Clayton-based Enterprise criticized for stance on rental car safety bill

By Bill Lambrecht

St. Louis Post-Dispatch

May 4, 2012

WASHINGTON • Negotiations aimed at regulating repair of rental vehicles with defects have bogged down, dimming hopes of passing legislation that has become the focus of a nationwide Internet campaign.

Clayton-based Enterprise Holdings Inc., a key player in the talks, is being accused by consumer advocates of seeking loopholes that would let companies rent and sell cars under recall for safety reasons without getting them fixed.

The advocacy group Consumers for Auto Reliability and Safety contended in a letter to Enterprise last week that provisions the companies want "would radically weaken consumer protections."

Enterprise paints a different picture. The company says it has joined with all major rental firms — except Hertz Corp. — in supporting legislation that would, for the first time, give the government authority over rental company policies for recalled autos.

Hertz has embraced a compromise with consumer advocates that is stricter than what corporate rivals, such as Enterprise, will accept.

Enterprise contends that the legislation it wants is "pretty similar" to a version drafted by consumer groups and — with limited exceptions — would prohibit renting or selling recalled vehicles.

In a statement, the company said it is seeking "a responsible and practical approach that reinforces the policies and practices that rental car companies already use to ensure that our customers rent cars that are safe to drive."

Until earlier this year, privately held Enterprise, which owns the National and Alamo rental companies, had insisted that any legislation was unnecessary.

But in February, Enterprise relented after becoming the target of an Internet protest pressing the company to support a regulatory bill in Congress. As of this week, more than 160,000 people had signed the Enterprise Rent-a-Car petition at Change.org.

The online protest was organized by Carol Houck, the mother of two California sisters who died in a fiery crash eight years ago while driving a vehicle rented from Enterprise. A jury awarded the Houck family $15 million two years ago after testimony that the vehicle, a PT Cruiser, had a power steering fluid leak that had gone unrepaired.

Last year, manufacturers and the National Highway Traffic Safety Administration together recalled 15.5 million vehicles for various reasons.

Typically, manufacturers cover the cost of repairs to recalled cars. The measures currently under consideration wouldn't change that. But while the government has authority over how auto manufacturers and dealers handle recalls, the safety agency lacks power to dictate what rental companies must do with recalled vehicles.

Often, recalled vehicles can be found in rental fleets. Hertz, for instance, has grounded more than 100,000 of its vehicles over the past three years after recalls that ranged from serious safety concerns to minor problems.

Richard Broome, the company's senior vice president for corporate affairs, said Hertz was reluctant at first to endorse national legislation but decided that it would be in the best interest of his company and the industry in general to join consumer advocates in a compromise.

"We were very happy to be on board," he said. "We think consumers should know they aren't driving a car that has been recalled or, if it has, that it has been repaired."

Pamela Gilbert, chief negotiator for the consumer groups, said that the likely next step is fighting out the issue in Congress. She expects a Senate hearing to be held soon. But given limited successes this election year in the polarized Congress, the lack of compromise diminishes the prospect of rental companies getting regulated any time soon.

Gilbert, a former executive director of the U.S. Consumer Product Safety Commission, said she is most disturbed at a proposal from Enterprise and its allies that would allow unrepaired, recalled vehicles to be rented if consumers were notified of the defect. She described that provision as a significant change from recall systems for any products.

"The point is to get a remedy, a replacement or a repair," she said.

Gilbert said consumer groups also object to a rental companies' proposal that would allow unrepaired vehicles to be sold by rental companies on a wholesale basis. "If recalled cars don't get fixed by the rental companies, they probably don't get fixed," she said.

Enterprise defends those provisions. The company says that it would rent a recalled vehicle "to avoid turning away customers who show up at their locations when their desired vehicle is subject to a recall which the manufacturer deems appropriate for disclosure rather than grounding." A company spokeswoman used the example of a defective seat belt chime, in which the seat belts themselves and warning lights still worked. In such cases, she wrote, "a disclosure served the same purpose as the chime itself."

With regard to automobile sales, Enterprise says that unlike all other dealers in used cars, rental companies would be unfairly singled out if forced to repair recalled vehicles sold on a wholesale basis.

Meanwhile, Houck said she had hoped to see the legislation named after her daughters, Raechel, 24, and Jacqueline, 20, who died in the 2004 accident, but thinks that is unlikely given the flagging negotiations. She said she has not heard from Enterprise even though the company said in its February statement that "we hope for the opportunity to work with" her.

"All we want is for them to fix recalled cars and not rent them. It's so simple," she said.



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