NHTSA: Foreign Tire Sales could face $16.4 million in penalties

Washington, DC - Foreign Tire Sales (FTS) Inc. could face penalties of $6000 per violation-or a maximum of $16.4 million-if it violates regulations pertaining to a tyre recall ordered by the National Highway Traffic Safety Administration (NHTSA), the agency warned in a June 26 letter to the firm.

NHTSA ordered a recall of about 450 000 Chinese-made light truck tyres bearing the names Westlake, Telluride, Compass and YKS after receiving information from FTS, the tyres' Union, New Jersey-based tyre importer and wholesale distributor, of unusually high adjustment rates in 2005 and their suspected involvement in a Pennsylvania road accident that allegedly caused two deaths and a crippling brain injury.

The tyres were manufactured by Hangzhou Zhongce Rubber Co. Ltd. of Hangzhou, China, starting in 2001 and sold exclusively by FTS originally in the US Later Hangzhou Zhongce rescinded its exclusive deal with FTS and sold the tyres through other distributors as well, according to an FTS filing with NHTSA. FTS said it stopped buying tyres from Hangzhou Zhongce in June 2006.

FTS said it could not shoulder the financial burden of a recall, and other companies were importing or selling the tyres as well.

But in the 26 June letter, Daniel Smith, associate administrator for enforcement, said NHTSA considers FTS the manufacturer of record since it imported the tyres for resale. FTS' report to NHTSA about the defect constitutes the notification by the manufacturer required by the National Traffic and Motor Vehicle Safety Act. A manufacturer that gives this notice, Mr. Smith wrote, is responsible for notifying owners, purchasers and dealers of the tyres.

NHTSA also countered FTS' claim that a recall would force it into bankruptcy.

“A company that chooses to import motor vehicles or motor vehicle equipment into this country accepts the same responsibility for compliance with the safety act as any other manufacturer,” Mr. Smith wrote.

NHTSA said FTS must submit a revised report by July 2.

From Tire Business (A Crain publication)

Letter from NHSTA to Foreign Tires Sales, Inc., Outlining Next Steps Regarding Problems With Tires Manufactutred in China NHTSA (US)

Letter from Foreign Tire Sales, Inc., Regarding Problems With Tires Manufactured in China NHTSA (US)

Tires recalled in U.S. still sold in Canada CTV (Canada)

Legal Muddle Stalls Chinese Tire Recall - Daily Auto Insider car and Driver (US)