[Senate Hearing 107-903]
[From the U.S. Government Publishing Office]
S. Hrg. 107-903
CUSTOMER CHOICE IN AUTOMOTIVE REPAIR SHOPS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CONSUMER AFFAIRS, FOREIGN COMMERCE AND TOURISM
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JULY 30, 2002
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska
Virginia CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon SAM BROWNBACK, Kansas
MAX CLELAND, Georgia GORDON SMITH, Oregon
BARBARA BOXER, California PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri GEORGE ALLEN, Virginia
BILL NELSON, Florida
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
Jeanne Bumpus, Republican Staff Director and General Counsel
Ann D. Begeman, Republican Deputy Staff Director
------
SUBCOMMITTEE ON CONSUMER AFFAIRS, FOREIGN COMMERCE
AND TOURISM
BYRON L. DORGAN, North Dakota, Chairman
JOHN D. ROCKEFELLER IV, West PETER G. FITZGERALD, Illinois
Virginia CONRAD BURNS, Montana
RON WYDEN, Oregon SAM BROWNBACK, Kansas
BARBARA BOXER, California GORDON SMITH, Oregon
JOHN EDWARDS, North Carolina JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri GEORGE ALLEN, Virginia
BILL NELSON, Florida
C O N T E N T S
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Page
Hearing held on July 30, 2002.................................... 1
Statement of Senator Dorgan...................................... 1
Witnesses
Cabaniss, John M., Jr., Director, Environment and Energy,
Association of International Automobile Manufacturers.......... 12
Prepared statement........................................... 13
Dana, Greg, Vice President, Environmental Affairs, Alliance of
Automobile Manufacturers....................................... 18
Prepared statement........................................... 20
Feste, Dale, Dale Feste Automotive, Hopkins, Minnesota........... 15
Prepared statement........................................... 17
Haas, Bill, Vice President, Technical Division, Education and
Training, Automotive Service Association....................... 7
Prepared statement with letter............................... 9
Nielsen, John, Director, Automotive Services and Repair Network,
American Automobile Association (AAA).......................... 23
Prepared statement........................................... 24
Vallely, John, President, North McLean AutoCare Center........... 26
Prepared statement........................................... 28
Wellstone, Hon. Paul, U.S. Senator from Minnesota................ 3
Prepared statement........................................... 5
Appendix
Prepared statement of Aaron Lowe, Vice President, Government
Affairs, Automotive Aftermarket Industry Association and the
Automotive Warehouse Distributors Association.................. 41
CUSTOMER CHOICE IN AUTOMOTIVE REPAIR SHOPS
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TUESDAY, JULY 30, 2002
U.S. Senate,
Subcommittee on Consumer Affairs, Foreign Commerce and
Tourism
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:25 p.m. in
room SR-253, Russell Senate Office Building, Hon. Byron L.
Dorgan, Chairman of the Subcommittee, presiding.
Staff Members assigned to this hearing: David Strickland,
Democratic Senior Counsel; Carlos Fierro, Republican Senior
Counsel; and Ken Nahigian, Republican Counsel.
OPENING STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. I'm going to call the Subcommittee hearing
to order today.
We welcome our colleague from Minnesota, Senator Wellstone.
The full committee just finished a rather lengthy hearing, less
than an hour ago, so we've spent a fair amount of the time in
this room, today.
We are convening the Subcommittee this afternoon for a
hearing at the request of our colleague from Minnesota, Senator
Wellstone. Senator Wellstone has brought to our attention a
very interesting issue regarding whether independent automobile
repair shops are being given the information they and their
customers need to properly repair their cars. The question
before us, is whether the ability of the consumer to choose
where they want to get their cars fixed being constrained
because the independent repair shops cannot get the information
they need to repair their vehicles?
Not surprisingly, depending on who you talk to, you get
different answers to that question. Some say all the
information is available, while others say they have to turn
away business because some repairs can only be done by a
dealer.
Let me say that I understand there's a natural tension
between repair information and proprietary information, between
making sure that anyone who is in the repair business today can
read the fault codes and properly repair the vehicle and not
releasing the internal computer codes that actually control how
the computer chip runs the vehicle. So we're having this
hearing to try to get to the bottom of what is really
happening.
What I do know is that if there ever was something an
American consumer cares about, it's their cars. My first
automobile was one I bought for $25. My dad pointed it out. My
dad was a fellow who drove a farm gas truck, and he told me of
an old car sitting in a granary on an abandoned farm. It was a
1924 Ford. The rats had eaten everything off that Ford--all the
wiring, the seat covers. All that was left was rusted metal. I
bought it for $25 from a fellow who had moved from the farm to
Milwaukee, Wisconsin. I hauled it into my dad's service station
and worked on it for about a year and a half restoring it. It
wasn't very complicated. The engine wasn't very complicated. It
was a labor of love.
But then I was in high school and discovered girls and
realized that I needed a car newer than a 1924 Ford. So now I
no longer own the 1924 Ford, much to my regret, but I know a
lot about cars because of that experience and the other cars
I've owned. I do know that today's cars have become
significantly more complicated. With computer chips and onboard
diagnostic equipment, they bear very little resemblance to that
1924 Ford. To fix a new model today, you almost have to be a
computer wizard. And to say that they are more difficult to
repair than my old car is really a large understatement.
This is a very important issue, because we know how much
people depend on their cars. We know that 70 to 80 percent of
all cars that are no longer under warranty are repaired at
independent repair facilities. We know also that there are a
lot of people who care a great deal about the dealership from
which they purchased that car, and they go back there
routinely. We know there are many other Americans who care a
great deal about their independent repair shop down the block
or on the corner, and that's where they trust getting their car
repaired. This is true especially in rural states where the
dealer's shop can often be many miles away.
Being able to take your car to the dealer is not always a
matter of choice. Having a good independent mechanic nearby who
has the information and tools that he or she needs to make the
right repair is critically important.
So I look forward to this hearing. I think it is a very
important and an interesting topic, and I appreciate Senator
Wellstone bringing it to the Subcommittee's attention.
The Senate has scheduled a vote for 2:45 today. My
intention would be to take Senator Wellstone's testimony. And,
following that, I will ask the other witnesses to come forward
and hear their testimony. We will then recess for perhaps 10
minutes while we cast our vote over in the Senate and then come
back and finish the hearing. I regret that inconvenience, but
that's what we need to do in order to accommodate the vote
that's occurring on the Senate floor.
Senator Wellstone, thank you very much for being here and
raising this issue. And why don't you proceed? Your entire
statement will be part of the record, and you may summarize as
you choose.
STATEMENT OF HON. PAUL WELLSTONE,
U.S. SENATOR FROM MINNESOTA
Senator Wellstone. Thank you, Mr. Chairman.
I have to say at the beginning that, you know, when I first
met with some of the independent mechanical repair facility
people and was just listening to them, I couldn't believe my
ears, and I thought this is really an important issue. This is
unfair, what's going on to a lot of small business people, and
unfair to consumers.
And when I look at the number of people that have come here
from, really, around the country, I just--I want to thank
everyone for being here today, and I just want to say to each
and every one of you that there was a full Committee this
morning with everybody here, and I know I've talked to a number
of different Senators who say they're very interested, and I
think there's going to be a lot of support.
Since I think this second committee is more important--the
second panel is more important, I'll just try to do this
briefly. I want to, first of all, thank you, and I want to tell
you that I think the real experts are going to be on the second
panel.
I want to say a word about Dale Feste, who is from
Minnesota, our state, President and Owner of Dale Feste
Automotive, which is a full-service independent mechanical
repair facility in Hopkins.
Dale founded his automotive repair business in 1980, and
his business now services over 4,200 vehicles per year. You
don't get that kind of business unless you provide the
customers with very, very good service. His shop is AAA
approved and was awarded top shop awards in 2000 and 2001. And
I would thank AAA for their strong support of this legislation.
In addition, he's a past president of the Alliance of
Automotive Service Providers of Minnesota, and I want to thank
Dale for coming all the way from Minnesota here to testify.
As I said, I met with a group of auto repair shop owners
back in April, and they were telling me about the Clean Air
Act, and they were telling me that basically, you know, there
was a requirement to monitor emissions, and they had access to
that code, but that basically what was happening is that post-
1996 you had this very sophisticated computerized system, but
they were being denied access to the code, in which case they
couldn't do the diagnosis and the repair work. And I couldn't
believe it. I mean, what I heard from them was that they were
unable to access the codes and the diagnostic tools necessary
to repair newer-model cars.
And, to me, it just sounded like almost a cartel, like a
few companies were driving them out of business. And then I
thought to myself, thinking back to the experience that we have
had in Northfield or in St. Paul, now. I mean, you sort of
build up a lot of trust with these independent mechanics. It's
where you want to take the car.
And I was saying this morning to everybody, Mr. Chairman,
that, look, if somebody wants to go to the dealership, they
should be able to, of course; but the only thing that these
small businessmen and women are asking for is a level playing
field. And the only thing I'm saying is that us consumers
should have a choice. We shouldn't be robbed of that choice.
So I introduced, on June 13th, the Motor Vehicle Owners'
Right to Repair Act, which would protect the viability of the
independent service station and repair shops and ensure that
consumers have a choice.
And basically I'll summarize and finish. This legislation
would simply require a manufacturer of a motor vehicle sold in
the United States to disclose to the vehicle owner, a repair
facility, and the Federal Trade Commission the information
necessary to do the diagnosis to service and repair the
vehicle. And the bill bars the FTC from requiring disclosure of
any information entitled to protection as to manufacturer's
trade secrets, so we deal with that concern.
Mr. Chairman, fundamentally this legislation is just about
a level playing field. Independent mechanics, all the
independent mechanics you see back here, they don't mind
competition. In fact, I think they thrive on it. I think with
fair competition, they can do great, and they know it, but they
can't stay in business if they don't have access to the
information to repair the new cars.
And if the kind of anticompetitive practices that you will
hear testimony on today continue to occur, we're simply going
to see a lot of these independent shops fail, through no fault
of their own, because of anticompetitive practice. If this
isn't fixed, the result of the loss of a competitive-free
market for auto repair will be higher prices, poor customer
service, and lower quality, which all means less safe cars and
trucks on America's roads. I don't think I'm stretching when I
make that point. This legislation is also an example of what is
good for small business is good for consumers.
I'll end my testimony on this note. I would guess that for
as long as there have been automobiles, there have been
independent mechanics to fix them, and I think both sides would
agree they've worked pretty well together. I don't think
anybody wins if this problem isn't fixed. I don't think it'll
be good for the automotive industry if we lose all of our
independent repair shops. I know it won't be good for our
consumers, and I know it won't be good for our communities.
I think this bill, Mr. Chairman, is a good way out of this
mess, but what I'm here for, more than anything else, is
results. I would be delighted if the manufacturers would sit
down with the independent mechanics and work out a fair
agreement in August. Otherwise, I'm committed to moving forward
with this legislation, getting every single Senator, Democrat
and Republican alike, behind these independent mechanics,
behind these small businesses and passing this legislation.
Once you meet with people and you hear about their
businesses and you hear about how they've built their
businesses, and then you see the threat that they're going to
be driven out of business because of an anticompetitive
practice, it really puts the fire in your belly. I mean, I'm so
determined to help, and I think we'll get strong bipartisan
support.
I thank you so much for holding this hearing. It's much
appreciated.
[The prepared statement of Senator Wellstone follows:]
Prepared Statement of Hon. Paul Wellstone, U.S. Senator from Minnesota
Mr. Chairman, members of the Subcommittee thank you for holding
this hearing on the Motor Vehicle Right to Repair Act and for allowing
me testify. I will be brief, because the real experts are in the second
panel, but I do want to make some short remarks about how I came to
this issue and why I think it is an important issue to be addressed by
this Subcommittee and the Senate.
Before I do that, I want to say a few words of introduction for one
of the experts on the Second Panel, Dale Feste, President and owner of
Dale Feste Automotive, a full service independent mechanical repair
facility in Hopkins, MN. Dale founded his automotive repair business in
1980 and his business now services over 4200 vehicles per year. His
shop is AAA approved and was awarded ``Top Shop'' awards in 2000 and
2001. In addition he is a past President of the Alliance of Automotive
Service Providers of Minnesota. Thank you, Dale, for agreeing to
testify.
In April of this year I met with a group of auto repair shop owners
from Minnesota who told me that some auto manufacturers are effectively
preventing them from working on newer cars. They explained that the
1990 Clean Air Act mandated that vehicle manufacturers install computer
systems to monitor emissions in 1996 model year cars and beyond. Today,
many vehicle systems are integrated into the car's computer system,
making auto repair an increasingly ``high tech'' business and making
access to the computer and the information it contains vital to the
ability to perform repairs.
The problem is that independent repair shops are increasingly
unable to access the codes and diagnostic tools necessary to repair
newer model cars. The effect is to reduce consumer choice for auto
repair services, and to endanger the livelihood of thousands of small,
family owned repair shops across the country.
I know that this Committee will agree that the last thing America
needs is another industry where all the little guys, the small,
independent businesses, are driven out. It is terrible for our
communities who lose businesses and jobs, and reduced competition means
higher prices for consumers.
On June 13th I introduced S. 2617, the Motor Vehicle Owners' Right
to Repair Act of 2002 to address this problem. This legislation would
protect the viability of independent service station and repair shops
and ensure that consumers will continue to have a choice of automotive
service providers.
Specifically, the Motor Vehicle Owners' Right to Repair Act would
simply require a manufacturer of a motor vehicle sold in the United
States to disclose to the vehicle owner, a repair facility, and the
Federal Trade Commission (FTC) the information necessary to diagnose,
service, or repair the vehicle. The bill bars the FTC from requiring
disclosure of any information entitled to protection as a
manufacturer's trade secret.
Mr. Chairman, fundamentally this legislation is about a level
playing field. Independent automotive repair shop owners have not come
to Congress looking for a hand-out. They simply want to be able to
compete for the driving public's repair dollar on the basis of quality,
service and price. Independent mechanics don't mind competition, but
they can't stay in business if they don't have access to the
information to repair newer cars. And if the kind of anti-competitive
practices that you will hear testimony on today continue to occur,
we're simply going to see these independent shops fail.
If this isn't fixed, the result of the loss of a competitive free
market for auto repair will be higher prices, poorer customer service,
and lower quality, which all mean less-safe cars and trucks on
America's roads. This legislation is also an example of what is good
for small business is good for the consumer.
I'll end my testimony on this note: I would guess that for as long
as there have been automobiles there have been independent mechanics to
fix them. And I think both sides would agree they've worked pretty well
together. I don't think anybody wins if this problem isn't fixed. I
don't think it will be good for the automobile industry if we lose all
of our independent repair shops. I know it won't be good for consumers
or our communities.
Mr. Chairman, I think my bill is a good way out of this mess. But
I'm really here to ask for results--an end to this anti-competitive
behavior. I am open to any solution that gets us there, and this
hearing is a good first step in that direction.
Senator Dorgan. Senator Wellstone, thank you very much.
Let me just ask a brief question, and then I would like to
ask the other witnesses to come forward. We will hear testimony
from Greg Dana, Vice President of Environmental Affairs, who
represents the Alliance of Automobile Manufacturers. On page
five of his testimony, he essentially says, ``Look, there's no
problem here.'' He's essentially saying that if independent
mechanics are not able to make the repairs, it's not because
they don't have the information; it's because they don't know
how to make the repairs.
