Reporting of Information and Documents About Potential Defects Retention of Records That Could Indicate Defects

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 574, 576, 579

[Docket No. NHTSA 2001-8677; Notice 2]

RIN 2127-AI25

Reporting of Information and Documents About Potential Defects Retention of Records That Could Indicate Defects

AGENCY:

National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION:

Notice of Proposed Rulemaking (NPRM).

SUMMARY:

This document proposes a regulation that would implement the “early warning reporting requirements” of the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act. Under this proposal, motor vehicle and motor vehicle equipment manufacturers would be required to report information and to submit documents on customer satisfaction campaigns and other activities that may assist in identifying defects related to motor vehicle safety.

We are also proposing amendments to NHTSA's general and tire recordkeeping regulations (Parts 576 and 574) to assure that manufacturers retain the information that must be reported to NHTSA under the early warning rule.

DATES:

Comment Closing Date:

Comments must be received on or before February 4, 2002.

ADDRESSES:

All comments on this NPRM should refer to the docket and notice number set forth above and be submitted to Docket Management, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590. The docket room hours are from 9:30 a.m. to 5:00 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT:

For non-legal issues, contact Jonathan White, Office of Defects Investigation, NHTSA (phone: 202-366-5226). For legal issues, contact Taylor Vinson, Office of Chief Counsel, NHTSA (phone: 202-366-5263).

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary of the Proposed Rule

II. Background: The TREAD Act (Public Law 106-414)

III. Manufacturers That Would Be Covered by the New Reporting Requirements

A. Manufacturers of motor vehicles.

B. Manufacturers of motor vehicle equipment.

1.Original equipment.

2.Replacement equipment, including tires.

C. Foreign manufacturers of motor vehicles and equipment.

D. Other representatives of manufacturers.

IV. Information That Would Be Reported

A. Production information.

B. Claim: a proposed definition.

C. Notice: a proposed definition.

D. Identification of the product in claims and notices.

E. Claims and notices involving death.

1. Whether to define “death”

2. Claims involving death.

3. Notices involving death.

4. Information about deaths.

F. Claims and notices involving injuries.

1. The difficulties of defining “serious injury.”

2. Reporting of incidents in which persons were injured, based on claims and notices.

G. Other possible conditions on reporting of claims and notices for death and injury.

H. Identical or substantially similar motor vehicles or equipment.

1. The meaning of “identical.”

2. Substantially similar motor vehicles.

3. Substantially similar motor vehicle equipment and tires.

I. Claims and notices involving property damage.

1. Definition of “property damage,” and whether to define “aggregate statistical data.”

2. Reports involving property damage.

J. Consumer complaints.

1. Definition of “consumer complaint.”

2. The rationale of requiring reports of consumer complaints.

K. Warranty claims information.

1. Definitions of “warranty” and “warranty claim.”

2. Reports involving warranty claims.

L. Field reports.

1. Definition of “field report.”

2. Reporting of field reports.

M. Customer satisfaction campaigns, consumer advisories; recalls, or other activities involving the repair or replacement of motor vehicles or motor vehicle equipment.

N. Components, systems, and fires to be included in reports.

O. One-time reporting of information on certain information received from January 1, 2000 to December 31, 2002, on 1994-2003 model year vehicles, and on child restraints and tires manufactured on or after January 1, 1998.

V. Information That We Would Not Require at This Time

A. Internal investigations and design changes in parts and components.

B. Most activities and events in foreign countries.

VI. When Information Would be Reported

A. Periodically.

B. Upon NHTSA's request.

VII. The Manner and Form in Which Information Would be Reported

VIII. How NHTSA Plans to Handle and Utilize Early Warning Information

A. Review and use of information.

B. Information in the possession of the manufacturer.

C. Disclosure.

D. The proposed requirements are not unduly burdensome.

E. Periodic Review.

IX. Proposed Extension of Recordkeeping Requirements to Include Manufacturers of Child Restraint Systems and Tires

X. Administrative Amendments to 49 CFR Part 573 to Accommodate Final Rules Implementing 49 U.S.C. Sections 30166(l) and (m)

XI. Rulemaking Analyses

I. Summary of the Proposed Rule

The proposed rule—the first phase of early warning reporting rulemaking—would in effect divide manufacturers of motor vehicles and motor vehicle equipment into two groups with different responsibilities for reporting information that could indicate the existence of potential safety related defects.

The first group would consist of larger manufacturers of motor vehicles, and all manufacturers of child restraint systems and tires. In general, vehicle manufacturers would report separately on five categories of vehicles (if they produced, imported, or sold 500 or more of a category annually in the United States): light vehicles, medium-heavy vehicles, buses, trailers, and motorcycles. These manufacturers would report certain specified information about each incident involving a death that occurred in the United States that is identified in a claim against the manufacturer or in a notice to the manufacturer alleging or proving that the death was caused by a possible defect in the manufacturer's product together with each death occurring in foreign countries that is identified in a claim against the manufacturer involving the manufacturer's product, or one that is identical or substantially similar to a product that the manufacturer has offered for sale in the United States. These manufacturers would also report the following:

•

Injuries.

Certain specified information about each incident that occurred in the United States in which a person was injured that is identified in a claim against the manufacturer or in a notice to the manufacturer alleging or proving that the injury was caused by a possible defect in the manufacturer's product.

•

Property damage.

Manufacturers other than child seat manufacturers would report the numbers of claims for $1,000 or more in property damage that occurred in the United States that are related to alleged problems with certain specified components and systems (there would be no minimum amount of property damage for claims received by tire manufacturers).

•

Consumer complaints.

Manufacturers (other than tire manufacturers) would report the numbers of consumer complaints they receive that are related to problems with certain specified components and systems that occurred in the United States.

•

Warranty claims information.

Manufacturers would report the number of warranty claims they receive that are related to problems with certain specified components and systems that occurred in the United States.

•

Field reports.

Manufacturers would report the total number of field reports they

receive from the manufacturer's employees and dealers, and from fleets, that are related to problems with certain specified components and systems and potential defects that occurred in the United States. In addition, manufacturers would provide copies of reports received from their employees and fleets, but would not need to provide copies of reports received from dealers.

These manufacturers would report the numbers identified above for each model and model or production year.

A tire manufacturer or brand name owner would not have to report any information other than information relating to incidents involving deaths for tires of the same size and design for which the cumulative annual production and importation does not exceed 15,000 (readers should note this exclusion in reviewing the proposed reporting requirements of this document, as we may not repeat it in all instances in which it may apply).

The second group would consist of all other manufacturers of motor vehicles and motor vehicle equipment, i.e., vehicle manufacturers insofar as they produced, imported, or sold in the United States fewer than 500 light vehicles, medium-heavy vehicles, buses, motorcycles, or trailers annually, manufacturers of original motor vehicle equipment and manufacturers of replacement motor vehicle equipment other than child restraint systems and tires. These manufacturers would report the same information about incidents involving deaths as the first category, but would not be required to report any other information.

In addition, all vehicle and equipment manufacturers in both groups would be required to provide copies of all documents sent or made available to more than one dealer, distributor, or owner, in the United States with respect to consumer advisories, recalls, or activities involving the repair or replacement of vehicles or equipment.

Reports would be submitted electronically, in specified formats. The components and systems on which reporting would be required would vary, depending on the type of product involved.

There would be four reporting periods each calendar year of three months each. All reports would be due not later than 30 days after the end of a calendar quarter. For submission of documents, the documents would be due not later than 30 days after the end of the month in which they are received or generated by the manufacturer. To help NHTSA identify trends that could indicate potential safety problems, manufacturers would be required, on a one-time basis, to report historical information by quarter for each of the reportable items covering the three-year period from January 1, 2000 through December 31, 2002, the date preceding the beginning of the first reporting period that would be established by the final rule, January 1, 2003.

The early warning reporting requirements would comprise subpart C of a new 49 CFR Part 579. The foreign defect reporting requirements proposed on October 11, 2001 (66 FR 51907) would comprise Subpart B of Part 579. This NPRM proposes a Subpart A containing general requirements that will apply to both subparts.

We also propose to expand recordkeeping requirements:

• For vehicles, records now required to be maintained under 49 CFR Part 576 for eight years would have to be maintained for 10 years.

• For the first time, manufacturers of tires and child restraint systems would be required to maintain the same types of records that manufacturers of vehicles have been required to keep under 49 CFR Part 576.

• Manufacturers of tires would be required to retain for five years records of purchasers of tires they manufacture. Manufacturers of motor vehicles would be required to retain for five years records of tires on each vehicle manufactured and the purchaser of each vehicle. Currently, 49 CFR Part 574 requires that these records be retained for three years.

The early warning final rule, the final rule pertaining to foreign defect campaigns, and current 49 CFR 573.8 would become 49 CFR Part 579. The provisions of current Part 579 would be moved to Part 573. Proposed effective dates: for amendments to Parts 574 and 576, 30 days after publication of the final rule; for revised Part 579, January 1, 2003.

II. Background: The TREAD Act (Public Law 106-414)

The Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act was enacted on November 1, 2000, Public Law 106-414.

The TREAD Act provides for NHTSA to require manufacturers of motor vehicles and motor vehicle equipment to submit information, periodically or upon NHTSA's request, that includes claims for deaths and serious injuries, property damage data, communications to customers and others, information on incidents resulting in fatalities or serious injuries from possible defects in vehicles or equipment in the United States or in identical or substantially similar vehicles or equipment in a foreign country, and other information that would assist NHTSA in identifying potential safety-related defects.

The TREAD Act amends 49 U.S.C. 30166 to add a new subsection (m), Early warning reporting requirements. Sections 30166(m)(3), (4), and (5) address, respectively, the elements to be reported, the handling and utilization of reported information, and periodic review and update of the final rule.

The crux of the early warning provisions is Section 30166(m)(3), which states: (3) Reporting elements.

(A)

Warranty and claims data.

As part of the final rule * * * the Secretary [of Transportation] shall require manufacturers of motor vehicles and motor vehicle equipment to report, periodically or upon request by the Secretary, information which is received by the manufacturer derived from foreign and domestic sources to the extent that such information may assist in the identification of defects related to motor vehicle safety in motor vehicles and motor vehicle equipment in the United States and which concerns—

(i) data on claims submitted to the manufacturer for serious injuries (including death) and aggregate statistical data on property damage from alleged defects in a motor vehicle or in motor vehicle equipment; or

(ii) customer satisfaction campaigns, consumer advisories, recalls, or other activity involving the repair or replacement of motor vehicles or items of motor vehicle equipment.

(B)

Other data.

As part of the final rule * * *, the Secretary may, to the extent that such information may assist in the identification of defects related to motor vehicle safety in motor vehicles and motor vehicle equipment in the United States, require manufacturers of motor vehicles or motor vehicle equipment to report, periodically or upon request of the Secretary, such information as the Secretary may request.

(C)

Reporting of possible defects.

The manufacturer of a motor vehicle or motor vehicle equipment shall report to the Secretary, in such manner as the Secretary establishes by regulation, all incidents of which the manufacturer receives actual notice which involve fatalities or serious injuries which are alleged or proven to have been caused by a possible defect in such manufacturer's motor vehicle or motor vehicle equipment in the United States, or in a foreign country when the possible defect is in a motor vehicle or motor vehicle equipment that is identical or substantially similar to a motor vehicle or motor vehicle equipment offered for sale in the United States.

The Secretary has delegated to the NHTSA Administrator the authority to carry out 49 U.S.C. Chapter 301 (49 CFR 1.50(a)).

On January 22, 2001, we issued an advance notice of proposed rulemaking (ANPRM) to discuss and to solicit comments on the ways in which NHTSA may best implement these statutory provisions (66 FR 6532). The reader is referred to that document for a discussion of the background of the TREAD Act and a manufacturer's reporting obligations prior to the TREAD Act. On October 11, 2001, we issued a notice of proposed rulemaking (NPRM) that would implement another provision of the TREAD Act, adding Section 30166(l) to Title 49 (66 FR 51907). Subsection (l) also applies to manufacturers of motor vehicles and motor vehicle equipment; it requires them to notify us of defect campaigns that they conduct outside the United States, or are ordered by a foreign government to conduct abroad, on vehicles and equipment identical or substantially similar to those sold in the United States. Readers are requested to review that NPRM in parallel with the early warning NPRM to ensure consistency between application and definitions as we intend for each final rule to become a subchapter of Part 579.

In response to the ANPRM, we received comments from a variety of sources. Motor vehicle manufacturers and associated trade organizations who commented were Ford Motor Company (Ford), Volvo Trucks North America (Volvo), the Truck Manufacturers Association (TMA), Blue Bird Body Co. (Blue Bird), International Truck and Engine Corporation (International Truck), Mack Trucks, Inc. (Mack), DaimlerChrysler

Corporation (DaimlerChrysler), the Association of International Automobile Manufacturers, Inc. (AIAM), the Recreational Vehicle Industry Association (RVIA), Harley-Davidson Motor Company (Harley-Davidson), Nissan North America, Inc. (Nissan), Volkswagen of America, Inc. (for itself, Volkswagen, AG and Audi AG) (Volkswagen), the Truck Trailer Manufacturers Association (TTMA), American Honda Motor Company (Honda), the Motorcycle Industry Council (MIC), the National Automobile Dealers Association (NADA), Fontaine Modification Company (Fontaine), and the Alliance of Automobile Manufacturers (the Alliance). The tire industry was represented by the Rubber Manufacturers Association (RMA) and the Bridgestone Corporation. Other motor vehicle equipment manufacturers and associated trade organizations who commented were the Automotive Occupants Restraint Council (AORC), TRW, Inc. (TRW), Atwood Mobile Products (Atwood), the Battery Council International, ArvinMeritor, Peterson Manufacturing Company, the Motor and Equipment Manufacturers Association (MEMA) and the Original Equipment Suppliers Association (OESA), both supported by Eagle-Picher Industries, Breed Technologies (Breed), Dana Corporation (Dana), Pilkington North America, Inc. (PNA), the Transportation Safety Equipment Institute (TSEI), the Automotive Aftermarket Industry Association (AAIA), Johnson Controls, the Torrington Company, the Specialty Equipment Manufacturers Association (SEMA), the National Truck Equipment Association (NTEA), Delphi Automotive Systems, LLC (Delphi), Webb Wheel Products, Inc. (Webb), Hella North America, Inc. (Hella), Osram Sylvania, Shepherd Hardware Products, LLC (Shepherd), Valeo, Inc., Am-Safe Commercial Products, Inc., and Harbour Industries. We also received comments from Consumer Union, Public Citizen, and Advocates for Highway and Auto Safety (Advocates).

