| 
 "Serious Risk of Adverse Publicity" as Nixon
Prepares to Meet Automakers
April 21, 1971
Memorandum to: H. R. Haldeman
From: Peter Flanigan
Subject: Meeting with Automobile Industry Leaders
This memo from Nixon aide Peter Flanigan -- an adviser on economic, commercial,
and financial policy -- to White House Chief of Staff H. R. Haldeman, outlines
several pending auto-industry regulations in anticipation of a meeting
President Nixon had requested with the leaders of the Big Four automakers:
Ford, Chrysler, General Motors, and American Motors. The most contentious of
the new regulations was NHTSA's proposed "passive restraints" rule requiring
that all cars made after August 15, 1973, have "passive restraint systems," such
as airbags or thick padding, to "guard against injury in a 30-mph perpendicular
crash whether or not seat belts are fastened," and that by August 15, 1975,
"they must protect against injury in all types of 30-mph accidents."
After summarizing the various regulations on the table and the automakers'
various positions (ranging from minor objections by GM and Chrysler to
strenuous objections by Ford and American Motors), Flanigan asks whether Nixon
risks the appearance of selling out to Detroit if a meeting with the Big Four
is publicized.
... is there not a serious risk of adverse publicity that the President "sold
out" to the Big Four if after such a meeting we make decisions favorable to the
industry on some of the issues listed above? A possible alternative would be to
meet separately with the major leaders. For example, the President could meet
with [Henry] Ford [II], with or without [Lee] Iacocca. Then ... he could meet
before or after with [James] Roche [of General Motors] and [Lynn] Townsend [of
Chrysler].
Talking Points for the President's Meeting
with the Transportation Secretary
April 22, 1971
Memorandum for: The President
From: Ken Cole
Subject: Meeting with Secretary Volpe
Friday, April 23, 1971
4 p.m. (1/2 hr.) - Oval Office
To prep President Nixon for a scheduled meeting with Secretary of
Transportation John Volpe, who strongly supported NHTSA's passive-restraints
regulation, White House aide Ken Cole wrote a routine memo laying out the
agenda for the meeting, including background and possible "talking points." The
memo concludes with this note:
Automobile Safety
Although Peter Flanigan has been in close touch with the Secretary on the
development of passive restraints in the automobile safety area, the Secretary
may raise this issue with you, specifically the airbag. If the Secretary raises
this, you should point out that you understand that hearings are still going on
and that there is considerable disagreement yet as to whether passive
restraints, particularly the airbag, have a real value. You should advise the
Secretary that before the Administration takes a position or any regulations
are issued, the hearings must be completed and the merits of any passive
restraints well demonstrated. There must also be an agreement with the
industry before any such position or regulations are issued. Any position
developed by the Department of Transportation and the Secretary must be
reviewed by the White House before it can be considered approved.
The Meeting: Ford and Iacocca Make Their Pitch
April 27, 1971
A Meeting in the Oval Office - 11:08 a.m. to 11:43 a.m.
Present:
Richard Nixon, President of the United States
John Ehrlichman, Assistant to the President
Henry Ford II, Chairman of Ford Motor Co.
Lee Iacocca, President of Ford Motor Co.
On the morning of April 27, 1971, President Nixon met privately in the Oval
Office with Henry Ford II, chairman of Ford Motor Co., and Lee Iacocca, Ford's
president. In the course of the meeting Ford and Iacocca complained that new
environmental and auto-safety regulations, in particular the proposed passive-restraints rule, would harm the U.S. auto industry as it struggled to compete
with the Japanese, and by extension would harm the U.S. economy. The meeting
with Ford and Iacocca was secretly recorded by Nixon, and FRONTLINE has
acquired the audio tapes and transcript with the help of the Nixon Presidential
Materials staff at the National Archives. To our knowledge, the recording has
never been broadcast.
- As the meeting got underway, Nixon indicated that he would be
sympathetic.
