[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 102-000
HOW THE CLEAN AIR ACT AFFECTS AUTO REPAIR
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT & GOVERNMENT PROGRAMS
of the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC, JUNE 28, 2005
__________
Serial No. 109-23
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
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COMMITTEE ON SMALL BUSINESS
DONALD A. MANZULLO, Illinois, Chairman
ROSCOE BARTLETT, Maryland, Vice NYDIA VELAZQUEZ, New York
Chairman JUANITA MILLENDER-McDONALD,
SUE KELLY, New York California
STEVE CHABOT, Ohio TOM UDALL, New Mexico
SAM GRAVES, Missouri DANIEL LIPINSKI, Illinois
TODD AKIN, Missouri ENI FALEOMAVAEGA, American Samoa
BILL SHUSTER, Pennsylvania DONNA CHRISTENSEN, Virgin Islands
MARILYN MUSGRAVE, Colorado DANNY DAVIS, Illinois
JEB BRADLEY, New Hampshire ED CASE, Hawaii
STEVE KING, Iowa MADELEINE BORDALLO, Guam
THADDEUS McCOTTER, Michigan RAUL GRIJALVA, Arizona
RIC KELLER, Florida MICHAEL MICHAUD, Maine
TED POE, Texas LINDA SANCHEZ, California
MICHAEL SODREL, Indiana JOHN BARROW, Georgia
JEFF FORTENBERRY, Nebraska MELISSA BEAN, Illinois
MICHAEL FITZPATRICK, Pennsylvania GWEN MOORE, Wisconsin
LYNN WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
J. Matthew Szymanski, Chief of Staff
Phil Eskeland, Deputy Chief of Staff/Policy Director
Michael Day, Minority Staff Director
SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT AND GOVERNMENT PROGRAMS
MARILYN MUSGRAVE, Colorado Chairman DANIEL LIPINSKI, Illinois
ROSCOE BARTLETT, Maryland TOM UDALL, New Mexico
BILL SHUSTER, Pennsylvania DANNY DAVIS, Illinois
MICHAEL FITZPATRICK, Pennsylvania RAUL GRIJALVA, Arizona
LYNN WESTMORELAND, Georgia MELISSA BEAN, Illinois
THADDEUS McCOTTER, Michigan GWEN MOORE, Wisconsin
JEB BRADLEY, New Hampshire
Piper Largent, Professional Staff
(ii)
C O N T E N T S
----------
Witnesses
Page
Barton, Hon. Joe, Chairman, Energy and Commerce Committee, US
House of Representatives....................................... 4
Houska, Mr. Dennis, Houska Automotive Service.................... 13
Bordoff, Mr. Fred, Vice President, Service Station Dealers
Association.................................................... 14
Ehlert, Mr. Eddie, Mazdonly, Ltd................................. 16
Lowe, Mr. Aaron, Vice President, Government Affairs, Automotive
Aftermarket Industry Association............................... 17
Cabaniss, Mr. John, Jr., Director of Environment and Energy,
Association of International Automobile Manufacturers, Inc..... 20
Marvaso, Ms. Kathleen, Managing Director, Government Affairs, AAA 21
Appendix
Opening statements:
Musgrave, Hon. Marilyn....................................... 30
Westmoreland, Hon. Lynn...................................... 32
Prepared statements:
Barton, Hon. Joe, Chairman, Energy and Commerce Committee, US
House of Representatives................................... 33
Houska, Mr. Dennis, Houska Automotive Service................ 37
Bordoff, Mr. Fred, Vice President, Service Station Dealers
Association................................................ 42
Lowe, Mr. Aaron, Vice President, Government Affairs,
Automotive Aftermarket Industry Association................ 46
Cabaniss, Mr. John, Jr., Director of Environment and Energy,
Association of International Automobile Manufacturers, Inc. 57
Marvaso, Ms. Kathleen, Managing Director, Government Affairs,
AAA........................................................ 62
Additional material:
Tire Industry Association.................................... 64
(iii)
HOW THE CLEAN AIR ACT AFFECTS AUTO REPAIR
----------
TUESDAY, JUNE 28, 2005
House of Representatives
Subcommittee on Workforce, Empowerment and
Government Programs
Committee on Small Business
Washington, DC
The Subcommittee met, pursuant to call, at 2:03 p.m. in
Room 311, Cannon House Office Building, Hon. Marilyn N.
