these 
aircraft. This ``long tail'' of liability will destroy what little 
remains of the light aircraft industry unless the problem is addressed 
immediately.
  Unlike many problems, this one has a consensus solution--enactment of 
legislation limiting the liability of general aviation manufacturers. 
This legislation enjoys such strong support because it will create 
jobs.
  The International Association of Machinists strongly supports this 
legislation. Russell Meyer has said that his company will restart 
production of piston-engine aircraft if this legislation is enacted 
and, ``within 5 years, more than 25,000 jobs would be created at no 
cost to the Government.'' In addition to light aircraft manufacturers, 
the Aircraft Owners and Pilots Association, representing those who 
purchase and use general aviation, support this initiative. Thus, this 
legislation is supported by manufacturers, labor, and the primary 
organization representing the users and consumers of general aviation.
  The members of President Clinton's Airline Commission unanimously 
supported enactment of a 15-year statute of repose in their August 19 
report to the President and the Congress. The report states:

       The enactment of legislation limiting the liability of 
     general aviation manufacturers to 15 years from the date of 
     manufacture would help regenerate a once-healthy industry and 
     help create thousands of jobs.

  The Commission reiterated its staunch support for this legislation in 
a November 2 letter to Transportation Secretary Federico Pena. The 
letter was commenting on a staff draft prepared by bureaucrats at the 
Department of Transportation that called for more study of the statute 
of repose issue. It started:

       On the issue of a statute of repose, it is clear that this 
     once competitive sector of our manufacturing industry cannot 
     be revived unless this step is taken. This is a limited and 
     targeted response to a demonstrated problem.

  The Commission went on to say, ``The time is right, right now.''
  Mr. President, I agree with the Commission. The time to act is now. 
Passage of this legislation will restore fairness to product liability 
cases involving general aviation aircraft, and it will revitalize an 
important industry while creating tens of thousands of new jobs. I urge 
my colleagues to support S. 1458.
  Mr. CHAFEE. Mr. President, I applaud my colleague from Kansas for her 
tenacity, perseverance, and great patience in bringing once again the 
issue of general aviation liability reform before this body.
  By granting an 18-year statute of repose, the Kassebaum legislation 
addresses one of the most important factors that have brought about the 
decline of the general aviation industry: increased product liability 
exposure, and its staggering cost to aircraft manufacturers.
  General aviation manufacturers are spending a huge amount of time and 
resources on defending lawsuits instead of developing or perfecting 
products and manufacturing technology. That burden is having an 
extremely detrimental effect on the health of the general aviation 
industry in this country. Sales of domestic aircraft have dropped 
sharply since the late 1970's. Cessna, Piper, and Beech aircraft among 
others have cut back production dramatically. Listen to this: In 1979, 
U.S. companies turned out 17,000 general aviation aircraft; in 1992, 
our companies made 400. The loss in this particular manufacturing 
sector has in turn had a ripple effect on the overall economy, with an 
estimated 100,000 jobs lost in general aviation manufacturing and those 
industries who supply general aviation parts and service. And U.S. 
manufacturers, who used to produce more than 95 percent of the world's 
general aviation aircraft, no longer have that leadership. The world 
leaders now are France, Germany, and Italy.
  Let me share one example with my colleagues. I have a letter here 
from Cessna. Cessna is a subsidiary of Textron, which is headquartered 
in my State of Rhode Island and which is an important employer there. 
Cessna has quit the business of piston aircraft completely, even though 
those sales were going quite well for them. Indeed, between 1965 and 
1982, Cessna sold 6,500 piston aircraft annually, and was investing $20 
to $25 million in research and development annually--15,000 men and 
women were employed by Cessna back then.