President: [My] views are, frankly, whether it's the environment or
pollution or Naderism or consumerism, are extremely pro-business. We are
fighting, frankly, a delaying action in many instances. ... There is pollution.
We all know that. You can fly over various places and you can see the stuff in
the air. Maybe, there are safety problems, I assume. [Unintelligible] I think
they're greatly exaggerated, but there are some. But where there is pollution
and where there is safety, the general principle that I believe in is that,
well, then we'll do the best we can to eliminate the toxins. But we can't have
a completely safe society or safe highways or safe cars and pollution-free and
so forth. Or we could have, go back and live like a bunch of damned animals.
That won't be too good, either. But I also know that using this issue, and,
boy, this is true. It's true in, in the environmentalists and it's true of the
consumerism people. They're a group of people that aren't one really damn bit
interested in safety or clean air. What they're interested in is destroying the
system. They're enemies of the system. So, what I'm trying to say is this: that
you can speak to me in terms that I am for the system. ...
I try to fight the demagogues to the extent that we can. ... The safety thing
is the kick, 'cause Nader's running around, squealing around about this and
that and the other thing. And so out of all this sort of thing what we have to
do is get beyond that: one, to do what is right to do, and then, second, what
we, having determined what is right to do, we have to determine
[unintelligible] we can do, and having in mind the political problem we have, I
mean, down in the Congress, in the things they will pass and the things that
they will ask us to do. So, it's with that in mind, that's the background. Now,
tell me the problem you've got with the industry, with the Department of
Transportation, and all these things and let me listen. ...
- Ford makes the case that the safety regulations in particular are
harming the industry and will cause the price of cars to go up.
Ford: I think the thing that concerns us more than anything else is this
total safety problem. And, what we're worried about really, basically, is --
this is an industry problem -- is really the economy of the United States, if
you want to get into the broad picture because we represent the total
automotive [unintelligible] supply, industry supplies, dealers, dealer
[unintelligible] the whole bit, about one-sixth of G.N.P. Now, if the price of
cars goes up because emission requirements is gonna be in there, even though
we, though we've talked about this morning, safety requirements are in there,
bumpers are in there. And these things are, and that's leaving out inflation
and material costs increases, which are also there. We think that the prices of
cars are going to go up from next year through '75 anywhere from a hundred
dollars to, up to maybe seven or eight hundred dollars in the next four years
because of the requirements. ...
We see the price of a Pinto, which now sells for nineteen hundred and nineteen
dollars going something like fifty percent in the next three years with
inflation part of it, but that's not the big part of it. It's the safety
requirements, the emission requirements, the bumper requirements. Now, what are
we really talking about? We're talking about trying to put some sense into the
Trans-, to DOT and how they go about doing their business. ... They've got
bumper standards for '73, they've got different bumper standards for '74,
they've got air bag standards. All of these things, the only thing that we want
to try to talk to you about this morning is the fact that these things are all
going to cost money. If these prices get so high that people stop buying cars
... they're gonna buy more foreign cars. ...
- Iacocca, who does most of the talking throughout the meeting, complains about the manner in which Secretary Volpe is running the Department of Transportation, and claims that
Ford Motor Co. is reaching the "despair point" and has started a "downhill slide."
Iacocca: I've been in the office of Secretary Volpe a number of times on
this. ... being real candid with him, I think that they have said in the
Department of Transportation that we are dedicated to passive restraints. The
citizens of the U.S. must be protected from their own idiocy, so we will put in
a sophisticated device that will blow up on impact and package him in an air
bag and save their lives. Well, we agreed that work has to be done in this
area. But look where we are: they have, this is law; this is the law of the
land, now, for 1974. ...
... we have already sunk two hundred and forty million into the safety area.
And we have on our cars today a hundred and forty dollars of, I don't say all
gadgetry, 'cause the steering columns, I think, are saving lives, the
collapsible column and the like, but the shoulder harnesses, the headrests are
complete wastes of money. ... Which gets me to the crux of it: there is nobody,
I mean nobody, whether I talk to Muskie, whether I talk to, someone, Secretary
of Transportation, that ever wants to talk to me as a businessman about costs.