Musgrave, [Chairman of the Subcommittee] presiding.
Present: Representatives Musgrave, Lipinski, Shuster,
Udall, and Westmoreland.
Chairwoman Musgrave. Good afternoon and welcome to the
Workforce, Empowerment and Government Programs Subcommittee.
Today's hearing will focus on how the Clean Air Act affects
auto repair.
I appreciate everyone's participation in this hearing,
particularly those of you that have traveled great distances to
get here.
When the Clean Air Act of 1990 was passed, it included a
provision that required automobile manufacturers to provide an
on-board diagnostic system to monitor emissions. Car makers
were required to show this information to facilitate repair
diagnoses pertaining to emissions. No other vehicle systems
were subject to the disclosures mandated by the Clean Air Act.
However, as more systems on our cars became electronically
controlled, some independent repair shops began reporting
difficulty in acquiring information to diagnose other computer-
controlled systems within vehicles.
Today, automobiles have several complex computer systems
that control braking, ignition, security, steering, emissions,
safety, and climate control. As a result, the information and
expertise needed to diagnose and repair them has increased
dramatically.
It is estimated that most newer vehicles have a minimum of
15 separate computers on-board. This hearing will focus on H.R.
2048, ``The Motor Vehicle's Owner Right to Repair'' bill
introduced by Representative Joe Barton. I appreciate Chairman
Barton coming here today to offer his testimony before this
Subcommittee on this bill.
U.S. consumers spend almost $200 million to maintain and
repair the 200 million cars on the road. The American economy
also benefits from a competitive after-market industry that
provides jobs to more than 5 million workers in almost 500,000
predominantly small businesses, and generates more than $200
billion in sales annually.
I look forward to receiving testimony from other witnesses
as well. It is important to hear the perspective of all parties
effected by this issue, whether they are franchisees,
independent repair shops or dealership owners, all of them have
one thing in common. They are all small businesses.
I now recognize our distinguished Ranking Member on the
Subcommittee, Representative Lipinski, for his opening
statement.
[Chairman Musgrave's opening statement may be found in the
appendix.]
Mr. Lipinski. Thank you, Madam Chairman.
As we advance in the twenty-first century so do our cars
and trucks. Today's vehicles continue to get more and more
sophisticated with technological advances such as computerized
navigation and ignition systems. In recent years, there has
been a push to make our cars more resilient, powerful, and
environmentally sound.
Along with today's automotive advancements comes a need for
advanced knowledge of repair and service. There is an obvious
gap here. The types of repair manuals that may have sufficed a
decade ago simply do not provide the information necessary to
repair newer, more complex vehicles.
Today's repair shops need to know how to check settings,
component schematics, and equipment interfaces, something they
simply aren't able to get from repair manuals.
As vehicles become more complex, the lack of readily
accessible repair information would have undesirable
consequences. With fewer shops available to do a repair, we
have to expect increased cost for car owners. Given the
expenses that already exist with today's vehicles, consumers do
not need any additional cost for their cars.
It is important that consumers have options when it comes
to getting their cars repaired, and that they can rely on their
local repair shops to get the job done. Many people turn to
their long-time neighborhood mechanics, the ones that they have
come to trust, who are usually small business owners, but how
do mechanics understand the mechanical, technical, and computer
systems on each car model?
Currently in place is a voluntary system for sharing
information between automobile manufacturers and service shops.
This system is designed to allow web-based access to
information on how to repair and service vehicles from over 30
different brands. But there are questions about how well this
voluntary system works.
