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The PRESIDING OFFICER. Under the previous order, upon disposition of H.R. 820, the Senate resumes consideration of S. 1458, which the clerk will report.
The legislative clerk read as follows:
A bill (S. 1458) to amend the Federal Aviation Act of 1958 to establish time limitations on certain civil actions against aircraft manufacturers, and for other purposes.
The Senate continued with the consideration of the bill.
Mr. DANFORTH. Mr. President, I am pleased to support S. 1458, the General Aviation Revitalization Act of 1993. This legislation will help to lift the weight of product liability lawsuits that has almost crushed our light aircraft manufacturing industry. I commend Senator Kassebaum for her leadership on this issue, which culminates with today's vote on this legislation.
The general aviation industry has experienced a dramatic decline in production since 1978. In that year, the industry produced 18,000 aircraft, of which 17,000 were piston-engine aircraft. Last year, the industry manufactured only 900 aircraft, including only 555 piston-engine aircraft. According to the General Aviation Manufacturers Association [GAMA], a major reason for the dramatic decline in the light aircraft industry is the application of the doctrine of strict liability in product liability cases arising out of aircraft accidents. GAMA statistics indicate that claim and defense costs for light aircraft airframe and component manufacturers have risen from $24 million in 1976 to $210 million in 1986. The three largest manufacturers of piston-engine aircraft are virtually out of that line of business. By 1986, Cessna , which has been the largest manufacturer of piston-engine models, had dropped completely out of that business. Last year, Beech manufactured only 18 percent of the piston aircraft they made in 1978, and Piper's production of piston aircraft has dropped to 2 percent of the 1978 level. Piper has been in bankruptcy since 1991.
Beech compiled statistics on all product liability litigation it defended between 1983 and 1986. During that time, Beech was named in 203 suits. The National Transportation Safety Board determined that a factor other than design or manufacturing error was the cause in each accident. Nevertheless, the average cost of each lawsuit, including defense costs and verdicts, was $530,000. Beech estimated that the costs of litigation added $70,000 to the price of each new aircraft.
The industry's decline has led to severe job losses and a balance of trade deficit. According to Russell Meyer, president of Cessna , this decline has led to the loss of 100,000 jobs. Moreover, in 1978, the light aircraft industry ran a balance of trade surplus of $340 million. In 1981, the industry experienced a balance of trade deficit of $200 million. That was the first deficit ever in the history of the industry. Last year, the balance of trade deficit reached $800 million.
Current product liability law allows manufacturers to be held liable for defective design or manufacture decades after the aircraft is manufactured. The average piston-engine aircraft is over 27 years old and one-third of the fleet is over 32 years old and manufacturers continue to be held liable for the design and manufacture of these aircraft. This `long tail' of liability will destroy what little remains of the light aircraft industry unless the problem is addressed immediately.
Unlike many problems, this one has a consensus solution--enactment of legislation limiting the liability of general aviation manufacturers. This legislation enjoys such strong support because it will create jobs.
The International Association of Machinists strongly supports this legislation. Russell Meyer has said that his company will restart production of piston-engine aircraft if this legislation is enacted and, `within 5 years, more than 25,000 jobs would be created at no cost to the Government.' In addition to light aircraft manufacturers, the Aircraft Owners and Pilots Association, representing those who purchase and use general aviation, support this initiative. Thus, this legislation is supported by manufacturers, labor, and the primary organization representing the users and consumers of general aviation.
The members of President Clinton's Airline Commission unanimously supported enactment of a 15-year statute of repose in their August 19 report to the President and the Congress. The report states:
The enactment of legislation limiting the liability of general aviation manufacturers to 15 years from the date of manufacture would help regenerate a once-healthy industry and help create thousands of jobs.
The Commission reiterated its staunch support for this legislation in a November 2 letter to Transportation Secretary Federico Pen˙AE6a. The letter was commenting on a staff draft prepared by bureaucrats at the Department of Transportation that called for more study of the statute of repose issue. It started:
On the issue of a statute of repose, it is clear that this once competitive sector of our manufacturing industry cannot be revived unless this step is taken. This is a limited and targeted response to a demonstrated problem.
The Commission went on to say, `The time is right, right now.'
Mr. President, I agree with the Commission. The time to act is now. Passage of this legislation will restore fairness to product liability cases involving general aviation aircraft, and it will revitalize an important industry while creating tens of thousands of new jobs. I urge my colleagues to support S. 1458.
Mr. CHAFEE. Mr. President, I applaud my colleague from Kansas for her tenacity, perseverance, and great patience in bringing once again the issue of general aviation liability reform before this body.