... We're not only frustrated, but, we've reached the despair point. ...
I have a feeling that the auto industry -- I'm only speaking for Ford -- ... we
are in a downhill slide, the likes of which we have never seen in our business.
And the Japs are in the wings ready to eat us up alive. So I'm in a position
to be saying to Toms and Volpe, 'Would you guys cool it a little bit? You're
gonna break us.' And they say, 'Hold it. People want safety.' I say, 'Well,
they, what do you mean they want safety? We get letters. We get about thousands
on customer service. You can't get your car fixed. We don't get anything on
safety! So again, give us a priority.' We cannot carry the load of inflation in
wages and safety in a four-year period without breaking our back. It's that
simple, and that's what we've tried to convey to these people.
- Wrapping up the meeting, Nixon assures Ford and Iacocca that he will look
into the specific problem and sums up his views on the larger issue of
regulating industry.
President: The thing we've got, the thing we have got to do, let me, let
me say, I, I'll, let me take a look at the whole, uh, John, what I can do here.
But the other thing is I want to see what the hell the department is doing in
the future. ...
I'll have to look at the situation, and I will on the air bag thing and the
rest. And, and, but, but I think this is an element that had, you see, goes
beyond the DOT because it involves America's competitive position, it involves
the health of the economy, it involves a lot of things. ...
We all want to do the right thing. The question is doing the right thing at the
right time and in a [unintelligible] way ... rather than doing it in a
revolutionary way, too drastic a way, that will just throw the baby out with
the bath water. ... That's the problem. ...
You see, what it is, too, is that we are, we are now becoming obsessed with the
idea that ... a lot of, what, what it really gets down to is that ... progress
... industrialization, ipso facto, is bad. The great life is to have it like
when the Indians were here. You know how the Indians lived? Dirty, filthy,
horrible.
Ehrlichman to Volpe: "The President desires
that the order be suspended"
April 30, 1971
Transcript of a telephone conversation between John Ehrlichman and Secretary of Transportation John Volpe
Three days after Nixon's meeting with Ford and Iacocca, John Ehrlichman
called the Secretary of Transportation to convey the president's desire that
the Transportation Department hold off on issuing the passive-restraints
regulation. In the course of the conversation, Volpe voices his concerns about
the political fallout from the decision, and even hints that he could leak the
story so as to make Nixon take the heat. The phone call was recorded and a
transcript has been made available by the National Archives. Following is an
excerpt:
Volpe: There will be an avalanche, and I mean an avalanche, of protest
in every newspaper in this country. ... we've postponed ... for a two year
period, listened to their [the auto industry's] complaints and their woes and
done everything we possibly could to accommodate their requirements and we have
allowed them to meet their goals in performance standards in several ways
rather than the air bag. Now I suggest to you, John, very sincerely that I
think the President and John Volpe and this Department particularly will
receive some of the worst editorial comments that we have seen in this area.
...
Ehrlichman: Well, I appreciate that the Nader element is very
[unintelligible] with their public relations and with their access to the
press. At the same time ... the two controlling considerations as far as the
President's concerned are, first of all, the showing that was made to him [by
the auto industry] that the idea is not a good idea -- number one and basic.
Number two that we're dealing here with an industry which are basically our
friends.
Volpe: ... Mr. Ford [a Democrat] isn't your friend.
Ehrlichman: He sure is.
Volpe: Well, you know what he did in 1960 and what he did in 1964.
Ehrlichman: Yes sir, but I know where he is today. I know exactly where
he is today. The point here is that pleasing Ralph Nader doesn't get us
anything.
Volpe: It isn't Ralph Nader I'm worried about. Christ, I've kicked him
in the teeth several times. Ralph Nader doesn't bother me a damn bit. What I'm
concerned about is the editorials of the newspapers of this nation.
Ehrlichman: Well, apparently, the President's willing to take that
heat.