These comments have provided us with numerous insights in developing this NPRM. We plan to issue a final rule by the statutory deadline, June 30, 2002, which will incorporate the early warning reporting elements specifically set forth in the TREAD Act. In addition to these elements, under Section 30166(m)(3)(B) we propose to require the submission of additional information that may assist in the identification of defects in vehicles in the United States. This will complete the first phase of our early warning rulemaking. Consistent with Section 30166(m)(5), we will periodically review the final rule; such review could result in amendments after June 30, 2002.

III. Manufacturers That Would Be Covered by the New Reporting Requirements

A. Manufacturers of Motor Vehicles

The TREAD Act provides for the agency to require manufacturers of motor vehicles

1

to submit information that may assist in the identification of safety-related defects. We must decide which manufacturers of motor vehicles would be required to submit reports under this rule, and whether different reporting requirements should apply to various categories of manufacturers. Section 30166(m)(3) does not exempt any manufacturer of motor vehicles from its coverage. On the other hand, it provides substantial discretion to the agency. The word “may” is used at several points in the statute. In addition, the agency's ability to use the information submitted is a statutory concern.

1

The term “motor vehicle” is a broad one. The statutory definition of “motor vehicle” (49 U.S.C. 30102(a)(6)) has been the subject of numerous interpretations since 1966.

One of the threshold questions in this rulemaking is whether the agency should exercise its discretion to defer the imposition of some or all potential early warning reporting requirements on some classes of manufacturers. The early warning regulation would be a new regulation, and inevitably the agency and regulated entities will face some issues in implementing it. It would be counterproductive to require the submission of more information than we could beneficially review or to impose impracticable requirements, particularly on small manufacturers. We have concluded that we should phase in the early warning reporting requirements and that, for the most part, it would be appropriate to focus first on larger volume manufacturers and on information regarding incidents and activities in the United States, as contrasted to those occurring in foreign countries.

Vehicles produced in small quantities have a smaller overall impact upon safety than large production vehicles, as we have frequently noted in providing temporary exemptions from one of more of the Federal motor vehicle safety standards under 49 U.S.C. 30113. Although we would not expect the volume of reports from any individual small volume manufacturer to be overwhelming if we were to require comprehensive reporting by smaller manufacturers, there would be some burden on them. More important, our interactions with, and review of submissions by, the large number of small manufacturers would divert the agency's resources from reports submitted by high volume manufacturers involving potential safety defects that could affect a far greater number of vehicles and thus have a greater impact on safety.

For the present time, we propose to exclude from most of the reporting requirements any vehicle manufacturer that manufactures for sale, offers for sale, imports, or sells, in the United States, fewer than 500 vehicles in the year of the reporting period, or which has done so in the two calendar years preceding the reporting period. We are also proposing to exclude registered importers (RIs) of vehicles not originally manufactured to comply with Federal motor vehicle safety standards from most of the reporting requirements. RIs would not have information that would be useful because most are small, and those that are not import vehicles on which we would generally receive reports from assembling or importing manufacturers. This exclusion would also apply to many manufacturers of multistage vehicles and alterers since most manufacture or sell fewer than 500 vehicles annually. However, these smaller volume manufacturers would not be exempt from the requirements, addressed below, to report to us certain specified information regarding all deaths occurring in the United States that are identified in claims against the manufacturer or in notices to in which it is alleged or proven that a death was caused by a possible defect in the manufacturer's vehicle, together with information on deaths occurring in foreign countries that are identified in claims against the manufacturer involving a vehicle that is identical or substantially similar to a vehicle that the manufacturer has offered for sale in the United States. With respect to all such reported deaths, manufacturers would have to provide certain information regarding the underlying incident, as described in greater detail below. These manufacturers would also have to provide copies of documents related to customer satisfaction campaigns, consumer advisories, recalls, and other safety activities under proposed section 579.5.

For those motor vehicle manufacturers that are not excluded from full reporting based on low levels of sales in the United States, we are proposing to establish separate reporting requirements based on the category of vehicle produced. We are proposing five categories of vehicles: Light vehicles, medium-heavy vehicles, buses, motorcycles and trailers. Each category has components and systems that distinguish it from the other four categories, and which may develop safety-related problems unique to that category. Therefore, we would require different information regarding each category of vehicle, which will help to reduce the complexity and burdensomeness of the rule.

Under our proposal, light vehicles would comprise any motor vehicle, except a bus, trailer, or motorcycle, with a GVWR of 10,000 lbs. or less. Medium-heavy vehicles would include trucks and multipurpose passenger vehicles with a GVWR over 10,000 lbs. Buses (including school buses) and trailers would be separately categorized regardless of GVWR. Motorcycles would include any two- or three-wheeled vehicle meeting the definition of motorcycle in 49 CFR 571.3(b).

We ask for comments on whether an annual aggregate production, importation, or sales of 500 vehicles in the United States is an appropriate figure upon which to base this distinction, whether a manufacturer's eligibility for these lesser reporting requirements should be determined based upon its production in the two calendar years preceding this report or whether a shorter, longer, or different period would be appropriate, and whether small volume vehicle manufacturers should be required to provide other data and information in addition to that relating to deaths. Finally, we are interested in having comments on our proposed five categories of vehicles. For instance, we are not proposing a separate category of “medium vehicle” because it seems to us that the components and systems of such vehicles would be those for which reporting would be required are those with which either light or medium-heavy vehicles are equipped.

B. Manufacturers of Motor Vehicle Equipment

The TREAD Act also provides for the agency to require manufacturers of motor vehicle equipment to submit early warning reporting information that may assist in the identification of safety-related defects. “Motor vehicle equipment” is defined in 49 U.S.C. 30102(a)(7), and consists of “original equipment” (OE) and “replacement equipment.” These two terms are currently defined in 49 CFR 579.4. We are not changing the definitions, but we are revising the language in new section 579.4(c) to make it more understandable.

1. Original Equipment

There are approximately 10,000 to 14,000 individual items of OE in a contemporary passenger car. Some are fabricated by the vehicle manufacturer, some by parts manufacturers, and some parts are incorporated into systems or modules assembled by various suppliers. There is a growing trend to packaging individual parts into a single unit, or module. For example, a steering wheel assembly may include an air bag, horn control, turn signal control, wiper control, ignition switch, cruise control, lighting controls, as well as associated wiring. Many of these units are assembled by a supplier, often with components from various manufacturers. Each of these fabricators or assemblers is also a manufacturer of motor vehicle equipment.

When a component or module installed as OE on a vehicle fails, generally vehicle owners will complain or file a claim with the entity that has manufactured and warranted the vehicle, rather than the assembler of the module or the manufacturers of the individual parts, who in most instances are unknown to the vehicle owner. In view of this, the Alliance, Ford, and AIAM specifically supported exclusion of OE manufacturers (OEMs) from early warning reporting requirements in their comments on the ANPRM.

OEMs, however, are not currently exempt from defect reporting requirements. Pursuant to 49 CFR 573.3(f), if an OEM sells an item of OE to more than one vehicle manufacturer and a defect or noncompliance is decided to exist in that OE, the OEM is required to notify us (as are the manufacturers of the vehicles in which the OE is installed). If the defective OE is used in the vehicles of only one vehicle manufacturer, the OEM may notify us on behalf of both itself and the vehicle manufacturer (Section 573.3(e))(in either case, the OEM may also be the party remedying the safety defect or the noncompliance). Thus, OEMs can and do make determinations that OE contains safety-related defects, and they will have some information of the type that the TREAD Act authorizes us to require, such as claims alleging failures of their products. Thus, we do not propose to totally exempt OEMs from early warning reporting.

We have tentatively decided that most meaningful information about possible defects is more likely to come to the attention of the vehicle manufacturer earlier than it would to the OEM. However, we want to be certain that we obtain information regarding deaths attributed to defects in OE. Accordingly, at this time, we are proposing that OEMs be exempt from all reporting requirements regarding OE they manufacture, except for reporting to us regarding deaths in the same manner as small volume vehicle manufacturers, discussed above. Of course, the vehicle manufacturer would be required to report fully in its capacity as a vehicle manufacturer, even if the vehicle manufacturer believed that the problem was the responsibility of the OEM.

2. Replacement Equipment, Including Tires

Replacement equipment comprises an even broader universe of parts than OE. Under both current 49 CFR 579.4(b) and proposed 579.4(c), it includes all motor vehicle equipment other than OE. Not only does the term have the literal meaning of equipment that is intended to replace OE, it also includes accessory equipment and “off-vehicle equipment” that is not part of a motor vehicle, such as retroreflective motorcycle rider apparel and child restraints. Manufacturers of replacement equipment are within the scope of the early warning reporting provisions of the statute.

Some replacement equipment items are critically important from a safety perspective, while others have less of a safety nexus. Tires, of course, are essential items of motor vehicle equipment, and tire manufacturers have the duty to conduct notification and remedy campaigns and to address defective or noncompliant tires, whether sold in the aftermarket or installed on new vehicles (see current 49 CFR 579.5(b)). Tire brand name owners (e.g., house brands) are also considered manufacturers (49 U.S.C. 30102(b)(1)(E)) and have the same defect and noncompliance reporting requirements as the actual fabricators of the tires (49 CFR 573.3(d)). Child restraints are also critical safety items. Therefore, we are proposing that all tire manufacturers, tire brand name owners, and manufacturers of child restraints would be required to provide the full range of information and documents proposed. There are relatively few manufacturers of child restraints and tires, and most are large businesses.

There is a large number of manufacturers of other types of replacement equipment. Much of this equipment is imported by or for auto parts houses such as J.C. Whitney, or general merchandisers such as K-Mart. An importer for resale is considered a manufacturer under the statute. See 49 U.S.C. 30102(a)(5)(B). A large universe of entities would be subject to multiple requirements if we were to fully apply early warning reporting requirements to all fabricators and importers of replacement equipment.

Therefore, at least for purposes of this initial rulemaking, we are proposing that, as with lower volume vehicle manufacturers and original equipment manufacturers, manufacturers of other types of replacement equipment would only be required to report to us claims and notices regarding deaths allegedly due to defects in their products. However, we may revisit these limitations under our periodic review of the rule.

C. Foreign Manufacturers of Motor Vehicles and Equipment

As defined before the enactment of the TREAD Act, a manufacturer is defined as “a person manufacturing or assembling motor vehicles or motor vehicle equipment, or importing motor vehicles or motor vehicle equipment for resale” (49 U.S.C. 30102(a)(5)). Foreign manufacturers offering vehicles or vehicle equipment for import must designate an agent on whom service may be made (49 U.S.C. 30164).

In its defect and noncompliance reporting regulations, the agency has addressed the question of who may file a defect or noncompliance report related to an imported item. Under 49 CFR 573.3(b), in the case of vehicles or equipment imported into the United States, a defect or noncompliance report may be filed by either the fabricating manufacturer or the importer of the vehicle or equipment. Defect and noncompliance reports covering vehicles manufactured outside of the United States have generally been submitted by the importer of the vehicles, which is usually a subsidiary of a foreign parent corporation (e.g., defects in vehicles made in Japan by Honda Motor Co. Ltd. are reported by American Honda Motor Co., Inc., even if the vehicle was certified by Honda Motor Co. Ltd.).

The TREAD Act expanded manufacturers' responsibilities with respect to foreign events and activities. See 49 U.S.C. 30166(l) and (m). It is evident that the TREAD Act has extraterritorial effect. In its comments on the ANPRM, the Alliance recognized that the TREAD Act was clearly written by Congress to apply to persons and activities outside of the United States and it is therefore a clear assertion of extraterritorial jurisdiction by the United States (Alliance comment, Attachment 10, p. 9). The Alliance went on to state that the early warning rule could reasonably require reports from foreign companies manufacturing vehicles for sale in the United States as long as the required reports relate to issues that could arise in those vehicles (p. 11). Today's proposal is consistent with that conclusion. Foreign entities would be required to provide the same information as we would require for domestic manufacturers, but as explained in further detail below, only with respect to vehicles and equipment that they sell in the United States, and to incidents involving death outside the United States that involve identical or substantially similar vehicles or equipment. To assure that we receive information initially provided to various foreign entities, including affiliates of foreign parent corporations, we propose to apply Part 579 to all vehicle and equipment manufacturers “with respect to all vehicles and equipment that have been offered for sale, sold, or leased by the manufacturer, any parent corporation of the manufacturer, any subsidiary or affiliate of the manufacturer, or any subsidiary or affiliate of any parent corporation of the manufacturer.”

This leaves the question of who must and who may report. In view of the definition of manufacturer and in further view of the specific provisions of Section 30166(m), we believe that the agency has authority to require a report from the foreign entity that

maintains the information, from the fabricating manufacturer, and from the importer of the vehicle or equipment. However, we are proposing to apply the reporting requirements for early warning in the same manner as we currently utilize for reporting noncompliance and defect determinations to NHTSA under Part 573, and that we have proposed for reporting of safety recalls and other safety campaigns in foreign countries pursuant to Section 3(a) of the TREAD Act, 49 U.S.C. 30166(l). See 66 FR 51905 et seq., October 11, 2001. Thus, under today's proposal, the report must be filed by either the fabricating manufacturer or by the importer of the vehicle or equipment. This is consistent with current reporting of safety defects and noncompliances. See 49 CFR 573.3(b).

A multinational corporation must ensure that all relevant information on matters for which reports are required throughout the world are made available to whatever entity makes those reports so that its designated entity timely provides the information to NHTSA. Thus, it would be a violation of law for a foreign fabricating manufacturer to designate its U.S. importer as its reporting entity, and then fail to assure that it is provided with the information that must be reported under this rule. Such manufacturers will have to adopt and implement practices to assure the proper flow of relevant information.

D. Other Representatives of Manufacturers

Most of the information covered by this rule would be provided directly to the entity (usually a corporation) that assembles or imports vehicles or equipment. However, some information, such as claims-related documents or field reports, might be initially received by affiliates or other representatives of manufacturers, such as their registered agents and outside counsel. Consistent with the thrust of the early warning statutory provisions, we are proposing to deem information received by these entities to be in the possession of the manufacturer, and thus to require each manufacturer to ensure that entities that it has the ability to control furnish it with relevant early warning information so that the manufacturer may make a full and timely report to NHTSA. However, we are not proposing to require such an affiliate or representative to report directly to NHTSA. We also ask for comments on our proposed applicability of this regulation to parents, affiliates, and subsidiaries of vehicle manufacturers.

In general, motor vehicle dealers are independent businesses (this is not the case with respect to some tire dealers). To the extent that they are independent, claims and other information received by dealers would not automatically be considered in the possession of the manufacturer. However, if the dealer were to convey such information to any employee or other representative of a manufacturer, the manufacturer would be deemed to have possession of it upon receipt.