By granting an 18-year statute of repose, the Kassebaum legislation addresses one of the most important factors that have brought about the decline of the general aviation industry: increased product liability exposure, and its staggering cost to aircraft manufacturers.
General aviation manufacturers are spending a huge amount of time and resources on defending lawsuits instead of developing or perfecting products and manufacturing technology. That burden is having an extremely detrimental effect on the health of the general aviation industry in this country. Sales of domestic aircraft have dropped sharply since the late 1970's. Cessna , Piper, and Beech aircraft among others have cut back production dramatically. Listen to this: In 1979, U.S. companies turned out 17,000 general aviation aircraft; in 1992, our companies made 400. The loss in this particular manufacturing sector has in turn had a ripple effect on the overall economy, with an estimated 100,000 jobs lost in general aviation manufacturing and those industries who supply general aviation parts and service. And U.S. manufacturers, who used to produce more than 95 percent of the world's general aviation aircraft, no longer have that leadership. The world leaders now are France, Germany, and Italy.
Let me share one example with my colleagues. I have a letter here from Cessna . Cessna is a subsidiary of Textron, which is headquartered in my State of Rhode Island and which is an important employer there. Cessna has quit the business of piston aircraft completely, even though those sales were going quite well for them. Indeed, between 1965 and 1982, Cessna sold 6,500 piston aircraft annually, and was investing $20 to $25 million in research and development annually--15,000 men and women were employed by Cessna back then.
But in 1986, with just 3,000 employees, they quit the piston aircraft business altogether. Why? Because of the phenomenal liability costs. Coincidentally, these costs amounted to $20 to $25 million each year--the same amount previously spent on R&D.
If the Kassebaum legislation is enacted into law, the president of Cessna , Russ Meyer, said publicly last fall that Cessna will restart production as soon as possible. And the entire general aviation industry predicts that if this legislation is enacted into law, employment in that industry will increase by 25,000 within 5 years. What a boost that would be in these difficult economic times.
Last August, the President's National Commission to Ensure a Strong Competitive Airline Industry came out with 61 recommendations. The single policy recommendation that the Commission believed would create the most jobs was to establish a statute of repose for the general aviation industry. No wonder the International Association of Machinists joins in support of this bill.
Now I want to reiterate a point made previously in debate on this bill about public safety: As my colleague from Kansas has so ably pointed out, this issue is not--I repeat not--a question of whether or not consumers are protected when they buy this aircraft. There are strict regulations placed on the general aviation industry for their manufacturing processes. Stringent Federal guidelines ensure that planes are built according to exacting criteria, and Federal approval and certification is required along the way. We have ensured that passengers in these aircraft are not placed in danger because of shoddy design or manufacturing, or any shortcuts taken by the manufacturer.
Indeed, I might point out that the bill is supported by virtually every aviation consumer organization.
When accidents do happen, virtually all--99 percent--occur not due to a manufacturing or design defect, but to other causes. Yet the liability costs for general aviation have skyrocketed.
I would argue strongly to my colleagues that a great part of our role in Congress is to protect the public's welfare and encourage economic development. The current liability system for general aviation adds nothing to public welfare, and enormously harms economic development.
If we do not adopt this measure, we will continue to see a decline in the general aviation industry--and equally important, a decline in U.S. jobs and trade. Are we ready to see the United States not only lose global leadership in this industry but to allow the general aviation industry to disappear altogether in this country?
In one stroke, we can improve substantially the situation--and therefore the fate--of this important industry. For Congress not to act is madness. I for one am not ready to see this industry, with all its technology and jobs, disappear from the face of this country.
I urge the adoption of this very simple but wise measure, and again extend my compliments to the Senator from Kansas.
Mr. DOLE. Mr. President, I rise in support of my distinguished Kansas colleague, Nancy Kassebaum, as an original cosponsor this important legislation that is designed to revitalize the general aviation industry. Since the 99th Congress, we have been attempting to obtain some form of relief that addresses a serious problem confronting this important national industry.
Mr. President, the general aviation industry has paid the price in recent years because of the dramatic increased costs associated with product liability. This legislation is a commonsense approach. It makes no sense for the general aviation industry to be penalized by these outrageous increases since they have occurred during a period where the safety record of general aviation has greatly improved.
