By on December 15, 2015

Buried deep within the recently passed highway transportation funding act is a provision to incentivize whistleblowers to speak out against automakers who design serious safety flaws in the cars that they make.

The Motor Vehicle Safety Whistleblower Act, passed in Congress earlier this year and signed into law by President Barack Obama this month as part of a larger highway transportation funding bill, is the first federal attempt at preventing catastrophic defects such as the ignition switch installed into General Motors cars that killed 124 people. This year, General Motors settled with victims and families for more than $600 million and paid federal regulators more than $900 million in fines.

The bill’s language specifically targets defects such as GM’s ignition switches, but could leave helpless whistleblowers in cases like Volkswagen’s or examples such as Ralph Nader’s outcry as part of his groundbreaking book “Unsafe At Any Speed.”

Sponsors in the Senate lauded the bill’s passage and said it could reduce the chances for further defects.

“After years of not having a multi-year transportation bill, this legislation offered an opportunity to address some safety concerns and recall problems that have been the subject of congressional oversight. I’m particularly pleased the legislation creates incentives for auto-industry whistleblowers to bring safety problems forward so that there’s a tool to quickly fix safety defects and prevent deadly accidents and injuries instead of just responding to safety violations after the fact,” Republican Sen. John Thune, who co-sponsored the whistleblower safety act, said in a statement.

Democratic Sen. Bill Nelson, who co-sponsored the bill with Sen. Thune, said the bill would bring from the shadows engineers who worked within the automobile industry.

“We’ve learned from recent events that the auto industry was not forthcoming about defective products or risks to consumers,” said Nelson. “This bill would reward insiders who become whistleblowers.”

But as part of that bill’s language, protection would only apply to auto-industry employees who speak out and would reward them with up to 30 percent of any monetary sanctions against an automaker. (For a case like GM’s, presumably that amount would be anywhere between $90 million and $270 million.)

The whistleblower protections and incentives mimic similar legislation passed for the financial industry after the recession.

However, the bill’s language doesn’t apply to whistleblowers who would speak out in a case like Volkswagen’s current diesel crisis. According to a spokesman for the Senate’s Commerce committee, the legislation only pertains to safety-related issues — environmental or emissions concerns would be separate legislation. The U.S. Senate Environmental and Public Works Committee is not considering legislation to reward or protect environmental whistleblowers.

A spokesman for the Alliance of Automobile Manufacturers, the largest lobby group for automakers in Washington DC, said the group didn’t have a position on the bill.

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12 Comments on “Automaker Whistleblower Protection Act Rewards Do-gooders, But There’s A Catch...”

  • avatar

    You never rat on your friends and you always keep your mouth shut.

    • 0 avatar

      Snitches get stitches.

      • 0 avatar

        Yeah, and people that die in vehicles not fit for use go to an undeserved early grave.

        It’s because of folks who parrot and buy into that foolish and tired old way of thinking that the folks who know that there is malfeasance afoot, and would like to do something about it, just keep quiet while folks are injured and die and the rest of us have to pay more for everything to cover the costs of remediation of stupid decisions not timely fixed.

    • 0 avatar

      It is often bad policy to conflate employers or colleagues with friends.

      As someone on the inside of the industry for over 30 years, and has seen my share of busting attempted safety cover ups, believe me when I tell you that there are only 3 bad things about this law:
      1. Rewards are not fixed at 30% (there is too much discretion and WB’s could be rewarded with only 10%);
      2. There is no anti-retaliation section to protect WB’s against the usual abuse they will receive from their employer for doing the right thing;
      3. The law doesn’t cover compliance with all health, safety and environmental legislation. (SEC has, and makes the best use of any WB law, this being for good coverage for securities-related issues, IRS has, but misuses, good law for tax-related issues, DOJ has, and well leverages, the False Claims act for other issues.)

    • 0 avatar

      Customers (and anyone along for the ride) are expendable. Your job and your manager’s job are not.

    • 0 avatar

      You never rat, and you don’t remember anything. If they are your enemies, deal with them appropriate to the transgression.

      Ratting is a bad policy regardless of who gets ratted out. Saying you will keep your mouth shut is admitting that you know something you don’t want to reveal, which will only invite pressure to reveal it.

      Don’t rat, period. If you have enemies, deal with them before you get dealt. Never brag about your memory or what a standup guy you are. Just be one.

      Tales from the old school. As taught to me by a couple of family friends.

  • avatar

    I appreciate Aaron’s reporting on this, but as with most senate staffers or the legislation that comes from their bosses, I end up with more questions that I know will not get answered.

    ” …incentivize whistleblowers to speak out against automakers who design serious safety flaws in the cars that they make.”