IV. Information That Would Be Reported

Section 30166(m)(3)(A) directs NHTSA to require manufacturers to report information which concerns data on “claims submitted to the manufacturer for serious injuries (including death) and aggregate statistical data on property damage from alleged defects in a motor vehicle or in motor vehicle equipment,” and on “customer satisfaction campaigns, consumer advisories, recalls or other activity involving the repair or replacement of motor vehicles or items of motor vehicle equipment.” Section 30166(m)(3)(B) authorizes us to require manufacturers to report other “such information” that may assist in the identification of safety defects. Finally, Section 30166(m)(3)(C) requires reporting of incidents, of which the manufacturer receives actual notice, involving deaths or serious injuries which are alleged or proven to have been caused by a possible defect in the manufacturer's vehicle or equipment in the United States, or in a foreign country when the possible defect is in a vehicle or equipment identical or substantially similar to that sold in the United States.

A. Production Information

For each reporting period, we would require manufacturers of vehicles whose sales, production, or importation for sale in the United States is 500 or more, and manufacturers of child restraint systems and tires, to provide information on the volume of production of their products. Production numbers are needed because the agency's trend analyses frequently are normalized to the number of claims, complaints, etc. per unit of production. These manufacturers would submit the following information with respect to each model and model year of vehicle manufactured in the calendar year of the reporting period and the nine model years prior to the model year of the reporting period, including models no longer in production: the manufacturer's name, the quarterly reporting period, the make, the model, the model year, the current model year production to the end of the reporting period, and the total model year production for all model years for which production has ceased. For all models of vehicles that are manufactured with more than one type of fuel system, the information required by this subsection would be reported separately for gasoline-powered vehicles and for non-gasoline-powered vehicles. For medium-heavy vehicles, there would be further subcategorization by service brake system (e.g., hydraulic, air).

We recognize that manufacturers of child restraint systems and tires generally do not specify “model years” for their products. For purposes of this rule, to avoid confusion, we are defining the term “model year” as the year that the item of equipment was manufactured.

Figure 1, below, represents a pro-forma example of how production information would be reported by a manufacturer of medium-heavy trucks, using an electronic spreadsheet. For each model/model year, there would be multiple rows if the medium-heavy truck model was produced with different types of fuel or brake systems.

Production Information

MEDIUM-HEAVY TRUCKS

Reporting Period:

Manufacturer:

Make

Model

Model year

Production

Fuel system type

(see below)

Brake system type

(see below)

2003

#

2002

#

2001

#

2000

#

1999

#

1998

#

1997

#

1996

#

1995

#

1994

#

Fuel System Type:

a. Gasoline

b. Diesel

c. Other

Brake System Type:

a. Hydraulic

b. Air

c. Other than hydraulic or air

Figure 1

We ask for comments on this suggested format for providing production information by electronic means.

B. Claim: A Proposed Definition

Section 30166(m)(3)(A) refers to claims data. The ANPRM stated that, in order to achieve the goals of the TREAD Act, the term “claim” must be construed broadly and provided some examples.

We have researched the definition of claim, considered comments received in response to the ANPRM, and considered our investigatory experience with requests for claims information.

Case law provides interpretations of the word “claim” in various contexts. In a Federal law context, “ ‘claim’ is something more than mere notice of an accident and an injury. The term ‘claim’ contemplates, in general usage, a demand for payment or relief.”

Avril

v.

U.S.

, 461 F.2d 1090, 1091 (9th Cir. 1972). See also,

Conoco, Inc.

v.

United States

, 39 Env't. Rep. Cas. (BNA) 1541 (N.D. La. 1994)(written request for compensation for damages or costs); 31 U.S.C. 3729(c) (claim involves request for demand for money or property).

State case law also provides a definition of the word “claim.” For example,

Fireman's Fund Insurance Co.

v.

The Superior Court of Los Angeles County

, 65 Cal. App. 4th 1205, 1216 (1997), noted that a claim encompasses more than a suit:

“claim” can be any number of things, none of which rise to the formal level of a suit—it may be a demand for payment communicated in a letter, or a document filed to protect an injured party's right to sue a governmental entity, or the document used to initiate a wide variety of administrative proceedings.

Other state law cases have further addressed the meaning of “claim.”

Safeco Surplus Lines Co.

v.

Employer's Reinsurance Corp.

, 11 Cal. App. 4th 1403, 1407 (1992), held that a “claim” is “the assertion, demand or challenge of something as a right; the assertion of a liability to the party making it do some service or pay a sum of money.”

Phoenix Ins. Co.

v.

Sukut Construction Co.

, 136 Cal. App. 3d 673, 677 (1982), stated that “a claim both in its ordinary meaning and as interpreted by the courts, is a demand for something as a right, or as due and a formal lawsuit is not required before a claim is made.”

Commenters provided a variety of views on a possible definition of a claim. The Alliance offered this definition to which Ford and Delphi agreed:

A claim or incident involving serious injury or death is any written demand, complaint, subrogation request or lawsuit received by a manufacturer from or on behalf of the person seriously or fatally injured that (a) involves “serious injury,” as further defined, or death, (b) alleges that a product defect was, at least in part, a contributing cause of the serious or fatal injury, and (c) contains sufficient information to identify the motor vehicle or item of motor vehicle equipment involved.

DaimlerChrysler would add that a “claim” includes a formal request for compensation. International Truck stated that the term should exclude warranty claims, which International considers to be dealer or customer submissions for reimbursement on parts and labor. TRW also pointed out the difference between claims for deaths and injuries and those submitted under warranties. TRW offered a definition for claims in the personal injury context as

a written demand for compensation against the manufacturer or written notice to the manufacturer of litigation where compensation is sought from the manufacturer and it is expressly alleged that death or serious personal injury has been caused by a defect in a specified vehicle and/or in specified motor vehicle equipment of the manufacturer.

Mack Truck stated that claims should be defined as verified written communications transmitted to the manufacturer, requesting compensation for property damage, death or personal injury allegedly caused by safety-related defects in a specified product of the manufacturer. Volvo Trucks would restrict “claim” to “any lawsuit filed requesting compensation for personal injuries or property damage that is the result of an alleged safety-related defect in a motor vehicle” and did not include subrogation claims. It would also exclude “any request for consequential damages that are the result of a warrantable repair or an alleged defect that does not relate to safety.”

We have considered the case law and the comments. We believe that the definition of claim should be broad, and meet our needs under the TREAD Act. We propose the following definition for claim:

A written request or demand for relief, including money or other compensation, assumption of expenditures, or equitable relief, related to a motor vehicle crash, accident, the failure of a component or system of a vehicle or an item of motor vehicle equipment, or a fire. Claim includes but is not limited to a demand in the absence of a lawsuit, a complaint initiating a lawsuit, an assertion or notice of litigation, a settlement, covenant not to sue or release of liability in the absence of a written demand, and a subrogation request. A claim exists regardless of any denial or refusal to pay it, and regardless of whether it has been settled or resolved in the manufacturer's favor. The existence of a claim may not be conditioned on the receipt of anything beyond the document stating a claim.

The proposed definition includes many of the elements addressed above by commenters. We do not address, as did the Alliance and others, what the claim must involve, allege or contain, as those matters are not parts of a definition of a claim. They are addressed below. However, we do refer to a motor vehicle crash, accident, component or system failure, and a fire, as these are the events that have safety implications. The definition would exclude, for example, events with which the rule is not concerned, such as injuries in manufacturers' factories. Warranties are addressed separately below. The last two sentences of our proposal are designed to assure that all relevant claims are provided to us. This would preclude attempts, similar to those that have been made by some manufacturers in our investigations, to evade reporting claims by conditioning them on receipt of parts, or their own assessments of the merits of claims.

C. Notice: A Proposed Definition

Section 30166(m)(3)(C) requires that the rule include the reporting of “all incidents of which the manufacturer receives actual notice,” involving fatalities or serious injuries that are alleged or proven to have been caused by a possible defect in its products. The term “actual notice” is extremely broad. Nonetheless, to avoid impractical requirements, we are proposing only to require reporting of incidents of which a manufacturer receives or obtains documentation (e.g., in written or electronic formats). Therefore, in this context, we would define “notice” of an applicable incident to mean “a document received by or prepared by a manufacturer that does not include a demand for relief.” This would include, for example, a letter advising a manufacturer of a crash in which there was a death or injury and an allegation of a defect in the vehicle where there was no claim for monetary or other relief. It would also include police accident reports transmitted to a manufacturer regarding deaths or injuries in which a causative factor was stated to be a performance failure of the vehicle or equipment, but would not include reports where no defect in, or failure of, the vehicle or equipment was indicated (e.g., a crash due to the driver losing control, with no system or equipment failure reported). Newspaper articles or other media reports would not, in themselves, constitute “notice,” unless either they were provided to the manufacturer, such as by an owner, or actions taken by the manufacturer reflect that it had received notice of the incidents in question.

D. Identification of the Product in Claims and Notices

To be covered by these early warning requirements, a claim or notice, as well as other matters addressed below, would have to identify the vehicle or equipment item involved in at least a minimal way. Otherwise, it would not be possible to identify what vehicle or equipment was involved, and the information would not help us to identify potential defects. In the context of identification, we propose to use the term “minimal specificity” and define it to mean “(a) for a vehicle, the make, model and model year, (b) for a child seat, the model (either the model name or model number), (c) for a tire, the model and size, and (d) for other motor vehicle equipment, if there is a model or family of models, the model name or model number.”

With regard to claims, notices, and other reporting obligations discussed below, for vehicles, we would define “model” to mean “a name that a manufacturer applies to a family of vehicles within a make which have a degree of commonality in construction, such as body, chassis or cab type.” “Make,” in turn, would mean “a name that a manufacturer applies to a group of vehicles.” The proposed definition of “make” is the identical definition of “make” used in 49 CFR Part 565,

Vehicle Identification Number Requirements

(see section 565.3(g)). The proposed definition of “model” is the definition the VIN regulation uses for “[vehicle] line” (see section 565.3(f)). Our objective is to obtain reports by commonly-understood designations. For example, with regard to the General Motors S-10 platform, we would expect to receive separate reports for pickup trucks and sport-utility vehicles, but the total for each would include both Chevrolet and GMC nameplates. But we would expect C and K platform pickup trucks to be reported together (the total including both Chevrolet and GMC nameplates) as they are both pickup trucks and the relevant difference (2- vs. 4-wheel drive) appears to be insignificant for early warning reporting. As another example, with regard to Ford pickup trucks, we expect separate reports for the F-150 and F-250, but, within each designation, do not want separate reports for two-door and four-door versions, or versions with different engines or transmissions. We request comments on this approach and how our definition may achieve it.

We would define “model year” for this and all other early warning reporting purposes to include the year that a vehicle was manufactured if the manufacturer has not assigned a model year to the vehicle covered by the report.

For equipment, “model” would mean the name that its manufacturer uses to designate it. “Model year” would mean the calendar year in which the equipment was manufactured.

We ask for comments on the clarity and inclusiveness of these proposed definitions.

If an otherwise covered claim or notice as initially received by the manufacturer does not identify the allegedly defective product with minimal specificity but a subsequent communication does, it would become a covered claim or notice at the time of the subsequent communication, and the manufacturer would be required to report it in its next report to NHTSA.

E. Claims and Notices Involving Death

1. Whether to Define Death

We are not proposing to define death or fatality because we do not believe that it is necessary or appropriate to do so. Our reason is simple: the subject matter of this category of information is claims involving deaths and notices of incidents involving fatalities. Proof of death is not necessary, nor does it matter when death occurred.

2. Claims Involving Death

We propose that every manufacturer be required to report certain information about each incident involving a death identified in claims it has received during each reporting period, if the claim identifies the product with minimal specificity. This would apply to claims regarding fatal incidents in foreign countries as well as the United States. Reports of claims involving death would be in electronic form, as we discuss later.

3. Notices Involving Death

We are also proposing that manufacturers be required to report similar information about each incident involving a death that occurred in the United States that is identified in a notice (as defined above) in which it is alleged or proven that the fatality was caused in whole or in part by a possible defect in such manufacturer's vehicle or equipment, received during each reporting period, if the product is identified with minimal specificity. Information about such deaths would be combined with information about claims of death on the same report.

4. Information About Deaths

The information about deaths to be reported would contain, for each incident, model and model year of the vehicle or equipment, the date of the incident, the number of deaths that occurred in the incident, the name of the State in the United States or the specific foreign country in which the incident occurred, and the identification of each component or system that allegedly contributed to the incident or the death reported.

We are proposing that manufacturers who sell 500 or more vehicles annually in the United States and manufacturers of tires (except as to low production tires) and child restraint systems identify systems or components involved in the same manner as those used for their other reporting obligations. These are discussed below. Vehicle manufacturers who sell fewer than 500 vehicles annually in the United States would also identify

systems or components involved in the same manner. However, given the large and varying universe of motor vehicle equipment, manufacturers of original equipment and of replacement equipment other than tires and child restraint systems would describe the systems or components involved in their own words, based on the claim or notice. We are proposing this approach to make reporting by these manufacturers simpler than it would otherwise be if they had to use designations with which they are not familiar.

For claims and notices, if the component or system is not identified, the manufacturer would enter “unknown.” If the manufacturer was not aware of one or more of the required items of information at the time the report was submitted, it would have to provide the information in a further report covering the reporting period in which it was received.

F. Claims and Notices Involving Injuries

1. The Difficulties of Defining “Serious Injury”

The issue of whether to define “serious injury,” and if so, how, has proven to be one of the more challenging tasks in the development of this NPRM.

We have considered several approaches. Originally, it seemed to us that it might be appropriate to use the Abbreviated Injury Scale (AIS) system. The AIS system was developed by a joint Committee on Injury Scaling, comprised of representatives from the American Medical Association, Association for the Advancement of Automotive Medicine, and the Society of Automotive Engineers (SAE). The AIS system ranks the severity of injuries numerically from 1 to 7. The injuries that are recorded are those that occur to the head, face, neck, thorax, abdomen, spine, upper and lower extremities, external/skin, burns and other trauma. In the ANPRM, the agency sought input on the potential use of the AIS system. The commenters had many disparate views.

In its comments, the Alliance labeled the AIS system unworkable for this purpose due to the highly sophisticated coding and complex nature of identifying claims. The Alliance noted that each manufacturer would need to have a staff of thoroughly trained personnel who understand the entire system. The manufacturer would have to train its responsible personnel to understand basic medicine and medical terms and to use the AIS coding system, which is not a simple task. There is a lengthy manual, and the Association for the Advancement of Automotive Medicine offers a two-day course for injury scaling according to the AIS. The course is designed for trauma nurses, registrars, physicians, hospital records personnel, and researchers who are responsible for injury databases. A general knowledge of anatomy is required before taking the class.