Volpe: ... [sic] the President will take the heat, it's John Volpe, as
you know, unless, of course, the story gets out ... won't get out from here,
but these damn things have a way of leaking that we're ordered to do it. ...
Ehrlichman: Well, the whole point here, as far as the scope of my
instructions is concerned, is that I'm instructed to advise you that the
President desires that the order be suspended. ...
Volpe: Well, I know what the President has asked you to do and you're
carrying out his instructions. I personally think it's a mistake but I will
comply with it. ...
Costs and Benefits
April 30, 1971
Memorandum for: Peter Flanigan
From: George Crawford
Subject: Automobile Safety
This memo from White House aide George Crawford spells out the proposed regulations to be reconsidered by the Department of Transportation (the "passive restraints," as well as a requirement that lights and buzzers warn when seatbelts are not fastened) and summarizes the industry's response. All of the automakers agreed to
the seatbelt-warning rule; the response to the passive restraints was more varied. Although GM and Chrysler had objections, both companies agreed to the passive-restraints ruling, while Ford and
American Motors, according to this memo, "objected strenuously, and Ford may sue
to challenge the rule as impracticable." The memo goes on to summarize the
Department of Transportation's estimates of the costs and benefits of passive
restraints:
With regard to passive restraints, DoT says airbags for 1973 would cost $100
[per car], for 1975 $150-$200, for a cost by 1976 of $1.5 -$2 billion annually,
saving 600 lives and 25,000 disabling injuries this first year; 5500 lives and
200,000 disabling injuries in the tenth year, when virtually all operating cars
would be equipped. ...
John Huntsman reports that the President, reading your briefing summary, said
"No! John, let's not go crazy on this," referring to the paragraph setting out
these rules.
A Faithful Servant
May 12, 1971
Handwritten Letter from John Volpe to President Nixon
In a handwritten letter, Secretary of Transporation John Volpe wrote Nixon to
say that he was prepared to carry out the president's decision on the
passive-restraints ruling, but that he would first like to have an opportunity
to present his case to the president and advisers John Ehrlichman and Peter
Flanigan. The text of the letter is quoted here in full:
Dear Mr. President:
John Ehrlichman and Peter Flanigan have passed on to me your concerns and
instructions regarding my Department's promulgation of a passive restraint rule
for the auto industry.
I will of course carry out your wishes in this matter and attempt to achieve
your objectives in the most effective and least politically damaging manner.
Since meeting with John and Peter I have conducted a complete review of the
pending legal and administrative procedures to determine the most advantageous
time to repeal or drastically modify this proposed rule. I believe it to be
around June 14, when the Department files the administrative record in response
to the industry's petition for reconsideration.
Within the next 30 days, however, and before we take this course of action, and
provided I believe there are facts, which have not been put into the equation,
I respectfully request that I be allowed to make a presentation to you, John
and Peter, so that your decision may be based on the very latest and complete
facts.
In addition, you might find it useful to talk to Ed Cole [of GM], who I believe
has a different viewpoint than Henry Ford.
As always, I am prepared to implement whatever decision you finally reach.
With fond regards,
John
The Follow Up: You've Got a Friend in Washington
May 17, 1971
"Personal/Confidential" Memorandum
For: Charles Colson
From: John Ehrlichman
Subject: Automobile Safety
Ehrlichman asks White House aide Charles Colson to "follow up" with the leaders
of Ford and GM following their meetings with the president, and to make clear
to them that the Department of Transporation's decision on the safety
regulations was ordered by President Nixon himself. The implication is that
Nixon wants to curry political favor with the auto industry, and in his reply
to Ehrlichman on May 27, 1971, Colson wrote, "I understand the point fully and will
proceed accordingly." Following is the complete text of Ehrlichman's memo to
Colson:
PERSONAL/CONFIDENTIAL
FOR CHUCK COLSON
Would you please now "follow up" on the meetings which the President has had
with Henry Ford II and James Roche of General Motors?
