a butzel long presentation the tread act: “early warning reporting” and what it means to you!...

59
A Butzel Long Presentation The TREAD Act: The TREAD Act: “Early Warning “Early Warning Reporting” Reporting” and What it Means to and What it Means to YOU! YOU! September 10, 2002 September 10, 2002 Seoul, South Korea Seoul, South Korea Part III Part III

Upload: raymond-dixon

Post on 27-Dec-2015

215 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

The TREAD Act:The TREAD Act: “Early Warning Reporting” “Early Warning Reporting” and What it Means to YOU! and What it Means to YOU!

September 10, 2002September 10, 2002Seoul, South KoreaSeoul, South Korea

Part IIIPart III

Page 2: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Page 3: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

TTransportationransportationRRecallecall

EEnhancement, nhancement, AAccountability, ccountability, And And DDocumentation Act ocumentation Act

(“(“TREADTREAD”)”)

Signed into law November 1, 2000Signed into law November 1, 2000

Not just tiresNot just tires

Page 4: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Purpose of PresentationPurpose of Presentation

Discuss the Latest Discuss the Latest

on the TREAD Act on the TREAD Act

““Early Warning Reporting” Early Warning Reporting”

and What it Means to YOU!and What it Means to YOU!

Page 5: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Butzel LongButzel Long

A Michigan Based Law FirmFull-Service Law Firm

Litigation (All)Litigation (All)Product LiabilityProduct LiabilityCommercial BusinessCommercial BusinessEmploymentEmploymentArbitrationArbitration

Transaction (All)Transaction (All)ImmigrationImmigrationCorporateCorporateInternational BusinessInternational BusinessLaborLabor

Page 6: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

LEX MUNDILEX MUNDI The World’s Leading The World’s Leading Association of Independent Association of Independent Law firmsLaw firms

• 158 member law firms around the globe

• Vehicle for members to extend their capabilities to serve client needs worldwide

• Lex Mundi Firm• Korea - Hwang Mok ParkHwang Mok Park

Page 7: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Overview of PresentationOverview of Presentation

““Early Warning” Reporting Requirements Early Warning” Reporting Requirements and Developments Since April 9, 2002 and Developments Since April 9, 2002 PresentationPresentation

– Who needs to report?Who needs to report?

– What to report?What to report?

– When to report?When to report?

How Korean Companies Should PrepareHow Korean Companies Should Prepare

Questions and AnswersQuestions and Answers

Page 8: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

The Arrival Of “TREAD”The Arrival Of “TREAD”

International ScopeInternational Scope

MoreMore than just OEMs than just OEMs

have duty to reporthave duty to report

CoordinationCoordination

Record-keepingRecord-keeping

ReportingReporting

Page 9: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

TTransportationransportationRRecallecall

EEnhancement, nhancement, AAccountability, ccountability, And And DDocumentation Act ocumentation Act

(“(“TREADTREAD”)”)

Signed into law on November 1, 2000Signed into law on November 1, 2000

““Early Warning” reporting is here!Early Warning” reporting is here!

Page 10: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

TREADTREAD: “Early Warning” : “Early Warning” Rulemaking ProcessRulemaking Process

Congressional Congressional Legislation does not Legislation does not define details or define details or substance of reportingsubstance of reporting

Rulemaking delegated Rulemaking delegated to NHTSA Administrator to NHTSA Administrator to provide details of to provide details of what to reportwhat to report

Page 11: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

““Early Warning” HistoryEarly Warning” History

TREAD Act signed into law TREAD Act signed into law November 1, 2000November 1, 2000

NHTSA issues ANPRMNHTSA issues ANPRM January 22, 2001January 22, 2001

KITA Presentation IKITA Presentation I May 22, 2001May 22, 2001

NHTSA issues NPRMNHTSA issues NPRM December 21, 2001December 21, 2001

KITA Presentation IIKITA Presentation II April 9, 2002April 9, 2002

Final rule statutory deadline Final rule statutory deadline June 30, 2002June 30, 2002