Another issue with using the AIS system is the amount of information required to determine the actual injury level. A manufacturer may never have enough information to properly code an injury according to the AIS system. Many claims and notices received by a manufacturer will allege an injury but contain insufficient information for AIS coding. In the absence of information demonstrating that the injury in question reached whatever threshold AIS level might be selected, a manufacturer would be justified in not reporting the incident, which could result in substantial under-reporting.

In addition, the AIS system necessarily involves subjective judgments. This could introduce error and inconsistency. Moreover, the manufacturers have stated that they are reluctant to interpret medical records.

Another concern is universal administration. The AIS system is prevalent in some professional circles in the United States, but many manufacturers indicated that the AIS system is not utilized outside the U.S. This may cause confusion when translating or reviewing foreign claims, especially if there is a different reporting system for injuries in foreign countries. Similarly, while most major vehicle manufacturers probably have employees who are familiar with it, the AIS system may not be utilized by many smaller manufacturers. Many smaller manufacturers commented that they were unaware of the AIS or believed that using it as a determinant of serious injury would be unworkable. We do not believe that it would be appropriate to specify different reporting criteria for different industry segments.

Nissan diverged from most manufacturers and supported a system similar to the AIS system for defining serious injuries, but sought a simplified, flexible system. Nissan suggested that the government and the industry create a joint task force to develop a table based upon the AIS system that would allow the ranking of injuries to define serious injury. Similar to Nissan, AIAM suggested that the AIS system needed to be simplified to allow manufacturers to easily classify an injury as serious or not serious. We do not know whether this approach would be workable. However, even if it were, there is insufficient time to develop such a system within the statutory deadline for the early warning rule.

CU and Advocates both supported the use of the AIS system as a triggering device. However, both commenters stated that if a claim alleges an injury and it cannot be determined if it involves a serious injury, the claim should be reported to the agency.

We also considered basing the definition of serious injury for purposes of the early warning rule on certain statutory and regulatory definitions. RMA suggested the definition from 18 U.S.C. 1365(g)(3). In that section, serious injury is defined as: “a bodily injury which involves (a) a substantial risk of death; (b) extreme physical pain; (c) protracted and obvious disfigurement; or (d) protracted loss or impairment of the function of a bodily member, organ or mental faculty.” The MIC suggested that we define serious injury similarly to the Consumer Product Safety Commission's (CPSC) definition of “grievous bodily injury” (16 CFR 1116.2 (b)). That section states, in pertinent part:

(b) Grievous bodily injury includes, but is not limited to, any of the following categories of injury:

(1) Mutilation or disfigurement. Disfigurement includes permanent facial disfigurement or non-facial scarring that results in permanent restriction of motion;

(2) Dismemberment or amputation, including the removal of a limb or other appendage of the body;

(3) The loss of important bodily functions or debilitating internal disorder. These terms include:

(i) Permanent injury to a vital organ, in any degree;

(ii) The total loss or loss of use of any internal organ,

(iii) Injury, temporary or permanent, to more than one internal organ;

(iv) Permanent brain injury to any degree or with any residual disorder (e.g. epilepsy), and brain or brain stem injury including coma and spinal cord injuries;

(v) Paraplegia, quadriplegia, or permanent paralysis or paresis, to any degree;

(vi) Blindness or permanent loss, to any degree, of vision, hearing, or sense of smell, touch, or taste;

(vii) Any back or neck injury requiring surgery, or any injury requiring joint replacement or any form of prosthesis, or; (viii) Compound fracture of any long bone, or multiple fractures that result in permanent or significant temporary loss of the function of an important part of the body;

(4) Injuries likely to require extended hospitalization, including any injury requiring 30 or more consecutive days of in-patient care in an acute care facility, or 60 or more consecutive days of in-patient care in a rehabilitation facility;

(5) Severe burns, including any third degree burn over ten percent of the body or more,

or any second degree burn over thirty percent of the body or more;

(6) Severe electric shock, including ventricular fibrillation, neurological damage, or thermal damage to internal tissue caused by electric shock.

(7) Other grievous injuries, including any allegation of traumatically induced disease.

In the context of early warning reporting, these definitions suffer from many of the same deficiencies as identified above regarding the AIS system. Reporting would ultimately depend on highly subjective determinations, including the assessment of terms like “substantial,” “extreme,” and “protracted.” This could lead to inconsistencies, under-reporting, and unwarranted delays. In addition, many categories, such as “substantial risk of death” and “extreme physical pain,” would need to be further defined.

We also considered using a surrogate for serious injury, such as hospitalization. The Alliance, which, as noted above, opposed technical assessments of injuries under the AIS system, took this approach. The Alliance would define serious injury as any non-fatal injury resulting in an overnight hospital admission (but not including emergency room treatment if the person was treated and released). The Alliance asserts that it is simple and is easier to administer than the AIS system. This is true; the Alliance's definition is simple and does not require sophisticated training of reporting personnel. Also, the definition provides an objective criterion. The reporting trigger, the hospitalization, would not need to be interpreted by the manufacturer to determine if it meets another standard.

On the other hand, the Alliance's definition is not broad enough. The definition only includes injuries that result in an overnight admission into a hospital, but excludes significant emergency room treatment. For the purposes of early warning, in our view, this is not sufficient. Due to various factors, such as health care management practices and evolving medical approaches, individuals with injuries that most people would view as serious are often treated in an emergency room but not actually admitted to a hospital. For example, under the Alliance's definition, a person who fractured a leg might not be considered to have incurred a serious injury, since he or she might not be admitted into the hospital for an overnight stay. Yet we believe that most people would agree that a fractured leg would be considered a serious injury. In addition, for various reasons, some seriously injured people, such as the poor and people in various religious groups, might not be admitted into a “hospital.” Most important, it is likely that most claims, and possibly even lawsuits, will not specifically state whether or not there was a hospital stay. Thus, many serious injuries that involved hospitalization would not be reported under this definition.

A difficulty that would exist under any definition of serious injury is the effort that would be needed to monitor the progress of claims to see if a claim that initially did not allege an injury that satisfied the definition was amended or supplemented such that the injury was serious. The Alliance asserted that constant monitoring of claims is not feasible and would not further the goals of the early warning provisions. The Alliance further commented that the burden should not be on the manufacturer to determine if a claim involves a serious injury. We disagree with the Alliance's assertion that follow up review under such a scenario would not further the goals of early warning. Nonetheless, we recognize that such efforts would impose significant additional burdens on manufacturers.

2. Reporting of Incidents in Which Persons Were Injured, Based on Claims and Notices

In view of the substantial problems associated with defining “serious injury,” for purposes of early warning reporting we are proposing to require certain categories of manufacturers to report each incident in which persons are injured in the United States that is identified in a claim or notice alleging or proving that the injury was caused by a possible defect in the manufacturer's product, if the claim or notice identifies the product with minimal specificity. For these manufacturers, the report would be combined with the reporting of incidents involving fatalities. This would limit the number of reports and avoid duplication that could be associated with separate reports of deaths and injuries stemming from the same incident.

We recognize that Sections 30166(m)(3)(A) and (C) refer to “serious injuries.” Nevertheless, we are authorized to require reporting of claims about, and notices of, all injuries by Section 30166(m)(3)(B) which provides:

Other Data

. As part of the final rule * * *, the Secretary may, to the extent that such information may assist in the identification of defects related to motor vehicle safety in motor vehicles and motor vehicle equipment in the United States, require manufacturers * * * to report, periodically or upon request of the Secretary, such information as the Secretary may request.

It is evident that information about injuries caused by defects in vehicles and equipment will “assist in the identification of defects related to safety.” Often, the gravity of an injury does not help determine whether a vehicle or equipment is defective, since the fact that a possible defect led to a crash is generally more relevant than the degree of injury experienced by a vehicle occupant in the crash. Thus, limiting reporting to serious injuries would not better lead to the discovery of defect trends. By requiring all claims and notices of injury to be reported, we would increase the robustness of the data base on which we could analyze whether a possible defect trend existed. Thus, such a requirement is authorized by Section 30166(m)(3)(B), and satisfies the agency's obligations under Sections 30166(m)(3)(A) and (C).

This proposed requirement avoids the operational difficulties described above associated with any attempt to develop a universal, objective definition of “serious” injuries. The decision about whether an incident involving an injury must be reported could be made on the basis of the limited information that would be expected in a claim or a notice of a covered incident, without requiring complicated coding efforts, or awaiting detailed information about the specifics of the injury or the extent of hospitalization. Thus, it would reduce delays that could turn “early warning” into “late warning.”

There are other benefits to this approach. Because manufacturers would not have to determine if the alleged injury met one or more potentially complex criteria for seriousness of an injury as provided under some proposals, this approach would eliminate the need for subjective determinations, and thus address the concern of manufacturers that their decisions could be second-guessed.

Although the incidents that would be reported in which persons were injured would be greater than under a more limited definition of “serious injury,” this approach would actually reduce the burden on manufacturers. They would not need specialized or highly trained staffs to make decisions about “seriousness.” As importantly, the need to monitor and repeatedly review incoming information to reassess whether an injury was “serious” would be minimized, if not eliminated. Also, most manufacturers would not have to significantly restructure their existing database systems to comply with this reporting requirement, since most, if not all, manufacturers keep a record of claims.

We have considered the consequence upon NHTSA of receiving, organizing, and analyzing this information. The Alliance has raised the specter that agency would be flooded with a tremendous amount of data, even if it was submitted in electronic form, stating that there are over 3.2 million injuries per year as a result of 6.3 million police-reported crashes. The Alliance has overstated the burden on NHTSA. The vast majority of those crashes and injuries do not result in claims against manufacturers, and do not involve alleged defects. In fact, the Alliance's supplemental comments noted that only 9,200 claims alleging death or injury were filed against their manufacturer members and two other manufacturers in the United States in 2000. Also, NHTSA would not be overwhelmed because, as discussed below, only a limited amount of information involving injury-producing incidents would be reported, as opposed to copies of the underlying claims or notices themselves.

We would require those manufacturers that must report information about injuries to provide the same information as required with respect to incidents involving deaths. If an incident involved both deaths and injuries, it would only be reported once, with both the number of deaths and the number of injuries specified.

G. Other Possible Conditions on Reporting of Deaths and Injuries

Some commenters suggested that, to be covered under the reporting provisions, a claim or notice must also specifically allege that the fatality or injury was caused by a possible defect. The allegation of a defect is not statutorily required under Section 30166(m)(3)(A) or (B). Moreover, such a limitation would lead to under-reporting. In a lawsuit, which is one type of a claim, a defect need not be alleged if the pleading requirements of the relevant jurisdiction do not require such an averment. For example, in some states such as California, the claim/pleading requirements for complaints do not require the plaintiff to allege the existence of a defect. Moreover, with respect to claims, the assertion of a defect is implicit, since ordinarily there would otherwise be no reason to make the claim. Therefore, we are proposing that, for early warning reporting purposes, a claim need not specifically allege or describe a defect. It is enough if the claim contains information indicating that a death or injury has allegedly occurred, and it is alleged or proven that the manufacturer's product is responsible.

Different considerations apply to those incidents of which the manufacturer receives notice that does not amount to a claim, since only incidents in which a defect is alleged or proven are to be reported under Section 30166(m)(3)(C). Thus, for such incidents, we would require an allegation of a defect. Otherwise, the manufacturer would be required to report incidents that came to its attention when no one believes that the manufacturer's product contributed to the death or injury; e.g., a fatal crash due to high speed or drunk driving. However, the specific component or system that allegedly led to the incident would not have to be identified in the claim or notice.

Some manufacturers suggested that the allegation that a vehicle component is involved would have to be confirmed before an incident would have to be reported. We reject this suggestion, since the litigation process is lengthy, and it may be months or years before the involvement of a component is confirmed, if at all. The vast majority of cases settle without findings and of those that do not, many may not identify the defective component in jury resolutions. Also, the earlier that information arrives at the agency, the earlier our investigators will have information to determine whether an investigation needs to be opened.

Some manufacturers also suggested that the reportable incidents be limited to failures of or problems with certain vehicle systems. As discussed below, we believe that this approach is appropriate for certain types of information. However, while deaths and injuries due to alleged defects are relatively rare, they are so significant that we want our information to be as complete as possible. Therefore, we propose to require reporting of all deaths and injuries in the United States based on claims and notices, regardless of the implicated components.

Section 30166(m)(3)(A) refers to claims “derived from foreign and domestic sources.” In the same vein, Section 30166(m)(3)(C) refers to the reporting of certain incidents of which the manufacturer receives actual notice that occur in a foreign country, when the vehicle or equipment is identical or substantially similar to products offered for sale in the United States. In an effort to minimize the burdens associated with gathering information about incidents in foreign countries, in this phase of rulemaking we are proposing to require only reporting of such claims involving fatalities occurring in a foreign country but not to require reports about incidents in foreign countries that resulted in non-fatal injuries. Relatively few claims are filed outside the United States, and, in light of the anticipated robustness of the domestic data, we do not believe that our early warning capabilities would be adversely affected. We recognize that this proposal would require manufacturers and their affiliates to review foreign information bases, but believe the seriousness of fatalities associated with potential defects warrants this requirement.

H. Identical or Substantially Similar Motor Vehicles or Equipment.

Under Section 30166(m)(3)(C), manufacturers of vehicles or equipment must report:

* * * incidents of which the manufacturer receives actual notice which involve fatalities or serious injuries which are alleged or proven to have been caused by a possible defect in such manufacturer's motor vehicle or motor vehicle equipment * * * in a foreign country when the possible defect is

in a motor vehicle or motor vehicle equipment that is identical or substantially similar to a motor vehicle or motor vehicle equipment offered for sale in the United States.

(emphasis added)

In response to the ANPRM, we received comments on the meaning and scope of this phrase. These comments helped us in preparing the NPRM (“Foreign Defect NPRM”) published on October 11, 2001 which would implement Section 30166(l), Reporting of defects in motor vehicles and products in foreign countries (66 FR 51907), which contains the underlined phrase.

1. The Meaning of “Identical”

The ANPRM asked:

“1. Is the word ‘identical’ understood internationally, or do we need to define it? If so, how?”

We discussed this issue extensively in the Foreign Defect NPRM (see 66 FR 51907 at 10-11) and incorporate that discussion by reference. We concluded that a definition of “identical” was not needed. The same applies to this notice.

