NATM defies downturn

March 1, 2002
IT WAS ALMOST AS IF the recession never happened. The 14th annual National Association of Trailer Manufacturers convention and exhibition attracted 570

IT WAS ALMOST AS IF the recession never happened.

The 14th annual National Association of Trailer Manufacturers convention and exhibition attracted 570 people, the most ever.

The mood among the members generally was upbeat, as the light-duty trailer manufacturing industry appears to have dodged the depths of downturn that has plagued the industry's counterparts among truck trailer manufacturers.

Held at The Orleans Hotel in Las Vegas, the convention provided attendees with an economic forecast, advice on avoiding and preparing for product liability litigation, getting more bang for the promotional buck, and how to be happy in spite of the circumstances.

The association also used the convention to roll out details of three programs designed to provide additional value for its members. They include:

  • A computerized way of producing customized owner manuals.

  • Warning labels designed for common risks associated with most light-duty trailers. The labels have been tested through the use of focus groups to verify that they communicate the desired information.

  • A voluntary inspection and consultation program, complimentary to members, designed to detect potential product safety problems before an accident (and ensuing product liability litigation) occurs.

Details on these programs can be found on the pages that follow.

One hundred companies bought all of the available 10' × 10' exhibit spaces to display the latest products and services to the audience of light-duty (below 26,000 GVWR) trailer manufacturers.

It was a year of growth for the association, according to President Jim Callaway and Executive Director Pam O'Toole. The association reached its 2001 goal of growing to at least 500 members. NATM started the year with 393 member companies. More than 40 of these new members attended the convention.

The association tackled several projects during last year, including joint research with the Society of Automotive Engineers regarding gooseneck trailers and work with the Surge Brake Coalition to eliminate the federal ban on surge brakes installed on small- and medium-sized trailers.

The NATM Technical Committee completed its annual revision of the Guidelines for Recommended Minimum Manufacturing Practices for Trailers Under 26,000 lb GVWR, and completed the safety label project and the model owner's manual programs that the association discussed at the convention. The Technical Committee is also responsible for the progress on the guidelines compliance consultations and the hiring and training of the new member services director to oversee the program.

Another NATM goal for 2001 was to offer seminars at regional locations to reduce the cost for members and to gain more participation among members' employees. In response to that goal, the association conducted a complimentary seminar on federal excise tax in September 2001 and is planning to offer four or five regional workshops in 2002.

The new programs are an effort on the part of the association to help its members create safer products.

When the safety of light-duty trailers is debated in product liability cases, manufacturers seem to be most vulnerable in the areas of warnings and instructions, according to Dick Klein, NATM engineer and a frequent expert witness for manufacturers in product liability cases. Because the overall safety of light-duty trailers is good, he says, plaintiff lawyers have tended to gravitate toward claims of inadequate warnings and instructions to make their cases.

The warning label program, member guidelines compliance audits, and the owner manual template are all programs NATM has developed recently to assist its members in these areas. Because the association has been growing strongly, NATM posted a healthy surplus this year. It was this surplus that enabled the association to invest in programs designed to provide additional value for NATM members.

Here are some of the highlights from this year's convention:

Guidelines compliance inspections now complimentary for members

NATM is now offering to assess the “safety quotient” of member companies — free of charge.

The association has created a new staff position, member services director, to assist member companies in a number of areas. Filling that position is Greg Soden, who joined NATM at the beginning of this year. Soden will tour the facilities of those members who invite him, viewing the manufacturing operation and evaluating the safety compliance of trailers that the company produces.

He will be paying particular attention to how well the company is following the recommended manufacturing guidelines that NATM has developed and refined over the years. For example, the NATM Technical Committee recently performed major rewrites of the federal excise tax and GVWR sections. The guidelines are compilation of myriad governmental safety regulations and engineering practices, all brought together in a single (albeit somewhat large) loose-leaf binder that can accommodate the periodic updates produced by NATM.

But it offers little value to publish guidelines until the companies for whom they are written apply the practices and comply with the regulations. That's why the association developed its Guidelines Compliance Program.

The association set as a goal last year to get at least 50% of its regular members to participate in a voluntary consultation visit from a third party during the year.

