Interpretation ID: vondale.ztv

Mr. James P. Vondale
Director, Automotive Safety Office
Environmental & Safety Engineering
Ford Motor Company, Fairlane Plaza South
330 Town Center Drive
Dearborn, MI 48126-2738

Dear Mr. Vondale:

This is in response to your letter of April 22, 2003, requesting the National Highway Traffic Safety Administration (NHTSA) to issue an interpretation that the early warning reporting (EWR) regulations (Subpart C of 49 CFR Part 579) "were not intended to capture data generated by two non-typical data sources. These data sources are from subsidiaries of Ford Motor Company that are a rental car company (Hertz), and "a company that administers external, supplemental third party extended warranty programs that can be purchased for both Ford and competitive vehicles (Automobile Protection Corporation or APCO).

For purposes of the EWR regulations, we have defined "manufacturer to specify that "This term includes any . . . subsidiary . . . . See Section 579.4(b). Therefore, the question is whether it is appropriate to require Ford to provide data that these subsidiaries may generate that would be reportable under the EWR regulations if it were generated by a vehicle producer itself.

You pointed out that Hertz is "an authorized vehicle service center, and that "warranty repair information on Ford vehicles operated by Hertz is contained in our warranty information system and will be included in the EWR warranty count information, as well as "any consumer complaints that were directed to Ford from renters of Hertz Ford products. We understand, then, that Ford will include in its EWR reports relating to the number of warranty claims and consumer complaints such claims and complaints as are reported to it by Hertz.

You asserted that other data Hertz collects should not have to be reported. We do not expect Ford to report on non-Ford vehicles that Hertz rents or leases. As to Ford vehicles that Hertz rents or leases, while it is possible that some valuable EWR information might be in the possession of Hertz, inclusion of that data would skew the Ford reports, since no other vehicle manufacturer would have a similar data source. Moreover, we expect that ordinarily claims involving death or injury, based on alleged problems with Ford vehicles, received by Hertz would also be asserted against and received by Ford. On the other hand, we would expect that if Hertz were required to report all claims involving death or injury, we would receive information on numerous claims based on Hertzs ownership of the vehicle, as opposed to a potential problem with the Ford vehicle. Similar considerations apply to property damage claims. Therefore, we will not require reporting of claims for death, injury or property damage, or consumer complaints, received only by Hertz (on Ford vehicles or other vehicles).

With respect to field reports, you asserted that you did not believe that "non-warranty data from Hertz would be valuable as field reports as "Hertz data does not come directly from employees of a vehicle manufacturing company. However, a field report need not be a communication that originates with an employee of a manufacturer. The term "field report also includes a communication from "an authorized service facility, or an entity known to the manufacturer as owning or operating a fleet to a manufacturer. See the revised definition of "field report at 68 FR 18142. A "fleet is defined as "more than ten motor vehicles of the same make, model, and model year. See 49 CFR 579.4(b). Thus, a communication from Hertz to Ford relating to failure, malfunction, lack of durability, or other performance problem in a vehicle manufactured by Ford, would be reportable by Ford. (We note, parenthetically, that a similar communication from Hertz to a vehicle manufacturer other than Ford would be reportable as a "field report by that manufacturer assuming that Hertz is an authorized service facility of that manufacturer, or owns and operates a fleet of vehicles produced by that manufacturer). However, we agree that a report by a Hertz employee to Hertz that was not forwarded to Ford in its capacity as a vehicle manufacturer would not have to be reported to NHTSA by Ford in its EWR submissions.

With respect to APCO, you related that this "subsidiary administers a third party supplemental extended warranty program, and that "the warranties are available to customers directly through [Ford] dealers [and] are also available through other, non-Ford dealers.

You also advised that Ford has an "internal ESP extended warranty system, which is contained in our warranty information system [and] will be included in the TREAD EWR warranty count information . In the preamble to the final rule (67 FR 45822, 45851), we observed that "in our view, the proposed definition [of warranty] already excludes third-party insurance-type contracts. However, we also noted that the proposed (and adopted) definition of warranty included "any written affirmation of fact or written promise made in connection with the sale or lease of a motor vehicle . . . by a manufacturer to a buyer or lessee . . . . Thus, claims under an APCO extended warranty that was sold by a Ford dealer in connection with the sale of a motor vehicle would be reportable by Ford under the EWR regulations. However, if the APCO extended warranty was purchased from a Ford dealer other than in connection with the sale of lease of the vehicle, or if the APCO extended warranty was purchased from other than a Ford dealer, each of these transactions would not be included in the definition of "warranty, and a claim filed under these APCO extended warranties would not have to be reported by Ford, even if the APCO contract covered a Ford-manufactured vehicle.

We recognize that this may create a reporting obligation, especially if APCO does not currently segregate its information in the manner we have described. However, the approach suggested in your letter would encourage Ford, and other vehicle manufacturers, to sell all extended warranties through subsidiaries to avoid reporting requirements, and would lead to a loss of potentially valuable EWR data.

If you have any questions, you may refer them to Taylor Vinson of this Office (202-366-5263).

Sincerely,

Jacqueline Glassman
Chief Counsel

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