I mean, that's essentially what the Alliance is saying,
with respect to the coordination they have had with the repair
shops, the pilot projects, the programs and so on.
On the other hand, I, as a consumer, have driven around for
some time with a car that says, ``Check your engine,'' so I
went to an independent repair shop, and they fixed whatever was
wrong, but they couldn't get the little light off. And I said,
``Well, why does it still say, `Check your engine?' '' They
said, ``Well, we don't have the capability of getting that
light off for you.'' So I drove for a long time with a ``Check
your engine'' light. Is that part of what you're talking about?
Senator Wellstone. It is. And, you know, Mr. Chairman, I'll
tell you something. This second panel, they're going to speak
so loudly and clearly to this point that was made. I must say
that if you're in any coffee shop in North Dakota or Minnesota,
and you ask people about, ``Well, do you think these
independent mechanics are--do you think they do a good job, or
do you think you really ought to be going to the dealerships
all the time because they do much better work?'' It's not even
a close call what you're going to hear.
And this basically--this is kind of like a little bit
outrageous--I'm not going to be shrill--that is to say you
don't give people access to the codes, you make sure that
they're not able to do some of the diagnosis and the work, and
then you turn around and say, ``The problem is that they don't
have the ability to do mechanical work.'' I think that's an
insulting claim to make, and I think we're going to have people
on the second panel that will speak to it directly.
Senator Dorgan. Well, Senator Wellstone, thank you for your
legislation and your leadership.
Senator Wellstone. Thank you.
Senator Dorgan. I do not know what your time situation is,
but if you have time, I would, by consent, invite you to join
me at the podium. You're not a Member of this Committee, but we
would invite you, as a courtesy, to join me. And thank you for
your testimony.
Let me call to the witness table, Mr. Bill Haas, Vice
President of Automobile Service Association; Mr. John Cabaniss,
Jr., Association of International Auto Manufacturers; Mr. Dale
Feste, who owns Dale Feste Automotive in Hopkins, Minnesota;
Ms. Josephine Cooper, President of the Alliance for Automobile
Manufacturers; Mr. John Nielsen, Director of Automotive
Services and Repair Shops for AAA; and Mr. John Vallely,
President of McLean Marathon Service representing NAPA.
I want to thank all of you for being with us today. And, as
you note from my opening statement and from the statement of
Senator Wellstone, we have a dispute about what the facts are
here. My hope is that we can, through the process of this
hearing, understand what factors we should base our decision on
whether federal legislation is warranted to address an
unfairness.
Why don't we begin the same way that I introduced the
panel? Mr. Bill Haas, Vice President of the Automotive Service
Association. Mr. Haas?
And I would say to all of you, your entire statement will
be made a part of the permanent record. You may summarize. Why
don't you proceed, Mr. Haas?
STATEMENT OF BILL HAAS, VICE PRESIDENT, TECHNICAL DIVISION,
EDUCATION AND TRAINING, AUTOMOTIVE SERVICE ASSOCIATION
Mr. Haas. Thank you.
Good afternoon, Mr. Chairman and Members of the
Subcommittee. My name is Bill Haas, and I appreciate the
opportunity to discuss S. 2617, the Motor Vehicle Owners' Right
to Repair Act, introduced by U.S. Senator Paul Wellstone. The
legislation is the companion bill to H.R. 2735 introduced by
U.S. Representatives Joe Barton of Texas and Edolphus Towns of
New York.
I serve as the Vice President of Technical Divisions,
Education and Training for the Automotive Service Association.
The ASA is the largest not-for-profit trade association of its
kind, internationally serving more than 13,000 member
businesses, representing over 65,000 professionals from all
segments of the automotive service industry.
I have an extensive background in automotive repair. I
completed a two-year automotive mechanics cooperative education
program while in high school. And since that time, I've been
involved in the industry in various capacities. I've been an
automotive technician, repair shop manager, parts counterman,
shop owner, and automotive instructor.
I've been ASE certified since 1976. ASE, the National
Institute of Automotive Service Excellence, is the automotive
industry's testing and certification organization. They are
supported by the automobile manufacturers, new car dealers, and
the independent aftermarket. They test certifications for our
members and new car dealers.
Mr. Chairman, the independent aftermarket is in trouble.
Since the beginning of the automobile, independent repairers
have been at the front lines of automotive repair. The American
motoring public clearly chooses the independent repairer 70
percent of the time after a vehicle is no longer under
warranty. Our repairers build relationships with consumers and
are a more economically viable alternative than the new car
dealer in most cases.
Prior to the 1990 Clean Air Act amendments, repairers were
able to obtain service information, tools, and training
sufficient to compete with the new car dealer. The Clean Air
Act's emissions requirements compelled the vehicle
manufacturers to install much more sophisticated equipment on
1996 and newer vehicles. During the debate of the Clean Air Act
amendments, Congress saw fit to provide language protecting the
independent repairer.
In addition, we believed that the U.S. Environmental
Protection Agency would enforce the law as passed by Congress.
This was affirmed in the 1995 EPA Service Information
Regulation. The regulation assured independent repairers the
same emissions service information as the new car dealers. It
also discussed at length that the vehicle manufacturer should
provide this information at a reasonable cost--not free, but at
a reasonable cost. We have always paid for service information
and believe that we should pay for it in the future but, I
stress again, at a reasonable cost.
How serious is our problem? There are approximately 209
million cars and light duty vehicles in the U.S. We estimate
that there are 178,000 independent repairers in the U.S. The
aftermarket's most recent analysis included 1,076,250,000
repair orders or incidents of service annually. This is the
number of service opportunities when the consumer drives a
vehicle to our business. This represented a total sales of $123
billion.
ASA recently surveyed our national leaders from across the
country and determined that today 15 percent of all incidents
of service are rejected due to a lack of information. This
amounts to 161,437,500 rejected incidents of repair annually.
The loss to our industry is $18,242,437,500.
Independent repairers will see numbers of rejected repairs
increase exponentially over the next few years. As 1996 and
newer vehicles move into our shops, customers will have little
patience with our sending them to the new car dealers. We lose
our customers and eventually our businesses. There are two
types of information independent repairers require to stay
competitive: emissions information and non-emissions
information. The dissemination of emissions information is
required by law. This law has not been enforced. The EPA has
contended that the 1995 regulation was insufficient to force
the vehicle manufacturers to give us the emissions information
required in the Clean Air Act amendments. EPA has proposed a
new emissions service information regulation in 2001, but it
has not been finalized. Clearly, emissions information has not
been provided as required by the 1995 regulation, and yet it
has not been enforced.
There are many cases where independent repairers can
purchase the same software as the new car dealer, but the
independent's software has specific repair items left blank
when the tool attempts to read the vehicles' computers. The new
car dealer's software contains these items. Some of these blank
items are related to safety. Honda Motor Company currently
restricts the release of pertinent service information related
to safety. Franchised Honda dealers purchase a scan tool, which
is manufactured for Honda by Vetronix. Honda prevents Vetronix
from including information necessary to diagnosis anti-lock
brake systems in the same tool when the tool is purchased by
anyone other than the franchise dealer.
With regard to reasonable cost, the law's intent was to
keep the independent repairer competitive. This part of the
1995 EPA regulation, reasonable cost, was exhausted in its
discussion. Yet some manufacturers are using it as a mechanism
to block service information distribution.
In closing, Mr. Chairman, emissions and non-emissions
service information are being denied to the independent
repairer at an increasing rate. Senator Wellstone's legislation
assures the aftermarket that both non-emissions and emissions
service information will be provided to the independent
repairer. This protects consumer choice and the continued safe
operation of the consumer's vehicle.
The independent repairers' technicians have the same
certification process as those of the new car dealer. We have
been trusted with over 70 percent of America's vehicles for
many years. We want to continue to be a competitive part of the
U.S. economy. Senator Wellstone's legislation assures us of
that role.
We are not an industry that comes regularly before the
Congress or your Committee. We hope you will give serious
consideration to Senator Wellstone's legislation.
Mr. Chairman, I also have a letter from the Tire Industry
Association that I would like to have included or submitted
along with my testimony this afternoon.
Mr. Haas. Thank you.
[The prepared statement of Mr. Haas, as well as a letter
from the Tire Industry Association, follow:]
Prepared Statement of Bill Haas, Vice President, Technical Division,
Education and Training, Automotive Service Association
Good afternoon Mr. Chairman and Members of the Subcommittee. My
name is Bill Haas and I appreciate the opportunity to discuss Senate
Bill 2617, the Motor Vehicle Owner's Right to Repair Act, introduced by
U.S. Senator Paul Wellstone. This legislation is the companion bill to
H.R. 2735 introduced by U.S. Representatives Joe Barton of Texas and
Edolphus Towns of New York.
I serve as Vice President of Divisions, Education and Training for
the Automotive Service Association. The ASA is the largest not-for-
profit trade association of its kind, internationally serving more than
13,000 member businesses, representing over 65,000 professionals from
all segments of the automotive service industry. We also have the
largest collision trade show in the world attended by approximately
40,000 professionals each year.
I have an extensive background in automotive repair. I completed a
two-year automotive mechanics cooperative education program while in
high school. Since that time, I've been involved in this industry in
various capacities. I have been an automotive technician, repair shop
manager, parts counterman, shop owner and automotive instructor. I have
also completed my Accredited Automotive Manager (AAM) designation from
the Automotive Management Institute (AMI) and have been ASE certified
since 1976. ASE, Automotive Service Excellence, is the automotive
industry's testing and certification organization. They are based in
Herndon, Virginia and are supported by automotive manufacturers, new
car dealers and the independent aftermarket. They test technicians for
our members and new car dealers. I have served as Chairman of the
Automotive Technology Advisory Committee at Fox Valley Technical
College in Wisconsin, Chairman of the Fox Cities Alliance for Education
Automotive Technology Youth Apprenticeship Program and participated in
ASE test-writing workshops for manual transmissions and drive axles.
The independent aftermarket is in trouble. Since the beginning of
the automobile, independent repairers have been at the front lines of
automotive repair. The American motoring public clearly chooses the
independent repairer 70% of the time after a vehicle is no longer under
warranty. Our repairers build relationships with consumers and are a
more economically viable alternative than the new car dealer in most
cases.
Prior to the 1990 Clean Air Act amendments repairers were able to
obtain service information, tools and training sufficient to compete
with the new car dealer. The Clean Air Act's emissions requirements
compelled the vehicle manufacturers to install much more sophisticated
equipment on 1996 and newer vehicles. During the debate of the Clean
Air Act Amendments, Congress saw fit to provide language protecting the
independent repairer. At the time, the aftermarket did not foresee
vehicle manufacturers tying many non-emissions functions of the
vehicles into these new high technology computers.
In addition, we believed that the U.S. Environmental Protection
Agency would enforce the law as passed by the Congress. This was
affirmed in the 1995 EPA service information regulation. The regulation
assured independent repairers the same emissions service information as
the new car dealers. It also discussed at length that the vehicle
manufacturers should provide this information at a reasonable cost, not
free but at a reasonable cost. We have always paid for service
information and believe that we should pay for it in the future but, I
stress at a reasonable cost.
How serious is our problem? There are approximately 209 million
light duty trucks and cars in the United States. We estimate there are
178,000 independent repairers in the U.S. The aftermarket's most recent
analysis included 1,076,250,000 repair orders or incidents of service.
This is the number of service opportunities when the consumer drives a
vehicle to our business. This represented total sales of $123 billion.
ASA surveyed our national leaders from across the country and
determined that today 15% of all incidents of service are rejected due
to a lack of information. This amounts to 161,437,500 rejected
incidents of repair annually. The loss to our industry is
$18,242,437,500. This means significant technician job losses and local
economic impact.
Independent repairers will see numbers of rejected repairs increase
exponentially over the next few years. As 1996 and newer vehicles move
into our shops, customers will have little patience with our sending
them to the new car dealers. We lose our customers and eventually our
businesses.
There are two types of information independent repairers require to
stay competitive; emissions information and non-emissions information.
The dissemination of emissions information is required by law. This law
has not been enforced. EPA has contended that the 1995 regulation was
insufficient to force the vehicle manufacturers to give us the
emissions information required in the Clean Air Act Amendments. EPA
proposed a new emissions service information regulation in 2001 but it
has not been finalized. Clearly emissions information has not been
provided as required by the 1995 regulation and yet it has not been
enforced. Enforcing the emissions service information regulation is
certainly a positive step for improving the plight of the independent
repairer.
Our information dilemma is two-fold: 1) Information is not being
provided by the vehicle manufacturers; 2) the information is priced to
place the aftermarket at a significant competitive disadvantage.
There are many cases where independent repairers can purchase the
same software as the new car dealer but the independent's software has
specific repair items left blank when the tool attempts to read the
vehicle's computer. The new car dealer's software contains these items.
Some of these blank items are related to safety. Honda Motor Company
currently restricts the release of pertinent service information
related to safety. Franchised Honda dealers purchase a scan tool which
is manufactured for Honda by Vetronix. Honda prevents Vetronix from
including information necessary to diagnose anti-lock brake systems in
the same tool when the tool is purchased by anyone other than the
franchised Honda dealer.
ASA's collision repairers have also had a vested interest in this
debate. Air bags have become a major cost item for a collision repair.
As these systems are increasingly tied into the vehicle's computers,
more and more vehicles will have to be forwarded to the new car dealer
after a collision repair is completed. This will cause more delays for
the consumer and increased insurance costs through rental car usage,
etc. Independent repairers have faithfully made collision repairs in
the past and are competent to make them in the future in a safe, timely
manner if they are provided sufficient service information.
There are cases where we can't purchase a specific tool. Chrysler,
until recently, blocked the aftermarket from purchasing its DRB III
tool. Since this legislation was introduced, the tool has been made
available to us.
With regard to reasonable cost, the law's intent was to keep the
independent repairer competitive. This part of the 1995 EPA regulation,
reasonable cost, was exhausted in its discussion. Yet some
manufacturers are using this as a mechanism to block service
information distribution. Volvo will provide information to the
aftermarket but at a cost of approximately $20,000. This does not
include vehicle updates. When we raised this issue with the EPA, they
informed us that this violated the spirit of reasonable cost and the
intent of the law. But without enforcement, the law is meaningless.
In closing Mr. Chairman, emissions and non-emissions service
information are being denied the independent repairer at an increasing
rate. EPA has not enforced the will of Congress as stated in the Clean
Air Act Amendments of 1990. We need this law enforced. Senator
Wellstone's legislation assures the aftermarket that both non-emissions
and emissions service information will be provided the independent
repairer. This protects consumer choice and the continued safe
operation of the consumer's vehicle.
The independent repairer's technicians have the same certification
process as those of the new car dealer. Many of our employees have
worked in new car dealerships. We have been trusted with over 70% of
America's vehicles for many years. We want to continue to be a
competitive part of the U.S. economy. Senator Wellstone's legislation
assures us this role.
We are not an industry that comes regularly before the U.S.
Congress or your Committee. We have an open dialogue with the vehicle
manufacturers through an industry group, the National Automotive
Service Task Force. This task force has been very helpful but can not
alone resolve the volume of rejected repairs due to the lack of service
information.
The majority of automobile manufacturers have sent letters in
support of providing emissions and non-emissions information. This is
certainly a step in the right direction but our problems still persist.
We hope you will give serious consideration to Senator Wellstone's
legislation.