NHTSA issues final rule NHTSA issues final rule July 3, 2002July 3, 2002

Effective date of final ruleEffective date of final rule August 9, 2002August 9, 2002

KITA Presentation IIIKITA Presentation III September 10, 2002September 10, 2002

First reporting period begins First reporting period begins April 1, 2003April 1, 2003

Page 12: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Purpose of TREAD Act Purpose of TREAD Act “Early Warning”“Early Warning”

TREAD requires an elaborate system of TREAD requires an elaborate system of “Early Warning” reporting“Early Warning” reporting

Legislative Intent:Legislative Intent: To develop an To develop an efficient means of identifying safety efficient means of identifying safety related defects without imposing related defects without imposing unreasonable burdens on the industry.unreasonable burdens on the industry.

Page 13: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Purpose of TREAD Act Purpose of TREAD Act “Early Warning”“Early Warning”

""Under this rule, motor vehicle and motor Under this rule, motor vehicle and motor vehicle equipment manufacturers will be vehicle equipment manufacturers will be required to report information that will assist required to report information that will assist NHTSA in promptly identifying defects related NHTSA in promptly identifying defects related to motor vehicle safety." to motor vehicle safety."

– – Dr. Jeffrey Runge, NHTSA AdministratorDr. Jeffrey Runge, NHTSA Administrator

Page 14: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

The Focus Of TREADThe Focus Of TREAD

Reporting requirementsReporting requirements

Legislative and regulatory follow-upLegislative and regulatory follow-up

Civil and criminal penaltiesCivil and criminal penalties

Page 15: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Key IssuesKey Issues

Who needs to report?Who needs to report?

What to report?What to report?

When to report?When to report?

Page 16: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

CurrentCurrentReporting RequirementsReporting Requirements

Overseas ExperienceOverseas Experience Regarding motor vehicles or motor vehicle Regarding motor vehicles or motor vehicle

equipment identical or substantially similar to a equipment identical or substantially similar to a vehicle or vehicle equipment sold in the U.S., vehicle or vehicle equipment sold in the U.S., the manufacturer must report:the manufacturer must report:

(1) a decision by a foreign government to conduct a (1) a decision by a foreign government to conduct a safety recall or safety campaign; andsafety recall or safety campaign; and

(2) a determination by the U.S. manufacturer to (2) a determination by the U.S. manufacturer to conduct a safety recall or safety campaign in a conduct a safety recall or safety campaign in a foreign countryforeign country

Page 17: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

““Early Warning Reporting”Early Warning Reporting”

TREAD requires an elaborate matrix of “Early TREAD requires an elaborate matrix of “Early Warning Reporting”Warning Reporting”

Information to be reported includes:Information to be reported includes:– Warranty and claims dataWarranty and claims data– Incidents involving serious injury or death alleged or Incidents involving serious injury or death alleged or

proven to be caused by vehicle or equipment defectsproven to be caused by vehicle or equipment defects– Other data that may assist in identifying safety-Other data that may assist in identifying safety-

related defectsrelated defects

Page 18: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Who Must Report Under Who Must Report Under “Early Warning?”“Early Warning?”

• AllAll manufacturers of motor vehicles manufacturers of motor vehicles and and

motor vehicle equipmentmotor vehicle equipment are within the are within the scope of the “Early Warning” reporting scope of the “Early Warning” reporting requirementsrequirements

U.S. vehicles and equipment andU.S. vehicles and equipment and

““Substantially similar” foreign vehicles and Substantially similar” foreign vehicles and equipmentequipment

Page 19: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Final RuleFinal Rule

Divide manufacturers Divide manufacturers into 2 groupsinto 2 groups

Different reporting Different reporting requirementsrequirements

Page 20: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Division Of Manufacturers Division Of Manufacturers Into Two GroupsInto Two Groups

Group 1:Group 1: Manufacturers of motor vehicles who produce, Manufacturers of motor vehicles who produce,

import, offer for sale or sell in the U.S. 500 or more import, offer for sale or sell in the U.S. 500 or more of a particular vehicle category annuallyof a particular vehicle category annually– 4 categories of vehicles: 4 categories of vehicles:

light vehicleslight vehiclesmedium-heavy vehicles and buses medium-heavy vehicles and buses motorcycles motorcycles trailerstrailers

