Zetsche: Legal reform will boost competitiveness of the domestic industry.
Zetsche called for legal reform at the state level and praised recent federal legislation that moves some class-action cases to federal courts. Legal reform will boost competitiveness of the domestic industry against Asian automakers, he says.
"No matter how tough anyone might think this business is today, it's going to get tougher," Zetsche said in a speech to the Detroit Economic Club last week.
Product innovation is critical, he said.
"The real threat of product-liability suits is the threat of dampening the incentive to innovate," Zetsche said.
"The last thing we should want in this industry is to have engineers shy away from new product designs because they are constantly defending past product designs in the courtroom and fear making revolutionary change."
The threat of liability suits creates "a huge disincentive for the honest and critical evaluation of the features on current and past vehicles," Zetsche said.
Engineers and designers "fear that their ideas or criticism of our current products might be taken completely out of context in court," he said. "Imagine: If that logic were used in the computer industry, we'd all still be using Commodore 64s."
The average family of four in the United States pays a "tort tax" of $3,380 annually in higher consumer prices, insurance rates, unemployment and health care costs, Zetsche says. Chrysler says the figures comes from the February "Economic Report of the President."
Said Zetsche: "Auto companies - all companies - have to step up and litigate meritless lawsuits even when it's cheaper to settle."
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