______
Tire Industry Association,
July 26, 2002.
Bob Redding,
Washington, DC Representative,
Automotive Service Association,
Washington, DC.
Dear Bob:
On behalf of the 4,000-plus members of the Tire Industry
Association (TIA) I would like to express to ASA our full support of
the Motor Vehicle Owners Right to Repair Act (H.R. 2735/S. 2617). This
legislation is crucial to the thousands of independent tire dealers who
perform tire and automotive services.
TIA was formed July 1 of this year when the Tire Association of
North America and the International Tire & Rubber Association merged
into a single entity. Our membership is comprised of tire dealers,
wholesalers and distributors, manufacturers and retreaders, businesses
that sell, service and recycle tire and rubber products, as well as
companies that provide equipment and services for the tire industry.
The Motor Vehicle Owners Right to Repair Act would require original
equipment manufacturers (OEMs) provide service information to
independent auto repair facilities. This bill could not be more
important to the tire industry at this time.
The Transportation Recall Enhancement, Accountability and
Documentation (TREAD) Act passed as a result of the Ford/Firestone
crisis in 2000 includes a mandate that all new passenger vehicles
(after 2005) be equipped with Tire Pressure Monitoring Systems (TPMSs).
The National Highway Traffic Safety Administration (NHTSA) issued the
final TPMS rule on July 5, 2002. One of TIA's largest concerns with the
published final rule is that the government is ignoring the need of
independent tire dealers and automotive service providers to be given
the OEM information necessary to install, service, maintain,
recalibrate and fix these TPMSs.
TIA will work closely with ASA in the effort to pass the Right to
Repair Act, a bill that is critical to our members.
Sincerely,
Becky MacDicken,
Director of Government Affairs,
Tire Industry Association.
Senator Dorgan. Mr. Haas, on page five, you indicated the
loss to your industry is $18,242,437,500. In Congress, we round
that off----
[Laughter.]
Senator Dorgan.--$18.2 billion.
[Laughter.]
Mr. Haas. I think that proves my point that we don't come
before you regularly, Mr. Chairman.
[Laughter.]
Senator Dorgan. You've got an accountant, that gets down to
the $500 in $18 billion. But anyway, I appreciate your
testimony, Mr. Haas.
Mr. Haas. Thank you.
Senator Dorgan. Next, let's hear from Mr. John Cabaniss,
Jr., Association of International Auto Manufacturers. Mr.
Cabaniss, why don't you proceed?
STATEMENT OF JOHN M. CABANISS, JR., DIRECTOR, ENVIRONMENT AND
ENERGY, ASSOCIATION OF INTERNATIONAL AUTOMOBILE MANUFACTURERS
Mr. Cabaniss. Thank you, Mr. Chairman, and thank you for
the opportunity to testify today before this Subcommittee
regarding vehicle service information.
My name is John Cabaniss. I am the Director for the
Environment and Energy at the Association of International
Automobile Manufacturers. And for the past two years, I've had
the privilege of serving as the chairman of the National
Automotive Service Task Force, a cooperative project involving
the auto industry, the auto service industry, and the equipment
and tool industry.
Automakers consider the auto service industry our partner
in providing vehicle service and repairs to the driving public.
Auto manufacturers do not intentionally withhold service
information from the service industry. To do so would be
contrary to their best interests. Automakers want their
customers to have a positive driving experience, including the
ability to obtain effective service no matter where they take
their vehicles. Automakers have every incentive to make sure
that the industry has the information, training, and tools to
maintain and repair vehicles. Historically, 70 to 80 percent of
the vehicle service information repairs are performed in non-
dealer shops, and this level has been constant for many years.
We do not expect it to change.
During the past decade, the auto industry has had to
address the challenge of managing the growing volume of
information needed to maintain and repair modern vehicles. For
the most part, however, questions involve where and how to
access the information rather than its actual availability.
Recognizing the need for a national forum for dialog on
service issues, in November 2000 the auto industry and the
service industry established the National Automotive Service
Task Force. Its mission is to facilitate the identification and
corrections of gaps and the availability and accessibility of
service information, training, diagnostic tools and equipment,
and communications to automotive service professionals.
At the outset, the Task Force recognized three basic
realities. First, despite the best efforts of everyone
involved, some gaps in service information, training, and tools
are inevitable. Second, the rapid pace of change in vehicle
technology, which will clearly continue, exacerbates this
problem. And, third, a continuing forum for open communication
and cooperation is the best way to address issues.
The Task Force has made significant and sustained progress.
The first issue addressed was accessibility. In May 2001, an
Internet site was opened on the International Automotive
Technicians Network Web site to provide a ready reference for
all technicians to obtain service information and tools from
auto manufacturers. A special feature of this site is the
inclusion of a complaint form for a technician's use if
information cannot be located. This reference Web site is
widely publicized and is updated several times each year. The
latest update was posted on July 1st of this year.
In October 2001, another major step forward occurred when
20 auto manufacturers announced a ``Letter of Intent'' to
demonstrate their commitment to the Task Force cooperative
process. This commitment, which formalizes what many automakers
are already doing, is that by early 2003, manufacturers intend
to make available to independent technicians the same
diagnostic tools, service information, and training materials
that they currently make available to their franchise dealers
for all 1996 and newer cars and trucks. All manufacturers are
moving ahead on this basis, and most are covering additional
model years on their Web sites and including directories for
information for earlier years.
The success of the Task Force is due to the participation
of a wide range of parties. Currently, there are 63
organizations in the Task Force, including the Automotive
Service Association, the Automotive Aftermarket Industry
Association, the Service Technicians Society, the Alliance of
Automotive Service Providers, and the Equipment and Tool
Institute, to name just a few. Participation continues to grow.
Just in the past week, we've added a few new members, including
CARQUEST and a number of other notables. There are a--these are
just a few examples of the progress being made in the Task
Force.
In conclusion, the auto industry is committed to the
National Automotive Service Task Force. We believe this Task
Force is the proper venue for continuing to address service
issues. And it is making significant and sustained progress.
Therefore, we believe that legislation in this area is not
needed.
Thank you. I would be pleased to answer any questions.
[The prepared statement of Mr. Cabaniss follows:]
Prepared Statement of John M. Cabaniss, Jr., Director, Environment and
Energy, Association of International Automobile Manufacturers
Thank you for the opportunity to testify before the Subcommittee
regarding vehicle service information related issues. My name is John
Cabaniss. I am the Director for Environment & Energy at the Association
of International Automobile Manufacturers.\1\ For the past two years, I
have had the privilege of serving as the chairman of the National
Automotive Service Task Force, a cooperative project involving the auto
industry, the automotive service industry, and the equipment and tool
industry.
---------------------------------------------------------------------------
\1\ AIAM members include American Honda Motor Co., American Suzuki
Motor Corp., Aston Martin Lagonda of North America, Inc., Hyundai Motor
America, Isuzu Motors America, Inc., Kia Motors America, Mitsubishi
Motor Sales of America, Nissan North America, Peugeot Motors of
America, Saab Cars USA, Societe Anonyme Des Usines Renault, Subaru of
America, and Toyota Motor Sales, U.S.A. AIAM also represents original
equipment suppliers and other automotive-related trade associations.
AIAM members have invested over $20 billion in new production and
distribution capacity in the U.S., creating tens of thousands of high-
skill, high-wage jobs across the country in manufacturing, supplier
industries, ports, distribution centers, headquarters, R&D centers, and
automobile dealerships.
---------------------------------------------------------------------------
In my presentation today, I will briefly describe who is involved
in the National Automotive Service Task Force project, what activities
are under way, and the progress that has been made and that is
continuing. After hearing this update, I hope you will agree that the
Task Force is the proper venue for addressing service issues, and that
legislation in this area is not needed.
To begin, I would point out that motor vehicle manufacturers
consider the automotive service industry our partner in providing
vehicle service and repairs to our mutual customers, the driving
public. Moreover, auto manufacturers do not intentionally withhold
service information from the auto service industry. To do so would be
contrary to their best interests. Automakers want their customers to
have a positive driving experience, including the ability to obtain
effective service no matter where or when their vehicles need
maintenance. Automakers have every incentive to make sure that the auto
service industry has the information, training, and tools to maintain
and repair vehicles. Historically, 70-80 percent of vehicle service and
repairs are performed in non-dealer shops. This level has been constant
for many years and is not expected to change.
During the past decade, the auto industry has had to address the
challenge of managing the growing volume of information needed to
maintain and repair modern vehicles. This necessitated changes in
communications channels and techniques. As these changes have been
made, some service providers have experienced difficulty in obtaining
the necessary information. For the most part, however, these
difficulties have involved questions about where and how to access the
information rather than its actual availability.
The NASTF Project
The origin of the National Automotive Service Task Force dates back
to 1999 when the Arizona legislature was considering a vehicle service
information bill. During 1999 and 2000, the auto industry and the
Arizona auto service industry worked together to investigate
allegations of manufacturers' withholding information. It soon became
apparent that the real issue for shops and technicians was
accessibility, that is, knowing where to get the information and tools
they need. It was also clear that a continuing forum for dialogue
between parties on these issues was needed at the national level.
Therefore, in November 2000 the National Automotive Service Task Force
was established jointly by the auto industry and the auto service
industry. The mission of the Task Force is to facilitate the
identification and correction of gaps in the availability and
accessibility of automotive service information, training, diagnostic
tools and equipment, and communications to automotive service
professionals.
At the outset, the Task Force recognized three basic realities.
First, that despite the best efforts of everyone involved, some gaps in
service information, training, and tools are inevitable. Second, that
the rapid pace of changes in vehicle technology, which will clearly
continue, exacerbates this problem. And, third, that a continuing forum
for open communication and cooperation is the best way to address
issues.
The Task Force has made significant and sustained progress. The
first issue the Task Force addressed was the issue of accessibility. In
May 2001 an Internet site was opened on the International Automotive
Technicians Network website to provide a ready reference for all
service technicians requiring service information and tools from auto
manufacturers. A special feature of this site is the inclusion of a
complaint form for a technician to use if he/she cannot locate the
information being sought. This reference information is updated several
times each year. The latest update was posted on July 1, 2002. This
reference is broadly publicized by Task Force participants.
At the Task Force semi-annual meeting in October 2001, another
major step forward occurred when twenty auto manufacturers announced
that they had signed a ``Letter of Intent'' to demonstrate their
commitment to the Task Force cooperative process. This commitment,
which formalizes what many automakers are already doing, is that:
LBy January, 2003, the manufacturers intend to make available to
independent technicians the same diagnostic and repair capabilities by
making available diagnostic tools (and tool information), service
information, and training materials that they currently make available
to their franchised dealers for all 1996 and newer cars and light
trucks.
LAll manufacturers are moving ahead on this basis, and most are
covering additional model years on their websites and including
directories for information for earlier years.
The success of the Task Force over the past two years is due to the
participation of a wide range of parties. We are fortunate to have a
``Who's Who'' of auto service organizations participating, including
the Automotive Service Association, the Automotive Aftermarket Industry
Association, The Automotive Service Councils of California, the Service
Technicians Society, the Alliance of Automotive Service Providers, the
International Automotive Service Technicians Network, and the Equipment
& Tool Institute, to name just a few. Altogether we have 78 individuals
representing 63 organizations participating in the Task Force, and
participation is growing. The complete list of participants and other
information is available at the Task Force website (www.nastf.org).
These are just a few examples of the progress that is being made in
the Task Force. In addition to the Service Information Committee, the
Task Force has a Training Committee, an Equipment and Tool Committee,
and a Communications Committee. The Training Committee is focused on
ensuring that all technicians have access to factory equivalent
training. The Equipment and Tool Committee is focused on improving the
availability of generic tools for both dealer and non-dealer shops.
Finally, the Communications Committee is focused on getting information
out to shops and technicians about the Task Force project, how to
obtain the tools and service information they need, the progress the
Task Force is making, how to get involved and provide input, and how
they can otherwise help with the project.
In conclusion, the auto industry is committed to the National
Automotive Service Task Force. We believe that this Task Force is the
proper venue for continuing to address service related issues, and it
is making significant and sustained progress in improving the
availability and accessibility of information, training, and tools to
automotive service professionals. Therefore, we believe that
legislation in this area is unnecessary.
Thank you. I would be pleased to answer any questions.
Senator Dorgan. Mr. Cabaniss, thank you very much.
Next, we will hear from Dale Feste, Dale Feste Automotive,
Hopkins, Minnesota. Mr. Feste, welcome.
STATEMENT OF DALE FESTE, DALE FESTE AUTOMOTIVE, HOPKINS,
MINNESOTA
Mr. Feste. Thank you. Good afternoon, Mr. Chairman. I've
looked forward for the opportunity to testify.
My name is Dale Feste, and I am the Owner and President of
Dale Feste Automotive in Hopkins, Minnesota, a suburb of
Minneapolis. I run a full-service mechanical independent repair
facility.
I founded my business in 1980. And at this point in time, I
serve approximately 4,200 vehicles per year. Like Senator
Wellstone referenced, I am a member of the Automotive Service
Association, and I also serve on the executive board of the
Automotive Management Institute.
Automotive technology today is being used to successfully
``lock out'' motor vehicle owners from being able to repair
their own vehicles. We are gradually losing the vehicle owners'
right to select where they have their vehicles repaired. The
independent automotive aftermarket repairs over 70 percent of
all the nation's vehicles. When a vehicle's warranty period is
over, independent repairers get the majority of these vehicles.
The Clean Air Act of 1990 required manufacturers to develop
new technologies and computers in an effort to lower vehicle
emissions. During that bill's consideration, we believed we
were protected by the following legislative language
referencing emissions service information in the Clean Air Act
amendments. And they read, ``No such information may be
withheld if that information is provided (directly or
indirectly) by the manufacturer to franchise dealers.''
EPA continued with a final regulation on August 9th of 1995
assuring independent repairers the same emissions service
information as new car dealers at a ``reasonable cost.'' This
has not occurred. We still have emissions information not
available to the independent, and reasonable cost with regard
to several manufacturers is not a consideration.
If you buy a Volvo Vira tool--that's the tool made
available to the independent repairer--it will not allow us to
make a complete emissions analysis of the vehicle. The Volvo
dealer has the Vadis tool. The Vadis tool allows the dealer to
make a complete analysis of the vehicle. This particular
example should not require a new law. The 1990 Clean Air Act
amendments and subsequent regulations should protect us and our
customers from this scenario.
We thought the legislative language in the 1995 regulation
would suffice in protecting our industry. They have not. There
are 178,000 independent repairers nationwide. We are the small
business persons in communities across the nation. Very
clearly, without service information, we will ultimately be
forced to close our doors. As the 1996 and newer vehicles come
out of warranty, they roll into our facilities. If we cannot
repair them, we have to send them back to the new car dealer.
This is 70 percent of America's fleet not under warranty.
Unfortunately, this lack of information is not limited only
to emissions. Many of the non-emission systems are now being
tied into these vehicle computers. Some of these are safety
items and are critical in the repair of our customers'
vehicles.
Let me give you an example. In April of this year, a long-
term customer of mine brought her 1996 Dodge Grand Caravan with
an air bag dash light on. We were unable to access any trouble
codes to diagnosis the system, and we had to send our customer
to the new car dealer, explaining to her that the dealer was
the only place that could access trouble codes for the air bag
system.
