How Lobbyists Undermine the Efficiency of Your Tires

In passing the 2007 Energy Independence and Security Act, the federal government acted to drastically improve the average fuel economy of new vehicles sold in the United States. But increased CAFE standards weren’t the only aspect in the legislation intended to get Americans driving more efficiently.

One little-known provision of the bill was targeted at raising consumer awareness of low rolling resistance tires, which can give drivers as much as a 10 percent improvement in fuel efficiency over competing models. The National Highway and Transportation Safety Administration was directed to devise a mandatory labeling system for all new replacement tires sold in the U.S., giving consumers a chance to do side-by-side comparisons of government-backed fuel efficiency, safety, and durability ratings.

That labeling and ratings system was scheduled to be implemented within 24 months, but has been delayed thanks in part to pressure from the tire industry, which prefers a “point-of-sale customer educational program revolving around government-mandated rolling resistance ratings.”

Industry Proposal

Alternative label design proposed by the industry.

The industry’s proposal would:

  • Force tire sellers to display a simplified sticker design at the point of sale rather than mandating a tag be placed on each tire.
  • Replace the color-coded , 1-100 number rating with a five-star system, representing performance relative to competing models designed for each class of vehicle, rather than a baseline score.
  • Obfuscate the meanings of the numbers by renaming the safety rating the “wet traction rating,” and the durability rating the “tread wear rating.”

Follow the Money

The Tire Industry Association (TIA) hired two seasoned Washington power players to influence the regulatory process: former House speaker Dennis Hastert of Illinois, and former Democratic representative Al Wynn of Maryland. In an April interview with MotorAge, TIA vice president Roy Littlefield said the group was “totally committed to [the] effort,” refusing to comment on its total spending but adding, “former Congressmen don’t come cheap.”

Behind the tire industry’s dubious assertion that attaching the labels would, as Littlefield told MotorAge, place a “tremendous burden on manufacturers,” is the reality that such a system might very well force tire companies to drastically overhaul their product lineups and improve the base quality of the tires they sell.

The industry isn’t lying when it says the proposed labels would be a burden—but not due to the cost of the plastic tags manufacturers would be forced to fix to each tire.

The broader effect of such a system would be that consumers would likely demand better quality tires at lower price points, creating unwanted strife for an industry that is only now beginning to recover from recent losses brought on by rising costs for raw materials.

Few customers are willing to sacrifice safety, durability, or fuel efficiency when they buy new tires, so if information is presented to them in such a way that makes the trade-offs associated with each model clear, the result would likely create a further crush on high-quality rubbers—something that hasn’t escaped the notice of rubber industry either.

Today, one of the leading suppliers of rubber to the tire industry, the LANXESS Corporation, issued a press release urging NHTSA to move forward with the labeling system as soon as possible. LANXESS has also spent at least $30,000 lobbying the House of Representatives and Senate on the issue over the past few months.

That spending was likely aimed at countering the efforts of the TIA and its member companies, who began to pour money into their congressional lobbying efforts early this year, citing a desire to “monitor” the regulatory process as it unfolds.

The TIA alone has spent $50,000 lobbying the issue, and though issue-specific spending information isn’t available for the sector’s member companies, Goodyear and Bridgestone’s political action committees each spend hundreds of thousands of dollars per year on campaign contributions—with the majority of the money going to Democrats.

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Office of Information and Regulatory Affairs Administrator Cass Sunstein.

Where the Rubber Meets the Road

Whether that money has influenced the delay of a new labeling standard is debatable, but in blocking the measure this year until further consumer testing could be performed, Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein wrote that NHTSA should “aim to measure consumers’ understanding of the label, and their likely behavior given that understanding” before finalizing its plan, setting the process back at least another six months.

The reasoning provided by Sunstein somewhat resembles the rationale offered by TIA for its alternative customer education-based proposal, though it remains unclear whether OIRA has come to see things the industry’s way or is simply making a good-faith effort to ensure the effectiveness of the labels. (Records do indicate that in January, representatives from several tire companies met with White House OIRA officials to advocate for their proposal.)

Meanwhile, the NHTSA was scheduled to complete its retooled study of the labels’ effectiveness on September 30 of this year, though the results haven’t yet been made public.

The NHSTA will review the new information and use it to reformulate the labeling system—if it so chooses. If the agency fails to devise a new rule that is satisfactory to OIRA, that office might again choose to send the rule back for further study.

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The Path of Least Resistance

Even if the tire industry is unsuccessful in steering the implementation of NHTSA’s consumer information efforts, the delays have given it more time to prepare for changes that in the words of one industry-funded study, would “result in [possible] shifts in consumer demand for replacement tires.”

For consumers, the takeaway from all of this legislative sausage-making should be the importance of gathering and comparing safety, durability and efficiency information before making any tire purchase—whether or not the government makes that process as easy showing up at the store and looking at a standardized label. (Consumer Reports is a good place to start for safety, durability and rolling resistance information, but several other groups including Green Seal also rate tires for efficiency.)

Drivers can save big money on gas and lower the emissions from their cars and trucks simply by buying the right tires and keeping them properly rotated and inflated. Those measures are lot less expensive than buying a new hybrid or electric car, and in some cases can provide equally impressive fuel economy improvements.


  • Stan Smart

    I’m all for a (relative) tire rating system. But the point-of-sale signs/ stickers make more sense than the individual tire stickers. Who sees the actual tires before they’re put on your car.

