AIAG Says Tread Act Compliance is More Than Just Data Submission

SOUTHFIELD, Mich. - As of Dec. 1, 2003 manufacturers must submit their first quarterly reports for compliance to the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, the Automotive Industry Action Group (AIAG) says adherence to the act is more than solely providing raw data and avoiding the act's civil or criminal penalties.

"Submitting data is not enough," said Andrew J. Cummins, executive director for AIAG. "Companies should move beyond compliance to reap the full benefits of the TREAD Act, such as leveraging the data to reduce manufacturing and warranty costs." In the future, AIAG will help companies learn how to use the information gained in regulatory compliance, such as the TREAD Act and other government regulations, to their benefit.

In 2000, Congress passed the TREAD Act that requires companies in two reporting categories to submit statistical data about consumer complaints, warranty claims, property damage claims and field reports in an electronic format to the National Highway Traffic Safety Administration (NHTSA) on a quarterly basis. This "Early Warning Reporting" (EWR) system is intended to identify defects in vehicles and equipment. Non-compliance can result in civil penalties of up to $15 million. Companies may face prison time as well.

"Transmitting your reports electronically is the easy part," said Morris Brown, AIAG materials management program manager. "The real challenge exists when companies must answer to the NHTSA when asked for clarification on their reports."

Since 2002, AIAG has been addressing the TREAD Act and its implications to the automotive supply chain. It has been proactively assisting the automotive industry to understand compliance. This year alone, the organization hosted four educational events and participated in a Web cast to help the automotive supply base to understand the act's impacts. Additionally, AIAG developed an information kit called the TC-5: Information Kit for TREAD Act Reporting. The document clarifies reporting requirements, key dates to follow when going through the reporting process and resources to obtain more information on the TREAD Act.

The organization is also developing a document to help the truck and heavy equipment industry correlate its required data to the American Trucking Association with the TREAD Act's Category Codes. The document, called the THE-8: TREAD Act VMRS System and Assembly Code Map, is scheduled for release later this month.

Founded in 1982, the Automotive Industry Action Group (AIAG) is a not-for-profit association of companies involved in the automotive industry. Through the cooperation of OEMs and suppliers, AIAG's primary goals are to reduce cost and complexity; improve quality, health, safety and the environment; and optimize speed-to-market, throughout the global supply chain. For more information on AIAG, please visit

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