2. Substantially Similar Motor Vehicles

The Foreign Defect NPRM discussed extensively the comments received in response to the ANPRM on the meaning of “substantially similar motor vehicles” (see 66 FR 51907 at 11-13), and that discussion is also incorporated by reference. On the basis of these comments, we proposed that motor vehicles would be substantially similar to each other for foreign defect reporting if one or more of five criteria was met, at proposed 49 CFR 579.12:

(a) A motor vehicle sold or in use outside the United States is identical or substantially

similar to a motor vehicle sold or offered for sale in the United States if:

(1) Such a vehicle has been sold in Canada or has been certified as complying with the Canadian Motor Vehicle Safety Standards;

(2) Such a vehicle is listed in Appendix A to part 593 of this chapter or determined to be eligible for importation into the United States in any agency decision issued between amendments to Appendix A to part 593;

(3) Such a vehicle is manufactured in the United States for sale in a foreign country;

(4) Such a vehicle is a counterpart of a vehicle sold or offered for sale in the United States or

(5) Such a vehicle and a vehicle sold or offered for sale in the United States both contain the component or system that gave rise or contributed to a safety recall or other safety campaign in a foreign country, without regard to the vehicle platform on which the components or systems is installed and regardless of whether the part numbers are identical.

We believe that the first four proposed criteria are equally appropriate for the purposes of early warning reporting, and are proposing them in this notice. With respect to the fourth criterion, or alternative test, the preamble of the Foreign Defect NPRM did not directly explain what we meant by a “counterpart” vehicle. However, by example, a discussion appearing on page 51912 provides an explanation of what, in our view, would be counterpart vehicles: “An example would be Ford Explorers assembled outside the United States, such as those assembled in Venezuela.” We added that “We would appreciate comments on whether this latter class of vehicles needs to be defined with greater specificity,” warning that that “in our view the term substantially similar sweeps with a broad brush and is not to be defeated by persons bent on finding or inventing distinctions to evade reporting.” We have now decided to propose a definition of “counterpart vehicle” for early warning which we believe should also apply for foreign defect reporting. A “counterpart vehicle” would be “a vehicle made in a foreign country that is equivalent to one made in the United States except that it may have a different name, labeling, driver side restraints, lighting or wheels/tires, or metric system measurements.” This would apply to both foreign defect reporting and early warning reporting.

The fifth alternative test, while appropriate for foreign defect reporting, is not relevant for purposes of early warning. Under the Foreign Defect NPRM, vehicles would be substantially similar if “both contain the component or system that gave rise or contributed to a safety recall or other safety campaign in a foreign country, without regard to the vehicle platform on which the component or systems is installed and regardless of whether the part numbers are identical.” Under Section 30166(l), a potential safety defect has already been identified in a specific component or system of a motor vehicle, usually by the manufacturer. In that context, the relative precision of a component-or system-based determination is workable. However, under Section 30166(m), a defect has not yet been identified by the manufacturer, and often a component-or system-based analysis will not be possible based on the information contained in a claim received by the manufacturer. Accordingly, we believe that a less precise focus is warranted. More particularly, we believe that platform-based reporting is consistent with the breadth of early warning reporting, yet specific enough to provide focus. We would consider foreign and U.S. vehicles as substantially similar if they use the same vehicle platform. An example would be the Cadillac Catera which uses the same vehicle platform as the Opel Omega, or the Jaguar S-Class, which shares a platform with the Lincoln LS. We specifically request comment on our view that foreign and U.S. vehicles would be substantially similar for reporting under Section 30166(m) if they shared a platform. We have not proposed a definition for “platform.” If a commenter believes that a definition of this term is necessary, we invite the commenter to suggest a definition that the commenter believes is appropriate.

3. Substantially Similar Motor Vehicle Equipment and Tires

Both Sections 30166(l) and (m) require reports pertaining to substantially similar motor vehicle equipment and tires, and the preamble to the Foreign Defect NPRM contains a pertinent discussion of this issue (see p. 51913-14).

For purposes of foreign defect reporting, we proposed to deem foreign and U.S. motor vehicle equipment as identical or substantially similar “if such equipment and the equipment sold or offered for sale in the United States are the same component or system, or both contain the component or system that gave rise or contributed to a safety recall or other safety campaign in a foreign country, regardless of whether the part numbers are identical.” The reference to a safety recall is inapposite for purposes of early warning, but we believe that the remainder of the proposed definition is valid. Accordingly, we are proposing that an item of motor vehicle equipment sold or in use outside the United States would be identical or substantially similar to equipment sold or offered for sale in the United States “if such equipment and the equipment sold or offered for sale in the United States have one or more components or systems that are the same, regardless of whether the part numbers are identical.” We believe that the breadth provided by this definition is necessary given the nature of claims, which often do not identify particular problematic components. In this light, we would regard foreign child restraint systems as substantially similar (if not identical) to U.S. counterparts if they incorporate one or more parts that are used in models of child restraints offered for sale in the U.S., regardless of whether the restraints are designed for children of different sizes than those sold in the U.S. and regardless of whether they share the same model number or name. For example, if buckles, tether hooks, anchorages, or straps are common throughout a manufacturer's range of models, the child restraints would be substantially similar even though the buckles, hooks, anchorages, or straps might be used on a variety of add-on, backless, belt positioning, rear-facing or booster seats produced by the manufacturer.

In light of the foregoing discussion, we request comments on the appropriate formulation of test(s) for determining whether foreign motor vehicle equipment is substantially similar to U.S. equipment.

Finally, the Foreign Defect NPRM contained a relevant discussion on identical or substantially similar tires (see p. 51914). We proposed that tires would be identical or substantially similar “if they have the same model name and size designation, or if they are identical except for the model name.” The wording of today's proposal differs slightly; tires would be identical or substantially similar if they have “the same model and size designation, or if [they are] identical in design except for the model name.” We see no real substantive difference in the two proposals and will adopt a common interpretation of this phrase that will be identical in both final rules.

I. Claims and Notices Involving Property Damage

Section 30166(m)(3)(A)(i) provides for reporting of “aggregate statistical data on property damage” from alleged defects in the manufacturer's products.

1. Definition of “Property Damage,” and Whether to Define “Aggregate Statistical Data”

In response to the ANPRM, manufacturers proposed definitions of

property damage to be reported. Nissan would limit it

to those claims received from vehicle owners, owner representatives, or insurance companies, which involve a crash, tire failure or fire where there is an allegation of defect which may have caused the crash, tire failure or fire. Specifically excluded would be communications requesting restitution for mechanical breakdown or improper operation such as the example of the engine that fails due to lack of maintenance.

AIAM would “include only claims received by the manufacturer in writing * * * limited to incidents in which a defect is alleged in one of the critical safety systems (brakes, steering, occupant restraint, fuel).” AIAM also suggested that a “dollar value threshold should be set (perhaps $2500)” to reduce the reporting of minor claims.

In our view, this portion of Section 30166(m)(3)(A)(i) is not limited to “claims” for property damage. Subparagraph (i) refers to “data on claims * * * for serious injuries (including death) and aggregate statistical data on property damage.” The words “claims for” do not pertain to property damage. Nevertheless, we recognize in most cases that manufacturers will only be aware of property damage that may be related to potential defects if they receive a claim seeking payment for the damage. Accordingly, with respect to property damage, we are proposing to require only reporting of claims information and not incidents of which a manufacturer receives actual notice.

We believe that the term “property damage” needs to be defined, and the comments have been helpful in formulating a proposed definition. We would include damage to the vehicle or other tangible property, but exclude equipment failure and matters solely involving warranty repairs. For example, if the brakes failed and there were no physical consequences other than the need to repair the brake system, there would be no property damage. If there was a brake failure and the vehicle hit an object, there could be property damage to the vehicle or object. Accordingly, for purposes of this rule, we propose that property damage means “physical injury to tangible property.” A property damage claim would mean:

A claim for property damage, excluding that part of a claim, if any, pertaining solely to damage to a component or system of a vehicle or an item of equipment itself based on the alleged failure or malfunction of the component, system, or item, and further excluding matters addressed under warranty.

We also asked for comments on how to define “aggregate statistical data on property damage.” We learned that there is no generally understood meaning of the term. For example, Fontaine believes “aggregate statistical data” means “the compilation of quantitative data without specific information on individual events.” For Delphi, “aggregate statistical data” means “summaries of property damage information organized by category (e.g. model year, product type, damage type) and tabulated as to total cost or number of incidents.”

AIAM would define aggregate statistical data “to exclude allegations of simple failure or breakage of a component” and limit it “to the number of incidents involving a collision, tire failure or fire and occurring in the U.S.” DaimlerChrysler would restrict “aggregate statistical data” to warranty information.

The Alliance stated that non-injury claims data should be normalized on the basis of total production or total sales. Trailer manufacturers, according to TTMA, “propose to report statistical data related to warranty claims, claims and lawsuits involving property damage resulting from an alleged safety-related defect involving the following components or systems: tires, axles/suspension/brake components, rear impact guards, lighting and related components, king pins and fifth-wheel couplers, pintle hooks and drawbar eyes.”

The property damage information that we are proposing to require manufacturers to submit is limited to the number of claims involving a limited number of systems, components, and fires (to be discussed later). Thus, the information to be submitted will be “aggregate statistical data.” Therefore, we do not see a need for a separate regulatory definition of this term.

2. Reports Involving Property Damage

Unlike reporting of claims and notices of incidents involving deaths and injuries, we would only require reporting of property damage claims when one or more specified vehicle components or systems has been identified as causing or contributing to the incident or damage. These components and systems were selected based upon their connection to safety recalls in the past, as described in Section IV below. They vary depending on the type of vehicle or equipment that is the subject of the report.

If the incident that allegedly led to the property damage also resulted in a death or injury, the manufacturer would only report the incident as one involving a death or injury, and it would not be required to report the incident under the property damage requirement. Otherwise, there could be a misleading “double count.”

Reports of property damage claims would be submitted in the same manner as the number of consumer complaints, warranty claims, and field reports, discussed later. The information would be reported separately for each model and model year and would be submitted in electronic form, as discussed in Section VII below. The manufacturer would not be required to submit documents reflecting the extent of the property damage or the details of the incident that allegedly led to the damage.

With respect to manufacturers of motor vehicle equipment, we are proposing to require only manufacturers of tires to report property damage information. We note that it is extremely unlikely that a child restraint would cause significant property damage.

We also propose that a vehicle manufacturer need not include in its report property damage claims that are for $1,000 or less, on the ground that this would exclude minor matters and reduce reporting burdens. We request comments on whether it is appropriate to establish such an exclusion, and, if so, what the level should be.

Tire manufacturers have historically kept records of all property damage claims, without regard for the amount of the claim, and this information has proven to be very valuable in identifying potential tire defects. For these reasons, we are proposing to require tire manufacturers to report all property damage claims, regardless of the amount of the claim.

J. Consumer Complaints

We are proposing to require submission of information about certain “consumer complaints” as “other data” under Section 30166(m)(3)(B).

1. Definition of “Consumer Complaint”

The ANPRM addressed consumer complaints but did not suggest a definition of “consumer complaint.” Nissan commented that the meaning of “consumer complaints” in the ANPRM was not clear, and that a definition was needed. DaimlerChrysler proposed the following definition: “Reports of incidents causing some dissatisfaction with the product, not necessarily accompanied by any demand for compensation or reimbursement.” Both DaimlerChrysler and Nissan noted that there was overlap between “consumer complaints” and “claims,” and that it would be difficult to completely separate the two. DaimlerChrysler also stated that about half of the over 100,000 “customer contacts” it receives

monthly represent consumer complaints and half involve questions or comments about the product.

NTEA argued that only safety-related complaints should be reported, and that non-safety-related complaints should not be reported.

Notwithstanding DaimlerChrysler's and Nissan's assertions, we believe that we can formulate a definition for “consumer complaint” that would not overlap with our proposed definition of “claim.” The primary distinction is that a “consumer complaint” would not seek monetary or other relief. It would be defined as:

a communication of any kind made by a consumer (or other person) to a manufacturer expressing dissatisfaction with a product, or relating the unsatisfactory performance of a product, or any actual or potential defect in a product, or any event that allegedly was caused by any actual or potential defect in a product, but not including a claim of any kind or a notice involving a fatality or injury.

The term “a communication of any kind” would primarily include communications that are written but it would also include oral complaints, such as made through a telephone call, that a manufacturer memorializes in a document, including an electronic information system. The definition we propose would also include communications in which the owner of a vehicle or item of equipment that is subject to a defect or noncompliance recall asserted that the remedy failed to correct the defect or noncompliance.

We recognize that this definition would include complaints about problems that do not involve safety. Based on our past experience during defect investigations, we do not believe that it would be appropriate to simply require reporting of “safety-related” problems, since manufacturers often have a much more narrow view of what constitutes a safety-related problem than we do. As explained below, we will assure that manufacturers only need to report consumer complaints about safety-related problems by itemizing the specific safety-related components and systems with respect to which complaints must be reported.

2. The Rationale for Requiring Reports of Consumer Complaints

Over the years, NHTSA's Office of Defects Investigation (ODI) has made productive use of consumer complaints to manufacturers in its investigations of alleged defects. The problem experience of owners or operators in the real-world use of their vehicles and equipment, as reflected in their communications to manufacturers, has indicated failures of components and systems that can have an impact on safety. While a given level of complaints regarding some components or systems may not indicate the existence of a defect, a higher level might. (This level would vary, depending on the component or system involved.) Because we have no way to measure directly, or to count, all failures in the field, the frequency of consumer complaints (which complement warranty claims and field reports) can provide valuable indications of possible safety problems warranting further investigation. Consumer complaints were discussed in the Congressional hearings that led to the TREAD Act. See, e.g. Firestone Tire Recall: Hearing before the Subcomm. on Telecomm. Trade & Consumer Prot. and the Subcomm. on Oversight & Investigations of the House Comm. on Commerce. 106th Congress (as yet unpublished) (September 6, 2000) (Statement of Dr. Susan Bailey, Administrator, NHTSA).

We stated in the ANPRM that consumer complaints might help in the early detection of possible safety-related defects, and might be “particularly important after the expiration of warranties.” During the warranty period, consumer complaint data would complement warranty data. We sought comments on how, whether, and to what extent we should require manufacturers to submit information about consumer complaints to us under Section 30166(m)(3)(B).

The responses from advocacy groups and the manufacturers differed significantly. Advocates and Public Citizen supported requiring the submission of consumer complaint information. One manufacturers' group, AORC, which represents a segment of equipment manufacturers, agreed with us that consumer complaints can provide a means to help NHTSA identify potential safety defects.

