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?

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2 of 18 comments
  • 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.

  • Damon Thomas Adding to the POSITIVES... It's a pretty fun car to mod
  • GregLocock Two adjacent states in Australia have different attitudes to roadworthy inspections. In NSW they are annual. In Victoria they only occur at change of ownership. As you'd expect this leads to many people in Vic keeping their old car.So if the worrywarts are correct Victoria's roads would be full of beaten up cars and so have a high accident rate compared with NSW. Oh well, the stats don't agree.
  • Lorenzo In Massachusetts, they used to require an inspection every 6 months, checking your brake lights, turn signals, horn, and headlight alignment, for two bucks.Now I get an "inspection" every two years in California, and all they check is the smog. MAYBE they notice the tire tread, squeaky brakes, or steering when they drive it into the bay, but all they check is the smog equipment and tailpipe emissions.For all they would know, the headlights, horn, and turn signals might not work, and the car has a "speed wobble" at 45 mph. AFAIK, they don't even check EVs.
  • Not Tire shop mechanic tugging on my wheel after I complained of grinding noise didn’t catch that the ball joint was failing. Subsequently failed to prevent the catastrophic failure of the ball joint and separation of the steering knuckle from the car! I’ve never lived in a state that required annual inspection, but can’t say that having the requirement has any bearing on improving safety given my experience with mechanics…
  • Mike978 Wow 700 days even with the recent car shortages.