In Kansas, especially in Wichita, where Beech, Cessna , and Learjet companies manufacture aircraft, the effect of congressional inaction has been dramatic. In 1992, a total of 899 general aviation aircraft were delivered--representing a decline of 6.7 percent from 1991. Of those aircraft deliveries, the world export market also showed
a 5-percent decline. Contrast that to 17,000 general aviation aircraft sold in 1979. Although 1993 aircraft delivery figures edged up slightly, it is clear to me that the industry is not experiencing new and robust health in the current environment.
Liability payments by manufacturers, on the other hand, rose from $24 million in 1979 to approximately $240 million in 1990. U.S. airplane manufacturing employment has declined since 1980 by 46 percent--from 40,000 workers to approximately 21,500 today.
The result is lost jobs, lost aircraft sales, and lost export markets. In addition, these losses also create adverse affects on other industries that rely on a healthy aircraft manufacturing market.
Mr. President, this approach, the creation of an 18 year statute of repose on civil actions brought against aircraft manufacturers or producers of general aviation parts is different from our previous efforts and represents a reasonable, sensible and fair solution for all concerned. This legislation is supported by manufacturers, consumers and labor. It was recommended by the President's Commission to Ensure a Strong Competitive Airline Industry. In fact, Cessna
Aircraft Co. in Wichita has made no secret of the fact that it will immediately hire workers to begin production of piston-powered aircraft as soon as this legislation is passed.
In fact, Mr. President, this approach will create thousands of high wage jobs immediately simply by bringing common sense to the product liability laws affecting general aviation. Not one Federal dollar is needed to get this result. And most importantly, this is not a blank check for relief Mr. President.
I want to congratulate Senator Kassebaum on her efforts to bring this important issue to the floor for a vote today. Enactment of this legislation is long overdue, and her efforts have been tireless and commendable.
Mr. DURENBERGER. Mr. President, I rise today in strong support of S. 1458, the General Aviation Revitalization Act of 1993.
Under this bill, as amended, no civil action can be brought for damages arising out of a general aviation accident if the accident occurred more than 18 years after the aircraft was delivered to its first purchaser. In the case of component parts, no civil action may be brought more than 18 years after the date of the replacement or addition.
I am told that most planes by that time have had several owners, at least three major overhauls and on average accumulated 6,000 hours of flying time.
I became a cosponsor of S. 1458 because I believe that unreasonable product liability costs associated with the domestic manufacturing of general aviation aircraft have been the single most important factor contributing to the decline in U.S. production of light airplanes. From 1978 to 1992, American general aviation manufacturers spent as much to defend product liability suits as they had spent to develop new aircraft from 1945 to 1978. As a result, American production of private airplanes declined from 17,000 in 1979 to less than 1,700 in 1989. Over 100,000 industry and related jobs were lost during that same period.
S. 1458 has the strong support of both manufacturers and organized labor. The International Association of Machinists and Aerospace Workers, the Aircraft Owners and Pilots Association, the Aircraft Electronics Association, the General Aviation Manufacturers Association, the Minnesota Department of Transportation, and Minnesota manufacturer Honeywell, Inc. have all written to me in support of the General Aviation Revitalization Act.
I urge my colleagues to join me in voting for this important measure.
Mr. LEVIN. Mr. President, my vote for this narrowly targeted and industry-specific legislation should not be construed to indicate my general view on issues dealing with Federal involvement in product liability issues.
There is already significant Federal involvement in aviation. The Federal Aviation Administration, governed by laws passed by Congress, has detailed regulatory oversight over general aviation. The FAA must certify each aircraft design before manufacture. Each individual plane must be certified before it is allowed to fly. And, each general aviation plane not in commercial use must pass an annual FAA certification.
The Federal involvement also goes beyond the machinery; the FAA regulates air routes and regulates and certifies the pilots. Thus this industry is in many ways unique, which is appropriate, in its degree of Federal involvement in regulation and certification.
I also want to commend Senator Kassebaum for her effort on behalf of this legislation and on her willingness to consider modifications to it. She is a model of tenacity, patience, and fairness.
Mr. DODD. Mr. President, I rise today in strong support of the General Aviation Revitalization Act. This legislation, which I am cosponsoring, should improve the American general aviation industry for manufacturers, employees, and consumers.
The American general aviation industry, which produces small planes designed for private use, has suffered a dramatic downturn in recent years. Deliveries of this type of aircraft dropped from nearly 18,000 in 1978 to less than 900 last year. Because of this decline, more than 100,000 jobs have been lost in manufacturing, sales, service, and related industries.
Much of the problem stems from laws which hold manufacturers liable for planes that were built decades ago. This open-ended liability has driven up the cost of insurance and made it increasingly expensive for American manufacturers. Not surprisingly, foreign manufacturers who are not constrained by these product liability laws have captured a growing share of the market.