All manufacturers of child restraint systemsAll manufacturers of child restraint systems (CRS)(CRS)

All manufactures of tiresAll manufactures of tires

Page 21: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Group 2:Group 2:

Manufacturers of motor vehicles who Manufacturers of motor vehicles who produce, import, offer for sale or sell in the produce, import, offer for sale or sell in the U.S. 499 or less vehicles annuallyU.S. 499 or less vehicles annually

All manufacturers of original motor vehicle All manufacturers of original motor vehicle equipment and replacement equipment equipment and replacement equipment (other than CRS and tires)(other than CRS and tires)

Division Of Manufacturers Division Of Manufacturers Into Two GroupsInto Two Groups

Page 22: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Examples of Examples of Group 2 ManufacturersGroup 2 Manufacturers

A steering wheel A steering wheel

assembly may include:assembly may include: – 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 considered a manufacturer of motor vehicle equipment.

Page 23: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Different Reporting Different Reporting RequirementsRequirements

Group 1:Group 1: Each claim or notice of death in the U.S. potentially Each claim or notice of death in the U.S. potentially

caused by a defectcaused by a defect Each claim of death in a foreign country potentially Each claim of death in a foreign country potentially

caused by a defect in a product caused by a defect in a product identicalidentical or or substantially similarsubstantially similar to a product offered for sale in to a product offered for sale in the U.S.the U.S.

Customer Satisfaction Campaigns, Consumer Customer Satisfaction Campaigns, Consumer advisories, recalls, or activities regarding advisories, recalls, or activities regarding repair/replacement (production of documents)repair/replacement (production of documents)

Each claim or notice of injury occurring in the U.S.Each claim or notice of injury occurring in the U.S.

Page 24: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Different Reporting Different Reporting RequirementsRequirements

Group 1Group 1 (continued):(continued):

Claims for property damage occurring in the Claims for property damage occurring in the U.S. (certain compounds; excluding CRS)U.S. (certain compounds; excluding CRS)

Aggregate number of consumer complaints and Aggregate number of consumer complaints and warranty claims occurring in the U.S. warranty claims occurring in the U.S.

Total number of field reports from employees, Total number of field reports from employees, dealers and fleets related to potential defects in dealers and fleets related to potential defects in the U.S. the U.S.

Production informationProduction information

Page 25: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Group 2:Group 2:

Each claim or notice of death in the U.S. Each claim or notice of death in the U.S. potentially caused by a defectpotentially caused by a defect

Each Each claim of deathclaim of death in a foreign country in a foreign country potentially caused by a defect in a product or potentially caused by a defect in a product or in in an identicalan identical or or substantially similarsubstantially similar product product offered for sale in the U.S.offered for sale in the U.S.

Different Reporting Different Reporting RequirementsRequirements

Page 26: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

““Substantially Similar”Substantially Similar”Defined (49 CFR 579.4 (d)(2))Defined (49 CFR 579.4 (d)(2))

Motor vehicle equipment that is sold or in Motor vehicle equipment that is sold or in use outside the U.S. and:use outside the U.S. and:

– Contains one or more components or systems Contains one or more components or systems that are the same as in the U.S.that are the same as in the U.S.

– Performs the same functionPerforms the same function

– Regardless of whether the part numbers are Regardless of whether the part numbers are identicalidentical

Page 27: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Is it “Substantially Similar?”Is it “Substantially Similar?”

Industry Question:Industry Question:““[I]f the only commonality is a single type of fastener [I]f the only commonality is a single type of fastener that neither failed nor contributed to the incident, are that neither failed nor contributed to the incident, are the components or equipment substantially similar?”the components or equipment substantially similar?”

NHTSA’s Answer:NHTSA’s Answer:““[T]he equipment incorporating the fasteners would [T]he equipment incorporating the fasteners would be substantially similar for early warning reporting be substantially similar for early warning reporting unlessunless the claim specifically identified a non- the claim specifically identified a non-common component as the source of the failure.” common component as the source of the failure.”

