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Firestone Tire Recall: NHTSA, Industry, and Congressional Responses

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Publication Date: January 2001

Publisher(s): Library of Congress. Congressional Research Service

Series: RL30710

Topic: Manufacturing and industry (Automotive industry)

Abstract:

On August 9, 2000, Bridgestone/Firestone, Inc. (Firestone) issued a voluntary safety recall of 14.4 million, 15-inch tires. Based on about 4300 complaints and other data, the National Highway Traffic Safety Administration (NHTSA) is aware of reports detailing a total of 148 deaths and more than 500 injuries allegedly related to certain Firestone tires. Most of the incidents that resulted in deaths reportedly involved sport utility vehicles (SUVs), primarily Ford Explorers. On September 1, 2000, NHTSA issued a warning to consumers recommending that users of an additional 1.4 million Firestone tires should take a number of actions to enhance their safety. Firestone had declined to extend its recall to include these additional tires. NHTSA is investigating whether the scope of Firestone's voluntary recall should be expanded to a mandatory recall affecting additional Firestone tires.

Industry states that more than 92% of the recalled tires have been replaced. To provide replacement tires, several actions were taken. For example, Ford suspended new vehicle production at several of its plants for a three-week period. Bridgestone Corporation, the parent company of Firestone, which is headquartered in Tokyo, conducted emergency airlifts of tires from Japan. Working with Ford, Firestone has urged other tire manufacturers to increase production. Firestone is conducting a consumer education program on proper tire maintenance. Numerous lawsuits regarding the deaths and injuries previously mentioned have been filed; a few have been settled. Although cost estimates of the tire recall and lawsuits vary, both companies have been financially hurt by this situation. For example, UBS Warburg, an integrated investment banking firm, has conducted a study that concluded that the Firestone tire recall and subsequent litigation could end up costing from $719 million to $2.7 billion.

Congressional hearings related to both government and industry responses to this safety challenge were held during the 106th Congress. The "Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, P.L. 106-414, was enacted to strengthen NHTSA's ability to detect and investigate vehicle and equipment defects. More specifically, the Act includes provisions to: increase or strengthen reporting requirements for manufacturers of motor vehicles or motor vehicle equipment, increase civil penalties for violations of the federal motor vehicle safety regulations, provide criminal penalties under certain conditions, require a rulemaking to revise and update NHTSA's tire standards, increase the number of years that a remedy for a defect must be provided without charge to the vehicle owner, and authorize increased funding for NHTSA. In addition, the Act requires the Secretary of DOT to undertake a comprehensive review of the criteria, procedures and methods used by NHTSA in determining whether to open a defects investigation. Within one year of enactment, the Secretary is to report to the authorizing committees of jurisdiction on the findings and actions taken pursuant to the report. NHTSA has begun to conduct the regulatory actions needed to implement various provisions of the TREAD Act. .