Article

Aftermarket Conflicted About How to Correct Right to Repair Fault

A warning light is flashing in the heavy-duty industry but disagreement over how to make the repair means that the problem is not likely to be fixed any time soon.

January 2008, TruckingInfo.com - Feature

by Oliver Patton, Washington Editor - Also by this author

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A warning light is flashing in the heavy-duty industry but disagreement over how to make the repair means that the problem is not likely to be fixed any time soon.

The breakdown is in the aftermarket. Manufacturers and independent repair shops cannot agree on how to share the information, tools and equipment needed to maintain truck engines and other components. It's a longstanding competition in which some of the players have decided there is no hope of successful negotiations and have committed to a strategy of legislating a remedy.

The resulting bill, the Motor Vehicle Owners Right to Repair Act of 2007, would require manufacturers to provide service shops all the information, tools and equipment they need to diagnose and repair a vehicle on "reasonable and non-discriminatory terms," while not disclosing trade secrets. It would put the Federal Trade Commission in charge of writing the rules.

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The bill actually has been bouncing around Congress for several years and now is awaiting action by the House Energy and Commerce Committee - action that by all accounts will not happen this year and is not likely next year, either.

Committee Chairman John Dingell, D-Mich., last year described an earlier version of the bill as "a magnificent cure for a problem that does not exist."

He continued: "I find myself distressed that with all of the other important business we have at hand here in this committee and in the Congress that we would be fiddling around with something of this quality."

Close observers on both sides and in the middle of this issue say Dingell's opposition is probably insurmountable, and add that the current congressional climate only raises the bar higher. Right to Repair is up against such top-of-mind issues such as funding the government, the Iraq war, energy legislation, tax reform, the farm bill and the presidential election.

"I think it is going to be very, very challenging to get something like Right to Repair legislation, to get much momentum on it, when you have a party like Mr. Dingell who's vigorously opposed to it, you don't have a (companion bill in the Senate), and there will be a limited amount of time and limited amount of ability to get traction on contentious issues," said Ann Wilson, vice president of government affairs for the Motor & Equipment Manufacturers Association.

MEMA, which represents the makers of motor vehicle components, tools and equipment, is a middle-of-the-road group on this issue: it wants to ensure that customers can get their vehicles repaired but prefers a negotiated rather than a legislated solution.

Michael Conlon, a Washington, D.C., attorney who represents automotive and heavy-duty aftermarket interests that strongly support the legislation, echoed the point: "At least until there's a new chairman of the Energy and Commerce Committee . . . I don't think it's going anywhere."

Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association, which supports the legislation, described the outlook for the bill as "difficult" due to Dingell's opposition and the general environment on Capitol Hill: "There just isn't a whole lot going on."

Lowe did say, though, that he is working on getting a companion bill introduced in the Senate.

Much of the debate over the legislation has been driven by automotive, as opposed to heavy-duty, interests, leading some to say that it does not apply to the heavy-duty side. But the language in the bill refers only to motor vehicles, which includes commercial trucks as well as private autos.

Support for the legislation from heavy-duty interests is not broad but those who are pushing for it are deeply committed.

"People who service heavy-duty engines are still having a lot of problems getting information from the engine manufacturers," said Conlon.

Tom Schrader is vice president of marketing for Jasper Engines and Transmissions, which at $500 million may be the largest remanufacturer of light and medium-duty engines in the world.

"Deep down inside probably everybody would rather solve it without legislation, but from our standpoint because of . . . how the (original equipment manufacturers) deal with competition, it's a little hard for us to believe that they are going to just sit down at the table and (say) we're going to try to help you guys with business we're trying to get ourselves," he said.

"The reality of today's world is that vehicle sales are down, and so the OEs and the dealerships are trying to find more ways to generate revenues in their businesses through service and parts sales. That to us seems to be making it tougher for the independents to be able to work on vehicles.

"That's how we see it and that's why Jasper has chosen to support Right to Repair."

Jasper's strategy is to keep pushing for the legislation, no matter how long it takes, Schrader said. "It is hard for us to swallow the consensus approach - to believe that that will really happen."