The air bag, along with other systems in the vehicle,
should not be compromised in any way. Repair information should
be open and available for all repairers to protect the
consumer. Although the tool has been finally made available to
the independent repairer by the manufacturer, the software does
not include safety items.
My friends in the collision repair industry face the air
bag situation many times each week. It is now one of the more
expensive systems in the vehicle to repair in a collision
repair. The collision repair facilities will, in an increasing
number of cases, have to delay their repair by sending what
should be a fully repaired vehicle to the new car dealer to
have the air bag system finished. This will not only cause a
significant delay to the customer, but also an additional
rental car cost for the consumer and for the insurer.
These are just a few examples of what we face as
independent repairers. I would like to make this perfectly
clear. We don't desire to steal sensitive information to
manufacture parts of manufacture vehicles. Congress reviewed
this issue at length during the 1990 Clean Air debate and
determined that we were an industry worth trusting and saving.
That's why the law mandated that we receive the same
information as the new car dealer.
Senator Wellstone's bill, S. 2617, assures the repairer
emissions and non-emissions information. It makes sure that we
have the information to repair and maintain those vehicles in
an effort for cleaner air. Senator Wellstone's legislation
promises the vehicle owner that the safety systems in that
vehicle have been repaired with the utmost care and accuracy
and timely information available in the marketplace.
Independent repairers strongly support S. 2617.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Feste follows:]
Prepared Statement of Dale Feste, Dale Feste Automotive,
Hopkins, Minnesota
Good afternoon Mr. Chairman, Members of the Subcommittee, my name
is Dale Feste. I am President and Owner of Dale Feste Automotive, a
full-service independent mechanical repair facility in Hopkins,
Minnesota. I am a graduate of the University of Wisconsin with a
Bachelor of Science Degree in Industrial Education.
I served as a vocational automotive instructor from 1970-1980 and
founded my automotive repair business in 1980, servicing over 4200
vehicles per year. My facility was awarded the top shop award by AAA in
2000 and 2001. I am a member of the Automotive Service Association and
serve on the Executive Board of the Automotive Management Institute,
which provides business management education for the automotive service
industry.
Automotive technology is being used today to successfully ``lock
out'' motor vehicle owners from being able to repair and maintain their
vehicles. We are gradually losing the vehicle owner's right to select
where they have their vehicles repaired. The independent automotive
aftermarket repairs over seventy percent of all vehicles. When a
vehicle's warranty period is over, independent repairers get the
majority of these vehicles. Our labor rates are less, we have lower
overhead and we want that customer to come back in our facility to have
their vehicle repaired. We have one interest, automotive repair. We
don't sell cars!
Prior to the 1990 Clean Air Act Amendments, there were some import
manufacturers that were difficult as far as providing some limited
information but generally the aftermarket could resolve these
information issues. The Clean Air Act Amendments required manufacturers
to develop these new technologies and computers in an effort to lower
vehicle emissions. During the Clean Air Act Amendments' consideration,
we believed we were protected by the following legislative language
referencing emissions service information: no such information may be
withheld if that information is provided (directly or indirectly) by
the manufacturer to franchised dealers or other persons engaged in the
repair, diagnosing, or servicing of motor vehicles.
EPA continued with a final regulation on August 9, 1995 assuring
repairers the same emissions service information as new car dealers at
a ``reasonable cost''. This has not occurred. At this point in time we
do not have all emissions information available to the independent for
a reasonable cost, and for some manufacturers this is not a
consideration.
If you buy a Volvo Vira tool, the tool made available to the
independent repairer, it will not allow us to make a complete emissions
analysis of the vehicle. The Volvo dealer has the Vadis tool. The Vadis
tool allows the dealer to make a complete analysis of the vehicle. This
particular example should not require a new law. The 1990 Clean Air Act
Amendments and subsequent regulations should protect us and our
customer from this scenario.
We thought the legislative language and the 1995 regulation would
suffice in protecting our industry. They have not. There are 178,000
independent repairers nationwide. We are small business persons in
communities across the nation. Without service information, we will
have to close our doors. As the 1996 and newer vehicles come out of
warranty, they roll into our facilities. If we can not repair them, we
have to send them to the new car dealer. This is seventy percent of
America's fleet not under warranty.
Unfortunately, this lack of information is not limited to
emissions. Many of the non-emissions systems are now being tied into
these vehicle computers. Some of these are safety items and are
critical in the repair of our customer's vehicle.
In April of this year, my customer brought in a 1996 Dodge Grand
Caravan with the air bag illuminator light on. We were unable to access
any trouble codes to diagnose the system. We had to send our customer
to the new car dealer explaining that the dealer was the only place
that could access trouble codes for the air bag system. The air bag
along with other systems in the vehicle should not be compromised in
any way. Repair information should be open and available for all
repairers to protect the consumer. Although the tool has been finally
made available to the independent repairer by the manufacturer, the
software does not include safety items.
My friends in the collision repair industry face the air bag
situation many times each week. It is now one of the more expensive
systems in the vehicle to replace in a collision repair. These
collision facilities will in an increasing number of cases have to
delay their repair by sending what should be a fully repaired vehicle
to the new car dealer to have the air bag system finished. This will
not only cause a significant delay for the customer but also additional
rental car costs to the consumer and the insurer.
These are just a few examples of what we face as independent
repairers. We do not desire to steal sensitive information to
manufacture parts or vehicles. Congress reviewed this issue at length
during the 1990 Clean Air debate and determined that we were an
industry worth trusting and saving. That's why the law mandated that we
receive the same information as the new car dealer.
Senator Wellstone's bill, Senate Bill 2617, assures the repairer
emissions and non-emissions information. It makes sure that as state
governments, under federal direction, test these vehicles in critical
non-attainment air quality states that we have the information to
repair and maintain those vehicles in an effort for cleaner air.
Senator Wellstone's legislation promises the vehicle owner that the
safety systems in that vehicle have been repaired with the most
accurate and timely information available in the marketplace.
Independent repairers support Senate Bill 2617.
Thank you.
Senator Dorgan. Mr. Feste, thank you very much.
There are three minutes remaining in the vote on the Senate
floor, Senator Wellstone and I will go cast our vote. We will
stand in recess for 10 minutes.
[Recess.]
Senator Dorgan. We will reconvene the hearing. Next we will
hear from Ms. Josephine Cooper.
Mr. Dana. She's my boss, and she's not here, Senator.
Senator Dorgan. All right. Well, I didn't see a Ms. Cooper
there.
Mr. Dana. I'm here in her place.
Senator Dorgan. Okay. Mr. Greg Dana, Vice President, the
Alliance of Automobile Manufacturers. Why don't you proceed?
STATEMENT OF GREG DANA, VICE PRESIDENT, ENVIRONMENTAL AFFAIRS,
ALLIANCE OF AUTOMOBILE MANUFACTURERS
Mr. Dana. Thank you, Senator.
Mr. Chairman, thank you for the opportunity to testify
today before the Subcommittee regarding access to information,
tools, and parts for vehicle repairs. I'd like to give you some
background on this issue, explain what we're doing with the
independent repair technicians to improve their situation, and
discuss the legislation introduced by Senator Wellstone.
There is a lot of reference to the Clean Air Act
requirement for computers to monitor vehicle emissions. This
computer is now commonly referred to as the onboard
diagnostics, or OBD, system and has been required on all new
vehicles since 1996. The OBD system monitors the engine,
transmission, fuel, and emission-control systems to ensure they
operate properly. If a problem occurs, the OBD system alerts
the driver by lighting the ``Check Engine'' light. To assist
the repair technician, the OBD system also stores a fault code
along with other information about what conditions existed at
the time the problem occurred.
OBD systems are required by the Federal Clean Air Act, and
they're also required by EPA regulations and California Air
Resources Board regulations to reduce vehicle emissions by
detecting problems that could cause emissions to increase,
assisting in the diagnosis and repair of the vehicle, and
ensuring repairs are done properly. Combined with today's
sophisticated emission control systems, the OBD system ensures
clean vehicles remain clean.
EPA and CARB regulations require the auto industry to make
emissions-related repair information available. In addition,
the industry makes available virtually all of the other non-
emission related repair information voluntarily to ensure that
the non-dealer repair shops can properly repair all manner of
problems. Historically, about 70 to 80 percent of vehicle
service and repairs are performed in non-dealer shops. For this
reason, it is absolutely critical to automakers that non-dealer
repair shops have the knowledge and the ability to repair the
vehicles they work on.
When Senator Wellstone introduced his parts and service
information bill, he said, and I'm quoting: ``I am saying to
the industry, if you want to sit down and negotiate an
agreement with the mechanics that is fair to these independent
mechanics, go ahead. Then we won't have to pass this
legislation.'' I'm happy to report that we are sitting down
with these independent mechanics, we are negotiating
agreements, and we have been doing this for over two years now.
We recognize that in the past there have been gaps in
service information and tools, but automakers are working with
independent technicians, first in Arizona, and now nationally,
through the National Automotive Service Task Force, to fix
these gaps. And John Cabaniss, who is the chair of NASTF,
testified before me to explain what NASTF does.
Most of the problems that non-dealer repair shops have with
availability of service information is where to get that
information. For this reason, the trade associations of the
auto industry and the aftermarket service industry have been
working closely together to attempt to fix this problem.
Most of the activity is detailed on the NASTF Web site. On
this Web site is a matrix of available service and tool
information and information of whom to contact to get this
information. The NASTF was established not just to ensure
disclosure, but to, more importantly, improve access to the
information and tools.
Some have portrayed this legislation as the little guy
versus the big guy. Automakers are concerned that the purported
inability to repair vehicles is a smokescreen being used by the
aftermarket parts industry to gain access to the automaker's
proprietary design and software information. The aftermarket
parts makers have been trying to gain access to the
intellectual capital of the auto industry for 12 years--at EPA,
in the courts, in the Arizona legislature. At every turn, they
were denied. We tried to work with them in California in
legislation. After the bill, the California legislation ensured
each car owner has the right to choose where and when and by
whom their car is serviced and repaired.
This bill has nothing to do with the little guys. It has
everything to do with big parts companies boosting profits by
seizing the proprietary design and software details from the
automakers. Independent repair shops have the same access to
service information and tools as the dealerships do for
emission-related diagnosis. Where repair information is not
mandated by law--such things as climate control, door
controllers, airbags, et cetera--automakers already either
provide or are working to provide the independent repair shops
this information and tools needed for them to have the same
capabilities as franchise dealers.
Key members of the independent repair community,
aftermarket trade association leaders, and automakers agree
that the remaining gaps and issues can be resolved
cooperatively without the need for legislation. Moreover, they
agree that the cooperative solutions will yield better results
in less time. The automobile industry stands ready to continue
to work with all independent technicians to resolve remaining
differences. We believe we are headed in the right direction
and look forward to keeping the Subcommittee updated on our
progress.
Thank you.
[The prepared statement of Mr. Dana follows:]
Prepared Statement of Greg Dana, Vice President, Environmental Affairs,
Alliance of Automobile Manufacturers
Mr. Chairman,
Thank you for the opportunity to testify before the Subcommittee
regarding access to information, tooling and parts for vehicle repairs.
My name is Greg Dana and I represent the Alliance of Automobile
Manufacturers (Alliance), a trade association of 12 car and light-truck
manufacturers. Our member companies include BMW Group, DaimlerChrysler
Corporation, Fiat, Ford Motor Company, General Motors Corporation,
Isuzu Motors of America, Mazda, Mitsubishi, Nissan North America,
Porsche, Toyota Motor North America and Volkswagen of America.
Alliance member companies have more than 600,000 employees in the
U.S., with more than 250 manufacturing facilities in 35 states.
Overall, a recent University of Michigan study found that the entire
automobile industry creates more than 6.6 million direct and spin-off
jobs in all 50 states and produces almost $243 billion in payroll
compensation annually.
Why are we here? Legislation has been introduced in the House and
Senate with the stated objective of promoting the consumer's right to
choose where their vehicles can be serviced. The proponents of this
legislation assert that automakers use special codes and other
practices to make it difficult for vehicle owners and independent
repair facilities to diagnose problems and get information on how to
repair the vehicles. These claims misrepresent the actual availability
of repair information, tooling and parts. They also disguise the real
reason for the legislation--to permit access of aftermarket parts
manufacturers to proprietary information of the automakers that is NOT
needed to repair the vehicle, but which would reduce their R&D costs
and allow them to alter vehicle performance characteristics. These are
not appropriate reasons to undermine the intellectual property rights
of the auto manufacturers.
Today, consumers have the freedom to choose where their vehicles
are serviced. Historically, about 70-80 percent of vehicle service and
repairs are performed in non-dealer shops. The auto industry views
these non-dealer shops as their partners in providing service to their
mutual customers, the driving public. Automakers are required by law to
provide to non-dealer shops all information to diagnose and repair
engine, transmission, fuel, and emission control systems.
Specifically, section 202(m)(5) of the 1990 Clean Air Act requires
auto manufacturers to provide independent repair operations all
information needed to make emission-related diagnosis and repairs. The
section is as follows: ``The Administrator, by regulation, shall
require (subject to the provisions of section 208c regarding the
protection of methods or processes entitled to protection as trade
secrets) manufacturers to provide promptly to any person engaged in the
repairing or servicing of motor vehicles or motor vehicle engines, and
the Administrator for use by any such persons, with any and all
information needed to make use of the emission control diagnostics
system prescribed under this subsection and such other information
including instructions for making emission related diagnosis and
repairs. No such information may be withheld under section 208c if that
information is provided (directly or indirectly) by the manufacturer to
franchised dealers or other persons engaged in the repair, diagnosing,
or servicing of motor vehicles or motor vehicle engines. Such
information shall also be available to the Administrator, subject to
section 208c, in carrying out the Administrator's responsibilities
under this section.''
As you can see, independent shops clearly have the same repair
capabilities as dealerships.
In light of the fact that service information and parts are
available today to fix almost all vehicles, the Alliance views S. 2617,
introduced by Senator Wellstone, as unnecessary and unwarranted.
Instead of federal legislation, the Alliance and our member companies
stand ready to work today with affected parties to resolve any
remaining differences or communication issues surrounding the repair of
cars and light trucks. In fact, automakers are already working with
independents to improve the flow of information and tools between
automakers and independents. Before discussing this, we should clear up
some misrepresentations that have surrounded this legislation.
What is OBD? The on-board diagnostic (OBD) system is an emissions
monitoring system required in all new vehicles since 1996. OBD monitors
the engine, transmission, fuel, the emission control systems, and any
other area that may impact vehicle emissions to ensure they operate
properly. If a problem occurs, the OBD system alerts the driver by
lighting the ``Check Engine'' light on the dashboard of a vehicle. To
assist the repair technician, the OBD system stores ``fault codes,''
along with other information about what conditions existed at the time
the problem occurred (whether the vehicle was warm or cold, the load on
the engine, etc.).
As mentioned earlier, OBD systems are required by the federal Clean
Air Act. Additionally, there are pending regulations from the
Environmental Protection Agency (EPA) and the California Air Resources
Board (CARB) to ensure that the vehicle emission system is operating
properly by 1) detecting problems that could cause emissions to
increase, 2) assisting in the diagnosis and repair of the vehicle, and
3) ensuring repairs are done properly. Combined with today's
sophisticated emission control systems, the OBD system ensures that
clean vehicles remain clean.