    This implies some intention to *willfully* design safety flaws, or at least to intentionally ignore fixing them. I am guessing they are aiming squarely at the GM ignition switch coverup, and implying they could not get enough evidence to fully prosecute them for these deaths. Was this really the reason GM was only assessed a (small) fine?

    Automakers are required to report all serious injuries or deaths involving their vehicles. Clearly many automakers are either under-reporting, or completely covering up serious issues. I guess instead of strengthening the existing agency, or making the fines even steeper, or mandating a different reporting mechanism that bypasses the carmakers, they are indirectly saying that self-regulation does not work, and they are switching to a system where employees will “regulate” their employers.

    And OK, the VW diesel scandal is not an auto safety issue, but it is a public health safety issue. If they only want to restrict whistleblower protection to cases involving only one agency’s purview (NHTSA) they could have said that.

    IDK, I mean we can dispense with all manner of personal rights and freedoms for small-time crooks or average citizens but we cannot subpoena enough records and bring enough people on the stand to put some execs behind bars for covering up deaths due to a cheap part?

    How much more legislation does it take to become cynical?

    • 0 avatar

      By incentivizing and protecting (two sides of same coin) whistleblowers, legislators 1) add a new information channel to the enforcement tool box, 2) raise the risk and cost of exposure and thus reduce the incentive and likelihood of malfeasors going to and playing the dark side, 3) send a strong message to whistleblowers and potential malfeasors that the sheriff in town has a new attitude and a new deputy (the whistleblower.)

      • 0 avatar

        Robert- I am in full agreement, I am all for whistle-blower protections. I do hope this works.

        I am just not clear on how it would work in real life. Two cases I can think of:

        1) an engineer sees corners being cut during product design, and/or sees reports of accidents and knows or determines the two are linked, and alerts authorities. That would help in early action to be taken for a stop or recall to reduce further D&I.

        2) after some defect gets on the radar screen of regulators or authorities, an engineer comes forward to testify with specifics that make the case against the car maker, managers or execs solid and able to stand in court.

        For the first case I cannot fathom anyone taking such a huge gamble. What if the part turns out to not be the primary defect, or the case gets misfiled or mishandled and gets dropped quietly. No compensation, and a ruined career.

        For the second, this legislation might work quite well (one would hope at least). In the case of GM though, was that what happened, that they couldn’t get anyone to testify against their own colleagues/bosses’ malfeasance? I don’t know the answer to that, but if that’s wasn’t the problem, there had better be some other legislation to prevent that from happening again, or to make it much more painful to the automaker if it ever happens again.

    • 0 avatar

      You are confusing the “GM ignition switch coverup” with “the inadequate GM ignition switch design”.

      Designing any product involves tens of thousands of choices, many of which do in fact involve trading off potential safety improvements against other matters such as economics or customer preference. I am not defending the way GM failed to provide a reliable ignition switch; locking ignition switches have been out there more than 45 years, you certainly should be able to design one that is reliable by now. But if every disgruntled employee who knows of a design choice that could be safety related can now come forward and claim “they could have made it safer but they chose for reasons of (cost, styling, parts commonality, timing, etc., etc.) not to do so”, I can see some real issues.

      On the other hand, covering-up a known defect on a regulated product constitutes fraud. That should be punished.

  • avatar

    Nader wounded the Corvair,but flimsy construction, dreadful brakes, and a dead-end engine design nailed the lid on its coffin, even after major suspension upgrades made the handling a real hoot. My 1961 coupe had an added front sway bar and rear transverse leaf spring that cleaned up the worst of its oversteer, but it was hard to excuse the way the oil pan screws had to be tightened every few days, along with dealers’ uncaring service and support attitudes.

    Today’s new cars are loaded with safety electro-nannies that can bail out a host of incompetent drivers, but there is still no reliable defense against DUI and plain old-fashioned stupidity. Consumers do have a right to expect products that perform as advertised — not just pie-in-sky EPA numbers and needlessly complex touch panels that dazzle rather than assist.

  • avatar

    What are the standards that determine whether a vehicle is “appropriately safe” and what are the standards that determine whether a vehicle, once deemed “not appropriately safe”, got that way through malfeasance or commercial pressures?

    If you manufacture a vehicle with 10 air bags, which meets the current regulatory standards, and your competitor uses 15 air bags, but you didn’t because of cost or styling concerns, will you be subject to prosecution by any “whistleblower” who decides to come forward and gouge you?

    And this leaves aside things like the GM fiasco where drunk, high, or otherwise incapacitated people drove cars off the road at high speed, and when in the chaos of the ensuing collision the ignition switch turned off and the air bags didn’t inflate, the whole thing is blamed on the ignition switch.

    I foresee lots more lawsuits coming, few if any of which will result in any actual improvement in automobiles.

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