Page 28: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Example of Claim that Example of Claim that Must be ReportedMust be Reported

Please Remember…Please Remember…

The following slide is just a hypotheticalThe following slide is just a hypothetical

Every case is uniqueEvery case is unique

The statutory intent is very broadThe statutory intent is very broad

Consider seeking legal counselConsider seeking legal counsel

Page 29: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Example of Claim that Example of Claim that Must be ReportedMust be Reported

Question:Question:

Must a Korean component manufacturer Must a Korean component manufacturer report under “Early Warning” if it receives report under “Early Warning” if it receives notice of a notice of a deathdeath in a in a written requestwritten request for relieffor relief based on allegations of the based on allegations of the failure of a failure of a componentcomponent??

Answer:Answer:

YES!YES! The term “claim” is defined very The term “claim” is defined very broadly.broadly.

Page 30: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Definition of “Claim”Definition of “Claim”

A written request or written demand for written request or written demand for reliefrelief, , 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 originating in or from a motor vehicle or a substance that leaked from a motor vehicle.

Page 31: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Definition of “Claim”Definition of “Claim”

Claim includes, but is not limited to, a demanddemand in the absence of a lawsuitin the absence of a lawsuit, a , a complaint initiating a lawsuitcomplaint initiating a lawsuit, an , an assertion assertion or notice of litigationor notice of litigation, a , a settlementsettlement, , covenant not to sue or release of liability covenant not to sue or release of liability in the absence of a written demandin the absence of a written demand, and a , and a subrogation requestsubrogation request. .

Page 32: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Definition of “Claim”Definition of “Claim”

A claim exists regardless of any denial or regardless of any denial or refusal to pay itrefusal 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(s) stating a claim.

Page 33: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Definition of “Claim”Definition of “Claim”

Claim does not includeClaim does not include demands related to demands related to asbestos exposure, to emissions of volatile asbestos exposure, to emissions of volatile organic compounds from vehicle interiors, or organic compounds from vehicle interiors, or to end-of-life disposal of vehicles, parts or to end-of-life disposal of vehicles, parts or components of vehicles, equipment, or parts components of vehicles, equipment, or parts or components of equipment. or components of equipment.

Page 34: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Example of Claim that Example of Claim that Must be ReportedMust be Reported

Question:Question:

what information must a Korean what information must a Korean component manufacturer report component manufacturer report under “Early Warning?”under “Early Warning?”

Page 35: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Information that Information that Must Be ReportedMust Be Reported

Information about deaths to be reported Information about deaths to be reported for each incident: for each incident: – make, model, and model year of the vehicle or make, model, and model year of the vehicle or

equipmentequipment

– date of the incidentdate of the incident

– number of deaths and injuries that occurred number of deaths and injuries that occurred

– name of the State in the United States or the foreign name of the State in the United States or the foreign country in which the incident occurredcountry in which the incident occurred

– identification of each component or system that identification of each component or system that allegedly contributed to the incident or the death allegedly contributed to the incident or the death reportedreported

– the VIN of the vehicle (or the TIN of the tire, as the VIN of the vehicle (or the TIN of the tire, as applicable)applicable)

Page 36: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

NHTSA “Early Warning” TemplatesNHTSA “Early Warning” TemplatesGeneral Reporting InformationGeneral Reporting Information

InfoName Info Value

ManufacturerName  

ReportQuarter  

ReportYear  

ReportName MiscVehicleAndEquip

ReportVersion  

ReportGeneratedDate  

ReportContactName  

ReportContactEmail

ReportContactPhone  

NHTSATemplateRevisionNo 1.01

http://www.nhtsa.dot.gov/cars/rules/EWR/MiscEquipmentVehicles.xls

Page 37: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

NHTSA “Early Warning” TemplatesNHTSA “Early Warning” TemplatesDeath Reporting ONLY!Death Reporting ONLY!

