Draft Safety Legislation: $3-$9 New Car Sale Fee, Unlimited Defect Fines, Mandatory Pedal Distances, More

The Detroit Free Press got its hands on draft auto safety legislation drawn up by Senators Waxman and Rockefeller, and aimed at preventing another Toyota recall-style scandal. In addition to mandating brake override systems on all cars sold in the US, The Freep says the bill would require that

[NHTSA] come up with rules for space between the brake and accelerator pedals, gear shift designs and stop-start systems – all problems highlighted by the Toyota probe. Automakers would be required to build vehicles with event data recorders that could be easily read, a step Detroit automakers made several years ago but that Toyota and other foreign brands have resisted.

Despite the Freep’s attempt at making the bill sound like it’s only going to affect Toyota and other non-Detroit automakers, there is plenty in the proposed legislation that could hurt any automaker.

For one thing, the proposal would make delays to recalls a potential firm-killer. NHTSA had told Toyota that its 2.3m unit recall delay would have earned it a fine of $13.8b had there not been a cap at $16.4m, the amount Toyota paid. Not only would this new legislation remove that cap, but it would also raise the per-vehicle fine from $6,000 to $25,000. Plus,

NHTSA also could fine manufacturers for withholding information from the agency, with fines of $50,000 per day up to $250 million

Under this system, the Toyota recall delay could have earned Toyota a fine of $57.5b… or more. It’s too bad Senators Waxman and Rockefeller hadn’t thought of this earlier, or Toyota could have just paid off most of the cost of GM’s bailout. As it is, an American firm is just as likely as any other to be caught in the next safety scandal. And if this measure passes, the stakes will be high enough that the next big scandal could just put its perpetrator out of business.

But the hits just keep coming:

Under the version proposed by Waxman, the U.S. Department of Transportation would have the power to collect a per-vehicle fee to fund NHTSA of $3 per vehicle, rising to $9 in its third year. The fee could not replace NHTSA’s current vehicle safety budget.

And there’s more from The AP on Waxman’s version of the bill, which:

would require a U.S. auto executive to certify the accuracy of information submitted to NHTSA in response to a government investigation. Any executive who provided false information could face up to $250 million in fines.

Waxmans version would also:

allow NHTSA to order an immediate recall if it finds an “imminent hazard of death or serious injury.”

More details as they become available. Meanwhile, Waxman is said to be holding a hearing next week on the legislation.