AIAG Assists OEMs, Suppliers with TREAD Act Compliance

Recommended Business Practices, Educational Events Offered In Advance of Aug. 31 NHTSA Reporting Deadline

SOUTHFIELD, Mich., April 15 -- By developing recommended business practices materials and providing educational seminars for its members, the Automotive Industry Action Group (AIAG) is helping the automotive industry comply with the new reporting requirements of the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act. Manufacturers must submit their first quarterly reports to the National Traffic Highway Safety Administration (NHTSA) by August 31, 2003. Companies failing to comply can face fines of up to $15 million.

"AIAG's goal is to educate our 1,600 members on the TREAD Act's new requirements, and to standardize the exchange of TREAD Act information among customers, suppliers, OEMs (Original Equipment Manufacturers) and NHTSA," said Morris Brown, AIAG's Materials Management Program Manager. "We're taking the initiative on this issue, as we did in a recent effort to educate the supply chain on anti-terrorism measures across U.S. and Canadian borders, to simplify the TREAD compliance process."

Passed by Congress in the fall of 2000, the TREAD Act requires companies in two reporting categories to submit statistical data about consumer complaints, warranty claims, property damage claims, and field reports to NHTSA on a quarterly basis in electronic format. This "Early Warning Reporting" system is intended to detect potential equipment or vehicle safety issues. The first reporting period began April 1, 2003.

Group 1 includes manufacturers of 500 or more vehicles annually, as well as all child restraint and tire manufacturers. Group 2 includes manufacturers of 1-500 vehicles per year, manufacturers of motor vehicle equipment (excluding child restraint systems and tire manufacturers) and registered importers.

The TREAD regulations have placed significant new administrative and electronic data demands on manufacturers and suppliers. To help its members meet these demands efficiently, AIAG is developing a recommended business practices document that will include a TREAD Executive Summary, a TREAD Act checklist for Groups 1 and 2, and critical success factors.

AIAG also has held educational events to prepare its members to meet their TREAD Act responsibilities. In February, AIAG conducted a sold-out TREAD Act compliance training session attended by more than 100 industry representatives. Brown also participated in a live web seminar held April 8 that was viewed by nearly 140 people. The TREAD web seminar is archived at http://www.bettermanagement.com/seminars/seminar.aspx?libraryid=5619 .

Future educational events targeted to specific manufacturers in Groups 1 and 2 are being planned, and an AIAG TREAD Act Reporting Working Group is meeting on a weekly basis, according to Brown. AIAG also will hold a TREAD Town Hall Meeting on August 25 at COBO Hall in Detroit.

"AIAG is taking a lead role for our members on TREAD Act issues to streamline the reporting process and to help them avoid unnecessary efforts and costs," Brown concluded.

Founded in 1982, AIAG is a not-for-profit trade association of over 1,500 automotive and truck manufacturers and their suppliers. AIAG's purpose is to provide an open forum where members cooperate in developing and promoting solutions that enhance the prosperity of the automotive industry. Its focus is to continuously improve business processes and practices involving trading partners throughout the supply chain. More information about AIAG and its initiatives can be found at www.aiag.org .