Most manufacturers and trade associations that commented on this issue opposed requiring the submission of consumer complaint information. Essentially, they argued that consumer complaint data would not be of any real value as early warning information. With respect to light vehicles, Ford and the Alliance noted that owner and consumer correspondence is less technically rich or timely than other sources of information. Three equipment manufacturers (ArvinMeritor, Atwood and TRW) argued that consumer complaints were of only marginal value. RMA, representing tire manufacturers, stated that reporting of all informal complaints would generate information that is misleading because it might be misinterpreted as fact, and that verbal complaints did not usually provide sufficient information to verify the legitimacy of the complaint. MIC also argued that the majority of consumer complaints are unreliable.

The ANPRM did not specifically state whether we expected to require manufacturers to submit complete copies of consumer complaints or simply “counts” of those complaints. MIC stated that “reporting of consumer complaints should not be required due to the large volume and the need to evaluate them as material to the purpose of the rule unless the Agency contemplates receiving all such communications.” Johnson Controls commented that even a count of customer complaints would overwhelm the agency “by data that has questionable relevance to safety.”

With respect to data other than consumer complaints, Public Citizen stated that, in most cases, summary information would be adequate until evidence of a potential defect surfaces. However, it would make an exception for consumer complaints. It would require submission of complete consumer complaints, because NHTSA “already has in place a well-developed system for categorizing those complaints by scanning them into a searchable format.” Advocates argued that consumer complaint information “is an important resource,” but suggested only that it “should be reported in aggregate form in conjunction with other reported information.” It would have a manufacturer search its database for relevant consumer reports for entries about the same or similar type of occurrence, vehicle system, part, or component when the manufacturer had information about a death, injury, or property damage.

After reviewing the comments received and assessing the value of consumer complaints to an early warning system, we have decided to propose requiring manufacturers of 500 or more vehicles as well as all child seat manufacturers to provide aggregated consumer complaint information to us on a periodic basis, but not to require copies of such complaints periodically. NHTSA relies heavily on consumer complaint information in initiating and conducting defect investigations. We often open investigations on the basis of consumer complaints that we receive and screen. More than 75 percent of the investigations conducted by ODI are opened on the basis of complaints that we receive from individual consumers, or that are furnished to us by interested third parties, such as consumer groups, police departments, State vehicle

inspectors, and school bus and other fleets.

After it opens investigations, ODI routinely asks manufacturers to provide information and copies of consumer complaints on the “subject defect;” also, ODI often asks manufacturers to update complaint information during the course of the investigation. This sort of information is very valuable in evaluating whether a defect related to motor vehicle safety exists in a given vehicle or equipment item. Since our first litigated defects enforcement case,

United States

v.

General Motors Corp.

(

“Wheels”

), 518 F.2d 420, 438 (D.C. Cir. 1975), which held that a

prima facie

case of defect can be made by showing a significant, “non de minimis number” of failures of a critical part that is expected to last for the life of the vehicle, the federal courts have recognized that consumer complaints can be a valuable source of evidence of the existence of a safety-related defect in motor vehicles.

ODI's experience has shown that consumers are more likely to report a problem to the manufacturer than to NHTSA. Historically, the number of consumer complaints to the manufacturer (either directly or through dealers) that NHTSA obtains after opening a defect investigation usually exceeds by a substantial amount the number of complaints that NHTSA had received directly from consumers prior to opening the investigation. Also, many consumers do not complain to NHTSA until after they have complained (unsuccessfully) to the manufacturer. Although there is no single threshold of consumer complaints about a particular component or system that will automatically trigger a defect investigation, it is likely that if it were aware of a relatively large number of consumer complaints to a manufacturer, ODI might well open investigations earlier. To the extent that such an investigation led to a recall, opening it earlier would likely have led to corrective action at an earlier date and the avoidance of some additional incidents.

Consumer complaints to child seat manufacturers have also consistently far outnumbered those to NHTSA about particular problems. For example, in November 1996, ODI opened an investigation of harness release button breaks in certain infant car seats. ODI had received four consumer complaints when it opened the investigation. After writing to the manufacturer and requesting complaint information, ODI learned that the company had received 328 complaints about the harness release button in those seats. Similarly, in May 1998, ODI opened an investigation of harness buckle failure in infant car seats on the basis of two consumer complaints. After writing to the manufacturer, ODI learned in July 1998, only two months later, that the company had received 92 complaints. Both of these investigations led to corrective action by the manufacturers.

We believe that NHTSA's ability to identify potential defects in a timely manner, and to identify and understand emerging defect trends, would be greatly strengthened if the agency were to receive information about consumer complaints relatively shortly after the manufacturer does. At present, ODI's decisions as to which products should be investigated are often based on limited information from consumers.

We are not proposing to require tire manufacturers to report the number of consumer complaints. We have concluded, from our experience with conducting tire investigations, that consumer complaints to tire manufacturers generally do not contain useful information for analysis of the alleged problem. For example, tire complaints do not consistently have full information describing the tire model, size, and date of manufacture. Without this identification, an analysis of failure rates and trends is not possible. Far more useful for analysis of potential defect trends is the tire manufacturer's adjustment (warranty) and claims data. The adjustment and claims data contain complete identification of the tire make, model, build plant type, and date of production. We have received such data in response to information requests issued during our defect investigations and find that these data are far superior than that contained in complaints.

We are proposing to require larger motor vehicle manufacturers, and all child restraint system manufacturers, to report the number of consumer complaints that the manufacturers have received about designated components and systems of their vehicles or equipment during each reporting period. Vehicle manufacturers would also report complaints about fire. The designated components and systems would be the same as those on which property damage claims are reported.

We are not proposing at this time to require reporting of consumer complaints from outside the United States. There are a number of issues related to foreign complaints, such as manufacturer review of potentially large numbers of complaints in foreign languages and NHTSA follow-up use, that dictate against requiring reporting, at least for the present.

NTEA, representing final stage manufacturers, said that manufacturers should be required to report only about components for which they are responsible, rather than about all components in a vehicle about which they may have received complaints. In view of our proposal to only require reporting from manufacturers of 500 or more vehicles per year (other than incidents involving fatalities), it is likely that few NTEA members will have to submit consumer complaint information. However, for these that are covered, we note that the issue of which manufacturer's product is “responsible” often is disputed and is not determinative for early warning purposes. Moreover, the final stage manufacturer is often the only entity with which an owner deals. For example, a consumer who experiences a fuel leak in a vehicle is more likely to complain to that manufacturer than the chassis manufacturer. To assure that important information is submitted, we are proposing to require that each covered vehicle manufacturer report on all consumer complaints (and other specified information) that it receives.

Under this proposal, manufacturers would be required to review, maintain, and compile consumer complaints made in any form, including those made by telephone to their customer relations representatives (employees or contractors) and those made to dealers that are transmitted to the manufacturer, as well as written communications directly to the manufacturer. The manufacturers have the capability to do this, as they presently submit relevant complaints in response to ODI information requests during defect investigations.

K. Warranty Claims Information

We are proposing to require submission of information about certain “warranty claims” as “other data” under Section 30166(m)(3)(B).

1. Definitions of “Warranty” and “Warranty Claim”

In the ANPRM, we sought input related to reporting of warranty claims but did not define them. We have decided to propose definitions of warranty and warranty claim. After reviewing various definitions of “warranty,” and comments on the issue, we have decided to propose a definition of warranty based on the definition of written warranty in the Moss-Magnuson Act, 15 U.S.C. 2301(6), to which manufacturers are subject. Under that Act, a “written warranty” means:

(A) any written affirmation of fact or written promise made in connection with the sale of

a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or

(B) any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking, which written affirmation, promise, or undertaking becomes part of the basis of the bargain between a supplier and a buyer for purposes other than resale of such product.

We propose to tailor that definition to the subject matter at issue and to define “warranty” as:

Any written affirmation of fact or written promise made in connection with the sale or lease of a motor vehicle or motor vehicle equipment by a manufacturer, distributor, or dealer to a buyer or lessee that relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time (including any extensions of such specified period of time), or any undertaking in writing in connection with the sale or lease by a manufacturer, distributor, or dealer of a motor vehicle or item of motor vehicle equipment to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking.

As explained below, we propose to require reporting of the number of repairs and/or replacements free of charge under warranties, as well as those under formal or informal extended warranties and good will. Good will includes the repair or replacement of a motor vehicle or item of motor vehicle equipment, including labor, paid for by the manufacturer, at least in part, when the repair or replacement is not covered under warranty. This can occur because the terms of the warranty have expired, or the issue is outside the terms of the warranty, for example, when the manufacturer pays or participates in voluntary Buy-Backs and Lemon Law Buy-Backs of vehicles or motor vehicle equipment.

The normal practice is for dealers to perform the repair or to provide the replacement and then to submit a claim for reimbursement to the manufacturer. Accordingly, we propose that warranty claim means “any claim presented to a manufacturer for payment pursuant to a warranty program, extended warranty program, or good will.”

2. Reports Involving Warranty Claims

In the ANPRM, we indicated that we believed that information about warranty claims can often provide relevant information that indicates the possible existence of a safety defect. Manufacturers, however, questioned this. The Alliance and Ford indicated that the data could be used to provide a dimension for a problem, but would be unlikely to be accurate as an early warning indicator. The primary problem, as seen by light duty vehicle manufacturers, is that there is a range of reasons for warranty claims that do not necessarily imply a safety defect. As Honda put it, “Warranty rates may be more reflective of Honda's customer satisfaction policy than an indication of product quality or failure rate.”

Most heavy duty vehicle manufacturers expressed concerns similar to those of light duty vehicle manufacturers. International Truck noted that “a manufacturer usually identifies safety issues long before there is any indication of such problems in the warranty system.” Several others commented on what they believed to be a lack of relationship between warranty claims and safety defects. Heavy duty vehicle purchasers, these commenters related, can choose from standard or premium warranty coverage terms, and some fleets negotiate individual coverage plans that are different from those applicable to light duty vehicles. The particular warranty terms vary from one to eight years, 100,000 miles to 1,000,000 miles, and 3250 operating hours to 18,000 operating hours.

These commenters asserted that, without knowing the warranty terms for the vehicles on which manufacturers report claim data, it would not be possible for NHTSA to interpret the data validly. Additionally, these commenters stated, because purchasers can choose their warranty coverage, they can tailor it to their expected use of the vehicle. As a result, some warranty coverage categories could show particularly high occurrences of claims as a result of use patterns rather than safety defects. While this would suggest that comparisons might not be valid in determinations whether there is a defect, it does not demonstrate that the information would have little or no use. For example, high rates or substantially increasing trends might warrant further inquiry by the agency. Without this information, the agency might not have a basis to look into the matter.

If some reporting of warranty data is required, light duty vehicle manufacturers argued that claims from foreign countries should be excluded. The reasons given by Nissan for exclusion include significantly greater complexity of reporting, the existence of a rich statistical sample due to volume and diverse operating conditions in the U.S. without additional foreign reports, different warranty periods in overseas markets, and different cultures and environments overseas. RVIA also opposed providing foreign warranty data. PACCAR suggested reporting foreign warranty information only if the components are substantially similar.

MIC suggested including warranty claims information related to major systems or components, but excluding foreign warranty data. Harley Davidson would like to exclude claims unrelated to safety or performance, such as fit, finish, or top speed.

Most equipment manufacturers opposed the reporting of warranty data; some asserted that they did not have such data and others asserted any they did have was of too poor quality to use. AAIA believes that historic data involving safety-related items that suggest potential for defects and/or recalls should be included in reporting. The major issue underlying the opposition of most equipment manufacturers appears to be that, in most cases, manufacturers of the vehicles receive warranty claims rather than the equipment manufacturers. As a result, the equipment manufacturers have limited information, much of which is considered proprietary by the vehicle manufacturers. Equipment manufacturers also repeated the data quality concerns asserted by both light and heavy duty vehicle manufacturers.

Tire manufacturers, represented by RMA, cautioned against assuming that warranty adjustments reflect tire defects. It noted that “many dealers, as well as tire manufacturers, sometimes use warranty adjustments as a means to “keep the customer happy,” and therefore the adjustment is “not necessarily a statement about product performance or an indication of product deficiency.” It also suggested that no foreign data or data prior to the effective date of the rule should be reported. It believes that foreign data is not comparable because of differences in coverage and road conditions and would be a burden to collect because of possible availability or integration problems between foreign and U.S. data.

Advocacy groups wanted warranty claims data to be reported as part of the early warning system.

Assuming that domestic warranty claims reporting is required, there was a common view among light duty vehicle manufacturers on what categories to include or exclude. Restraint systems, brake systems, steering systems and fuel systems would be included, as well as tires. However, this does not cover numerous

components whose failure has led to safety recalls.

There was no consensus among heavy duty vehicle manufacturers on what warranty claims information should be reported. In part, the variance is a reflection of the different products the commenters manufacture. RVIA and PACCAR both named restraint systems, fuel tanks, steering systems, and axle/suspension/brake components as the most important systems on which to report (PACCAR suggested that build date of vehicles should be used in place of model year because model year is not identified in their warranty data and varies by manufacturer). TTMA focused on the components relevant to its members: axle/suspension/brake components, rear impact guards, tires, lighting and related components, king-pins and fifth wheel couplers, and pintle hooks and drawbar eyes. Fontaine suggested that only components most frequently associated with recalls, including equipment to which a FMVSS applies and defined safety-related items, should be subject to reporting.

After reviewing the comments received and assessing the value of warranty claims data to the early identification of possible safety defects, we have decided to propose to require manufacturers of 500 or more vehicles annually and all child seat and tire manufacturers to report aggregated warranty claims data from the U.S. on certain specified components and systems (as described below).

Although we agree that the evidence of even a relatively high rate of warranty claims does not necessarily indicate the existence of a defect, our experience in conducting defect investigations has demonstrated that warranty claims information often reveals a potential problem that could be related to safety. As noted above, we are limiting our proposal to require information regarding only some systems. Moreover, we would not require actual copies of warranty claims, but rather a listing of the number of such claims regarding each specified component or system in each vehicle or equipment model received by the manufacturer in each reporting period.

As with consumer complaints, manufacturers would have to maintain warranty claims, group the numbers of claims by reporting categories, and report them. Most, if not all, manufacturers maintain warranty information in computerized databases, and they have the ability to provide problem-specific warranty information under this rule, since they already do so in response to ODI's information requests during defect investigations.

L. Field Reports

As part of its defect investigations, ODI regularly requires manufacturers to provide “field reports” about alleged defects. These include communications received by a manufacturer from the manufacturer's technical staff, a dealer, an authorized service center, or others, regarding an alleged problem in or dissatisfaction with a product in use. They are usually prepared by someone with technical expertise. There are far fewer field reports than consumer complaints, although practices resulting in the generation of field reports vary widely among manufacturers. Field reports are not specifically mentioned in the TREAD Act, but were addressed in the ANPRM. We sought input on the appropriate definition of field report, the components or systems on which field reports would be valuable in an early warning context, information in them that should be reported to NHTSA, and manufacturers' use of them. We are proposing to require submission of information and documents about certain “field reports” as “other data” under Section 30166(m)(3)(B).

