February 22, 2010

Congress Says Ask, but Toyota and Fellow Automakers Say Don't Tell: The Story of NHTSA and Industry Secrecy

Ten years ago, after NHTSA received reports of numerous deaths and injuries linked to Firestone tires and Ford Explorers, Congress passed the TREAD Act, bolstering the authority of the National Highway Traffic Safety Administration (NHTSA) to identify possible defects in vehicles and tires by collecting information (“early warning data”) from auto and tire manufacturers. The law requires disclosure of data about incidents involving deaths or injuries, injury and property damage claims (including lawsuits), consumer complaints, warranty claims, field reports (problems reported from dealers, for example), and production data. Ten years later, the Toyota scandal is here, with lives lost. NHTSA is blamed for failing to connect the dots, and Toyota is criticized for a “culture of secrecy.”

What happened? How could a law designed to improve access to early warning signs of trouble apparently fail so spectacularly? The story is complicated and still emerging, but we will surely miss some important lessons from it if stereotypes -- faceless bureaucrats and secrecy-minded Japanese businessmen! -- become convenient whipping boys.

Lesson 1. An all-too-common occurrence in Washington has recurred: when Congress passes a law industry doesn’t like, industry turns to the agency in charge of implementing the law for relief – a particularly shrewd tactic during the Bush II years. In this case, in 2002, NHTSA dutifully issued its regulation requiring “Early Warning Reports” from manufacturers on a quarterly basis. One year later, however, at the behest of automakers, NHTSA began what would become a five-year effort to keep much of this information secret from the public, accepting industry claims that the information requested was “confidential business information” (or “CBI”). (For more about NHTSA’s CBI rule and its tortured history, see Public Citizen. For government secrecy issues generally, see CPR’s perspective.)

Lesson 2. Relatively obscure tactics – CBI is a prime example – allow industry to gut the power of laws designed to utilize the power of information. The tragic but completely foreseeable result is that the public loses access to crucial information that would have allowed watchdog groups to call for action if NHTSA failed to act, as it did in Toyota’s case. As a timeline attached to CPR Member Scholars Rena Steinzor and Sidney Shapiro's letter to the House Committee on Oversight and Government Reform shows, Toyota’s problems coincided with NHTSA’s and industry efforts to hide (via CBI) much of the early warning data required by the TREAD Act.

Lesson 3. Some of the best information for watchdog groups to keep NHTSA on its regulatory toes is precisely the information automakers don’t want you to see: field reports from the mechanics at dealerships about the kinds of repair problems they encounter on a regular basis. As Lena Pons at Public Citizen explained to me, field reports are far more informative than customer complaints, because customers are much more likely to have their car repaired than to take the time to file a complaint with either NHTSA or the company. Moreover, field reports are compiled by the very people in the best position to see emerging problems: mechanics at dealerships who are experts in the brand of car they fix.

Lesson 4. Toyota’s “culture of secrecy” is our culture of secrecy. The Alliance of Automobile Manufacturers and the Rubber Manufacturers Association lobbied for and litigated on behalf of making early warning data CBI. This lobbying, in fact, continues on other fronts – from the chemical industry to the food industry. As CPR Member Scholar Wendy Wagner recently pointed out, reporters are beginning to get to the bottom of how industry has abused EPA’s CBI program.

Secrecy costs lives. At a minimum, NHTSA should make field reports public; individuals interested in researching a car’s safety record should have access to the information they need to make informed decisions, and watchdog groups would be better able to spot trends to file petitions with the agency. Meanwhile, as Congress investigates the Toyota scandal, it should ask itself how the TREAD Act, which was clearly designed to spotlight potential problems with auto safety, became a shadowy shell of its former self. Industry’s love affair with CBI is one of the answers.

Shana Jones, Executive Director, Center for Progressive Reform. Bio.

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