The legislative repercussions of the Bridgestone/Firestone Inc. tire crisis are part of a growing trend toward greater legal pressure on the entire automotive industry.
Under the most sweeping auto safety legislation in decades, automotive industry officials could face up to 15 years in prison for hiding information on defects that lead to deaths or serious injuries. The bill awaits President Clinton's signature.
Last month, the international tax, accounting and consulting firm KPMG LLP released a survey of 43 U.S. automotive firms that reported an increase in litigation costs over all areas of business. More than half of the group reported higher annual litigation costs and also higher expected litigation costs in the near future.
Nearly 25 percent of the automotive companies said they expected to have to increase in-house legal staffs in order to keep up with the growing litigation.
The firms in the survey traced the growing litigation to different areas, including product issues, employment disputes, general contracts disputes and insurance claims.
Product liability itself has become a targeted area for civil litigation, said Marc Sherman, KPMG's national director of litigation consulting.
'Any area where you can be made a defendant in a class-action suit has become a fertile field for litigation,' he said. 'Product liability is one of them.' And with some of the large and well-publicized jury verdicts and court judgments coming out of auto industry cases in recent years, the auto industry itself has become a large target for litigation.
Legislation watchers are wondering how any new rules might affect overseas business.
The Motor & Equipment Manufacturers Association, an auto supplier trade group in Research Triangle Park, N.C, had worried that a requirement to report safety concerns to foreign governments might present new proprietary problems. The association believes some foreign governments are too closely tied to automotive companies in their countries. Being made to hand over early safety data could put U.S. firms at a competitive disadvantage there.