1. Definition of “Field Report”

The ANPRM asked for comments on an appropriate definition of “field report.” Two broad themes cut across industry responses. First, respondents stressed the importance of clearly and precisely defining the term “field report.” The term has a variety of meanings, both within and across industry segments. The Alliance requested that the term be defined as technical reports by technical staff involving one or more incidents in the field involving a covered vehicle system on a vehicle that had been sold. According to other respondents, the term has numerous meanings within the medium and heavy-duty truck industry as well as among equipment manufacturers and is not well defined across the tire industry. We were told that the trailer industry, for example, does not use the term “field reports.”

The second broad theme in the comments by manufacturers was a recommendation to limit the number and types of field reports to be reported to us. As reflected in the definition suggested above, the Alliance would limit it to certain technical reports about an incident (or several similar incidents) that are prepared by technical representatives. The Alliance would exclude unverified reports regarding customer complaints that are passed through to the manufacturer without any technical analysis. They would also exclude research reports or accident reconstruction reports prepared for local police departments or litigation. Commenters in the tire industry and the heavy trucking industry indicated that many of the communications they refer to as field reports deal with sales, marketing and customer satisfaction programs, which they would exclude.

We have concluded that the Alliance's proposed restriction of the definition to “technical reports” that are prepared by “technical” employees is not feasible. It would require a definition of “technical” and “technical report” and assessments of whether the author was a technical employee and whether the content amounted to a technical report, which could result in delays, under-reporting, and unnecessary burdens. Nonetheless, we agree that sales and marketing literature should not be included.

There was considerable discussion about whether we should require the reporting of field reports prepared by a dealer's technicians. The Alliance recommended including both types of reports in an early warning system. Some manufacturers as well as MIC, however, felt that submission of dealer reports should not be required. We believe that it is important for us to receive information about such dealer reports received by manufacturers regarding potential defects because they are a valuable source of relevant information. Indeed, they are one of the bases upon which manufacturers become aware of potential defects in their products. We therefore are proposing to require reporting of the cumulative number of field reports prepared both by manufacturers' employees or representatives and by dealers, including their employees. However, manufacturers would not have to submit copies of reports prepared by dealers or dealer employees.

We also propose to include in our definition of “field report” any document received by a manufacturer that was prepared by a person owning or representing one or more fleets of vehicles. For these purposes, a fleet would be defined as more than ten vehicles of the same model and model year. Such reports often contain data on multiple incidents involving vehicles used by delivery companies (e.g., FedEx, UPS), rental companies, trucking companies, police departments, and school districts. Fleet vehicles generally accumulate greater miles over a given period of time than non-commercial vehicles and therefore can serve as a valuable source of predictive information for early warning purposes.

Other definitional issues raised by commenters were whether field reports should be limited to written communication and to “non-privileged” documents. Reporting would be required with regard to documented communications (e.g., those in writing, entered electronically, or otherwise converted into a document in the broadest sense of the word). With respect to the issue of privilege, we recognize that a field report truly prepared in anticipation of litigation could be considered as work product, and thus ordinarily be exempt from production in litigation. We believe that the existence of any such reports should be indicated to us, even though privileged and work product documents would not have to be submitted.

Accordingly, we propose the following definition for “field report:”

A communication in writing, including communications in electronic form, from an employee or representative of a manufacturer of motor vehicles or motor vehicle equipment, a dealer or authorized service facility of such manufacturer, or by an entity that owns or operates a fleet, to a manufacturer, regarding the failure, malfunction, lack of durability, or other performance problem of a motor vehicle or motor vehicle equipment, or any part thereof, produced by that manufacturer, regardless of whether the problem is verified or assessed to be lacking in merit.

2. Reporting of Field Reports

The ANPRM asked whether reporting of field reports should be limited to reports on systems and components that are safety-related, and whether the same systems and components should be covered as for warranty claims. The ANPRM did not identify the specific systems and components with respect to which the submission of field reports might be required.

TTMA supplied a list that included some equipment: rear impact guards, lighting and related components, king pins and fifth wheel couplers, pintle hooks and drawbar eyes. On the opposing side, ArvinMeritor felt that each manufacturer is best able to determine what components and environmental and loading factors constitute a possible risk of product failure and whether those failures are likely to pose a risk to safety. Public Citizen opposed limiting early warning programs to certain components or special lists of parts. It argued that an incremental approach is “dangerously under-inclusive and thus out of conformance with Congressional intent under the TREAD Act.”

We do not agree that each manufacturer should be allowed to determine possible risks of product failure and whether they are likely to pose a risk to safety before reporting field report information. On the other hand, we do not agree with Public Citizen that an incremental approach under which only certain reports would have to be submitted would be “dangerously under-inclusive,” particularly if we require the submission of field reports on systems and components that historically have been most represented in safety defect recall campaigns.

We have tentatively decided, therefore, that manufacturers of 500 or more motor vehicles and all manufacturers of child restraint systems and tires must report the number of field reports originating in the United States regarding the same components and systems as for property damage claims, consumer complaints, and warranty claims. As with these categories of information, reporting would be done separately for each model and model year.

Consumer complaints that were merely forwarded to the manufacturer by the dealer without any comment or assessment would not have to be reported as field reports, but they would have to be reported as consumer complaints.

In addition to requiring the number of field reports by category that are prepared or received during each reporting period, we would require copies of the field reports themselves that are generated by employees or representatives of the manufacturer or by representatives of fleets of the manufacturers' vehicles. We would not require copies of reports that are prepared by dealers or their employees.

M. Customer Satisfaction Campaigns, Consumer Advisories, Recalls, or Other Activities Involving the Repair or Replacement of Motor Vehicles or Motor Vehicle Equipment

Section 30166(m)(3)(A)(ii) provides for submission of information (derived from foreign and domestic sources) that concerns “customer satisfaction campaigns, consumer advisories, recalls, or other activity involving the repair or replacement of motor vehicles or items of motor vehicle equipment” (we will use the term “campaign” at times hereafter collectively to refer to all such actions by the manufacturer). As we stated in the ANPRM, this new section is broader than 49 CFR 573.8 (2001) (which implements Section 30166(f)), which requires a manufacturer to provide copies of communications to more than one manufacturer, distributor, dealer, lessor, lessee, or purchaser regarding “any defect” including “any failure or malfunction beyond normal deterioration in use, or any flaw or unintended deviation from design specifications, whether or not such defect is safety related.” We further stated in the ANPRM that this category of information would encompass any communication to, or made available to, more than one dealer, distributor, other manufacturer, or more than one owner, whether in writing or by electronic means, relating to replacement or repair of a component, or modification of the way that a vehicle or equipment item is to be operated.

The ANPRM requested comments on whether the various campaign activities identified in the TREAD Act should be defined, and, if so, what would be appropriate definitions. Most of the comments from the light and heavy vehicle manufacturers generally argued that campaigns should be defined because the term has different meanings across industry segments. Nevertheless, only the Alliance suggested a definition (also endorsed by Ford and Nissan), which reads as follows:

Customer satisfaction campaigns, consumer advisories, recalls, or other activity involving the repair or replacement of motor vehicles or items of motor vehicle equipment shall mean those actions, other than foreign recalls or other safety campaigns as further defined [by the Alliance], undertaken or authorized by a manufacturer in which a class of affected owners of motor vehicles or items of motor vehicle equipment are notified of an offer to repair or replace the vehicle or equipment or to extend any applicable vehicle or equipment warranty.

The proposed Alliance definition does not address one of the categories of action identified in the statute: “other activity involving the repair or replacement of motor vehicles or items of motor vehicle equipment.” It is also too limited with respect to some of the other categories. For instance, “customer satisfaction campaigns” and “consumer advisories” need not involve repair, replacement, or extended warranties. Also, a “consumer advisory” could include a warning relating to the way that a vehicle is to be driven or maintained. Accordingly, it would not necessarily involve repair or replacement.

We agree with the Alliance's suggestion that foreign recall and safety campaigns, which are covered under Section 30166(l), and a new Subpart B to 49 CFR Part 579 (see the Foreign Defect NPRM at 66 FR 51907

et seq.

), need not be separately reported under the early warning provisions.

We propose to define the phrase “customer satisfaction campaign, consumer advisory, recall, or other activity involving the repair or replacement of motor vehicles or motor vehicle equipment,” to mean:

Any communication by a manufacturer to, or made available to, more than one dealer, distributor, lessor, lessee, other manufacturer, or owner, whether in writing or by electronic means, relating to (1) repair, replacement, or modification of a vehicle, component of a vehicle or item of equipment, or a component thereof (2) the manner in which a vehicle or equipment is to be maintained or operated, or (3) or advice or direction to a dealer or distributor to cease the delivery or sale of specified models of vehicles or equipment.

We have included communications related to operation and maintenance because they may relate to a potential defect. For example, a warning not to turn on the wipers when the windshield has snow on it may indicate a wiper defect.

The proposed definition would not include routine marketing documents or documents relating to surveys of owner satisfaction. It would include all notifications, product improvement or technical service bulletins, advisories, and other communications regarding the subject matter that are issued to, or made available to, more than one vehicle or equipment dealer, distributor, lessor, lessee, other manufacturer or owner involving any systems or components in the vehicle or equipment, not merely the specified components for which reports must be submitted regarding property damage claims, consumer complaints, warranty claims, or field reports. This would include any category of information relating to the replacement or repair of a vehicle or vehicle component, or the way a vehicle or vehicle equipment item is to be maintained or operated, whether or not there has been any determination by the manufacturer that these actions pertain to or are being undertaken because of a defect or a safety-related concern.

In our view, this requirement is similar to although somewhat broader than the notices, bulletins, and other communications that for years have been required to be submitted by 49 CFR 573.8 (2001). Under Section 573.8, a manufacturer might argue that a condition that was the subject of a communication to dealers or others did not rise to the level of a “defect” or “malfunction,” and that it therefore did not have to provide copies of such a communication to NHTSA. Under early warning reporting, it would have to provide these related notices regardless of whether a “defect” existed.

Nevertheless, because of these similarities, we are proposing to implement this aspect of early warning reporting by including it in the same section as current Section 573.8, which would be moved to a new Section 579.5(a). This new Section 579.5(b) would also apply to all manufacturers of vehicles and equipment, which are currently required to submit copies of similar communications to NHTSA on a monthly basis. We anticipate that there will be relatively few documents covered by this proposal that would not have been covered under Section 573.8.

In our administration of existing Section 573.8, we have noted several problems, such as the failure of a manufacturer to make monthly submissions of covered documents and disputes over what had actually been sent to us. These problems could have been avoided if the manufacturer had issued a cover letter identifying the submitted documents. Therefore, we are proposing to require a cover letter for each monthly submission of documents required to be submitted under proposed Section 579.5 that identifies each communication in the submission by name or subject matter and date.

If a communication falls within the category described in both Section 579.5(a) and Section 579.5(b), it would only have to be submitted once.

Finally, the ANPRM sought comments on whether we should require manufacturers to provide additional information regarding the facts and analysis that led to the decision to conduct the campaigns. Many of the commenters opposed a requirement of this nature, feeling that requiring the routine submission of background information regarding the facts and analysis that led to campaigns would be extremely burdensome. On the other hand, both CU and Advocates contended that NHTSA should receive information regarding the facts and analysis that led to the manufacturer's decision to initiate the campaign.

The general consensus of manufacturers was that NHTSA should review all covered communications, including service bulletins that the agency currently receives under Section 573.8, and then decide whether to request additional facts and analysis on a case-by-case basis. This is what we currently do with respect to communications received under Section 573.8. Certain communications suggest a potential safety issue which requires clarification. ODI then contacts the manufacturer to obtain additional information, as appropriate. We plan to proceed in the same manner with respect to these submissions, except that we would require each submission to be accompanied by a cover letter identifying each communication that is part of the submission and the date of the communication.

N. Components, Systems and Fires To Be Included in Reports

We considered requiring manufacturers to provide us with the number of property damage claims, consumer complaints, warranty claims and field reports that are associated with all systems and components of a vehicle or item of equipment. We decided against doing so, because this approach could generate large volumes of information that, we believe, would not be particularly useful. Instead, NHTSA has attempted to identify, for each category of vehicle, for child restraint systems, and for tires, those systems and components whose failures are most likely to lead to safety recalls. These are the systems and components on which it is most important that we obtain timely information regarding failures, as compared to failures that are not related to safety or those that rarely, if ever, lead to safety recalls. Our goal was to select those systems and components which capture the vast majority of safety recalls. In identifying these vehicle systems and components, we requested the Volpe National Transportation Systems Center (Volpe) to conduct an analysis of past defect recalls. For each category of vehicle, Volpe looked at, among others, the total number of defect recalls associated with various specific systems and components, the number of vehicles covered by those recalls, the number of recalls influenced by ODI investigations, and the number of recalled vehicles influenced by ODI investigations.

The study provided information on different components and systems implicated in recalls for light vehicles, medium-heavy vehicles, buses, motorcycles, and trailers. A copy of the study, which includes a description of the methodology, is in the docket. The underlying data are in NHTSA's DIMS II data base which can be searched by the public through the NHTSA website. The components and systems are identified below as part of the discussion on reporting requirements.

For light vehicles, we propose to require manufacturers to separately report the number of problems/incidents related to steering, suspension, service brakes, parking brakes, engine and engine cooling system, fuel system integrity, power train, electrical system, lighting, visual

systems, climate control system including defroster, airbags (including but not limited to frontal, side, head protection, and curtains that deploy in a crash), seat belts (including anchorages and other related components), structure (other than latches), seats, engine speed control including throttle and cruise control, integrated child restraint systems, latches (door, hood, hatch), tires, wheels, trailer hitches and related attachments, and the number of incidents in which there was a fire. For incidents of death and injury only, if another system or component is allegedly involved or if the system or component is not specified in the claim or notice, the incident would be included, and “other” would be specified. Figures 2 and 3, below, represent pro-forma examples of how a manufacturer of light vehicles would report incidents involving deaths and injuries and warranty claims, using electronic spreadsheets.

