[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.
____________________