Auto Dealers, Trucking Firms Poised for Victory in Highway Bill

  • Dealers win exemption from rules on renting cars with defects
  • Trucking firms get carve-outs from rest rules, weight limits

It was supposed to be Congress’s response to a historic string of auto safety lapses that rocked the industry.

Instead, lawmakers are finalizing a highway bill that would permit teenagers to drive commercial trucks and buses across state lines, let dealers sell used cars with outstanding safety recalls and ease rules on how much rest truckers must get.

Dozens of industry-friendly provisions are being decried by consumer groups as House and Senate negotiators will meet starting Wednesday to reconcile different versions of a bill that will set national safety policy for the next six years. Current funding expires Nov. 20; a measure the House passed Monday would extend that two weeks.

“For 25 years, the highway bill has been a success story, saving tens of thousands of lives,” said Jackie Gillan, president of Advocates for Highway and Auto Safety, a Washington consumer group. “This year’s bill drives safety off a cliff.”

Last year’s General Motors Co. ignition-switch fiasco helped push the total number of recalls in the U.S. to 64 million cars, more than double the previous record. Then Honda Motor Co. paid $70 million for failing to properly report death, injury and warranty data to U.S. regulators. This month, Takata Corp., the maker of faulty airbags linked to seven deaths and 100 injuries in the U.S., agreed to a civil penalty that could reach $200 million, an all-time-high. That was the third time this year a misbehaving company paid a record-breaking fine to auto-safety regulators. Trucking fatalities are also increasing.

Industry Exemptions

Yet the House voted to pare back the vehicle-safety budget for the National Highway Traffic Safety Administration and carve out exemptions to trucker rest regulations. The Senate voted to hide truck and bus company safety scores from the public. More significantly for safety advocates, neither chamber of Congress added criminal penalties for auto executives that knowingly violate safety rules.

The Senate -- though not House -- version of the bill would for the first time ban the rental of cars with safety defects. Auto dealers, however, successfully argued that loaner cars, such as those given to consumers while their vehicles are in the shop, should be treated differently than rental cars.

Consumer groups and the Obama administration pushed Congress to go even further, to ban the sale of used cars with open safety recalls. Neither the Senate nor the House included a used-car ban.

Dealer Pushback

The National Automobile Dealers Association argued in congressional testimony and letters to lawmakers that cars with safety defects aren’t a public threat because only about 9 percent of recalls issued by automakers or NHTSA are accompanied by stop-drive orders. Most routine recalls, the group said, allow owners to continue driving affected vehicles while automakers line up parts and schedule repairs.

“Dealers agree that all safety defects need to be repaired, but not all safety defects present an immediate danger to drivers,” NADA spokesman Jared Allen said in an interview. “There isn’t a dealer out there that would sell or loan a vehicle they believed to be unsafe to drive.”

Most other efforts to beef up NHTSA to help prevent future safety crises like the failure to detect the GM ignition-switch defect or the record-breaking Takata air-bag recalls were left out of the bill.

NHTSA Budget

In fact, NHTSA’s funding was targeted by the House bill. It proposes to cut the agency’s budget for vehicle safety by $15 million in each of the next six years compared to the Senate version, which matched the Obama administration request.

Both versions of the highway bill make increased NHTSA funding contingent on reforms recommended by the Transportation Department’s inspector general.

Lawmakers have other mandates for the agency in the legislation. They want NHTSA to outline every Dec. 1 any planned regulations, guidelines or changes to its policy priorities, make automakers responsible for covering defect repairs for 15 years from the current 10 years, and force automakers to retain records for 10 years instead of 5 years.

“I’m pleased that we were able to achieve these important reforms, but we have a lot more road to cover,” House Energy and Commerce Committee Chairman Fred Upton, a Michigan Republican, said in a Nov. 5 statement. His committee was responsible for the auto safety provisions in the highway bill.

Criminal Penalties?

Safety groups wanted criminal penalties for auto executives who knowingly withhold information about defects, much higher fines for auto companies that violate safety laws.

The bill increases the maximum fine for a single violation from $35 million to $105 million, short of the $300 million the Obama administration recommended. The Senate Commerce Committee voted against amendments to add criminal penalties.

“No one wants to risk going to jail for their job,” said Laura Christian, mother of a woman killed in a crash involving a defective GM ignition switch, in an interview. “The bill is pro-auto, not pro-consumer. The auto industry’s grip on Congress has to end.”

Safety rules have helped the U.S. reduce traffic fatalities by nearly 25 percent over the past decade, said Wade Newton, spokesman for the Alliance of Automobile Manufacturers. The fatality rate per per 100 million miles of travel is half what it was in 1990, he said.

“We are living in the safest period in motor vehicle history,” Newton said.

Big-Rig Favors

Trucking companies are also in line to receive a long list of industry-favored changes to the law under the highway bill.

For the first time, drivers under the age of 21 may be permitted to drive big-rig trucks across state lines. They will also be permitted to drive buses carrying passengers. These changes are expected to benefit trucking companies struggling to find enough drivers to fill jobs.

The trucking industry is attempting to do what the country has done with 16- and 17-year-old motorists in creating a graduated licensing system, said Dave Osiecki, executive vice president and chief of national advocacy at the American Trucking Associations. The 18-year-old or 19-year-old drivers -- the House and Senate bill differ on the exact age -- would get experience with big rigs under controlled conditions. Forty-eight states already permit 18-year-olds to drive trucks within state borders, he said.

Concrete, Logging

Numerous segments of the trucking industry got special exemptions from safety rules in the legislation. Ready-mix concrete delivery drivers operating within 100 miles of their bases won’t have to comply with federal rest requirements or take breaks. States with extra rest breaks will be preempted by federal law. Logging trucks in Wisconsin and Minnesota will be able to exceed weight limits on certain Interstate highways. And drivers transporting as much as 1,000 gallons of fuel won’t need HazMat certifications as long as they’re working in agriculture.

“One-size-fits-all regulations don’t really work for this industry,” Osiecki said. “It’s a challenge for the government.”

Safety groups released a public poll Tuesday that underscores how unpopular policies written into the highway bill are with the U.S. public: 84 percent of Americans support criminal liability for auto executives; 86 percent support the ban on selling used cars with safety defects; and 73 percent oppose teen truck drivers. 

“By a margin of six to one, people want safer roads, safer cars and safer trucks,” said Senator Edward Markey, a Massachusetts Democrat. “These bills and the provisions in them are just plain wrong.”

For Joan Claybrook, a longtime safety advocate who has helped craft highway bills since the 1980s, said Congress is missing its chance to make needed fixes to the law following the spate of corporate scandals that has led to record numbers of vehicle recalls.

“Instead of decisive action to improve safety, we’re being given a steady stream of corporate loopholes,” Claybrook said.

The bill is H.R. 22.

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