  But in 1986, with just 3,000 employees, they quit the piston aircraft 
business altogether. Why? Because of the phenomenal liability costs. 
Coincidentally, these costs amounted to $20 to $25 million each year--
the same amount previously spent on R&D.
  If the Kassebaum legislation is enacted into law, the president of 
Cessna, Russ Meyer, said publicly last fall that Cessna will restart 
production as soon as possible. And the entire general aviation 
industry predicts that if this legislation is enacted into law, 
employment in that industry will increase by 25,000 within 5 years. 
What a boost that would be in these difficult economic times.
  Last August, the President's National Commission to Ensure a Strong 
Competitive Airline Industry came out with 61 recommendations. The 
single policy recommendation that the Commission believed would create 
the most jobs was to establish a statute of repose for the general 
aviation industry. No wonder the International Association of 
Machinists joins in support of this bill.
  Now I want to reiterate a point made previously in debate on this 
bill about public safety: As my colleague from Kansas has so ably 
pointed out, this issue is not--I repeat not--a question of whether or 
not consumers are protected when they buy this aircraft. There are 
strict regulations placed on the general aviation industry for their 
manufacturing processes. Stringent Federal guidelines ensure that 
planes are built according to exacting criteria, and Federal approval 
and certification is required along the way. We have ensured that 
passengers in these aircraft are not placed in danger because of shoddy 
design or manufacturing, or any shortcuts taken by the manufacturer.
  Indeed, I might point out that the bill is supported by virtually 
every aviation consumer organization.
  When accidents do happen, virtually all--99 percent--occur not due to 
a manufacturing or design defect, but to other causes. Yet the 
liability costs for general aviation have skyrocketed.
  I would argue strongly to my colleagues that a great part of our role 
in Congress is to protect the public's welfare and encourage economic 
development. The current liability system for general aviation adds 
nothing to public welfare, and enormously harms economic development.
  If we do not adopt this measure, we will continue to see a decline in 
the general aviation industry--and equally important, a decline in U.S. 
jobs and trade. Are we ready to see the United States not only lose 
global leadership in this industry but to allow the general aviation 
industry to disappear altogether in this country?
  In one stroke, we can improve substantially the situation--and 
therefore the fate--of this important industry. For Congress not to act 
is madness. I for one am not ready to see this industry, with all its 
technology and jobs, disappear from the face of this country.
  I urge the adoption of this very simple but wise measure, and again 
extend my compliments to the Senator from Kansas.
  Mr. DOLE. Mr. President, I rise in support of my distinguished Kansas 
colleague, Nancy Kassebaum, as an original cosponsor this important 
legislation that is designed to revitalize the general aviation 
industry. Since the 99th Congress, we have been attempting to obtain 
some form of relief that addresses a serious problem confronting this 
important national industry.
  Mr. President, the general aviation industry has paid the price in 
recent years because of the dramatic increased costs associated with 
product liability. This legislation is a commonsense approach. It makes 
no sense for the general aviation industry to be penalized by these 
outrageous increases since they have occurred during a period where the 
safety record of general aviation has greatly improved.
  In Kansas, especially in Wichita, where Beech, Cessna, and Learjet 
companies manufacture aircraft, the effect of congressional inaction 
has been dramatic. In 1992, a total of 899 general aviation aircraft 
were delivered--representing a decline of 6.7 percent from 1991. Of 
those aircraft deliveries, the world export market also showed a 5-
percent decline. Contrast that to 17,000 general aviation aircraft sold 
in 1979. Although 1993 aircraft delivery figures edged up slightly, it 
is clear to me that the industry is not experiencing new and robust 
health in the current environment.

  Liability payments by manufacturers, on the other hand, rose from $24 
million in 1979 to approximately $240 million in 1990. U.S. airplane 
manufacturing employment has declined since 1980 by 46 percent--from 
40,000 workers to approximately 21,500 today.
  The result is lost jobs, lost aircraft sales, and lost export 
markets. In addition, these losses also create adverse affects on other 
industries that rely on a healthy aircraft manufacturing market.
  Mr. President, this approach, the creation of an 18 year statute of 
repose on civil actions brought against aircraft manufacturers or 
producers of general aviation parts is different from our previous 
efforts and represents a reasonable, sensible and fair solution for all 
concerned. This legislation is supported by manufacturers, consumers 
and labor. It was recommended by the President's Commission to Ensure a 
Strong Competitive Airline Industry. In fact, Cessna Aircraft Co. in 
Wichita has made no secret of the fact that it will immediately hire 
workers to begin production of piston-powered aircraft as soon as this 
legislation is passed.

