[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

                              ----------                              
                                                                   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

                              ----------                              


                         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.

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