TREAD Act requirements for the Automotive Industry

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NHTSA & TREAD Act
The TREAD (Transportation Recall Enhancement Accountability Documentation) Act was passed by the NHTSA (National Highway Traffic Safety Administration) in order to generate increased efficiency in data reporting and to create better ties between the field reports and the manufacturing of vehicles and components. The overall goal of the NHTSA is to improve consumer safety by creating an early warning system to detect safety - related defects in automobiles. This is the largest piece of legislation to recently impact all vehicle manufacturers and many other auto industry suppliers. Data reporting processes and systems must be in compliance in time to deliver the first set of TREAD reports to NHTSA no later than December 1, 2003.

The future implications of the Transportation Recall Enhancement Accountability and Documentation (TREAD) Act are still unclear, but its impact cannot be underestimated. The December 1, 2003 'Early Warning Reporting' deadline for the TREAD Act is of critical importance to automotive manufacturers and suppliers. The automotive industry requires considerable resources in terms of financial, technology and human resources to deal with the requirements
of the Act, and the potential consequences for failure to prepare include civil and criminal penalties. The Act requires both domestic and foreign companies to report certain information (covered in the requirements section) to the NHTSA.

TREAD Act Reporting Requirements

Quarterly Early Warning Reporting
Measure
The Early Warning Reporting quarter was moved to July 1, 2003 - September 30, 2003, with reports for that quarter due in December 1, 2003. This was moved after the earlier announcement by NHTSA that its first Early Warning Reporting quarter would run from April 1, 2003 to June 30, 2003, and that manufacturers who had anything to report needed to file reports to NHTSA's ARTEMIS system no later than September 1, 2003.

• Group 1 Manufacturers - Vehicle manufacturers who sell or lease more than 500 vehicles in a category annually, and all manufacturers of tires and of child restraint systems - Group manufacturers must report information set forth in the sub-section that applies to their particular industry, and only have a three year Early Warning Report (EWR) due on December 31, 2003.
• Group 2 Manufacturers - Vehicle manufacturers who sell or lease less than 500 vehicles in a category annually, plus all manufacturers of vehicle equipment (original and replacement) other than tires and child restraint systems - Group 2 must report on the more limited information required, and need not submit an EWR quarterly report to indicate that it has nothing to report for that quarter
  • Group 1 and Group 2 manufacturers must obtain passwords and manufacturer IDs from NHTSA for purposes of EWR only, at least thirty days before its first EWR quarterly report is due.

Foreign Safety Recall and Campaign Reporting
Group 1 and Group 2 manufacturers both need to submit reports to NHTSA within five working days of when a manufacturer determines (or when a foreign government sends written notification to the manufacturer of its determination) to conduct a foreign safety recall or other foreign safety campaign of a vehicle or vehicle equipment that is identical to or substantially similar to what it sells in the United States.

Monthly reporting
Group 1 or Group 2 manufacturers must send a copy to NHTSA within five working days after the end of each month with regard to certain notices, bulletins, customer satisfaction campaigns, consumer advisories and other communications regarding any defect, repair, or replacement of a motor vehicle or motor vehicle equipment to more than one manufacturer in the United States.

The areas/details that the TREAD Act mandates for reporting include -

Field reports
Manufacturers must report, and in some cases provide hard copies of, the number of field reports they receive in regards to issues on components and systems in the United States that are faulty or have problems.

Manufacturers must report the number of field reports received during the reporting quarter for each make/model/model year combination offered for sale in United States. Unlike fatalities and injuries, it's not necessary to include any warranty claim and warranty adjustment that does not involve one of the identified system and components, roll-over or fire, and the report must provide;

• The make / model / model year combination.
• The system or component that allegedly contributed to the incident.
  • System and components must be coded by numeric codes specified in the rule.

Field reports/hard copies
Manufacturers must provide a hard copy of each field report (other than a dealer field report) that;

• Is generated in the United States.
• Is received by the manufacturer during the reporting quarter and is involved in one or more of the system and components identified in numeric codes specified in the rule for reporting fatalities (including roll-over and fire). If the field report does not involve one of the identified system and components, roll-over or fire, it is not reportable.

External communication
Expansion of the rule requiring monthly submission of a copy of any written communication sent to more than one manufacturer, dealer, distributor, lessee, lessor or purchaser related to a possible defect, whether or not safety-related. Expanded requirement now relates to "safety" communication also, whether related to the defect or not. This requirement covers external communication sent within the United States.

Fatality report
Manufacturer must report;

• A claim of a fatality in the United States received by the manufacturer.
• A notice of a fatality the United States received by the manufacturer, if the notice alleges that the fatality was caused by a possible defect in the manufacturer's vehicle or equipment.
• A claim of a fatality in a foreign country received by the manufacturer concerning a vehicle or item of equipment that is "substantially similar" to the vehicle or item of equipment offered for sale by that manufacturer in the United States.