  In fact, Mr. President, this approach will create thousands of high 
wage jobs immediately simply by bringing common sense to the product 
liability laws affecting general aviation. Not one Federal dollar is 
needed to get this result. And most importantly, this is not a blank 
check for relief Mr. President.
  I want to congratulate Senator Kassebaum on her efforts to bring this 
important issue to the floor for a vote today. Enactment of this 
legislation is long overdue, and her efforts have been tireless and 
commendable.
  Mr. DURENBERGER. Mr. President, I rise today in strong support of S. 
1458, the General Aviation Revitalization Act of 1993.
  Under this bill, as amended, no civil action can be brought for 
damages arising out of a general aviation accident if the accident 
occurred more than 18 years after the aircraft was delivered to its 
first purchaser. In the case of component parts, no civil action may be 
brought more than 18 years after the date of the replacement or 
addition.
  I am told that most planes by that time have had several owners, at 
least three major overhauls and on average accumulated 6,000 hours of 
flying time.
  I became a cosponsor of S. 1458 because I believe that unreasonable 
product liability costs associated with the domestic manufacturing of 
general aviation aircraft have been the single most important factor 
contributing to the decline in U.S. production of light airplanes. From 
1978 to 1992, American general aviation manufacturers spent as much to 
defend product liability suits as they had spent to develop new 
aircraft from 1945 to 1978. As a result, American production of private 
airplanes declined from 17,000 in 1979 to less than 1,700 in 1989. Over 
100,000 industry and related jobs were lost during that same period.
  S. 1458 has the strong support of both manufacturers and organized 
labor. The International Association of Machinists and Aerospace 
Workers, the Aircraft Owners and Pilots Association, the Aircraft 
Electronics Association, the General Aviation Manufacturers 
Association, the Minnesota Department of Transportation, and Minnesota 
manufacturer Honeywell, Inc. have all written to me in support of the 
General Aviation Revitalization Act.
  I urge my colleagues to join me in voting for this important measure.
  Mr. LEVIN. Mr. President, my vote for this narrowly targeted and 
industry-specific legislation should not be construed to indicate my 
general view on issues dealing with Federal involvement in product 
liability issues.
  There is already significant Federal involvement in aviation. The 
Federal Aviation Administration, governed by laws passed by Congress, 
has detailed regulatory oversight over general aviation. The FAA must 
certify each aircraft design before manufacture. Each individual plane 
must be certified before it is allowed to fly. And, each general 
aviation plane not in commercial use must pass an annual FAA 
certification.
  The Federal involvement also goes beyond the machinery; the FAA 
regulates air routes and regulates and certifies the pilots. Thus this 
industry is in many ways unique, which is appropriate, in its degree of 
Federal involvement in regulation and certification.
  I also want to commend Senator Kassebaum for her effort on behalf of 
this legislation and on her willingness to consider modifications to 
it. She is a model of tenacity, patience, and fairness.
  Mr. DODD. Mr. President, I rise today in strong support of the 
General Aviation Revitalization Act. This legislation, which I am 
cosponsoring, should improve the American general aviation industry for 
manufacturers, employees, and consumers.
  The American general aviation industry, which produces small planes 
designed for private use, has suffered a dramatic downturn in recent 
years. Deliveries of this type of aircraft dropped from nearly 18,000 
in 1978 to less than 900 last year. Because of this decline, more than 
100,000 jobs have been lost in manufacturing, sales, service, and 
related industries.
  Much of the problem stems from laws which hold manufacturers liable 
for planes that were built decades ago. This open-ended liability has 
driven up the cost of insurance and made it increasingly expensive for 
American manufacturers. Not surprisingly, foreign manufacturers who are 
not constrained by these product liability laws have captured a growing 
share of the market.
  This legislation should help restore the competitive balance and 
provide new opportunities for American workers. Generally, the bill 
provides that no civil action for damages arising out of a general 
aviation accident may be brought against the aircraft manufacturer if 
the accident occurs more than 18 years after delivery of the aircraft 
to the first purchaser. It also provides a similar, 18-year statute of 
repose for manufacturers of general aviation component parts.
  In the past, I have opposed various measures that Senator Kassebaum 
has introduced on this subject. In my view, those efforts struck the 
balance too much toward manufacturers. But this most recent version, 
which has been modified after bipartisan negotiations, is a narrow 
measure that protects the interests of consumers and employees as well 
as manufacturers. Indeed, a wide range of constituents in my home State 
of Connecticut--machinists, airline pilots, and employers--have urged 
me to support this bill.
  In closing, Mr. President, I urge my colleagues to vote in favor of 
this vital piece of legislation. I commend Senator Kassebaum for her 
hard work on this measure, and I look forward to the opportunity it 
presents for a revitalized general aviation industry.
  The PRESIDING OFFICER. Under the previous order, the question now 
occurs on final passage of the bill. The yeas and nays have been 
ordered. The clerk will call the roll.
  The bill clerk called the roll.
  Mr. FORD. I announce that the Senate from Oklahoma [Mr. Boren] is 
necessarily absent.
  I further announce that if present and voting, the Senator from 
Oklahoma [Mr. Boren] would vote ``aye.''
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 91, nays 8, as follows:

                      [Rollcall Vote No. 61 Leg.]