The claim that automakers use ``access codes'' to lock out
independent repair shops is demonstrably untrue. ``Access code'' as
used almost invariably refers to ``fault codes'' which automakers have
always made available to anyone despite what the proponents of this
legislation claim.
Since there's been some confusion and misrepresentation of the
codes associated with the OBD system, let me take a moment to describe
this issue for the Committee. There are two types of ``codes'' you
should be aware of:
Fault codes (sometimes called ``diagnostic trouble codes'') store
information that identify problems and where they occurred (e.g.,
misfire in #2 cylinder). Additionally, information is stored that
describes how the vehicle was operating when it occurred. These codes
are available to anyone with a scan tool and a shop manual. Scan tools
can be purchased from scan tool manufacturers, tool dealers,
aftermarket auto parts stores, or directly from the automakers. Shop
manuals can be purchased from independent service information providers
or from automakers. In addition, service information (including shop
manuals) will be readily available on the Internet by early 2003.
Calibration code (``software code,'' or just ``calibration'') is
another ``code'' normally discussed in conjunction with OBD systems.
This is computer software that controls the functions of the engine,
transmission, and fuel system and ensures the vehicle is operating
properly. The software is similar to the software code used for word
processing on a personal computer which is proprietary and not
available to the public. The OBD calibration code is proprietary and is
NOT provided to anyone outside of the company--including franchised
dealers. Just as with personal computers, an individual does not need
the proprietary software code to repair vehicles. In fact, access to
the calibration would allow individuals to TAMPER with the engine
control system to change the performance characteristics of the
vehicle--typically at the expense of higher emissions. For this reason,
the government initially REQUIRED manufacturers to encrypt their
calibration codes and only dropped the encryption requirement when they
were confident that manufacturers would continue to do so.
So if the aftermarket service providers have the information they
need, what is the real intent of this legislation? Make no mistake: the
aftermarket part manufacturers, rather than the repair shops, stand to
benefit most from the bill. Meeting today's very stringent emission and
safety regulations requires more design, development, testing, and
certification of parts. This is just as true for automakers as it is
for aftermarket part manufacturers--automakers recognize it as the
price of doing business. Part manufacturers see it differently. Rather
than putting their money in R&D to develop quality competitive parts,
they are putting their money on L&R (legislation and regulation) in the
hopes that legislators or regulators will force automakers to turn over
proprietary design specifications and software. Part makers would have
a significant savings every year in R&D. However, the end result would
be a devastating blow to the intellectual property rights governing
computer software and irreparable harm to vehicle pollution control and
safety systems and the computers that control them.
What about vehicle reprogramming? Reprogramming refers to a
procedure automakers use to replace the calibration code with a new one
authorized by the manufacturer, and approved by EPA or CARB. Sometimes
manufacturers discover minor problems with a new vehicle's calibration
that, when fixed, improve the vehicle's performance. The changes are
normally minor and reprogramming typically occurs when the vehicle is
new and still under warranty. Because some vehicles are reprogrammed in
the aftermarket, reprogramming tools have been available to independent
repair technicians.
To reduce the cost of reprogramming tools in the aftermarket and
eliminate the need for a unique reprogramming tool for every car
manufacturer, automakers and the Society of Automotive Engineers (SAE),
with leadership from EPA, spearheaded an effort to create a single
black box that can be connected between a technician's personal
computer and any manufacturer's vehicle. This ``black box'' will
eliminate the need to purchase multiple reprogramming tools, and make
it easier for the aftermarket to provide this service as vehicles age.
Why are some technicians unable to service the OBD system or access
the fault codes? In most of the cases where technicians thought they
did not have access to the necessary tools and information, they simply
did not know how to find the information and tools they needed. Since
May 2001, the Automotive Service Association (ASA), as part of the
National Automotive Service Task Force (NASTF), has acted as a NASTF
clearinghouse for shop owners across the nation to identify actual
complaints about information accessibility. To date, about a dozen
complaints have been received nationwide. All issues were usually
resolved within a few days. The NASTF clearinghouse is widely
publicized by the International Automotive Technicians Network, the
Service Technicians Society and other NASTF participants.
What are automakers doing to ensure that technicians and shops
owners have access to information moving forward? To improve the flow
of information, automakers teamed with independent repair
professionals, first in Arizona through the Arizona Pilot Program and
then nationally through the National Automotive Service Task Force
(NASTF). These programs have dramatically improved the flow of
information and led to a better understanding on all sides. NASTF
continues to identify remaining gaps and develop a framework to
cooperatively resolve them. Information (including 800 numbers and
websites) to obtain tools and service information is available.
What about non-emission related computer systems (climate control,
anti-lock brakes, etc.)? In an October 2001 letter, 17 automakers
representing about 90% of all vehicles sold in the U.S. made a
commitment that by early 2003 they would ``make available to
independent technicians the same diagnostic and repair capabilities by
making available diagnostic tools (and tool information), service
information and training materials that they currently make available
to their franchised dealerships for all 1996 and newer cars and light
trucks.'' This commitment was made without exception--independent
technicians will receive the same tools and information that the
franchised dealers receive. Four additional automakers signed letters
of intent agreeing to the same commitment, but with narrow exceptions
for systems such as anti-theft. The vast majority of this service
information is already available.
What else are automakers doing to improve vehicle repairs? Through
the NASTF and Arizona Pilot Program, automakers learned that while
service information is available, it is not always readily accessible.
To provide greater accessibility, automakers are working to make their
shop manuals, technical bulletins, training materials, etc. available
over the Internet. Ultimately, technicians can go to the web and
immediately access information needed to service a vehicle in their
shops. All service information will be accessible over the Internet by
early 2003. In addition, as part of the NASTF activities, automakers
are working with other interested parties to improve information for
generic tools and training for non-dealer technicians.
The Bottom Line:
Independent repair shops have the same repair capabilities as
dealerships. Where repair information is not mandated by law (climate
control, door controllers, air bags, etc.), automakers either already
provide or intend to provide by January 2003, the information and tools
needed for independent repair shops to have the same capabilities as
franchised dealers.
Key members of the independent repair community, aftermarket trade
association leaders, and automakers agree that the remaining gaps and
issues can be resolved cooperatively without the need for legislation.
Moreover, they agree that cooperative solutions will yield better
results in less time than legislation and regulation.
The automobile industry stands ready to work with all affected
parties in resolving remaining differences. We believe we are headed in
the right direction and look forward to keeping the Committee updated
on our progress.
Thank you.
Senator Dorgan. Mr. Dana, thank you very much.
Next, we will hear from John Nielsen, Director of the
Automotive Services and Repair Network for the AAA. Mr.
Nielsen, why don't you proceed.
STATEMENT OF JOHN NIELSEN, DIRECTOR, AUTOMOTIVE SERVICES AND
REPAIR NETWORK, AMERICAN AUTOMOBILE ASSOCIATION (AAA)
Mr. Nielsen. Good afternoon, Mr. Chairman. On behalf of
AAA, I'd like to thank you for the opportunity to testify on S.
2617. As you may know, AAA has been an advocate for motorists
for over a hundred years. We currently represent 45 million
members, or one in four households.
I am a Master level auto technician. I've been in the auto
service industry for more than 20 years. Currently my primary
role with AAA is to assure that AAA members have access to
quality automotive repair at reasonable costs. I coordinate the
objective inspection of more than 7,500 repair facilities that
consist of both independent and franchise dealers.
Mr. Chairman, you've been told of ownership of data, and
heard a lot of talk about sophisticated codes. The message that
AAA delivers to you today is that a problem exists for
motorists. It directly impacts their choice, their safety, and
the ownership of the data produced in their car. And we believe
that this problem can be solved with S. 2617.
Members look to AAA for assistance in all of their
automotive experiences, from purchase to repair. We work to
take some of the mystery and stress out of buying a car,
maintaining a car, and operating a car.
AAA strongly supports S. 2617 for three very important
reasons, the first being consumer choice, the second being
vehicle safety, and the third reason being the right of
ownership of information generated by the vehicle.
Study after study reveals that consumers find automotive
repair and maintenance very stressful. Having confidence in a
trusted repair facility is one way to alleviate that stress. A
recent AAA study found that 80 percent of members wanted the
opportunity to take their car to an independent repair facility
at any time they chose necessary. They found it either
important or very important. Further, the ability to choose a
repair facility creates competition, which ultimately benefits
the consumer.
Mr. Chairman, I want to make it clear that AAA is not
saying that it's bad to take your car to a dealership. Quite
the contrary, many of our members have outstanding
relationships and receive outstanding service from franchise
auto dealers. We simply believe that motorists should have the
choice.
Technology has made the cars we drive today much smarter.
More than 80 percent of the systems on some cars are controlled
or monitored by computer systems. Computers in these cars can
tell us if we need an oil change, or if we have a problem with
our braking system. In fact, today they're starting to tell us
if we have low air pressure in our tires. They can tell us this
before there's truly a problem and before we need to call a tow
truck to tow a stranded motorist.
But what if you or your service technician didn't have
access to this information? Anti-lock brakes, air bags,
electronic traction, and stability control systems are only a
few safety items that can be faulty on today's new cars. Yet
it's becoming increasingly difficult or impossible for
independent technicians to diagnose and repair the data
generated by the car. This means consumers driving faulty
vehicles many miles from a new car dealership or at a time when
the only authorized dealership is very busy or closed will be
unreasonably inconvenienced and their safety placed at risk.
Consumers that have previously had a negative experience at
their local dealership--including overcharging, work not
performed on time, unauthorized repairs, or repairs not
properly performed--will not have the recourse of taking their
vehicle to another facility the way the industry is heading in
this case.
Mr. Chairman, AAA believes that when you drive off the lot
with your car, you, the consumer, own a lot more than just the
pieces of your vehicle. You own the information necessary to
have it repaired by a trusted service advisor, whether that be
factory trained or independent. This information, whether it's
viewed as intellectual property or real property, is really the
property of the car buyer.
S. 2617 rightly states that ``the ability to diagnose,
service, and repair a motor vehicle in a timely, reliable, and
affordable manner is essential to the safety and well-being of
automotive consumers in the U.S.''
In difficult economic times, repairs may be delayed as
expenses are prioritized. This often exacerbates the mechanical
problems. If motorists don't have an adequate choice of repair
facilities, they may face higher prices and unsatisfactory
service. There are many people that must juggle expenses on a
fixed income, and others who are faced with economic challenges
that demand competitive prices. Competition is essential, but
if the current trend continues, the customer will have fewer
choices, not more.
There are also areas of the country where motorists could
be forced to drive long distances or pay unneeded long-distance
towing fees if local providers do not have the equipment
necessary to address this problem.
Mr. Chairman, the new car you purchase is more than just
the high-performance components that make up a car. It's a
major investment that our families count on to get around. We
count on it to keep us safe. Let us allow consumers to protect
that investment and maintain choice for safe, reliable, and
enjoyable operation of their automobiles by supporting the
right to repair.
Thank you. I'll take questions if you have any.
[The prepared statement of Mr. Nielsen follows:]
Prepared Statement of John Nielsen, Director, Automotive Services and
Repair Network, American Automobile Association (AAA)
Good afternoon, Mr. Chairman and Members of the Subcommittee. I am
very pleased to be here today on behalf of AAA to provide testimony in
support of S. 2617, the Motor Vehicle Owners' Right to Repair Act. As
you may know, AAA has advocated the interests of car owners for over
100 years, and currently represents more than 45 million members
comprising a quarter of all U.S. households.
My name is John Nielsen. I am a Master level auto service
technician with over twenty years of experience in the automobile
service industry. My primary responsibility is to make certain AAA
members are able to locate quality facilities that can quickly and
efficiently service their vehicles at a reasonable cost. In this
position, I coordinate the objective inspection and approval of a
network of more than 7,500 AAA-approved repair facilities that are both
franchised new car dealerships and independently-owned repair shops.
Members look to AAA for advice and assistance in all of their
automotive experiences, from purchase to repair. We assist them with
information and advice regarding the proper maintenance and servicing
of their vehicles, finding quality repair facilities, and with shopping
for a new or used vehicle that best meets their needs. In short, we try
to take some of the mystery out of finding, buying, operating and
maintaining a vehicle.
AAA strongly supports S. 2617, and the companion House bill, H.R.
2735, for three important reasons: consumer choice, vehicle safety, and
the right of car owners to own the information generated by their
automobiles. The measure before you today will ensure that motorists
can have the kind of service that is best suited to their particular
needs.
Consumers are often uncertain about how to communicate with repair
providers. Study after study reveals that consumers find automotive
repair and maintenance stressful. Having confidence in a trusted
service technician goes a long way towards alleviating that stress.
Studies also find that consumers want to choose who repairs their
vehicles. A recent AAA study found that as many as 80% of our members
believe it is ``important'' or ``very important'' that consumers are
able to choose a service provider other than a dealership. Furthermore,
the ability to choose a repair facility creates competition which is
beneficial to the consumer. Service shops must control costs and focus
on providing quality repairs if they want to stay in business.
Mr. Chairman, that is not to say that AAA believes motorists should
not have their vehicle serviced at a dealership. Quite the contrary,
many of our members enjoy the relationship and service that dealers
provide. We simply believe that motorists should have the choice.
Technology has made the cars we drive smarter. More than 80% of the
systems on some cars are monitored or controlled by a computer.
Computers in the car can tell us of the need for an oil change, trouble
with an oxygen sensor, an impending problem with our brakes, and even
if our tire pressure is too low--before there is a problem or critical
safety breakdown. Before you have to call AAA from the side of the
road. But what if you, or your trusted service technician, do not have
access to this critical safety and diagnostic information?
Imagine traveling on a Saturday afternoon, the dashboard light
comes on warning of a malfunction with the anti lock brakes system. You
stop at the first service station and ask the technician to fix the
problem. The technician checks the vehicle and determines the problem
is not mechanical but rather, in the electrical system on which only
the dealer can work--not because dealer technicians are more skilled,
but because the independent technician cannot acquire the appropriate
repair information. The closest dealer for your make of car is 25 miles
away and won't open until Monday morning. Is it safe to keep driving
the car on the trip? If not, is it safe to drive the car to the dealer
and wait until Monday, or do you need a tow truck to pick up the car?
Can the dealer service the car Monday or are they booked up?
This situation could just as easily have involved the supplemental
restraint system or the electronic traction and stability control
system. Each has the potential to compromise the safety of the
vehicle's owner and passengers, but potentially other motorists as
well. Problems repairing so-called comfort features in the vehicle such
as the climate control may not compromise safety but would undoubtedly
inconvenience the consumer.
Mr. Chairman, AAA believes that when you drive off the lot with
your car, you, the consumer, own more than just the vehicle; you own
the information necessary to have it repaired by a trusted service
advisor of your choosing--whether it be at an independent facility or a
dealership. This information, whether it is viewed as intellectual
property or real property, is really the property of the car-buyer.
S. 2617 rightly states that ``the ability to diagnose, service, and
repair a motor vehicle in a timely, reliable, and affordable manner is
essential to the safety and well-being of automotive consumers in the
U.S.''
The members of this panel are keenly aware of how a downturn in the
economy directly impacts the wallets of your constituents. In difficult
economic times, repairs may be delayed as expenses are prioritized,
often exacerbating the mechanical problem. If motorists do not have an
adequate choice of repair facilities, they may face higher prices and
unsatisfactory service. Some people just cannot afford to go to the
dealership for every repair. There are many people that must juggle
expenses on a fixed income, and others who are faced with economic
challenges that demand competitive prices for repairs. Competition is
essential, but if the current trend continues, the consumer will have
fewer choices--not more.