The report must provide:

• The make, model, model year and VIN on the involved vehicle.
• The incident date.
• The number of deaths in the incident.
• The number of injuries (if any appeared in the U.S.).
• The state or foreign country where the incident occurred.
• The system or component that allegedly contributed to the incident.
  • System and components must be coded by numeric codes specified in the rule.
  • If a specific system or component was identified as contributing to the fatality, and is not one of the system and components covered by the codes in the rule, the report must code it as "other".
  • If no specific system or component was identified as contributing to the fatality, the report must code it as "none".
  • If multiple systems/components are alleged to have been involved, the manufacturer must report each of them, up to a maximum of five.
• Whether the incident involved fire and/or roll-over.

Injury report
A report on each injury, no matter how minor, during the reporting period identified in any of the following ways;

• A claim of an injury in the United States received by the manufacturer
• A notice of an injury in the United States received by the manufacturer, if the notice alleges that the injury was caused by possible defect in the manufacturer's vehicle or equipment.
• There's no requirement report on injuries occurring in foreign countries

Each injury report must provide:

• The make, model, model year and VIN of the involved vehicle.
• The incident date
• The number of injuries
• The state where the incident occurred
• Each system or component that allegedly contributed to the incident
  • System and components must be coded by numeric codes specified in the rule.
  • If a specific system or component was identified as contributing to the injury, and is not one of the system and components covered by the codes in the rule, the report must code it as "other".
  • If no specific system or component was identified as contributing to the injury, the report must code it as "none".
  • If multiple systems and components are alleged to have been involved, the manufacturer must report each of them, up to a maximum of five.
• Whether the incident involved fire or roll-over.

If an injury turns into a fatality, it does not have to be reported again. Do not have to report injuries caused by asbestos exposure or injuries caused by exposure to volatile or organic compounds. Manufacturing process not covered. Starts from the time it leaves the factory as a completed vehicle.

Production
Manufacturers must report the total number of vehicles, tires included, according to make, model, and model year.

Published documents
Manufacturers must report any document that was provided to more than one dealer, distributor, owner, purchaser, or lessee/lessor in the U.S. Such documents include those about customer satisfaction, campaigns, recalls, notices advisories, and vehicle replacements.

Death and Injury Reports
Manufacturers must report on the total number of deaths and injuries identified in claims against them. The reports must include all U.S. deaths and injuries and any foreign deaths, including incident codes. The reports must also specify if the information about the death or injury alleges or proves that the death was caused by a manufacturing defect.

Property damage
Manufacturers must report the number of claims for property damage that occurred in the US that are related to alleged problems with certain specified components and systems, regardless of the amount of such claims. They must report the number of property damage claims (a claim is a written request for relief ) received during the reporting quarter for each make/model/model year combination of vehicles offered for sale in the United States. Unlike fatalities and injuries, its not necessary to include any claims that do not involve one of the identified system and components, rollover or fire. Damage to the vehicle itself that is normally covered under warranty is not reportable i.e. an exhaust leak has damaged clothes (reportable) and mattress (non-reportable). The mattress would be reported under warranty claims and the report must provide -

• The make/model/model year combination
• The system or component that allegedly contributed to the incident
  • System and components must be coded by numeric codes specified in the rule

Consumer complaints
Manufacturers must report the number of consumer complaints they receive that are related to problems with certain specified components and systems that occurred in the US. They must report the number of consumer complaints received by the area of the company charged with dealing with those complaints during the reporting quarter for each make/model/model year combination offered for sale in the United States. These complaints must be coded by the same numeric codes specified in the role for use in reporting fatalities. Unlike fatalities and injuries, its not necessary to include any warranty claim and warranty adjustment that does not involve one of the identified system and components, roll-over or fire and the report must provide -

• The make/model/model year combination.
• The system or component that allegedly contributed to the incident up to a maximum of five.
  • System and components must be coded by numeric codes specified in the rule.

Warranty Claims Reports
Manufacturers must report the total number of warranty claims they receive in the U.S. in conjunction with specified components and systems, including all good will and extended warranty claims. They must report the number of warranty declines and warranty adjustments paid during the reporting quarter for each make/model/model year combination of vehicle offered for sale in the United States. Unlike fatalities and injuries, its not necessary to include any warranty claim and warranty adjustment that does not involve one of the identified system and components, roll-over or fire and the report must provide -

• The make/model/model year combination.
• The system or component that allegedly contributed to the incident up to a maximum of five.
  • System and components must be coded by numeric codes specified in the rule.

For the latest legislative information regarding the TREAD Act please visit the National Highway Traffic Safety Administration (NHTSA) website at www.nhtsa.dot.gov.

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