                                YEAS--91

     Akaka
     Baucus
     Bennett
     Bingaman
     Bond
     Boxer
     Breaux
     Brown
     Bryan
     Bumpers
     Burns
     Byrd
     Campbell
     Chafee
     Coats
     Cochran
     Cohen
     Conrad
     Coverdell
     Craig
     D'Amato
     Danforth
     Daschle
     DeConcini
     Dodd
     Dole
     Domenici
     Dorgan
     Durenberger
     Exon
     Faircloth
     Feingold
     Feinstein
     Ford
     Glenn
     Gorton
     Graham
     Gramm
     Grassley
     Gregg
     Harkin
     Hatch
     Hatfield
     Helms
     Hollings
     Hutchison
     Inouye
     Jeffords
     Johnston
     Kassebaum
     Kempthorne
     Kennedy
     Kerrey
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lott
     Lugar
     Mack
     Mathews
     McCain
     McConnell
     Metzenbaum
     Mikulski
     Mitchell
     Moseley-Braun
     Moynihan
     Murkowski
     Murray
     Nickles
     Nunn
     Packwood
     Pell
     Pressler
     Pryor
     Reid
     Riegle
     Robb
     Rockefeller
     Roth
     Sarbanes
     Sasser
     Simpson
     Smith
     Stevens
     Thurmond
     Wallop
     Warner

                                NAYS--8

     Biden
     Bradley
     Heflin
     Shelby
     Simon
     Specter
     Wellstone
     Wofford

                             NOT VOTING--1

       
     Boren
       
  So the bill (S. 1458) was passed, as follows:

                                S. 1458

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``General Aviation 
     Revitalization Act of 1994''.

     SEC. 2. TIME LIMITATION ON CIVIL ACTIONS AGAINST AIRCRAFT 
                   MANUFACTURERS.

       Title XI of the Federal Aviation Act of 1958 (49 U.S.C. 
     App. 1510-1518) is amended by adding at the end the following 
     new section:

     ``SEC. 1119. TIME LIMITATION ON CIVIL ACTIONS AGAINST 
                   AIRCRAFT MANUFACTURERS.

       ``(a) In General.--Except as provided in subsection (b) of 
     this section, no civil action for damages for death or injury 
     to persons or damage to property arising out of an accident 
     involving a general aviation aircraft may be brought against 
     the manufacturer of the aircraft or the manufacturer of any 
     component, system, subassembly, or other part of the 
     aircraft, if the accident occurred--
       ``(1) more than 18 years after--
       ``(A) the date of delivery of the aircraft to its first 
     purchaser or lessee, if delivered directly from the 
     manufacturer; or
       ``(B) the date of first delivery of the aircraft to a 
     person engaged in the business of selling or leasing such 
     aircraft; or
       ``(2) with respect to any component, system, subassembly, 
     or other part which replaced another product originally in, 
     or which was added to, the aircraft, and which is alleged to 
     have caused the claimant's damages, more than 18 years after 
     the date of the replacement or addition.
       ``(b) Exceptions.--Subsection (a) of this section does not 
     apply--
       ``(1) if the claimant pleads with specificity the facts 
     necessary to prove, and proves by clear and convincing 
     evidence that the manufacturer with respect to certification 
     or obligations with respect to continuing airworthiness of an 
     aircraft or aircraft component knowingly misrepresented to 
     the FAA, or concealed or withheld from the FAA, required 
     information that is material and relevant to the performance 
     or the maintenance or operation of such aircraft or component 
     that is causally related to the harm which the claimant 
     allegedly suffered;
       ``(2) if the person for whose injury or death the claim is 
     being made is a passenger for purposes of receiving treatment 
     for a medical or other emergency; or
       ``(3) if the person for whose injury or death the claim is 
     being made was not aboard the aircraft at the time of the 
     accident.
       ``(c) General Aviation Aircraft Defined.--For the purposes 
     of this section, the term `general aviation aircraft' means 
     any aircraft for which a type certificate or an airworthiness 
     certificate has been issued by the Administrator, which, at 
     the time such certificate was originally issued, had a 
     maximum seating capacity of fewer than 20 passengers, and 
     which was not, at the time of the accident, engaged in 
     scheduled passenger carrying operations as defined under 
     regulations issued under this Act.
       ``(d) Relationship to Other Laws.--This section supersedes 
     any Federal or State law to the extent that such law permits 
     a civil action described in subsection (a) to be brought 
     after the applicable deadline for such civil action 
     established by subsection (a).''.

     SEC. 3. CONFORMING AMENDMENT.

       The table of contents contained in the first section of the 
     Federal Aviation Act of 1958 is amended by adding at the end 
     of the matter relating to title XI of such Act the following:

``Sec. 1119. Time Limitation on Civil Actions Against Aircraft 
              Manufacturers.
``(a) In general.
``(b) Exceptions.
``(c) General aviation aircraft defined.
``(d) Relationship to other laws.''.
  Mr. MITCHELL addressed the Chair.
  The PRESIDING OFFICER. The majority leader is recognized.

                          ____________________