Interpretation ID: 77-4.47

TYPE: INTERPRETATION-NHTSA

DATE: 12/05/77

FROM: AUTHOR UNAVAILABLE; Joan Claybrook; NHTSA

TO: International Harvester

TITLE: FMVSR INTERPRETATION

TEXT: This responds to your October 3, 1977, letter questioning the position of the National Highway Traffic Safety Administration (NHTSA) concerning the public dissemination of defect and noncompliance information by press release prior to a manufacturer's notification as required by Part 577, Defect and Noncompliance Notification. In your letter, you refer to a press release issued by the agency concerning defects in some of your vehicles. This release was made prior to your providing notification to the vehicle owners.

The NHTSA through Part 577 requires that manufacturers provide notification to the owners of vehicles involved in defect or noncompliance recalls. This notification must be provided, in the case of a manufacturer-initiated recall, within a "reasonable time" after a manufacturer discovers the existence of a defect or noncompliance. You conclude that the publication of an agency press release prior to the time that a manufacturer notifies owners of a defect or noncompliance in effect shortens the "reasonable time" allowed for such notification. This in turn, you suggest, results in unnecessary public concern before the manufacturer is capable of implementing the recall.

The publication of an agency press release does not shorten the time period allotted a manufacturer under Part 577 for providing notification. A manufacturer is still permitted a "reasonable time" to comply with the requirements. The NHTSA has adopted the "reasonable time" approach to manufacturer notification of owners, because it realizes that the amount of preparation to conduct a recall may vary depending upon the complexity of the defect or noncompliance.

The agency operates under different timing considerations than those applicable to a manufacturer. The NHTSA is under a mandate to ensure that vehicles containing potentially dangerous defects or noncompliances are corrected or removed from highway service as soon as possible. The agency understands that any recall and remedy process is somewhat time-consuming for a manufacturer, and accordingly, vehicles will not be repaired immediately. Therefore, in the interim time between a manufacturer's discovery of a defect or noncompliance and his notice and remedy, the agency must issue warnings to vehicle owners so that they can take the appropriate action. Such action might include checking their vehicle for possible signs of failure or discontinuance of use of the affected vehicle.

In summation, the agency must balance the manufacturer's need for a reasonable time to notify and remedy with the vehicle owner's need for immediate information pertaining to any potential safety problems. This balance has taken the form of the NHTSA's issuance of a warning pending a manufacturer's issuance of notification. The NHTSA concludes that through this mechanism safety is preserved and manufacturers are not unduly burdened.

SINCERELY,

INTERNATIONAL HARVESTER

October 3, 1977

Joan Claybrook, Administrator U.S. Department of Transportation National Highway Traffic Safety Administration

RE: Press Releases/Safety Recalls

As I am sure you have been informed, we met with Mr. Dugoff and other representatives of your staff on September 21 for the main purpose of discussing the recent press release issued by your office concerning IH safety recall #77 V-127 and specifically, whether releases of that nature represent a new policy of your Department. As a related issue, we also discussed the procedure used by your Department regarding defect investigations. As we advised Mr. Dugoff, we are writing this letter to confirm our understanding of certain aspects and to provide you with a short written memorandum expressing our position with respect to such press releases.

With respect to the corolary issue of defect investigation and determination, we were advised by Mr. Berndt that NHTSA did have a policy of following the procedure detailed in your proposed rulemaking on the subject and that the manufacturer would be advised if NHTSA intended to issue such a determination of defect. In other words, a manufacturer need not expect a public announcement of the defect determination to be made prior to advice to the manufacturer that such determination was being made.

With respect to the main subject of our meeting, the press release on recall #77 V-127, our Company is extremely concerned with the practical results of that release, both in its content and in its timing. The following is a sample of the problems which result therefrom:

1. No Company personnel or IH dealers were knowledgeable of the recall or its repair techniques;

2. Needless public anxiety was created -- hundreds of calls were made since the DOT did not identify the models involved;

3. U.S. Army-Germany pulled all IH vehicles off the road;

4. Two large U.S. based fleets notified IH that they would either park or deadline all IH vehicles, possibly exposing IH to damage claims for downtime due to the commercial nature of the vehicles;

5. Three other large fleets indicated that they were considering putting IH vehicles out-of-service, with the same result as 4 above;

6. IH press release issued after DOT's identifying the specific trucks involved and adding repair information is totally ignored by the U.S. Press.

All internal IH Company actions such as customer notification letters, engineering approved repair techniques, repair instructions, repair parts ordering and packaging, vehicle quantities involved and identification, and registered owner identification, as illustrated in the attached chart, necessarily start after the defect determination. It follows, therefore, that in most cases, IH could not inform its dealers and field sales and service personnel in time to handle inquiries and/or repairs if DOT persists in the practice of utilizing the initial 5 day defect report as the source information for NHTSA press releases which are made prior to our "preparing" our recall.

With respect to our position that the press release was premature, your office repeatedly queried as to whether or not it was the position of IH that safety defects should remain concealed from the public. Obviously, that is not our position, but it is our position that we should comply with the current regulations governing the subject. Specifically, Part 577, Defect the Noncompliance Notification, has recently been amended to add certain parameters to this Part which were not present in the existing Rule. Specifically, one of the purposes of the amendment was to specify "the content, timing, and form of the notification that complies with the requirements set forth in Section 153 of the Act." (Emphasis added) Section 577.7(a)(1) was specifically included and provided that the customer notification must "Be furnished within a reasonable time after the manufacturer first determines the existence of a defect which relates to motor vehicle safety. . ." (Emphasis added) It is our understanding that this timing was included since a manufacturer necessarily needs some amount of time in order to prepare for a recall. Prior to creating customer reaction when the problem is yet insolvable, we strongly believe that the referenced sub-section was intended squarely for the purpose of allowing a manufacturer the time to prepare to remedy defects prior to customer notification. It would appear to us that the "reasonable time" which the law now allows us is being shortened by means of the early press release policy.

The press release was issued based on information contained in our statutorily required 5 day defect notice. It is our understanding that the purpose of the 5 day notice, as detailed in Part 573.2, is to enable your office to analyze the adequacy of our defect notification and corrective action, owner response thereto and to compare defect incidents rates among different groups of motor vehicles. Therefore, our compliance with this Part, and for the purposes above stated, in fact result in a different purpose being accomplished, namely, public notice of the defect earlier than the time of such notice required by Part 577. It certainly appears to us to be an anomaly that information provided for one purpose in fact ended up being used for another, seemingly in derogation of our rights under Part 577.

In summary, the view we wish to express is not that we oppose all press releases, but rather that we think a properly timed press release could be far more effective if it was coordinated with the time of the manufacturer's customer recall letters, assuming, of course, that such letters are sent within the reasonable time allowed. We are in no way suggesting that a press release should be held off in all cases, even those where a manufacturer is unreasonably delaying customer notification. We do believe that coordinated timing would enhance the initiation of a campaign. We respectfully request that you give this matter your attention and consideration.

J. KEVIN SMITH -- DIRECTOR, PRODUCT RELIABILITY AND QUALITY, NORTH AMER. OPERATIONS; TRUCK GROUP (Graphics omitted)