http://www.nhtsa.dot.gov/cars/rules/EWR/MiscEquipmentVehicles.xls

ID

MAKe

MODEl

MODELYEAR VIN

INCI

DENTDATE

NUMDEATHS

NUMI

NJURI

ES

STATEORFCNTRy

SYSORCOMPA

SYSORCOMPB

SYSORCOMPC

SYSORCOMPD

SYSORCOMPE

                                         

                                         

                                         

                                         

                                         

                                         

Page 38: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Record KeepingRecord Keeping

Record retention requirements expanded Record retention requirements expanded

Equipment manufacturers to retain records Equipment manufacturers to retain records related to incidents referred to in related to incidents referred to in claims claims and notices involving deaths for 5 yearsand notices involving deaths for 5 years

Applies to records in your possession, Applies to records in your possession, generated or acquired on or after August 9, generated or acquired on or after August 9, 20022002

Page 39: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Documents Must Be SubmittedDocuments Must Be Submitted49 CFR 579.5 (former 573.8)49 CFR 579.5 (former 573.8)

Equipment manufacturers must furnish to Equipment manufacturers must furnish to NHTSA copies of:NHTSA copies of:

– All notices, bulletins and other tangible All notices, bulletins and other tangible communications (communications (i.ei.e., non-verbal) ., non-verbal)

– Sent to Sent to more than onemore than one manufacturer, manufacturer, distributor, dealer or purchaser distributor, dealer or purchaser

Page 40: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Documents Must Be SubmittedDocuments Must Be Submitted49 CFR 579.5 (former 573.8)49 CFR 579.5 (former 573.8)

Equipment manufacturers must furnish to NHTSA Equipment manufacturers must furnish to NHTSA copies of any communication regarding any defect copies of any communication regarding any defect in its equipment including: in its equipment including: –any failure or malfunction beyond normal deterioration in any failure or malfunction beyond normal deterioration in

use, or use, or

–any failure of performance, or any failure of performance, or

–any flaw or unintended deviation from design any flaw or unintended deviation from design specificationsspecifications

Whether or not such defect is safety relatedWhether or not such defect is safety related

Page 41: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Documents Must Be SubmittedDocuments Must Be Submitted49 CFR 579.5 (former 573.8)49 CFR 579.5 (former 573.8)

Reporting requirements are not avoided by Reporting requirements are not avoided by making common communications to customers in making common communications to customers in separate monthsseparate months

Timing for the report is triggered by the issuance Timing for the report is triggered by the issuance of the communication to a second customerof the communication to a second customer

Law Department should be consulted in all cases Law Department should be consulted in all cases in advance of issuing bulletins or other tangible in advance of issuing bulletins or other tangible communications to multiple customerscommunications to multiple customers

Page 42: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Summary Of Summary Of Reporting RequirementsReporting Requirements

Information that must be reported Large Volume Manufacturers of Motor Vehicles

Manufacturers of Child Safety Restraints

Manufacturers of Tires

Small Volume Manufacturers of Motor Vehicles

Manufacturers of Motor Vehicle Equipment

Death identified in a "claim" YES YES YES YES YES

Death identified in a "notice" YES YES YES YES YES

Death occurring in foreign country identified in a "claim"

YES YES YES YES YES

Injury identified in a "claim" YES YES YES NO NO

Injury identified in a "notice" YES YES YES NO NO

Property damage identified in a claim YES NO YES NO NO

Customer complaintsYES

Combined with Warranty Claims

NO NO NO

Warranty claimsYES YES

Adjustments for Tire Mfrs

NO NO

Field reports YES YES NO NO NO

Production YES YES YES NO NO

Documents sent or made available to more than one dealer, distributor, owner, purchaser, lessor or lessee with respect to customer satisfaction campaigns, consumer advisories, recalls, or other

YES YES YES YES YES

One time historical data report YES YES YES NO NO

Page 43: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Procedural RequirementsProcedural Requirements

How And When How And When

““Early Warning” InformationEarly Warning” Information

Must Be ReportedMust Be Reported

Page 44: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

How and When “Early Warning” How and When “Early Warning” Information Must Be ReportedInformation Must Be Reported

Electronic submission in specified formatElectronic submission in specified format