David Deegan of Engine Lab of Tampa, an independent shop that works on medium-duty commercial trucks as well as light trucks and cars, is less attached to the legislative solution but insisted that the problem needs to be solved.

Engine Lab has difficulty getting information on specifications and engine codes, as well as parts, he said.

"Normally what we find is that the answer from our sources is, sorry, can't help because you have to have a particular piece of machinery that would break the code down and give you a path for repair. The OE is simply not willing to do that. You have to become a subscriber, especially on the truck side, to their specifications and then you have to navigate through web sites and information sources . . . that make it frustrating and expensive."

Deegan said he has no problem investing in the machinery, but he can't keep up with the need to constantly buy new machinery.

"I'd rather not legislate but the OE views my portion of the automotive and truck aftermarket as competition. Obviously they can outspend me and do many things that I can't do. I'm not complaining because I made the choice to do what I'm doing, but I think the solution is to . . . share information.

"If we're going to charge for information, then I don't think the independent should be penalized for not being able to make rapid investment changes in large dollar equipment."

Frustration among those who want Congress to solve the problem has led to a move to get states to pass Right to Repair legislation. So far, bills have been introduced in seven states. None have been passed.

Dingell and others argue that the consensus approach is working, at least on the automotive side, thanks to the work of the National Automotive Service Task Force, an alliance of a dozen aftermarket organizations formed in 2000 in a cooperative effort to correct information lapses between manufacturers and service outlets.

The heavy-duty aftermarket with the complexity and variety of its products and the horizontal structure of its component supply side bears little resemblance to the automotive aftermarket, but some still see the NASTF model as promising.

According to Robert Redding, the Washington, D.C., representative of the Automotive Service Association, a group that includes independent heavy-duty service companies, NASTF sets the example of how to resolve the right-to-repair conflict on the HD side.

"We've solved this within the industry, with a private-sector, free-market initiative," he said. "We don't want . . . to have to call the Federal Trade Commission and wait for a bureaucracy that doesn't have the money to fund it, doesn't have the staff or the technology to tell us how to fix it."

For the Heavy Duty Manufacturers Association, an arm of MEMA that represents component makers as well as companies that build service and repair equipment, this is what president and COO Tim Kraus described as an "emerging issue."

"We don't view it as a threat," he said. "It's a misnomer to call it a right to repair issue, because it's not. It's really an access to information issue."

There must be room in the market for independent operators that can service trucks, Kraus said.

"I think it's an industry problem that's just begging for an industry solution, and it's going to take an organization or a coalition of organizations to sit down and try to figure out how to solve the problem. But to hand it to Washington and expect it to come out with everybody in the independent and OEM channels to be happy with it would be a very difficult proposition."

Kraus has been active in setting up a public forum on the issue at Heavy Duty Aftermarket Week, a conference on aftermarket issues slated for Las Vegas in January.

The trucking industry itself has a mixed reaction to the issue.

Todd Spencer, executive vice president of the Owner Operator Independent Drivers Association, said he has not heard complaints from his members about obtaining service from independent shops on their trucks.

Larger fleet operators are starting to get concerned, however, according to Rob Braswell, technical director of the Technology and Maintenance Council of American Trucking Associations.

Big fleets are big customers, so they get what they want, he said. "But there are a lot of folks that aren't that big a customer, and they either have to pay for the information, and they make it expensive, or if you're an independent repair shop you don't even get access to it."

Braswell said he has begun hearing concerns from TMC members about getting access to service information.

The issue is particularly lively when it comes to federal and state regulations concerning on-board diagnostics for emissions equipment. The federal Environmental Protection Agency has proposed that heavy duty manufacturers install diagnostic systems to make sure that emissions controls are working properly, starting with the engines for the agency's 2010 standards.

A corollary to that requirement will be that the information needed to diagnose and correct problems be available to anyone who needs it. EPA has proposed regulating the pricing of service information. The aftermarket groups represented by Conlon, including the Automotive Aftermarket Industry Alliance and the Automotive Engine Rebuilders Association, have pressed EPA to set up a tiered approach to availability and pricing for the information. The Engine Manufacturers Association, meanwhile, argued that EPA does not have the authority to regulate this pricing and should take steps to ensure that manufacturers maintain control over their proprietary information.

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