Today's hearing will examine whether there is a problem and
to what extent it persists. We will specifically look at one
possible solution, H.R. 2048, the Right to Repair Act, which
has been introduced by Mr. Barton, Chair of the Energy and
Commerce Committee. I applaud Mr. Barton for his work on this
issue, and I look forward to hearing his testimony.
H.R. 2048 creates a system that would allow access via the
Internet to repair information and service training for all
parts of the vehicle. This would be administered and enforced
by the FTC. In addition, the bill creates a legal duty to
immediately provide a vehicle owner or repair shop of the
owner's choosing with all the necessary information to diagnose
or repair the vehicle. This sounds like a reasonable approach,
but we must evaluate all of its possible implications.
As the Committee proceeds today to examine this issue, it
is important to ensure that whatever solution is found does not
have unintended negative consequences. While working to solve
one problem, we need to guard against creating additional ones
through our actions.
Clearly, there are small businesses on both sides of this
issue, whether it is an independent repair shop or a local
dealership, all of whom would be impacted by the right to
repair bill. It is very important that we carefully examine the
issue and evaluate the necessity for these types of changes.
The automotive service and repair issue involves many
players--repair shops, dealerships and consumers, and we need
to make sure that any changes are fair and balanced for all of
those involved. We want to have a system that provides
information, doesn't give one entity an advantage over the
other, and in the end gives the consumer the best possible
deal.
This is an important topic and I look forward to hearing
the testimony of today's witnesses and to our discussion. Thank
you.
Chairwoman Musgrave. Thank you, Mr. Lipinski.
Mr. Westmoreland, would you like time for an opening
statement?
Mr. Westmoreland. Yes, ma'am. Thank you, Madam Chairman,
for holding this hearing today, and I appreciate all the
willingness of all you to come testify and to be present during
this hearing. It is nice to see that we have got somebody from
Georgia here, Mr. Ehlert, and we welcome him to testify, and I
have met with representatives from most of the organizations
and associations present today, and I must admit something is
not quite making sense about this whole thing.
Now, I have not heard from any of my constituents. I have
called some of the auto repair dealers in my district, but what
I have heard from is a lot of people from across Georgia that
are not in my district, and somebody out there, Ms. Chairman,
is spending a lot of money doing some third-party phone
calling. And I know it is good money that you are spending and
I would use it wisely, but when you connect them with a
congressional office you might want to make sure that it goes
to the office that they actually have some representation from.
Always, there are a lot of disparities in the stories that
you hear up here, and this one is no different. I look forward
to hearing today from both sides. I am going into this hearing
with an open mind, and the main thing that really bothers me, I
guess, is the fact that we are trying to create a new
bureaucracy for them to look at a problem or an issue that from
my understanding and from my looking into the issue that there
is already a private sector mechanism that is in place to work.
Now, it may have some problems, but we are here today to
hear about those problems and learn what we can do about it,
and Ms. Chairman, that is what I have. Thank you.
[Congressman Westmoreland's opening statement may be found
in the appendix.]
Chairwoman Musgrave. Thank you. Mr. Udall.
Mr. Udall. Madam Chair, thank you very much, and appreciate
you holding this hearing. I think that we are all concerned
about the Clean Air Act and concerned about how the Clean Air
Act impacts auto repair and small business.
I would welcome the witnesses. I know that many of them
have come from a long distance, and appreciate having them
here.
Clearly, there are a couple important issues here today.
One concerns consumers, and the ability for them to get their
autos repaired. Another is the issue of small business. We have
independent small businesses and also franchise dealer shops
and other variations that are out there, and we need to make
sure we are being fair to all of them, and the key issue, as
the previous speaker, my colleague just mentioned, is this
national automotive service task force.
We have a voluntary system in place. I will be very
interested to hear from the witnesses how it is working, what
are the problems, and it seems a key issue here is if it is
working well, why replace it.