Incidents Involving Deaths and/or Injuries Based on Claims and Notices

LIGHT VEHICLES

Reporting Period:

Manufacturer:

Make

Model

Model year

Incident date

Number of deaths

Number of

injuries

(U.S. only)

State or foreign country

Involved

systems or

components

(see below)

Involved Systems or Components:

01 Steering

02 Suspension

03 Service Brakes

04 Parking Brakes

05 Engine Speed Control Including Throttle and Cruise Control

06 Air Bags

07 Seat Belts

08 Integrated Child Restraint Systems

09 Latches—Doors, Hoods, Hatches

10 Tires

11 Fuel System Integrity

12 Power Train

13 Electrical System

14 Engine and Engine Cooling System

15 Structure (other than Latches)

16 Visual Systems

17 Seats

18 Lighting

19 Wheels

20 Climate Control System Including Defroster

21 Trailer Hitches and Related Attachments

22 Fire

99 Other

Fig. 2

Warranty Claims

Light Vehicles

Manufacturer:

Reporting Period:

Make

Model

Model year

Number of reports

Steering

Suspension

Service brakes

Parking brakes

Engine

Fuel system

Power train

Electrical

Lighting

Visual

Climate control

Seat belts

Air bags

Structure

Seats

Engine speed controls

Integrated child restraints

Latches

Tires

Wheels

Hitches

Fires

2003

2002

2001

2000

1999

1998

1997

Note: Make, model, and model year data will be coded in a way to relate it to data in the products table shown in Figure 1. Reports must be broken out for each subgroup, by fuel system type and brake system type for each subgroup where more than one brake or fuel system was produced in a given make, model, and model year product line.

Figure 3

We have placed in the docket copies of pro-forma spreadsheets for other types of numerical reporting, such as property damage claims, and request comments on the appropriateness and utility of this format. We have also proposed definitions for many of the systems and components for which reporting would be required, such as suspension, vehicle speed control, and latches. While we believe that these definitions are straight forward and self-explanatory, we request comments on their accuracy and completeness.

For medium-heavy vehicles, we propose to require manufacturers to separately report the number of problems/incidents relating to steering, suspension, service brakes, parking brake, engine and engine cooling system, fuel system integrity, power train, electrical system, lighting, visual systems, climate control system including defroster, airbags (including but not limited to frontal, side, head protection, and curtains that deploy in a crash), seat belts including anchorages and other related components, structure (other than latches), seats, engine speed control including cruise control, latches (door, hood, hatch), tires, wheels, trailer hitches and related attachments, engine exhaust system, the number of incidents in which there was a fire, and, for incidents of death only, if another system or component is allegedly involved or if the system or component is not specified in the claim or notice.

For buses/school buses, we propose to require manufacturers to separately report the number of problems/incidents relating to steering, suspension, service brakes, parking brake, engine and engine cooling system, fuel system integrity, power train, electrical system, lighting/horn/alarms, visual systems, climate control system including defroster, airbags (including but not limited to frontal, side, head protection, and curtains that deploy in a crash), seat belts including anchorages and other related components, structure (other than latches), seats, engine speed control including throttle and cruise control, latches (door, hood, hatch), tires, wheels, trailer hitches and related attachments, engine exhaust systems, the number of incidents in which there was a fire, and, for incidents of death only, if another system or component is allegedly involved or if the system or component is not specified in the claim or notice.

For trailers, we propose to require manufacturers to separately report the number of problems/incidents relating to suspension, service brakes, parking brakes, electrical system, lighting/horns/alarms, climate control systems (including fuel systems in camping/travel trailers), structure (other than latches), latches, tires, wheels, trailer hitches and related attachments, the number of incidents in which there was a fire, and, for incidents of death only, if another system or component is allegedly involved or if the system or component is not specified in the claim or notice.

For motorcycles, we propose to require manufacturers to separately report the number of problems/incidents relating to steering, suspension, service brakes, engine and engine cooling system, fuel system integrity, powertrain, electrical system, lighting, structure, engine speed control (including throttle and cruise control), wheels, tires, the number of incidents in which there was a fire, and, for incidents of death only, if another system or component is allegedly involved or if the system or component is not specified in the claim or notice

ODI did not ask Volpe to analyze recalls of child restraint systems. Rather, ODI separately reviewed those recalls to identify the components whose failures have led to most of the recalls. Based on this review, which has been placed in the docket, we propose to require manufacturers to separately report the number of problems/incidents relating to the buckle and restraint harness, handle, shell, and base.

With respect to tires, we are proposing to follow the suggestions of the Rubber Manufacturers Association (RMA) in its comments. Fatality and injury reporting would include the information required of manufacturers of other products, and would also include the damage claimed, the vehicle manufacturer, the vehicle make, model and model year, the tire size, “the tire line,” and the DOT identification code for the tire. In addition, under RMA's suggestions shown in Attachment B to Comment NHTSA 2001-8677-15, warranty and property damage claim data would be provided for each applicable “tire size, tire line, SKU, serial code, Mfg. Plant, OE/Repl, OE Vehicle & Year.” (We specifically request RMA to provide their comments on appropriate definitions of the terms “bead,” “common green,” “tire line,” “sidewall,” “SKU,” and “serial code”.) For each year of production, the manufacturer would provide the number of tires produced under warranty and the total number of tires produced, the number of adjustments, the warranty adjustment rate, the number of property damage claims, and the property damage claims rate.

For property damage and warranty adjustments, we propose to require manufacturers to separately report the number of problems/incidents relating to tread, sidewall, and bead. For incidents involving death, if another component is allegedly involved, or if the component is not specified in the claim, the incident would still have to be reported.

Each tire manufacturer would also have to include information regarding “common green tires” with respect to each applicable tire model.

Consistent with the approach taken in connection with the Uniform Tire Quality Grading Standard, 49 CFR 575.104, we are not proposing to require reporting of warranty adjustment, property damage claims, and field reports with respect to tires for which total annual production of the same design and size is 15,000 or less. This would include retreaded tires as well, and may have the practical effect of excluding most, if not all, retreaded tire manufacturers from all reporting requirements except for reports of incidents involving death.

O. One-time Reporting of Information on Certain Information Received From January 1, 2000 to December 31, 2002, on 1994-2003 Model Year Vehicles, and on Child Restraints and Tires Manufactured on or After January 1, 1998

As early warning reporting begins, receipt by NHTSA of information from the first several reporting periods would not provide sufficient information to allow us to identify potential safety defects unless we could compare it to similar information about earlier periods. Without this historical information, we would not be able to identify potential defect trends or make comparisons. For example, data indicating that a particular component in a particular model/model year vehicle was the subject of six property damage claims in the third year after the model was introduced would be more relevant if we knew the claims history of similar models in recent years. To assure that the data are useful from the onset of reporting, we must “seed” our data base with historical data rather than merely letting it accumulate from the effective date of the final rule. Therefore, we are proposing that, no later than the date that a manufacturer must submit its first reports under the final rule, expected to be April 30, 2003, each manufacturer would also submit, on a one-time basis, corresponding reports reflecting the same information required by paragraphs (a) and (c) in each of proposed Sections 579.21

through 579.27, as applicable, providing information on the numbers of property damage claims, consumer complaints, warranty claims, and field reports that it received in each calendar quarter from January 1, 2000, to December 31, 2002, for each model and model year vehicle manufactured in model years 1994 through 2003, for child restraint systems manufactured on or after January 1, 1998, and for tires manufactured on or after January 1, 1998. Each report would identify the alleged system or component related to the claim, incident, etc., as would the reports for the current reporting period. We would not require such historical information on claims for deaths and injuries because we do not expect information of this type to indicate trends in potential defects to the same extent as warranty claims or property damage claims may.

We request comment on whether the time frame for the proposal is appropriate, and whether we should exclude historical data for deaths and injuries.

V. Information That We Would Not Require at This Time

The ANPRM requested comments on whether we should require reporting on a number of additional types of information that could help us to promptly identify possible defects. However, given the fact that a final rule must be published in less than eight months from the publication date of this notice, and in recognition of the potential burdens on manufacturers to develop information systems capable of retaining and reporting information to us, we have attempted to minimize these burdens to the extent possible. Moreover, we have concentrated our efforts on identifying the types of information noted in the statute or for which most manufacturers currently maintain records, such as customer complaints and warranty claim data.

A. Internal Investigations and Design Changes in Parts and Components

We received a number of comments on the questions we asked regarding manufacturers' internal investigations of possible safety-related defects. Manufacturers generally called attention to the semantic difficulties in determining when an investigation had been commenced and the alleged chilling effect a reporting requirement might have on such investigations. For the present, we have decided not to seek this type of information, but we may give further consideration to this issue in future rulemaking relating to early warning reporting.

We also asked for comments on requiring reporting of changes in the design or construction of parts. Many commenters felt that this would be burdensome due to the sheer number of changes, few of which relate to safety. We are deferring any consideration of requiring reports of parts changes.

B. Most Activities and Events in Foreign Countries

As noted above, at this time we are proposing to require manufacturers to report to us information on claims regarding foreign deaths (and on foreign campaigns under Section 30166(l)), involving substantially similar motor vehicles and equipment. We may decide to propose reporting of additional information regarding foreign activities and incidents in a future rulemaking.

VI. When Information Would Be Reported

Section 30166(m)(3)(A) and (B) state that the information covered by those paragraphs shall be reported “periodically or upon request” by NHTSA. Section 30166(m)(3)(C) states that the information covered by that paragraph shall be reported “in such manner as [NHTSA] establishes by regulation.” The ANPRM discussed several possibilities.

A. Periodically

The statute authorizes us to require periodic reporting of information related to the early warning of defects. In the ANPRM, we posited reporting on bases of “information-as-received,” monthly, and quarterly, depending upon our perception of the gravity of the information involved (e.g., we suggested the possibility that information about deaths allegedly caused by safety defects might justify a more frequent period of reporting than other types of information).

Commenters generally objected to reporting information “as received.” There was no objection to reporting on a quarterly basis, the same as is required for defect campaign reporting under 49 CFR 573.6.

On balance, we have concluded that, with respect to statistical reports, an “as received” or even monthly basis would impose too great a burden and would be unlikely to provide significant timeliness benefits. A quarterly reporting period would appear to be more appropriate. However, we request comments on whether we should require reporting six times per year. Finally, the burden upon manufacturers would be lessened if a common reporting date were adopted for the submission of all statistical early warning information that we will require “periodically.”

We are proposing that all information, as well as copies of relevant field reports, be submitted to us not later than the 30th day of the calendar month following the end of the reporting period. We believe that 30 days will be sufficient to compile this information, but we request comments on whether a shorter or longer period would be appropriate. We also propose that all communications that would be required by Section 579.5 (those presently required by 49 CFR 573.8 and those that would be covered by the early warning rule, i.e., communications relating to a customer satisfaction campaign, consumer advisory, recall, or other safety activity involving the repair or replacement of motor vehicles or equipment) be submitted to us monthly, within 5 working days of the end of the month, as is presently required for submissions under Section 573.8.

B. Upon NHTSA's Request

The TREAD Act also requires all manufacturers to provide information within the scope of the early warning provision when we request it. Such a requirement complements our pre-TREAD authority to request safety-related information as part of our investigations. Under this new authority, the information need not relate to an investigation; it need only be of such a nature that it may assist us in the identification of safety-related defects. Thus, we plan to follow up with manufacturers to obtain additional information if the information in the periodic reports suggests that there may be a possible problem. Such inquiries need not be characterized as formal defect investigations. Rather, they would be part of the agency's screening process under which it decides whether to open a defect investigation into particular matters.

VII. The Manner and Form in Which Information Would Be Reported

Section 30166(m)(4)(A) (iii) requires us to specify “the manner and form of reporting [early warning] information including in electronic form.”

Before the ANPRM, we had a limited amount of knowledge about information that manufacturers receive regarding certain types of incidents and activities in the United States, in what form it is received, and how, if at all, they route, code, maintain, and review the information. It seemed likely to us that the types of information to be reported would be kept in a variety of manufacturer computer systems and formats, at least for major and mid-sized

manufacturers. Some manufacturers might use different computer systems for different types of information, and some might not be computerized at all. We noted that to be able to use most of the early warning information efficiently, we would have to maintain it in computer systems that can read and incorporate the information into a standardized set of data fields, definitions, and codes.

In the ANPRM, we discussed the possibility of establishing levels below which manufacturers would not be required to report to us, citing the practice of the California Air Resources Board in establishing a “trigger” of a percentage of returned emissions system components. Upon reflection, we have concluded that determining appropriate triggers is not possible at this time. We lack a basis for establishing triggers, and it would be unduly complicated to determine a dividing line. Companies have different practices with respect to warranty programs, field reports, and other information items. The comments did not give us sufficient information to establish appropriate dividing lines. We believe that the solution we propose, the submission of the numbers of activities or incidents, will provide us with more usable information and obviate the need for a manufacturer to calculate rates based upon production figures that change from one reporting period to the next.

In the ANPRM, we discussed the possibility of using spreadsheets in a specified format with separate reports of the numbers of various categories of information (e.g., claims/notices of deaths and injuries, consumer complaints, warranty claims, field reports) along with other information (such as production volumes) by make, model, model year, and by component (we would specify which components). We would then be able to utilize a computer to identify aggregate numbers, rates (using production data which would be submitted), or unusual trends in each of these categories. This would obviate the need for manufacturers to provide us with their warranty or claims codes or to make significant revisions to their current coding procedures.

NHTSA is considering several alternative methods for manufacturers' to submit their periodic reports. As described elsewhere, aggregate data would be required from some manufacturers. These data would be formatted in either a Microsoft Excel spreadsheet, or in a form readily importable into an Excel spreadsheet, using the then-current version of Excel. NHTSA would establish a link on its web site to a data repository suitable for containing these data. Manufacturers would be able to use that link to “push” their file to the NHTSA site. Upon receipt of the data, an acknowledgement would be returned to the submitter, noting the date and time of the submission.

For data files smaller than the size limit of the DOT Internet e-mail server, currently set at 5 MB [megabyte], manufacturers could submit their data as an attachment to an e-mail message. NHTSA would establish an e-mail address to receive these submissions. The e-mail system would provide a return receipt. There is, however, increased risk that this method would not result in the data actually arriving at the appropriate office in NHTSA, since e-mail servers are often unreliable in handling of large attachments, both within DOT and, possibly, within the manufacturers' own systems. We believe that the preferred method, based on ease of use and reliability, would be the web site link described above.

NHTSA would also accept the data on a CD-ROM, mailed to the Office of Defects Investigation via certified mail with the postal service return receipt.

For small manufacturers, which only need to submit minimal amounts of data, we are considering establishing an interactive form on our web site that could be filled out by manual data entry by the submitter. It is anticipated that this method will require completing a form for each make, model, and model year of a product that was involved in a fatal incident.

Paper documents, computer printouts, or similar non-electronic submissions of the required aggregate data would not be acceptable.

With respect to copies of communications submitted under proposed Section 579.5 and copies of manufacturer and fleet field reports, we would prefer receiving the documents in electronic form using any state of the art graphic compression protocol available, through any of the first three methods described above. However, we woul

This text is long and has been trimmed here. Open the source document for the complete record.