There are also areas of the country where motorists could be forced
to drive long distances or pay unneeded long-distance towing fees if
local providers do not have the equipment necessary to address a repair
problem.
It's very important to note that lower cost doesn't mean lower
quality repairs, as long as all service technicians have the
information necessary to diagnose and repair problems. Consumers have a
right to high quality repairs and should not be compelled to use
service facilities that may have previously delivered poor service, or
denied the opportunity to get a second opinion. If consumers are
limited to only one service option, they do not have that opportunity.
Mr. Chairman, Members of the Committee, the new car you've bought
is more than just the high-performance components that make up your
vehicle. It's a major investment for consumers and for families. It's
what keeps us mobile and what we rely on to keep us safe. Let's allow
consumers to protect that investment and maintain choice for safe,
reliable, and enjoyable operation of their automobiles by supporting
Right to Repair.
Mr. Chairman, thank you again for this opportunity to testify. I
would be happy to answer any questions that the Committee might have at
this time.
Senator Dorgan. Mr. Nielsen, thank you very much.
And, finally, Mr. Vallely. Mr. Vallely is the president of
McLean Marathon Service representing NAPA. Mr. Vallely, why
don't you proceed?
STATEMENT OF JOHN VALLELY, PRESIDENT,
NORTH McLEAN AUTOCARE CENTER
Mr. Vallely. Thank you, Mr. Chairman.
McLean AutoCare Center is a family owned business employing
approximately 10 people with three service bays and gasoline
islands, kind of your old-time thing. We are located in Elgin,
Illinois, and founded in 1970, so we've been around awhile.
My independent repair facility is one of only 10,000
nationally recognized network of NAPA AutoCare Centers across
the nation. Being an autocare center has allowed me to be
independent and maintain a competitive edge. My employees and
their families are part of the reputation of being a respected
and trusted repair facility within our community.
NAPA and the other aftermarket trainers provide technical
training in specific automotive systems, introducing the latest
in diagnostic and repair techniques for both domestic and
import vehicles. Their extensive management training teaches
the shop owners how to manage cash flow, set goals for the
business, manage employees and best serve the community through
technician training.
NAPA, as well as other aftermarket companies, requires
highly trained technicians who must be certified through the
Automotive Service Excellence Program. We also have a code of
ethics that each AutoCare dealer has agreed upon prior to being
an AutoCare Center. These skilled technicians have worked on a
large range of models and systems and should not be deprived
from working on that path.
My son, Christopher, is currently enrolled in an automotive
training program at Elgin Community College. He has worked at
the shop for three years and intends to take over the business
as his chosen career. Frankly, I'm greatly concerned about the
future and longevity of the independent automotive maintenance
and repair business if the current trends are not curtailed.
Many of my colleagues have also voiced similar concerns.
Today's automobiles are increasingly more sophisticated due to
advancements and computer-controlled technology that can be
found in most major systems of the automobile today.
Information on service procedures, as well as accessibility to
diagnostic code and procedures, is crucial to their proper
maintenance and repair.
In many instances, these codes and procedures and
affordable scan tools themselves are not made available to the
independent repair technicians. Many of the diagnostic
procedures that are made available are written only for use
with specific OE scan tools. These procedures are not
applicable to the more commonly sold scanners that are used and
updated annually from aftermarket source scan tools such as
Snap-on diagnostics.
Purchasing multiple scan tools would be--that would
communicate with the most common vehicle models would be cost-
prohibitive to the independent repair shop. Scan tools cost an
average of $5,000, or even more, per tool. Multiply that by the
number of car manufacturers and a general repair shop would
need to invest well over $100,000 for average coverage to
perform these repairs, with no guarantees that it would work on
next year's models or even be updatable.
Put the initial purchase price aside for just a moment, and
the initial--the annual update cost alone for those scanners
would put most independents out of business, as computer
controls are found in most of the vehicles' major systems. Scan
tools that are able to communicate with each model type are
necessary to perform even the most routine and minor repairs.
BMW vehicles, for example, require the use of a scan tool
to reset the service reminder light after a routine oil and
filter change. We purchased a $400 tool, not a scan tool, that
has one function only, and that's to reset that reminder light.
We felt, though it may not seem as a lot, however, even if we
were able to purchase special tools for every minor repair, it
would still add up to a significant investment.
Recently, my shop had to send a customer to a Jeep
dealership to program his replacement ignition keys and remote
transmitters. Now, the procedure required the Chrysler DRBIII
scan tool. My domestic car scanner, with a fully updated Snap-
on, was unable to perform that procedure. With additional
programmable control modules being added to vehicles each year,
I have to wonder what will be my small business's ability to
perform these repairs, or are we slowly being phased out due to
economic restraints?
Having the ability to economically access, accurately
diagnose, and properly repair the automotive computer-
controlled systems is crucial to any auto repair shop's future,
whether it be an OE dealership or an independent repair
facility. Without the access to the diagnostic procedures from
the manufacturers, we, the aftermarket, would be prohibited
from repairing many current and future automobiles and light
trucks. If this were to happen, the number of vehicles that we
would be able to repair would diminish and eventually force us
out of business. This would reduce the number of bays in our
community, leave skilled workers without jobs, and eventually,
unfairly, cause the automobile owners only one choice due to a
lack of competition.
A blackout of information and affordable diagnostic
equipment could blatantly create a monopoly for the OE
dealerships. The results may create safety concerns and clean
air problems, as well. Motorists who are driving vehicles that
are in immediate need of a repair on a safety- or emissions-
related system such as brakes, air bags, steering, and engine
performance issues, but live in towns where car dealerships are
not present--or if the motorists are on vacation with their
families in areas without car dealers--could compromise their
safety and that of others by attempting to drive an unsafe
vehicle.
Additionally, if the independent repair industry were
locked out and denied access to codes and repair information on
computer-controlled systems, these motorists would be left
without a choice and be forced to return to the OE dealership.
Considering the number of vehicles in service today, with new
cars and light trucks being delivered daily, the OE dealerships
would be overloaded and unable to perform the service in a
reasonable, cost-efficient, or even timely manner.
Repair choice must remain with the vehicle owner and
requires a variety of competitive automotive service centers to
reserve that right. Competition always benefits the consumer.
In order to accomplish this, the information must be
available. With the European manufacturers already denying the
aftermarket access to information to properly repair their
vehicles, what is to stop other manufacturers from following
their lead? There will be no uniformity for motorists to place
their trust. As American workers are forced from their
automotive aftermarket related jobs, the economic domino effect
will cause the American economy to suffer instead. Unemployed
people simply do not spend money that they do not have. But, by
then, it will be too late.
Legislation, and not negotiation, is the appropriate way to
stop the potential strong arm collapse of the automotive
aftermarket that is so vital to America's transportation and
solve the fair repair problem.
Thank you for the opportunity to testify on this consumer
and small business problem.
[The prepared statement of Mr. Vallely follows:]
Prepared Statement of John Vallely, President,
North McLean AutoCare Center
Mr. Chairman, distinguished Members of the Committee, my name is
John Vallely. I am the President of North McLean AutoCare Center, a
family business employing approximately 10 people, with 3 service bays
and gasoline islands. We are located in Elgin, Illinois and were
founded in 1970.
I currently serve as the Chairman of the School District U-46
Automotive Advisory, and the Elgin Community College Automotive
Advisory Committees. I am also a part-time Automotive Instructor at the
College.
I have served on the NAPA National AutoCare Advisory Council for
two years. Participation demands input on issues such as technician and
management training requirements and recommendations, discussion of
industry trends and issues particular to the automotive industry,
AutoCare membership standards, imaging and promotions, business aids
and programs which promote automotive professionalism. These issues and
other programs allow us, the independent repair shops, to be
competitive in today's market environment. Currently I serve as a
member of the local NAPA Chicago AutoCare Advertising Committee.
My independent repair facility is only one of the over 10,000
nationally recognized network of quality NAPA AutoCare Centers. Being a
NAPA AutoCare Center has allowed me to remain independent and maintain
a competitive edge. My employees and their families are proud of our
reputation of being a respected and trusted repair facility within our
community.
NAPA and other aftermarket trainers provide technical training in
specific automotive systems, introducing the latest in diagnostic and
repair techniques for both the domestic and import vehicles. Their
extensive management training teaches the shop owners how to manage
cash flow, set goals for the business, manage employees and best serve
the community through technician training.
NAPA, as well as other aftermarket companies, requires highly
trained technicians who must be certified through the Automotive
Service Excellence or ASE program. This is a written requirement in the
``Code of Ethics'' that each AutoCare dealer agreed to prior to being
accepted as a NAPA AutoCare Center. These skilled technicians have
worked on a large range of models and systems and should not be
deprived from continuing on that path.
My son, Christopher, is currently enrolled in the automotive
training program at Elgin Community College. He has worked at the shop
for three years and intends to take over the business as his chosen
career. Frankly, I am gravely concerned with the future and longevity
of the independent automotive maintenance and repair business if the
current trends are not curtailed. Many of my colleagues have voiced
similar concerns. Today's automobiles are increasingly more
sophisticated due to advancements in computer-controlled technology
that can be found in most major systems of the automobile today.
Information on service procedures as well as accessibility to
diagnostic codes and procedures is crucial to their proper maintenance
and repair.
In many instances, these diagnostic codes, procedures and
affordable scan tools themselves are not made available to the
independent repair technicians. Many of the diagnostic procedures that
are made available, are written only for use with specific OE scan
tools. These procedures are not applicable to the more common scanners
that are used and updated annually from the aftermarket scan tool
manufacturers such as Snap-on Diagnostics. Purchasing multiple scan
tools that would communicate with the most common vehicle models would
be cost prohibitive to the independent repair shop. Scan tools cost an
average of $5000.00 (five thousand dollars) or more per tool. Multiply
this by the number of car manufacturers and the general repair shop
would need to invest well over $100,000.00 for average coverage with no
guarantee that it would work on next year's models or even be
updateable. Put the initial purchase price aside for a moment. The
annual update cost alone would put most independents out of business as
computer controls are used in most of the vehicles' major systems.
Scan tools that are able to communicate with each model type are
necessary to perform even the most routine and minor repairs. BMW
vehicles require the use of a scan tool to reset the service reminder
light after routine engine oil and filter change. We purchased a
special $400.00 tool that has one function, to reset the reminder
light. That may not seem like a lot, however, even if we were able to
purchase special equipment for each minor repair, it would still add up
to a significant investment. Recently, my shop had to send a customer
to the Jeep dealership to program his replacement ignition keys and
remote transmitters, the procedure required the Chrysler DRB III scan
tool. My domestic car scanner, the fully updated Snap-on, was unable to
perform this procedure. With additional programmable control modules
being added to the vehicles each year, I have to wonder what will my
small business' ability to perform these repairs be or are we slowly
being phased out due to economic restraints?
Having the ability to economically access, accurately diagnose, and
properly repair the automotive computer controlled systems is crucial
to any automotive repair shop's future whether it be an OE dealership
or an independent repair facility. Without the access to diagnostic
procedures from the manufacturers, we, the aftermarket, would be
prohibited from repairing many current and future automobiles and light
trucks. If this were allowed to happen, the number of vehicles that we
would be able to repair would diminish, and eventually force us out of
business. This would reduce the available number of bays in our
community, leave skilled employees without jobs and, eventually,
unfairly cause the automobile owners only one choice for repair due to
the lack of competition.
A black out of information and affordable diagnostic equipment
would blatantly create a monopoly for the OE dealerships. Results may
create safety concerns and clean air problems as well. Motorists who
are driving vehicles that are in immediate need of a repair on safety
or emissions related systems such as brakes, air bags, steering, and
engine performance issues but live in towns where car dealerships are
not present, or motorists on vacation with their families in areas
without car dealerships, could compromise their safety and that of
others by attempting to drive an unsafe vehicle.
Additionally, if the independent repair industry were locked out of
and denied access to codes and repair information on computer
controlled systems, those motorists would be left without choice and be
forced to return to the OE dealership. Considering the number of
vehicles in service today with new cars and light trucks being
delivered daily, the OE dealerships would be overloaded and unable to
perform service in a reasonable, cost efficient or timely manner. The
repair facility choice must remain with the vehicle owner and requires
a variety of competitive automotive service centers to reserve that
right. Competition always benefits the consumer. In order to accomplish
this, the information must be available.
With the European manufacturers already denying the aftermarket
access to information to properly repair their vehicles, what is to
stop other manufacturers from following their lead? Heck, manufacturers
such as Volkswagen have already stated that they will not share their
information. There will be no uniformity for motorists to place their
trust. As the American workers are forced from their automotive
aftermarket related jobs, the economic domino effect will cause the
American economy to suffer instead. Unemployed people simply do not
spend money that they do not have. But, by then it will be too late.
Legislation and not negotiation is the appropriate way to stop the
potential strong-armed collapse of the automotive aftermarket that is
so vital to America's transportation and resolve the ``fair repair''
problem.
Thank you for the opportunity to testify on this consumer and small
business problem. I would be pleased to answer any questions that you
may have.
Senator Dorgan. Mr. Vallely, thank you very much.
Now, I notice that there are a number of people in this
room wearing the same shirt. And usually that means something.
Today I suspect it means that we have folks here from
independent dealerships or other organizations that represent
either automotive dealerships or independent repair shops, I'm
not sure which.
But let me ask a question of those of the audience and ask
for a show of hands, if I might. How many of you in this room
are engaged in the business of repairing or fixing automobiles
in one way or another?
[A show of hands.]
Senator Dorgan. All right. And of those of you who are
involved in the repair of automobiles, how many of you have
experienced having an automobile brought to you for repair that
you could not repair because you don't have access to codes and
scanners and so on?
[A show of hands.]
Senator Dorgan. All right. The testimony by all six was
interesting testimony, and I agree with something Mr. Nielsen
said. It's not the province of this Committee or this Congress
to encourage or discourage people to go to wonderful
dealerships with great repair shops or independent repair shops
on the corner someplace. That's a decision for consumers to
make. I think there are some outstanding mechanics and repair
technicians who work in both venues. So this is not about
trying to force choices, one versus another. It is about making
sure Americans have the choice. We have had conflicting
testimony with six witnesses today, so let me try to understand
where the facts are, if I might.
Mr. Dana and Mr. Cabaniss, both of you have essentially
said, on behalf of manufacturers, ``There's really no problem
here. Look, it's in our interest to allow independent repair
shops to have these codes and access to it and so on, and
there's really not much of a problem.'' In fact--let me get a
couple of quotes--I believe it was Mr. Dana said, ``As you can
see, independent shops clearly have the same repair
capabilities as dealerships. In light of the fact that service
information and parts are available today to fix almost all
vehicles, the legislation introduced by Senator Wellstone is
unnecessary and unwarranted.''
Mr. Dana, you heard the testimony of Mr. Vallely, Mr. Haas,
Mr. Feste, and Mr. Nielsen, who really aren't involved in the
repair business; he's involved in AAA, which is a different
circumstance altogether. They all disagree with your assertion
that there's no problem here. Respond to their disagreement, if
you will.
Mr. Dana. I think there are a couple of issues, Senator.
One is that you have to look back on the recent past to see how
far we've come in making sure this information is available to
aftermarket service technicians. Clearly, there were gaps in
the past, and we recognize that, but the problem is really one
of being aware of where to get the information.