4 reporting periods each calendar year4 reporting periods each calendar year

Documents must be submitted no later Documents must be submitted no later than 30 days after the end of the calendar than 30 days after the end of the calendar quarterquarter

First report covers second quarter of 2003First report covers second quarter of 2003

Page 45: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

How and When “Early Warning” How and When “Early Warning” Information Must Be ReportedInformation Must Be Reported

• One-time requirementOne-time requirement (currently (currently Group 1Group 1 only): only):

– By quarter, warranty claims, By quarter, warranty claims, adjustments and field reports for three-adjustments and field reports for three-year period April 1, 2000 through March year period April 1, 2000 through March 31, 200331, 2003

– Due September 30, 2003Due September 30, 2003

Page 46: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Important “Early Warning” DatesImportant “Early Warning” DatesTREAD Act signed into law November 1, 2000

NHTSA issues ANPRM January 22, 2001

NHTSA issues NPRM December 21, 2002

Statutory deadline for final rule June 30, 2002

Final rule issued July 3, 2002

Final rule published in Federal Register July 10, 2002

Effective date of final rule August 9, 2002

Petitions for Reconsideration due August 26, 2002

First reporting period begins April 1, 2003

Customer satisfaction documents due May 7, 2003

Customer satisfaction documents due June 6, 2003

First reporting period ends June 30, 2003

Second reporting period begins July 1, 2003

Customer satisfaction documents due July 7, 2003

Customer satisfaction documents due August 7, 2003

First reports due September 1, 2003

Customer satisfaction documents due September 5, 2003

One-time historic report due September 30,2003

Second reporting period ends September 30, 2003

Third reporting period begins October 1, 2003

Customer satisfaction documents due October 7, 2003

Customer satisfaction documents due November 7, 2003

Second reports due December 1, 2003

Customer satisfaction documents due December 5, 2003

Third reporting period ends December 31, 2003

Courtesy of Butzel Long, P.C.

Page 47: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Important “Early Warning” DatesImportant “Early Warning” DatesFirst quarter reporting begins January 1, 2004

Customer satisfaction documents due January 7, 2004

Customer satisfaction documents due February 6, 2004

Third 2003 reports due March 1, 2004

Customer satisfaction documents due March 5, 2004

First quarter reporting ends March 30, 2004

Second quarter reporting begins April 1, 2004

Customer satisfaction documents due April 7, 2004

First quarter reporting due April 30, 2004

Customer satisfaction documents due May 7, 2004

Customer satisfaction documents due June 7, 2004

Second quarter reporting ends June 30, 2004

Third quarter reporting begins July 1, 2004

Customer satisfaction documents due July 7, 2004

Second quarter reports due July 31, 2004

Customer satisfaction documents due August 6, 2004

Customer satisfaction documents due September 7, 2004

Third quarter reporting ends September 30, 2004

Fourth quarter reporting begins October 1, 2004

Customer satisfaction documents due October 7, 2004

Third quarter reports due November 1, 2004

Customer satisfaction documents due November 5, 2004

Customer satisfaction documents due December 7, 2004

Fourth quarter reporting ends December 31, 2004

Courtesy of Butzel Long, P.C.

Page 48: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Other Important Tread ProvisionsOther Important Tread Provisions

CIVILCIVILandand

CRIMINALCRIMINAL

PENALTIESPENALTIES

Page 49: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Civil and Criminal PenaltiesCivil and Criminal Penalties

TREAD expands current TREAD expands current

penalty provisions:penalty provisions:

– Stiffer fines and penalties for Stiffer fines and penalties for corporate failure to comply with the corporate failure to comply with the ActAct

– Provides for criminal liability for Provides for criminal liability for falsifying or withholding informationfalsifying or withholding information

Page 50: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

TREAD Provides TREAD Provides A “Safe Harbor” To Encourage A “Safe Harbor” To Encourage Reporting and “Whistleblowers”Reporting and “Whistleblowers”

No criminal penalties if:No criminal penalties if:

– The violator at the time did not know that The violator at the time did not know that the violation would result in an accident the violation would result in an accident causing death or serious bodily injurycausing death or serious bodily injury

– The violator corrects any improper The violator corrects any improper reports or failure to report within a reports or failure to report within a reasonable timereasonable time

Page 51: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

TREAD ACTTREAD ACT

““Early Warning Reporting” Early Warning Reporting”

is HERE!is HERE!

