Will Manufacturers Kill the Used Tires Biz?

Tiremakers have long held the re-sale market at arms length, out of a healthy respect for the boundaries of anti-trust regulations.  But a number of factors are aligning that may shift the market away from the re-sale of used tires for vehicles. The cost of selling used tires is going up – the scrap market is growing in tandem with the demand for used tires to be recycled into fuel to meet the energy requirements of rising economies, such as China’s. At the same time, tire litigation is getting more sophisticated and manufacturers have a keener understanding of their liability.

In 2007, Safety Research & Strategies kick-started this shift by publishing Used Tires: A Booming Business with Hidden Dangers. The report made the link between crashes, tire age and used tires, using data to show that nearly one-third of aged tire crashes investigated involve used tires. It also noted that inspections by used tire wholesalers are cursory and lead to dangerous tires entering the market and recommended used tire sellers adopt higher standards that included visual reviews and internal examinations, such as shearography or X-rays.

NHTSAball: How the Agency Plays the Game

Moneyball has opened in the movie theaters, starring Brad Pitt as the redoubtable Billy Beane, general manager of the Oakland Athletics. Beane had been a future baseball superstar who washed out after three seasons of bench-warming and bouncing between Triple-A and major league teams. He was, however, that rare individual who resisted his own PR, which was certain and glowing, and the perfect foil for the movie’s real subject: baseball statistics and how numbers could guide a poor team like the A’s to the playoffs more regularly than the conventional wisdom said was possible.

The A’s, as Michael Lewis, author of the book on which it is based describes the team, was populated with Major League’s castoffs – catchers and pitchers who looked more like beer-swilling bowlers, college prospects that the talent scouts had deemed too cold to bother with, and a computer nerd for an assistant GM.  But Beane knew from his own field experience just how wrong Major League Baseball could be in assessing players. He chose, instead, to exploit a different set of metrics developed by a passionate fan who happened to be statistically apt, but shunned by the rest of Beane’s peers. Using this recipe, he cobbles together victory after victory.  The book roughly follows the A’s during the 2002 season, from the June amateur player’s draft to the historic September 4th game, in which the A’s won their 20th consecutive game – breaking a 102-year old American League record.

Among the book’s heroes is Bill James. James is the quirky inventor of Sabermetrics, the statistical analysis of baseball data, used to better understand success and failure in the game. James had a restless, numerically inclined mind and, it would be fair to say, an obsessive interest in baseball. The marriage of his aptitude and his interests produced a series of abstracts and books on baseball metrics, beginning in 1977. At first, James was ignored by all but a handful of fans. But, eventually, he gained a following. And in 1997 one of them became the manager of the Oakland A’s.

If the narrative has a villain, it’s Major League Baseball itself. Wholly in the thrall of its own myths, this billion dollar enterprise, when it bothered with data at all, used it incorrectly. Rich teams could skim the obvious cream of talent, but beyond buying wins, hadn’t a clue how it was really done.

Lewis’s point was that even with huge sums of money at stake, those most vested in the outcome can be utterly blinded by their own subjective biases. Once biases are institutionalized, they become facts, stubborn in the face of new or competing or different information. Those who can’t even identify the data that should be informing critical decisions – let alone using it properly – are bound to make expensive mistakes.

So what’s The Safety Record’s point? We saw a number of striking parallels to the way NHTSA operates, when it comes to numbers.  The agency is, ostensibly, data-driven and science-based. Hell, it slaps that phrase on everything from Powerpoint presentations to appropriations requests. But there’s plenty of evidence that the agency dismisses – out-of-hand – outside information; that long-held beliefs hamper its data analyses; that it pays way too much attention to data that is not useful and fails to collect data that is.

Moneyball: For example, here Lewis characterizes James’ assessment of MLB’s metrics:

“Worse, baseball teams didn’t have the sense to know what to collect, and so an awful lot of critical data simply went unrecorded.”

NHTSAball: There’s lots of data NHTSA doesn’t collect. For example, the agency has promulgated a recall system for tires that is predicated solely on the Tire Identification Number. Years of rulemaking were devoted to debating the format of the TIN, popularly known as the DOT code, an 11-character, alpha-numeric code that represents the plant, size, date of manufacture molded into the sidewall of a tire. The aim of the TIN was to identify a recalled tire and it is the only definitive measure to do so.  Does NHTSA require tire makers who recall their products to list the range of TINs in the recall population? No, it does not. Some manufacturers report it; others don’t. NHTSA’s good, either way. The DOT code would be a nifty little data point in any tire-related fatality in the Fatality Analysis Reporting System. The agency could use such data to identify tire failure trends, but it remains information uncollected. And while we’re on tires, NHTSA doesn’t require manufacturers to report tire claims if the tire is older than five years – so no data, no problem for the aged tire issues that took center stage following Firestone recalls in 2000 and 2001 and remain a constant source of catastrophic crashes.

Tire Known Unknowns: Decoding the Date

Human Factors researchers at the State University of North Carolina have recently concluded that consumers can’t read the date of manufacture obscured by the week and month configuration dictated by the Tire Identification Number (aka the DOT number).

Researchers Jesseca Taylor and Michael Wogalter asked 83 test subjects to translate tire markings as represented by different date configurations, ranging from the conventional month/day/year (12/05/07) to the DOT code’s four-digit week-year (2205). Effect of Text Format on Determining Tires’ Date of Manufacture, accepted by Annual Proceedings of 55th Human Factors and Ergonomics Society, found that when consumers chose to translate the different four-digit representations into a month and year, they consistently failed to understand that the first two digits represented the week of manufacture.

The DOT number, an alpha-numeric code found on the tire sidewall, has consistently confused consumers and tire professionals. The last four characters of the 11-character code contain the week and year the tire was made. For example, 0302 signifies that the tire was made during the third week of 2002. (Tires made prior to 2000 used a three-digit date configuration at the end of the DOT code.  In those cases, 039 signifies that the tire was manufactured during the third week of 1999 – or the 1989.)  No participant in Taylor and Wogalter’s study correctly identified examples such as 03/01 or 1102. They confused the first two digits with the month itself, for example, identifying “03” as March, instead of realizing that the third week of the year falls in January.

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