That's the reason we created this organization called NASTF
where we, in the auto industry, work with the aftermarket
service association people and try to make them aware of where
to get the information. Many times the information is not
available directly from our manufacturer, but from a third
party provider that the manufacturer hires to distribute their
service information.
I can give you an anecdote of a meeting we had in----
Senator Dorgan. Well, let's stop at that moment just for a
second. I'm sorry to interrupt you, but the testimony by Mr.
Feste, if you buy a Volvo, V-i-r-a, Vira tool, is it?
Mr. Feste. Yes.
Senator Dorgan.--the tool made available to the independent
repairer, quote: ``it will not allow us to make complete
emissions analysis of the vehicle. The Volvo dealer has the
Vadis tool.'' It ``allows the dealer to make a complete
analysis of the vehicle.'' So are you accurate in what you just
represented to me? What about the Volvo situation Mr. Feste
inquired about?
Mr. Dana. I'm not entirely familiar with the Volvo system,
but it is required by law that every vehicle can be diagnosed
in the OBD system for emission-related repairs.
Senator Dorgan. But you indicated in your testimony that
the information and parts are available to fix almost all
vehicles, so you're not----
Mr. Dana. That's correct, for non emission-related repairs.
Senator Dorgan.--You're not necessarily sure of that?
Mr. Dana. No, we know that there are certain gaps that
still remain to be filled.
Senator Dorgan. But you didn't put that in your testimony.
Mr. Dana. Yes, I did, sir. I said----
Senator Dorgan. Well----
Mr. Dana.--I said most vehicles can be repaired. I said
virtually all of them.
Senator Dorgan. Let's talk----
Mr. Dana. We know that there are gaps, Senator.
Senator Dorgan. OK.----
Mr. Dana. We are working as hard as we can to make sure
that the aftermarket independent repair shops know how to
access and get the right information----
Senator Dorgan. Let me talk----
Mr. Dana.--because it's critical.
Senator Dorgan.--about those gaps, then, if I might,
because, Mr. Vallely, you run a shop in Illinois. Is the
problem here just some gaps? Your testimony suggested the
problem is much more systemic than that; it's a broad problem
of the automobile manufacturers not wanting you to have access
to that information. So Mr. Dana says it's gaps. What's your
impression of that?
Mr. Vallely. Well, I'm kind of, so to speak, at the bottom
of the food chain, so for me to find information, I have to
depend on other companies to get the information to me, which
is--you know, scanner manufacturers, all that, and provide
information systems.
Senator Dorgan. But Mr. Dana also just said that it might
be the case you just don't know where to get the information.
Wasn't that your testimony, Mr. Dana? So is this a problem, Mr.
Feste, that you don't know where to get the information?
Mr. Feste. No, that's not the problem.
Senator Dorgan. Well, tell Mr. Dana----
Mr. Feste. The problem is----
Senator Dorgan.--why that's not the problem?
Mr. Feste.--some of the information is not available.
Senator Dorgan. You say it's not available.
Mr. Feste. That's correct, not available to the
independent.
Senator Dorgan. Mr. Dana, tell me about that. I mean, we
have independents who say this is not available, you say it is.
How do we demonstrate where the facts are?
Mr. Dana. What I can tell you is that the manufacturers are
committed to getting this information to the independents. Yes,
there are some manufacturers on certain systems in the cars
where information is not yet available. We're working on
getting that available to all the independents.
By and large, if you go across many of the larger
companies, you'll find every single bit of information is
available that they give their dealerships to repair cars.
There is nothing withheld whatsoever.
Senator Dorgan. Do you repair cars, Mr. Dana?
Mr. Dana. Not for a long time, sir.
Senator Dorgan. Mr. Nielsen, you wanted to comment.
Mr. Nielsen. Thank you, Mr. Chairman. This morning, I was
reviewing the information that's available on data
availability, and I asked my staff to visit the NASTF site and
pull down the list that Mr. Dana has spoke of where it actually
lists what data is available and where you can purchase it. My
staff called those locations up, and many of them are factory,
many of them are aftermarket or third-party manufacturers.
The first thing that we found is to purchase the various
equipment for each year is roughly $107,000, very much
consistent with the testimony we heard earlier. What was not
available, what we were told by many manufacturers who
represent a large part of cars sold in the U.S., is that one of
two things: either the equipment could not be sold to the
aftermarket or that they would sell them the equipment but not
the information necessary to diagnose the cars.
So absolutely, there is clearly a lack of information, a
lack of ability to get the information, and apparently a
disconnect between manufacturers and the information that's
being disseminated.
Senator Dorgan. Mr. Haas, you see the dispute that exists
here. I want to ask Mr. Cabaniss in a moment, as well, because,
Mr. Cabaniss, you, in your testimony, seemed to say that either
there isn't a problem, or if there is a problem it's very
quickly being remedied--Mr. Haas, how do we get at the facts
here?
Mr. Haas. Well, Mr. Chairman, I think the facts are very
evident. The number one fact is, the only thing that the auto
manufacturers are required to provide to the independent
repairers are information for the diagnosis and repair of
emissions-related systems on the automobile.
The other piece of evidence that we have is that the
manufacturers association, the Alliance of Automobile
Manufacturers, last October, provided a letter that they refer
to as the OEM letter of intent. I think that's the best piece
of evidence that you have, because in the letter of intent, the
Alliance has gone so far as to say that they will provide to
the independent repairers the information, training, and
diagnostic scan tool capabilities, the same as they provide to
their dealerships' technicians, by January 1 of 2003.
Now, here's the real, hard evidence: 20 manufacturers have
supported the Alliance's letter. There are 22 manufacturers
that we have to be concerned with in this country that sell
automobiles. So two of them are missing. They're not even
supporting the Alliance's letter of intent.
Senator Dorgan. Which are the two manufacturers?
Mr. Haas. Honda and Porsche. So we have 20 manufacturers
that are supporting the letter of intent. And, in the letter of
intent, four of those 20 manufacturers have already said, ``We
will not provide, to the independents, certain information. We
will limit or restrict certain safety or security information
in our automobiles.''
So as Mr. Dana professes that the manufacturers are working
hard to provide this, it's absolutely untrue. They're not.
They've already stated that they have no intention to. Those
four manufacturers are BMW, Saab, Volkswagen of American, and
Daimler-Chrysler.
It's also interesting that, of those 20 manufacturers that
have supported the letter of intent, as we sit on the verge of
August 1 of 2002 looking forward to the date that they set
forth of making this information available for January 1, 2003,
to date we have only three automobile manufacturers that have
demonstrated their ability to successfully provide affordable
access and the availability of service information to the
independents.
That's the hard facts. That's the evidence.
Senator Dorgan. Which are the three manufacturers?
Mr. Haas. The three manufacturers that have done that are
General Motors, Hyundai, and Mazda.
Senator Dorgan. Mr. Cabaniss, you've just heard Mr. Haas
and other witnesses. It's quite clear that, from an operational
standpoint, those who are in the independent shops trying to
make repairs are facing a pretty significant problem, and yet
you and Mr. Dana say there's really not a problem here.
Reconcile that, if you would.
Mr. Cabaniss. Mr. Chairman, I'm not suggesting there have
not been problems in the past. And, as Mr. Dana said, we
recognize that there have been gaps in the past, and there are
gaps today. And the purpose of the Task Force, the National
Automotive Service Task Force, is exactly about closing those
gaps as soon as we possibly can.
And with respect to the letter of intent that Mr. Haas just
mentioned, yes, 20 manufacturers signed on to that letter, and
in a few cases with some limited exceptions. That, however,
does not mean that the manufacturers that did not sign are not
moving ahead. They simply didn't sign the letter.
All the manufacturers are moving ahead on the same basis,
to provide the information and to correcting the gaps that are
there. And by early next year, the goal is to have that done.
That doesn't mean, however, that the job will be complete.
My expectation is that we'll continue to find situations,
hopefully only in a few instances, where we continue to need to
address problems. But the point that I'm trying to bring to
your attention is simply that we have a process in place to do
this. We're all working together. In fact, Mr. Feste and Mr.
Haas are both part of the Task Force effort, and we appreciate
their participation.
We are working hard to address the issues. And the fact of
the matter is we have a process in place to do that now, and
we're moving ahead diligently to address that problem. If you
look at the number of issues, the gaps, so to speak, that we
had, say, two years ago when we started, they were much greater
than they are today. In another year--in fact, in a few months,
six months, we'll make even more progress. Six months further
after that, I believe we'll make even further progress. As long
as we continue to stay the course and work together, that's
what it takes to address this problem.
Senator Dorgan. Tell me why it's not in the interests of
the manufacturers to withhold the information from the
independents and force repairs to be made in the dealerships,
the franchise dealerships?
Mr. Cabaniss. Well, first of all, Senator, it's--it would--
as, actually, I think Mr. Feste himself--or Mr. Vallely--excuse
me if I got that wrong--mentioned, it's--there was no way--we
don't have the--in the dealerships don't have the capability of
providing service to--if, for some reason, the customers
decided to bring their cars all of a sudden to the dealership,
there's just not the capability to do it. We need the
aftermarket industry, the independents, to be able to service
our customers, our mutual customers.
And we--believe me, we need to keep our customers happy. We
want to see them back in the showroom again to buy another car
from us, and so we need to keep our customers happy, and that
means being able to get their cars fixed conveniently if
something breaks. We hope they don't break very often. But if
they do, the last thing we want is a dissatisfied customer.
Senator Dorgan. Mr. Cabaniss, this Subcommittee is going to
inquire of the EPA with respect to enforcement issues, and also
of the Federal Trade Commission on these issues. My fervent
hope would be you would find it in your interests and in the
interest of the manufacturers to provide all of that
information and the ability at a reasonable price to access the
equipment so that the independent dealerships in this country
can provide the necessary repairs.
I'm still trying to understand this circumstance. I always
worry about bigger interests and smaller interests and making
sure the rules are fair. There's an old Bob Wills and Texas
Playboys song with a verse, ``The little bee sucks the blossom,
but the big bee gets the honey. The little guy picks the
cotton, and the big guy gets the money.'' There's a lot of that
in life with respect to big versus smaller interests.
And what I hear today from folks who run independent repair
shops, I assume folks that, in many cases across the country,
don't have large shops but have some awfully good mechanics, is
that they feel that there's information withheld from them that
prevents them from being able to provide the service to their
customers that they want to provide in repairing a vehicle.
So let me call on Senator Wellstone for inquiry.
Senator Wellstone. Mr. Chairman, I can be relatively brief
here.
I was a college teacher; you just had a great seminar
class. I like the way you do that. You had everybody speaking,
and you covered a lot of the ground I wanted to cover. I think
I can get to the point that I want to get to with two
questions.
And I guess, for Mr. Cabaniss and Mr. Dana, this--it would
be helpful for me to sort of get your perspective on record on
this. Leaving aside the specifics of the legislation, could you
tell the Chairman, the Committee, whether or not the auto
manufacturers agree with the principle that the independent
repair shops--because I think that's what this is about--should
have the same access to information needed to repair vehicles
as the franchise auto dealers? Would you agree with that
principle?
Mr. Cabaniss. Yes, sir, I would.
Mr. Dana. A hundred percent, sir.
Senator Wellstone. OK. Well, that's very important to know.
Then I guess the second question, which maybe we'd go to you,
Mr. Haas, is what assurances--you know, we--you just heard
industry say we agree with that principle, and we've heard
about the Task Force and that there's progress being made. What
assurances would you want to have with--from the point of view
of the AAA or the consumers, the owners of cars, or, for that
matter, the independent mechanics--what assurances do you need
to make sure that, in your own words, the shops are going to
get access to the information at a reasonable cost, to get the
diagnostic--to be able to do the diagnostic--I mean, what do
you--what's the missing piece here?
I mean, we've got legislation. We can move that. I think
there would be a lot--I was talking to Senator McCain on the
floor. I know he was very busy today. He might have been here.
Others I think are interested. I can't commit anyone. The Chair
has got a strong reputation as being pro consumer. We can move
this and continue to go forward, but it also would be nice if
there would be just some agreement where everybody could end up
winning.
What do you need, in terms of assurances?
Mr. Haas. We'd need to know, first of all, what is
available to the franchise dealer technician in order to know
comparatively that we're receiving the same information.
What I don't understand--and I think Volvo is a perfect
example of this--is even though they're required by law to
provide emissions information to technicians today, they've
decided to provide it to the independents in an absolutely
different tool than the tool that they use to provide it to
their dealership technicians.
Now, you know, a minute ago, we just heard Mr. Cabaniss and
Mr. Dana say that, well, we'll provide to the independents
exactly what we provide to the franchise dealers. And Volvo, in
this for instance, has already demonstrated that, no, they're
not willing to do that. If that were the case, if these
manufacturers truly believed that they were willing to provide
the same information to independent technicians that they
provide to dealership technicians, this example with Volvo
would not exist today.
Let me share with you this. This is a quote from another
manufacturer represented by the associations represented here
today, BMW. And this is a quote from BMW. ``In general, BMW is
not in a position to provide BMW service processes, equipment,
and features which have no bearing on emissions regulations and
which are specifically developed to enhance the customer-
service experience at BMW authorized dealers to anyone but BMW
dealers.'' I think that's the story.
So I have to disagree with what Mr. Dana and Mr. Cabaniss
are suggesting here this afternoon. They're saying all the
manufacturers they represent are willing to come to the table
voluntarily and provide this? I think that they'd better go
back and check with BMW.
Senator Wellstone. Well, I would say this, Mr. Chairman,
and I'd finish this way, and you may, as the Chair, have--may
want to have the final word--this is what occurs to me.
I mean, just sort of building on what Mr. Haas said, it
would seem to me that we've had two individuals, Mr. Cabaniss
and Mr. Dana, who have done an excellent job of, you know,
representing the manufacturers--I'm not here to bash anyone--
who have said that, you know, this is moving along, and we want
to cooperate. And then I think you talked about six months, and
than in another six months--that was someone's language.
And I think what I'm hearing from a lot of the independent
dealers is, ``Time is not neutral for us.'' In other words, you
know, you can keep talking six months and six months and six
months, and then pretty soon there won't be that many of us
left. And so that doesn't do it for us. And so I----
Mr. Haas. Mr. Wellstone?
Senator Wellstone. Yeah?
Mr. Haas. Every day that passes without resolution to this
compromises the position of the consumer. Every day.
Senator Wellstone. Well, I would suggest to the industry--
and I'd be anxious to hear from the Chair--I would suggest that
the industry, as one Senator from the State of Minnesota, that
there be some slightly--let me just take everything you've said
in good faith, and if that's the case, then I would say the
negotiations need to move forward expeditiously, and they need
to be concrete, and there needs to be some assurances, and that
you all need to come to terms with one another as soon as
possible.
I mean, I think, right now, the present course isn't
working. Otherwise, I think we move forward on the legislative
front.
Senator Dorgan. Let me ask----
Mr. Dana. Senator, if I could comment on that?
Senator Dorgan. Yes, please.
Mr. Dana. We are working closely with them. And Bill Haas
is the contact point at ASA for this complaint form which is on
the NASTF Web site. If any independent service provider cannot
get service information from a manufacturer, is told he cannot
have it, they fill out this form, get it to Bill Haas, Bill
will send it to either myself or John, and we'll get it to the
manufacturer, and we will do everything in our power to correct
that situation as soon as possible.
