You’ve read in Tracks or elsewhere or heard presentations at NATM events that the National Highway Traffic Safety Administration (NHTSA) is going after large trailer and RV manufacturers, such as Forest River and Spartan, and major vehicle equipment suppliers, such as Takata and Kidde, for ignoring or failing to comply with NHTSA’s safety defect reporting requirements, its Early Warning Reporting (EWR) regulations, and other agency rules. You’ve been told NHTSA has hit these mega-producers with huge multi-million dollar fines, put them under strict compliance-watch regimes tied to formal “consent orders,” which have required them to hire expensive safety consultants or independent federal monitors, at their cost, to oversee their future compliance commitments.
But you’re not worried. You are a “small” manufacturer of trailers—you sell fewer than 5,000 a year—a family-owned and operated small business, generating modest sales revenues. You think you’re too small for NHTSA to bother with. Besides, you have your World Manufacturer Identifiers (WMI), you’ve registered with NHTSA, you’ve signed up for your EWR ID, and you’ve applied for membership in the National Association of Trailer Manufacturers (NATM) and intend to participate in its Compliance Program. Flying under NHTSA’s radar screen has worked well for you for years. NHTSA has paid no attention to you—so far.
We can tell you from our experience that this cozy, secure sensation you’re feeling—because you think you’re inconspicuous to NHTSA—is misplaced. More a function of your good luck. Do not be deceived. Do not be lulled into “compliance” complacency. NHTSA has made it clear it expects all manufacturers of trailers (as well as RVs and trucks), regardless of size or output, to fully comply with its reporting requirements and safety standards. It has backed up this expectation with recent enforcement actions against the “smaller” trailer manufacturer.
NHTSA clearly will not tolerate companies flouting the law, regardless of size. This is especially true for those producing unsafe motor vehicles. NHTSA has techniques for identifying non-compliant companies, and it will pursue enforcement actions when warranted.
NHTSA is keeping an eye out for tell-tale signs of the non-compliant company. For example, the motor vehicle manufacturer that fails to file “field reports”—a requirement applying to all trailer manufacturers producing 5,000 or more units annually—is a tip-off. A “field report” may seem like a fuzzy, wishy-washy term, not normally associated with manufacturing trailers. Some trailer manufacturers are tempted to blow it off by assuming, “I don’t have any of those.” That would be a mistake. Under NHTSA’s definition in 49 C.F.R. § 579.24(d), a “field report” is any report you, as a manufacturer, receive from one of your employees or representatives (not from one of your dealers), assessing an alleged failure, malfunction, or other performance problem--whether it is safety-related or not—associated with one of your trailer’s systems or one of its specified components. The NHTSA definition of “report” is extremely broad—any written communication (including email) from your employee or representative. As with warranty claims, NHTSA believes manufacturers cranking out more than 5,000 trailers a year are bound to have received at least one “field report” in a year. The number will vary, depending upon total production volumes.
Another document NHTSA is looking for from all manufacturers, regardless of how many trailers they produce, is sometimes referred to as a technical service bulletin or a “TSB.” NHTSA, in 49 C.F.R. § 579.5, requires manufacturers to submit, on a monthly basis, copies of “all notices, bulletins, and other communications” (including emails) sent to two or more manufacturers, distributors, dealers, customers, or purchasers “regarding any defect” in the manufacturer’s trailers or items of equipment (its parts and accessories) even if that defect is not safety-related. A “defect” includes any failure or malfunction (beyond normal deterioration from use), any failure of performance, and any flaw or deviation from design specifications. As with “field reports,” if NHTSA is not receiving any of these TSBs from a trailer manufacturer during the year, that may be a red flag: NHTSA is likely to suspect this company, either intentionally or through ignorance, is not complying with one of NHTSA’s very important safety regulations. NHTSA will want to know why it has received no TSBs and may investigate or inquire with information request letters. If that company is yours, you will now be on NHTSA’s radar screen.
NHTSA vigilantly looks for non-compliances by cross-checking its list of EWR filers and NHTSA-registered manufacturers against published data compiling the numbers of trailers registered with each state and their manufacturer. If your company is not on that NHTSA list but shows up prominently in the state database of registered vehicle producers, you can expect a call from NHTSA. (NATM members need not worry about this issue because they already participate in NATM’s Compliance Program.)
NATM’s mandatory Compliance Program, with its biennial on-site compliance reviews, will help educate you as to what NHTSA requires, but ultimately it is your responsibility to know and to comply—and to provide NATM’s compliance consultants with complete, accurate information about the safety aspects of your trailer manufacturing processes. Size and ignorance are no excuse and will not deter NHTSA from investigating your operations and, if warranted, seeking penalties.* Currently, the penalty maximum is at $21,000 for each violation (where each vehicle or each day late can count as a violation), with a cap of $105 million for a related series of violations. Don’t take your obligations lightly.
About the Authors
Annette Sandberg is former Administrator and Deputy Administrator of the Federal Motor Carrier Safety Administration and Deputy Administrator of the National Highway Traffic Safety Administration. She is counsel to the law firm of Scopelitis, Garvin, Light, Hanson & Feary. Kim Mann, a partner in the Scopelitis law firm, is General Counsel of NATM.
*Note from The National Highway Traffic Safety Administration: NHTSA maintains a proactive approach to safety. In addition to vigilant enforcement, NHTSA also serves as federal resource that small businesses can contact for guidance through firstname.lastname@example.org