“There were quite a few who volunteered for the third-party compliance consultations, although not 50% of the members,” NATM President Jim Callaway said. “Although the program didn't proceed as originally planned, NATM is well on the way to accomplishing this goal.”

By hiring a member services director to conduct the compliance consultations, the NATM board of directors believes many more member companies will request the consultations. The belief seems to be well founded. Pam O'Toole, NATM executive director, says the association has received numerous requests for a consultation since the convention was held.

“This will move the program to a new level that will ultimately mean safer products for our customers and a reduction of liability for our members,” Callaway said. Prior to offering this service free of charge to its members, NATM had supported $300 of the $500 cost of performing third-party consultation visits.

Scheduling limitations for the third-party inspectors prevented approximately 20 of the companies that volunteered last year from receiving their consultation. These will be placed at the head of the list when Greg Soden begins making his visits early this year.

Word processor template provides ‘instant’ manuals

In today's litigious society, it is vital for trailer manufacturers to provide detailed instructions on using the trailer — especially how to couple it, how to load it, and how to maintain it.

Writing an owner manual and keeping it current can be a time-consuming task, but a new NATM-developed template used in conjunction with Microsoft Word makes the task much simpler.

The template, available from NATM at no cost to members, uses the outlining feature of Microsoft Word to speed up the creation of a customized manual and to greatly simplify the job of revising it. In effect, the basic outline (already created to meet the needs of the most common types of trailers) is the contents page. Click the plus sign, an the outline expands into greater detail. Eventually, the entire manual is displayed.

Text styles can be changed easily to provide a distinct look for an entire company or an individual trailer.

If a certain topic does not apply to that particular trailer, delete it. Microsoft Word automatically renumbers all the chapters. Although content can be deleted easily, NATM advises caution when adding content. The association suggests contacting someone who is experienced in the production of manuals to make sure the result is something that is an asset to product safety.

What exactly should warning labels accomplish?

Warning labels are a manufacturer's last line of defense when it comes to product safety. When a perceived danger cannot be designed out of a product or a guard installed to protect the user, the only remaining option is to warn.

But how should the labels be designed? What should they say? What types of illustration should be included? Where should they go? And after all of the criteria are met, do they really communicate the manufacturer's message?

Charles Seybolt with the consulting company of Weinstein Associates explained the importance of proper label design and provided details of how his company assisted in the development of a series of warning labels for NATM and commissioned focus groups to evaluate how effectively the warning labels could be understood.

The tests asked individuals to perform the tasks required by the label. Seybolt showed video tape of people hooking up a trailer and safety chain based on the information provided by a warning label. Although labels are not a substitute for user's manuals, Seybolt pointed out that the actions of the people on the video tape showed that the labels were working.

Because the NATM warning labels have been tested, Seybolt encouraged members to use them if they are applicable to the types of trailers the individual company manufactures. He noted that warning labels that have been proven effective and are industry standards have more credibility in product liability litigation.

“Widespread use of the same labels means less liability exposure,” Seybolt said. “They would be recognized as the industry standard.”

The NATM labels have uniform specification, use long-lasting materials, and meet the requirements of ANSI Z535.

All Things Considered

Seybolt outlined the many things that must be considered when designing a warning label. Among them:

  • The warning. The label should communicate the type of hazard, the magnitude of the risk, and the action that must be taken to minimize the risk.

  • Objective and subjective considerations. These include the colors, print style, symbols, the format of the label, and its durability. Others include the choice of signal words (danger, warning, caution), the pictogram designed to illustrate the signal words, the content of the message, whether or not the message should be in more than one language, the size of the label, and where it should go.

  • Adequacy of warnings and instructions. These issues should be based on the characteristics of those who use the product, the environment in which it is used, and the patterns of usage.

Reducing product liability losses

About the only way for a manufacturer not to have to face a product liability suit is to not be a manufacturer, attorney Tom Kuzmick told NATM manufacturers. But there are things companies can take actions to strengthen themselves when the inevitable happens.

“As soon as you are sued, you lose,” Kuzmick said. Referring to the amount of time and effort manufacturers are required to spend defending themselves in any product liability case, he pointed out that “even if you win, you lose.”

One reason manufacturers have a difficult time being successful in such litigation is that tort law requires the manufacturer to have done everything necessary at the time of the sale to make the product safe. This standard leaves manufacturers easy prey to second-guessing on the part of the plaintiff's attorney.