This legislation should help restore the competitive balance and provide new opportunities for American workers. Generally, the bill provides that no civil action for damages arising out of a general aviation accident may be brought against the aircraft manufacturer if the accident occurs more than 18 years after delivery of the aircraft to the first purchaser. It also provides a similar, 18-year statute of repose for manufacturers of general aviation component parts.
In the past, I have opposed various measures that Senator Kassebaum has introduced on this subject. In my view, those efforts struck the balance too much toward manufacturers. But this most recent version, which has been modified after bipartisan negotiations, is a narrow measure that protects the interests of consumers and employees as well as manufacturers. Indeed, a wide range of constituents in my home State of Connecticut--machinists, airline pilots, and employers--have urged me to support this bill.
In closing, Mr. President, I urge my colleagues to vote in favor of this vital piece of legislation. I commend Senator Kassebaum for her hard work on this measure, and I look forward to the opportunity it presents for a revitalized general aviation industry.
The PRESIDING OFFICER. Under the previous order, the question now occurs on final passage of the bill. The yeas and nays have been ordered. The clerk will call the roll.
The bill clerk called the roll.
Mr. FORD. I announce that the Senate from Oklahoma [Mr. Boren] is necessarily absent.
I further announce that if present and voting, the Senator from Oklahoma [Mr. Boren] would vote `aye.'
The PRESIDING OFFICER. Are there any other Senators in the Chamber desiring to vote?
The result was announced--yeas 91, nays 8, as follows:
So the bill (S. 1458) was passed, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `General Aviation Revitalization Act of 1994'.
SEC. 2. TIME LIMITATION ON CIVIL ACTIONS AGAINST AIRCRAFT MANUFACTURERS.
Title XI of the Federal Aviation Act of 1958 (49 U.S.C. App. 1510-1518) is amended by adding at the end the following new section:
`SEC. 1119. TIME LIMITATION ON CIVIL ACTIONS AGAINST AIRCRAFT MANUFACTURERS.
`(a) In General: Except as provided in subsection (b) of this section, no civil action for damages for death or injury to persons or damage to property arising out of an accident involving a general aviation aircraft may be brought against the manufacturer of the aircraft or the manufacturer of any component, system, subassembly, or other part of the aircraft, if the accident occurred--
`(1) more than 18 years after--
`(A) the date of delivery of the aircraft to its first purchaser or lessee, if delivered directly from the manufacturer; or
`(B) the date of first delivery of the aircraft to a person engaged in the business of selling or leasing such aircraft; or
`(2) with respect to any component, system, subassembly, or other part which
replaced another product originally in, or which was added to, the aircraft, and
which is alleged to have caused the claimant's damages, more than 18 years after
the date of the replacement or addition.
`(b) Exceptions: Subsection (a) of this section does not apply--
`(1) if the claimant pleads with specificity the facts necessary to prove, and proves by clear and convincing evidence that the manufacturer with respect to certification or obligations with respect to continuing airworthiness of an aircraft or aircraft component knowingly misrepresented to the FAA, or concealed or withheld from the FAA, required information that is material and relevant to the performance or the maintenance or operation of such aircraft or component that is causally related to the harm which the claimant allegedly suffered;
`(2) if the person for whose injury or death the claim is being made is a passenger for purposes of receiving treatment for a medical or other emergency; or
`(3) if the person for whose injury or death the claim is being made was not
aboard the aircraft at the time of the accident.
`(c) General Aviation Aircraft Defined: For the purposes of this section, the term `general aviation aircraft' means any aircraft for which a type certificate or an airworthiness certificate has been issued by the Administrator, which, at the time such certificate was originally issued, had a maximum seating capacity of fewer than 20 passengers, and which was not, at the time of the accident, engaged in scheduled passenger carrying operations as defined under regulations issued under this Act.
`(d) Relationship to Other Laws: This section supersedes any Federal or State law to the extent that such law permits a civil action described in subsection (a) to be brought after the applicable deadline for such civil action established by subsection (a).'.
SEC. 3. CONFORMING AMENDMENT.
The table of contents contained in the first section of the Federal Aviation Act of 1958 is amended by adding at the end of the matter relating to title XI of such Act the following:
`Sec. 1119. Time Limitation on Civil Actions Against Aircraft Manufacturers.
`(a) In general.
`(c) General aviation aircraft defined.
`(d) Relationship to other laws.'.
Mr. MITCHELL addressed the Chair.
The PRESIDING OFFICER. The majority leader is recognized.
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