Senator Dorgan. Mr. Dana----
Mr. Dana. We've set this up to try and make that happen.
Senator Dorgan. Yeah, let me ask about the BMW issue,
specifically. I know nothing about this except what Mr. Haas
just represented, but it is exactly what we don't want to
happen in this country.
We don't want someone producing an automobile and saying,
``Oh, by the way, we have included in this automobile certain
repair components the keys to which we will give only the
franchise dealerships to the exclusion of all the independent
repair shops around the country.''
I don't think anybody wants that to be the case. Consumers
in this country want the choice. They want to be able to take
their car back to a wonderful dealer, get it repaired there, or
they want to take it to their corner trusted independent repair
shop, have it repaired there.
In either case, you've got the American people who want to
make the choice that they choose to make. Often they'll choose
the dealership. Just as often, they'll choose the independent
repair shop. But if a company decides it wants to predetermine
what that choice must be by withholding key information from
independent repair shops, it seems to me that is anticonsumer,
anticompetitive. So that's exactly what we want to avoid having
happen in this country.
Now, respond, if you will, to Mr. Haas' assertion with
respect to one company, BMW.
Mr. Dana. I'd like to, Mr. Haas, know when that quote was
from--what date that quote was from.
Senator Dorgan. All right. Mr. Haas, when was that quote--
--
Mr. Haas. That quote was from----
Senator Dorgan. Don't tell me 1942.
[Laughter.]
Mr. Haas. No, no. No, Mr. Chairman, it was not. It was from
this year, and I believe--I can't give you the exact date,
unfortunately, this afternoon, but I believe it was from May or
June of this year.
Mr. Dana. Well, then we need to get a complaint form filled
out, Bill, because in BMW's letter of intent, it said they were
going to make information available to the dealerships. They
have some exceptions, and we're working on that, having to do
with anti-theft systems and security.
So, again, as I've tried to explain to you, Senator, there
is a problem with people either in a third-party provider or
even some people who are in a manufacturer saying the wrong
thing, because even in our own companies it hasn't been
filtered down in some cases.
Senator Dorgan. What--let me----
Mr. Haas. This was a quote from a representative of BMW.
This wasn't a third-party provider. This was from a gentleman
employed by BMW.
Senator Dorgan. I'm going to ask, in fairness to BMW, if
they would like to submit a statement for the record.
Mr. Dana. We'll be happy to have them do that.
Senator Dorgan. The hearing record, of course, will remain
open.
But let's assume, for the moment--and I don't know this to
be the case; I don't even know who the BMW representative was.
Assume that you have a manufacturer that says, ``Look, it's in
our interest not to provide this information. We fully intend
to try to steer all of the business back to our franchise
dealerships. That's what our company wants to do.'' Let's
assume, Mr. Dana, that one of your companies takes that
position. What can you do to remedy that? Is there anything you
can do?
Mr. Dana. First of all, none of the members have taken that
position. And even BMW has made the point that they are willing
to make it available for the aftermarket--in their letter of
intent, right here.
Senator Dorgan. I'm just asking you what if--what if some
company says, ``Go fly a kite. We intend to try to steer
everybody back to our franchise dealerships.'' What's the
remedy for that?
Mr. Dana. I think the competitiveness of this industry
would fix that problem quickly, sir.
Senator Dorgan. All right.
Senator Wellstone. I don't agree with that statement.
Senator Dorgan. Yes. There can't be competition for the
repair of an automobile for which you're not able to make the
repairs. That's the whole point of the hearing, of course.
Let me ask one other question. We're talking about
concerns. I assume there are some good actors out there. Can
you tell me, Mr. Feste, which of the automobile manufacturers
seems to be most responsive in providing information to
independent repair shops?
Mr. Feste. Yes. From an independent repair standpoint,
General Motors has been most accommodating and extremely
helpful in service information and helping us to access codes
and so on. They are a major player, and we would certainly hope
that the other manufacturers would look to General Motors and
take a cue from them.
Senator Dorgan. I want to thank Senator Wellstone. He has
to run to another engagement, but I want to thank him for
bringing this to the attention of the Committee.
Mr. Haas. Mr. Chairman, I'd like to----
Senator Dorgan. Yes?
Mr. Haas.--add to Mr. Feste's----
Senator Dorgan. Of course.
Mr. Haas.--comments that not only has General Motors done
an outstanding job of making the information available, they've
done it in a manner that is accessible and affordable, and
those are key issues. Those are very important. It's not just
simply is the information available. It must be accessible, it
must be affordable.
Senator Dorgan. All right. Well, let's have this hearing
stand as an expression of concern that this problem be
resolved. It can be resolved legislatively by passing
legislation here in Congress, or it can be resolved through the
negotiations and determination that Mr. Dana and Mr. Cabaniss
have described. I don't think independent repair shops and
consumers would care how it's resolved as long as it's resolved
fairly and fully.
But I think it's important for us to understand that it
would not be appropriate in our country for automobile
manufacturers to say, ``We're going to produce a product that
can only be repaired in our franchise dealerships.'' That's not
in the interest of the consumer, and it's not what we want to
have happen with respect to the fostering of competition in our
country.
I'm going to send a letter to the EPA and ask about
enforcement issues, generally, because that's been raised here
and I think it's important to inquire about that. Second, I'm
going to ask the Federal Trade Commission to monitor this issue
with you all so that we can evaluate what kind of progress is
made.
I would agree with Senator Wellstone that if progress is
not made or if we face a circumstance where we're discovering
independent repair shops are being frozen out of the
information systematically, I think that Congress will take a
hard look at passing the type of legislation Senator Wellstone
has introduced.
I think this hearing is informative and instructive, even
though we've had very different opinions. From the exchange, I
get a sense of what the circumstances are, and I think you
should get a sense that there's an expression of concern here
in Congress about what has happened in the past and what we
think should happen in the future in order to foster
competition.
It is true that the automobile is vastly different than it
was 50 years ago. Fifty years ago, you could take it almost
anyplace, put it up on a hoist and take a few bolts out and
take a look at what was inside the engine. Boy, it's a
radically different circumstance in trying to deal with
vehicles these days.
I think it's especially important at the end of this
hearing to say that there are a lot of so-called ``good guys''
in the automobile repair business, both at franchise
dealerships and independent repair shops. I don't want anybody
to get the notion that there are bad actors all over the lot
here. There are ``good guys'' with respect to manufacturers.
There are ``good guys'' with respect to doing automotive repair
and people that the American consumer can inherently trust in
having their automobile repaired.
This is not just a matter of convenience. In many cases
it's a matter of safety for drivers and their families and
other people on the road.
So I want to thank all of you for preparing testimony and
submitting it today and thank others of you who've come. This
record will remain open for two weeks from the date of this
hearing. If you wish to submit comments for the record, we will
include them as a formal part of the hearing. This hearing is
adjourned.
[Whereupon, at 4 p.m., the hearing was adjourned.]
APPENDIX
Prepared Statement of Aaron Lowe, Vice President, Government Affairs,
Automotive Aftermarket Industry Association and the Automotive
Warehouse Distributors Association
On behalf of the 2,500 members of the Automotive Aftermarket
Industry Association (AAIA) and the 300 member Automotive Warehouse
Distributors Association (AWDA), I respectively submit the following
testimony regarding The Motor Vehicle Owners Right To Repair Act (S.
2617).
AAIA and AWDA represent manufacturers, manufacturers'
representatives, distributors, retailers, and installers of aftermarket
parts and accessories. These companies sell primarily into the
automotive aftermarket, which is everything that happens to a car once
it leaves the dealership. It is estimated that 70 to 80 percent of car
owners patronize the independent aftermarket, those not affiliated with
the motor vehicle manufacturers, once their vehicles are out of
warranty based on the factors of convenience, price and trust. In fact,
U.S. car owners enjoy the most affordable repair aftermarket in the
world due to the fact that there is significant competition in this
country both for the repair and the supply of replacement parts. The
affordability of repairs for the average motorist helps ensure that
they can continue to maintain critical safety and emissions related
systems. However, our industry is concerned that competition, the very
thing that holds so many benefits for the car owners and the
environment, may disappear as a result of government regulation and
desires by some manufacturers to use technology advances for monopoly
gains.
Legislation and regulations enacted in the late eighties and
nineties, both federally and in California, required that car companies
equip vehicles with on-board diagnostic systems capable of monitoring
the major emissions control systems and alerting the car owner of a
malfunction. The system also would provide technicians with the ability
to better locate and correct emissions related problems. As Congress
moved to enact these requirements, they also were extremely concerned
that the increased use of computers could provide new car dealers and
the car companies with a monopoly in the service of these vehicles.
Therefore, provisions were added in both House and Senate versions of
the 1990 Clean Air Act Amendments that required standardized access to
the OBD II system, as well as a mandate that all information necessary
to use the OBD II system and to make emissions related repairs be
provided to anyone who repaired vehicles. On August 9, 1995, the U.S.
Environmental Protection Agency issued regulations (60 FR 40474)
implementing the ``information availability requirements''.
Since the 1990 Act and the subsequent regulations, the use of
computers on vehicles has increased whereby virtually every system on
the vehicle is tied into the vehicle's central computer. Further, while
some vehicle manufacturers have become more conscious of the importance
of the aftermarket to ensuring consumer satisfaction with their
vehicles, other car companies have not been as cooperative. The
problems that have been plaguing the aftermarket since the promulgation
of the EPA information availability regulations can be summarized in
the following three scenarios:
The information is available, but difficult to locate;
The information is available, but priced too high for most
aftermarket shops to afford it, or;
The information is not available at all, at any price.
AAIA and AWDA further have been concerned about how the on-board
computer will impact parts manufacturers. Essentially, while
independent producers could build a part that performed equally with
the OE part it was intended to replace, the part might not interface
properly with computer and thus set off the malfunction indicator light
unnecessarily. Thus, the aftermarket manufacturers need information
regarding the operation of the system such that they could build parts
to work properly with the system. In response to our concerns, EPA
determined that Congress did not intend for the information
availability provision to cover replacement parts and therefore the
Agency did not include any requirements in its 1995 rulemaking.
Following promulgation of the final service information rule, the
aftermarket sued claiming that the agency should have considered
replacement parts related issues in their OBD II and information
availability rulemaking due to their impact on the availability of
competitive repairs. While the US Court of Appeals acknowledged there
might be competitive concerns regarding replacement parts as a result
of the OBD II standards, the court ruled that EPA was within its
statutory discretion when it determined that parts issues should not be
considered.
Frustrated by EPA's lack of enforcement of the current service
information rules and the absence of consideration of the parts
compatibility issue, the aftermarket in the late nineties turned to
California in order to resolve its issues. California was selected
since it had taken the lead in the development of OBD II and the fact
that most car companies were building their systems to meet the
California standards. Further, EPA had determined that OBD II systems
that were California compliant would also be considered compliant with
Federal OBD II standards. Thus the aftermarket felt that legislation
enacted in California would have national implications.
Legislation (SB 1146) introduced by Senator John Burton in February
of 1999 attempted to correct many of the problems being experienced by
independents in obtaining emissions related service information and
tools. A provision requiring information necessary to ensure that
aftermarket manufacturers had access to information necessary to ensure
that their parts were compatible with the OBD II system was included in
the bill.
While there was general agreement regarding many of the service
information provisions, the parts provisions became extremely
contentious with the vehicle manufacturers. Specifically, the
manufacturers publicly charged that aftermarket companies were looking
for free access to the blueprints for replacement parts and the
internal calibrations of their on-board computers, similar to the
arguments that they are espousing with this legislation. Through
several negotiating sessions between parts manufacturers and car
companies, a compromise was reached whereby only general and generic
operating parameters would be shared. We felt that this agreement would
not only provide the necessary information for aftermarket parts
manufacturers, but as it turned out, this same information would be
invaluable to technicians in properly understanding how the OBD system
works and therefore assist them in repairing the vehicle. It also would
ensure that car companies would not be required to release proprietary
software codes unless a court determined that the information was
necessary to preserve competition in the aftermarket. Subsequent to
that agreement, all of the major vehicle manufacturers, except one,
decided to no longer oppose the bill.
The agreement in California came about because the aftermarket and
car companies got together and determined what information about the
OBD II system was really necessary for developing replacement parts.
While the legislation has yet to be fully implemented, we believe that
it will go a long way toward ensuring competition in both the repair
and parts area without jeopardizing proprietary information.
Based on the events in California, AAIA and AWDA take exception to
contentions made by the car companies in their testimony at the July 30
hearing that there is a sinister plot by the part manufacturers to use
this legislation to obtain the internal calibrations. In truth, the
reason that parts manufacturers are supporting the Motor Vehicle Owners
Right To Repair Act is really very simple. The independent service
providers are our number one customers. If they disappear, our
independent manufacturers disappear as well. In essence, their survival
is our survival. In addition, if an independent supply of replacement
parts evaporates, service providers are harmed since they depend on us
to keep parts prices down and therefore help them stay competitive.
However, we are not asking for any more information than is needed to
properly repair and maintain today's highly sophisticated emissions and
safety systems.
The actions in California, EPA and Arizona, also have brought about
another important benefit, the establishment of the National Automotive
Service Information Task Force (NATF). The task force is comprised of
both aftermarket and car companies groups committed to resolving
problems in the availability of service information and tools. The
discussions by this group are important to developing open
communications necessary to correct our concerns. Further, the
legislative and regulatory activities have brought about written
commitments from many of the vehicle manufacturers to make available
all service information, both emissions and non-emissions related to
the aftermarket by January 1, 2003. AAIA and AWDA applaud these
developments. If the car companies honor their commitments, car owner
satisfaction with car company products should improve and competition
will be preserved. Definitely a win-win for everyone involved.
However, before everyone declares victory and goes home, it should
be noted that there are at least two car companies that have not signed
on to the letter of intent and there are others that have conditioned
their commitments to this effort. Further, should the car companies not
comply; there is nothing in the letter that would be enforceable by our
members or consumers. Finally, the letter of commitment does not cover
the price of this information to independents or how they will make
this information available. Both are critical issues to the actual
availability to our industry.
Therefore, AAIA and AWDA believe that it is essential that Congress
pass S. 2617 in order to ensure that the commitments made by the car
companies continue to be viable. In fact, if all information will be
available in 2003 as promised by the manufacturers, there is little
that the companies will need to fear from the enactment of S. 2617.
However, should they determine not to comply, then the bill will
provide the aftermarket, FTC and the car owners a legal avenue to
mandate compliance.
Mr. Chairman, this legislation will not provide our industry with
any advantage in competing with the dealerships or the car companies.
What it will do is level the playing field for independents in
competing with the dealerships, thus ensuring competition. The car
companies can continue to have the ability to develop vehicle systems
that are better than their competition. Their patents will be safe and
will not suddenly become vulnerable to being stolen by the aftermarket
as they have suggested. However, what this bill will do is ensure that
once that vehicle is in the hands of consumers, he or she can obtain
repairs at the facility of their choosing whether independent or
dealer. We believe that absent an unfair advantage, the car owners will
continue to return to the independent based on service value and
convenience. However, we look forward to that fight in the marketplace
and not in the halls of Congress or the federal agencies. We therefore
strongly urge the committee to move forward with consideration of this
legislation as soon as possible.
Thank you for this opportunity to testify and we welcome any
questions that the Committee might have.