“As a manufacturer, you walk into the courtroom with both hands tied behind your back,” Kuzmick said. “All you can do is duck and dodge.”

Kuzmick discussed several areas in the litigation process that require particular attention.

During the discovery phase, any document a manufacturer may have generated in the course of designing and marketing the product can be put in front of a jury — including engineering and concept files. Kuzmick advised manufacturers to:

  • Request a confidentiality agreement with plaintiff's counsel to prevent proprietary files from being circulated.

The network of plaintiff's trial lawyers makes such advice mandatory. Kuzmick said that if a company is sued in one location, that suit quickly will become known among lawyers around the country. If the company is sued again and the set of documents do not match, the company can be discredited easily.

“You must produce the exact set of documents at the next suit, or you automatically are proved to be a liar,” Kuzmick said. “When that happens, you might as well get your checkbook out.”

Used Against You

Sales literature is another area where manufacturers must be careful. There is a natural conflict between the sales staff and a manufacturer's lawyers. The sales department wants to show that the company's product is the best, which is not the primary goal of the legal counsel.

“Your goal is to produce the safest product,” Kuzmick said.

Expect the plaintiff's counsel to request copies of sales literature. However, company memos also can be demanded — including those in which the manufacturer rejected a safer design because of cost issues or because the design would adversely affect the way the product performs.

Kuzmick stressed that manufacturers should have a document creation, retention, and destruction policy, and that it should be evaluated continuously. He pointed out that a lack of documentation can be damaging to a manufacturer's defense.

“All of the steps you take to design, manufacture, and control quality are wasted unless the process is documented,” Kuzmick said.

Kuzmick points out that product liability claims are not subject to a time limit. He encouraged manufacturers to keep good records of the products they manufacture.

Manufacturers also should do a thorough job of documenting the inspections, warranty work, and repairs they make. Record should never be discarded where a potential claim exists, Kuzmick said.

Controlling Risk

Before a product leaves the manufacturer's possession, the manufacturer should do the following, Kuzmick said:

  • Identify the hazards associated with the product.

  • Design the hazards out of the product.

  • If the hazards can't be designed out of the product, guard them.

  • If the hazards cannot be removed through the installation of a guard, warn the user — not just the buyer. Warn against all identified hazards, even if those hazards theoretically have been eliminated.

  • Exhaustively instruct the end user and the buyer of risks associated with the product, the proper operation of the product, and how to maintain it.

“Once a product has been found defective, it is found defective in the next case and the next case,” Kuzmick said.

That even holds true if the manufacturer simply built what the customer requested.

“This really redefines customer service,” Kuzmick said. “Saying, ‘the customer asked for it this way’ is not a defense.”

Kuzmick pointed out that the “customer service” defense is undercut if for no other reason than the person who is making those requests and buying these custom trailers is not the same person who actually uses them. He suggested that manufacturers include in the purchase agreement language that indemnifies and releases the manufacturer when the customer wants to deviate from or alter safety designs on which the manufacturer has spent money developing and documenting.

Words of Warning

Manufacturers have an obligation to warn of dangers they foresee, yet the very presence of a warning demonstrates that the manufacturer acknowledges the potential danger. Among the things manufacturers must consider when dealing with warnings:

  • Is it really impossible to design out the hazard?

  • The warning must be issued in such a way that it is delivered to the actual user. Kuzmick gave an example of a warning that was written on the package. However, while the buyer of the product may have seen the warning, the user of the product never saw the package — nor the warning.

  • Manufacturers must assume that the design features built into the product will be eliminated through subsequent modification.

Single Source

Kuzmick said manufacturers should designate someone to speak for their companies.

“This does not automatically have to be the head of marketing or the company's CEO,” Kuzmick said. “Look for someone who is technically sound and presents a good appearance.”

Companies also need one person to supervise the bank of information the company maintains and to approve discovery responses when litigation begins.

Manufacturers also should retain competent investigators, expert witnesses, and legal counsel to help plan and coordinate a product liability defense program.

“Don't leave it to your insurance carrier,” Kuzmick said. “If it is your company, you have to stay involved.

“This is a war. You are going against an opponent who wants everything you have. If you aren't prepared, you will be a victim, and they will be laughing all the way to the bank with your money.”