    At best you see a display tire, or manufacturer’s literature.

    Any rating system would be better than none; especially now that there are so many choices.

  • zach

    The problem with point-of-sale signs is that they can be easily hidden/blocked/accidentally removed by individual retailers. Having a rating on each unit means that every display tire is guaranteed to have the information there where somebody will notice it. In the EU retailers have to both have point of sale displays and tags on the tires.

    The real rationale behind the tire industry’s fight against these tags is stated in roundabout ways in several instances in documents they’ve submitted to OIRA for review: They’re worried that customers will no longer be willing to buy cheap tires with low durability and safety ratings (particularly durability.)

    As one NYTimes blogger put it when describing a similar fight that took place in the EU:

    “Perhaps another reason that the tire makers are unhappy about the stickers is that consumers could start demanding tires that perform well in all three categories –- efficiency, grip and noise –- thereby forcing tire companies to produce all-around better products, and oblige them to be more competitive.”

    And it isn’t always true that something is better than nothing when it comes to what is what is essentially government mandated advertising. If the industry is allowed to rename the ratings and adjust the system so that it isn’t as clear to consumers, only people who went to the store looking for high-efficiency tires to begin with are likely to buy them.

  • Zach001

    I know little about today’s economy and more to the point(and subject)… of cars, tires, mechanics, etc. But I found this article very insightful, easily understandable, and well laid out. Being an average amercian teenager and actually WANTING to keep this article is a big stretch for me/US, so thank you writer…

    Zachary

  • Jbarnes59

    Did you know that Goodrich developed a tire that lasted virtually forever. The rest of the companies paid them big bucks to take them off the market.

  • Anonymous

    Yes, that Goodrich tire is now stored in the same warehouse where the 100 MPG cars are stored, not to mention the Ark of the Covenant.

  • Dan Zielinski

    The Rubber Manufacturers Association is the primary trade association for tire manufacturers in the U.S.

    In 2007, RMA advocated before Congress in FAVOR of the law that required the National Highway Traffic Safety Administrion (NHTSA) to issue a tire fuel efficiency regulation.

    RMA and tire manufacturers support this effort. Our members want consumers to have information about tire performance and the ability to compete based on uniform information about all tires.

    RMA commented extensively on the NHTSA proposed regulation. Anyone can access those comments at http://www.regulations.gov and enter “NHTSA 2008-0121″ for the proper regulatory docket.

    Our members expressed many concerns with the NHTSA proposal. Chief among them was that NHTSA’s proposed “label” — a paper sticker attached to all new tires – is never seen by consumers. Making this medium the primary source of consumer information is a waste of time. Information needs to be available to consumers before they buy tires to be most effective. Putting in on a paper label that no one sees is not helpful.

    Next. the fuel efficiency calcluation NHTSA proposed would have grouped all small tires at the upper range of “fuel efficiency” and larger tires — on SUVs, pickups and other larger vehicles — at the low end. This would not give consumers much incentive to choose the most fuel efficient tire for their specific vehicle.

    Our proposal would have tire fuel efficiency calculated as it has been for decades and the same way at which tire makers in Europe and Asia calculate tire fuel efficiency. This way, consumers would have a choice of fuel efficiency for nearly any vehicle.

    Finally, when President Obama’s Office of Management and Budget reviewed NHTSA’s proposed regulation — as they do for alll major regulations — they found it deficient and sent it back for revision. That process is beginning again and we look forward to working with the agency to craft a regulation that will give consumers useful information in an effective format that will help them choose the most appropriate tire for their vehicle.

    When this rule is final, tire manufacturers will have another way to compete for customers based on uniform information across all tires and consumers will benefit even more.

    Dan Zielinski
    Sr. Vice President
    Rubber Manufacturers Association
    Washington, DC

  • veek

    Thanks. Mr. Zielinski, for the information.

    Bad data is worse than no data, and it looks like our esteemed federal government has again gone with the “give ‘em bad data” track. Trying to give a single “star” type rating to simplistically summarize all the complicated variables that we all encounter in tire performance is just b-o-g-u-s.

    Maybe the tire manufacturers could just dispense with the government and give us useful data, including the variables involved. Consumers are not always as stupid as the bureaucratic empire-builders.

  • Octavius

    In the end, the question is what is the best way to convey to the end-user information that is useful to them in their decision making, so let the focus groups begin, if they haven’t already.

    It also sounds to me that there is a bit of a tempest in a teapot going on here — all passenger car tires (as far I know) currently come with treadwear, traction and temperature ratings applied directly to the sidewall, involving numbers and letters that are easy to use in comparison to other, similar, tires, and what is being proposed could certainly add a fuel efficiency indicator to cover that.

    Absolute rankings don’t prevent the user from making comparisons across a particular size of tire, but they don’t necessarily tell you what you’re getting, without additional research by the user. E.g., if durability is scaled 1 – 100, then what does “1″ and what does “100″ mean? Percentile across all tires in the known universe? Percentile of all tires of that size and application? Lifetime mileage measured in thousands of miles? What?

    In the current system, I believe the ratings represent some quantitative link to the actual performance, and that seems to serve a useful purpose, which is flexible, and most people can digest (even though the origin of those numbers might bear some resemblance sausage-making).

    What I am concerned is that, when the day is done, we may end up with a half-cocked scheme that corresponds to some politicians’s imagined ideal, but is worse than useless to the man or woman behind the wheel.