The President was very glad that these gentlemen came in to talk to him about
the air bag which, it turns out, would have been a very onerous and expensive
regulation for the automobile industry.
Mr. Ford and Mr. Roche in separate meetings convinced the President of the lack
of wisdom of these regulations.
For your private information Secretary Volpe will, on or before the 14th of
June, cause a reconsideration of the safety regulations to be completed,
pursuant to petitions now pending, in favor of the auto companies.
However, it should be made clear to the manufacturers that the President in
fact ordered the reconsideration and the result.
If in doubt, call me.
John D. Ehrlichman
According to The New York Times, Ehrlichman later testified that Nixon
"instructed me to tell Charles Colson, one of his assistants, to exploit the
Ford meeting. ... I wrote a memo to Charles Colson conveying the president's
wish that he hit up the Ford people for a political contribution."
Big Four to Nixon: "Very Reasonable"
Sept. 8, 1971
Memorandum for: The President
From: Peter Flanigan
Subject: Airbags and Bumpers
This "action" memo from Peter Flanigan to President Nixon spells out the
administration's decision on the auto safety regulations and asks for the
president's approval. In the memo, Flanigan writes:
As I reported to you earlier the automobile industry unanimously agrees
that:
-- Passive restraints will be desirable when the technology has been
developed;
-- The inflatable airbag is the most promising way of providing a passive
restraint;
-- The technology does not presently exist to manufacture and install safe
airbags.
As a result of negotiations with the automobile industry, Secretary Volpe
proposes, subject to your approval, to issue a revised rule. He points out that
the revisions will "draw fire" from safety advocates, including 75 Congressmen
and Senators who signed a petition, and will be interpreted as a retreat in
favor of the industry. ...
Because of the checkered history of both passive restraints and bumper
requirements, I personally talked to Roche and Cole of G.M., Ford and Iacocca
of Ford, Townsend and Riccardo of Chrysler and Chapin of American Motors. All
of these men find the proposed rules entirely acceptable, characterizing them
as "very reasonable" and "more than acceptable."
"For political purposes..."
Sept. 22, 1971
Memorandum for: The President
From: Peter M. Flanigan
Subject: Airbags and Bumpers
The Transportation Department's revised ruling (to which the auto industry leaders agreed) required 1977 models to carry a passive-restraint
system. Here, Flanigan asks Nixon to approve a request from Volpe to move the
requirement up to 1976 models, because of political considerations. Flanigan
informs Nixon that he has spoken to the auto industry leaders and that they
find the 1976 deadline "entirely acceptable," but that for "political purposes"
they will publicly voice disappointment with the revised ruling.
You approved a proposed change in the ruling by Transportation on passive
restraints (airbags) which would include, among other things, passive
restraints in the 1977 models. Because of serious potential political
repercussions resulting from this change in the current rule, Secretary Volpe
has urged that this date be brought forward to the 1976 model year. I have
discussed this proposed revision with Lynn Townsend [of Chrysler], Ed Cole
[of GM], and Henry Ford, and all agreed that the revision would be acceptable.
For political purposes they will, when the rule is announced, indicate that
they would have preferred a later date. However, they have assured me that
they find this program entirely acceptable.
Coda
The airbag controversy would drag on for 20 more years, becoming perhaps the
most tangled and emotional auto-safety issue of them all, even reaching the
U.S. Supreme Court, which ruled in June 1983 against a Reagan administration effort
to rescind an airbag regulation scheduled to go into effect. The auto industry
successfully delayed introducing airbags for several more years, however,
pointing to the dangers posed in some cases to drivers and unrestrained small
children, while safety advocates argued that the benefit of saving thousands of
lives far outweighed the possible risks. In December 1991, the Intermodal
Surface Transportation Efficiency Act (ISTEA) was passed, requiring passenger
airbags in all 1998 model year cars and all 1999 model year vans and light
trucks. It is worth noting that in the fiercely contested negotiations over the
ISTEA legislation, airbags were the primary victory for safety advocates, while
SUV rollover regulations, among other things, were sacrificed.
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