Run A Car Company, Go To Jail

Bertel Schmitt
by Bertel Schmitt

Before the TREAD act came about in the year 2000, I had a PowerPoint chart showing the inside of a U.S. jail, along with inmates (I won’t show the image to avoid a discussion of racism). The headline was: “This is where your career can end.” It was for internal Volkswagen consumption only. Somehow, imprisonment never became law. This was then, this is now: If Washington lawmakers get their wish, managing a car company can imperil livelihood and freedom of the top managers.

A provision of the Motor Vehicle Safety Act pushed by Senate Commerce Committee Chairman John D. Rockefeller ( D., W.Va.) would require a company’s senior executive in the U.S. to sign off on all documents submitted to the National Highway Traffic Safety Administration as part of a defect investigation, says the Dow Jones Newswire ( via NASDAQ). “The executive would be fined up to $10 million in civil fines for submitting information that is deemed false or misleading. He or she would also face imprisonment of up to 12 months, beyond criminal penalties outlined in other laws.”

The Senate Commerce Committee approved the bill this month (at the same day those highly questionable 89 dead people were found in the NHTSA database). A vote of the full Senate is expected this summer.

A competing version, championed by House Energy and Commerce Committee Chairman Henry Waxman (D., Calif.), threatens company safety officials in the U.S. with loss of money and freedom. If the law will be passed, it will be highly unlikely that these posts will be filled. The Waxman bill cleared his committee and could reach the House floor in coming weeks.

The Alliance of Automobile Manufacturers, the industry’s main trade group, already cried foul and says the Rockefeller bill favors those expletive deleted foreigners. Why? The top U.S. official at domestic car companies is the CEO. At foreign auto makers, it’s some expendable underling. In other words: If GM messes up, Whitacre heads for the slammer. If Toyota NSFW’s up, it would be Jim Lentz going to the big house. The Alliance of Automobile Manufacturers favors the Waxmann version.

Still thinking of a career in the car business?


Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • M 1 M 1 on Jun 17, 2010

    Sounds like an excellent plan to strangle the little bit of life that remains of this country's heavy manufacturing capacity.

  • Mr Carpenter Mr Carpenter on Jun 17, 2010

    The whole idea behind a "limited liability company" as it is more correctly named in Canada and other English speaking nations, is to limit how much liability stockholders and executives will be under. In plain words, since some time in the early 19th century, a "corporation" becomes a virtual "person". Just think; without this, modern life as we know it, would be virtually impossible. Look at Studebaker (1852-1966 in transportation). Clem Studebaker could design and pretty well build a wheelbarrow or a conestoga wagon, all by himself. Think we could get one man shops to design, engineer, develop, test, and manufacture a 21st century automobile? How about a relatively simple thing like a light switch? An insurance policy? Do you think a one or two or five man shop could do that? As usual, the imbecilic powers that be have yet again stumbled across yet another way to erode the foundation of modern civilization with stupid ideas like the one espoused here by a politician who knows nothing about business and cares even less. Much like the rest of the know-nothings in Washington and virtually all capitals across the world.

  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
  • ToolGuy Ford is good at drifting all right... 😉
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