NOW WHAT SHOULD WE DO?NOW WHAT SHOULD WE DO?

Page 52: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Impact On Foreign Manufactures of Impact On Foreign Manufactures of Motor Vehicles and EquipmentMotor Vehicles and Equipment

TREAD Act has extraterritorial effectTREAD Act has extraterritorial effect

Must provide same information as U.S. Must provide same information as U.S. manufacturers but only with respect to:manufacturers but only with respect to:– Vehicles and equipment sold, and offered for Vehicles and equipment sold, and offered for

sale or lease, in the U.S.sale or lease, in the U.S.

– Incidents involving death outside of the U.S. Incidents involving death outside of the U.S. that involve “identical or substantially similar” that involve “identical or substantially similar” vehicles or equipmentvehicles or equipment

Page 53: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Impact On Foreign Manufactures of Impact On Foreign Manufactures of Motor Vehicles and EquipmentMotor Vehicles and Equipment

Either the fabricating manufacturer or Either the fabricating manufacturer or importer must file required reportimporter must file required report

Bottom-lineBottom-line - Requires coordination among - Requires coordination among equipment and vehicle manufacturers, and equipment and vehicle manufacturers, and implementation of systems to electronically implementation of systems to electronically track required data (e.g. component track required data (e.g. component manufacturers “small manufacturers” will manufacturers “small manufacturers” will still need to “report” to OEMS)still need to “report” to OEMS)

Page 54: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

How Korean Companies Should How Korean Companies Should Prepare ThemselvesPrepare Themselves

Develop a centralized internal structure and Develop a centralized internal structure and procedure for identifying and evaluating procedure for identifying and evaluating circumstances that may require reporting to circumstances that may require reporting to NHTSANHTSA

Implement policies and procedures for Implement policies and procedures for identifying and collecting the required data identifying and collecting the required data and documentsand documents

At a Minimum. . .At a Minimum. . .

Page 55: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

How Korean Companies Should How Korean Companies Should Prepare ThemselvesPrepare Themselves

Designate “Early Warning” official(s) who will Designate “Early Warning” official(s) who will be responsible for the development and be responsible for the development and implementation of new policesimplementation of new polices

Train workers to ensure compliance with Train workers to ensure compliance with data retention and document collection, and data retention and document collection, and the submission of information to the the submission of information to the responsible in-house personresponsible in-house person

At a Minimum. . .At a Minimum. . .

Page 56: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

How Korean Companies Should How Korean Companies Should Prepare ThemselvesPrepare Themselves

Develop and implement software programs and/or Develop and implement software programs and/or databases to track “Early Warning” informationdatabases to track “Early Warning” information

Carefully monitor future modifications to TREAD Act Carefully monitor future modifications to TREAD Act legislation and rules at legislation and rules at http://www.access.gpo.gov/nara/cfr/index.htmlhttp://www.access.gpo.gov/nara/cfr/index.html

Review Butzel Long Client Alerts (see Review Butzel Long Client Alerts (see www.butzel.comwww.butzel.com) ) and obtain “Early Warning Reporting” pamphletand obtain “Early Warning Reporting” pamphlet

At a Minimum. . .At a Minimum. . .

Page 57: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

If you have any questions. . .If you have any questions. . .

Daniel P. Malone, Butzel LongDaniel P. Malone, Butzel Long150 West Jefferson, 150 West Jefferson,

Suite 900, Detroit, MI 48226Suite 900, Detroit, MI 48226

(313) 225-7032(313) 225-7032

[email protected]@butzel.com

Contact Information:Contact Information:

Page 58: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Page 59: A Butzel Long Presentation The TREAD Act: “Early Warning Reporting” and What it Means to YOU! September 10, 2002 Seoul, South Korea Part III

A Butzel Long Presentation

Questions and DiscussionQuestions and Discussion