So with that I look forward to getting to the witnesses,
and thank you very much, Madam Chair.
Chairwoman Musgrave. Thank you, Mr. Udall.
We are waiting just a moment on Chairman Barton. We will
see if he can be here shortly, if you will be patient for a
moment, please.
[Off the record.]
Chairwoman Musgrave. Welcome to the Committee, and we are
delighted that you are here and look forward to hearing from
you.
STATEMENT OF THE HONORABLE JOE BARTON, ENERGY AND COMMERCE
COMMITTEE
Mr. Barton. I am glad to testify before the Small Business
Committee on H.R. 2048, the Right to Repair Bill. I have a
formal statement. Do you want me to just put in the record and
talk, or do you want me to read it?
Chairwoman Musgrave. Why do you not put it in the record
and just talk to us.
Mr. Barton. Okay.
Chairwoman Musgrave. That would be great.
Mr. Barton. Then I would ask unanimous consent to put the
statement in the record, and let me just briefly apprise the
Committee of what we are trying to do.
We all have in our districts hundreds and in some cases
maybe thousands of small businesses that sell auto parts and
repair cars and trucks. Many of our constituents do not have
new cars. The cars are not in warranty. So when they need a
repair, they need a part. They want to take it to an
independent auto repair shop.
Because of the complexity of today's engines, more and more
the diagnostics are such that it takes special computer
equipment, special computer programs to even find out what is
wrong with the car. And our automobile manufacturers who have
done world-class engineering more and more are reluctant to
share the information with the small independent auto repair
shops.
So about four years ago I was approached by some--in the
repair industry in my district, and we sat down with the
dealers and we sat down with the manufacturers, and we tried to
come up with a voluntary agreement to share nonproprietary
information with these repair shops.
There was a volunteer agreement. That volunteer agreement
kicked in in late 2002, which is almost three years ago or is
three years ago, and the manufacturers and the dealers said
problem solved.
The problem with that is the problem is not solved. You can
pay for the computer. You can pay for the software. You can get
your PIN number, and somebody comes in with a vehicle to an
independent shop, it can take between eight days to two weeks
to get the information necessary to repair that vehicle. Not
many people are going to wait that long.
So earlier this year I reintroduced H.R. 2048 which would
require that that information be shared. Again, it is
nonproprietary. We are not trying to seal the trade secrets of
GM or Chrysler or Ford or Toyota or Mazda or anybody else, but
we are saying that it is the tradition in this country that you
have an independent auto parts industry and an independent
repair industry, and if the industry cannot have a voluntary
agreement, then we will stipulate in federal law how that
information--again in a nonproprietary fashion--has to be
shared.
The bill is introduced. It is in the jurisdiction of the
Energy and Commerce Committee, which I happen to Chair, and we
are waiting to see if we can get voluntary agreement. If we
cannot, I am prepared to move the bill, and I believe I know
how to count votes. I believe we have got the votes to pass it.
I think if we put it on the floor, it is going to pass
overwhelmingly.
In the last Congress, a bill similar to this bill had over
100 co-sponsors, and we are endorsed by the AAA, the NFIB,
which is a small business association, the Retail Industry
Leaders Association, and a number of other groups. So I think
this issue has legs. I think the publicity that you are going
to give it today and the information that is going to be
elicited by this hearing will probably give us some much needed
momentum.
And with that, Madam Chairwoman, I would be happy to answer
questions.
[Congressman Barton's statement may be found in the
appendix.]
Chairwoman Musgrave. I think at this time I will ask, Mr.
Westmoreland, if you have questions.
Mr. Westmoreland. Thank you.
Mr. Chairman, you said that with the voluntary system as it
is now if somebody went on the web page or whatever it is to
get it, it would take?
Mr. Barton. Eight to 15 days.
Mr. Westmoreland. Eight to 15 days. Now, is this from the
website that the manufacturers and dealers have put up or is
this another site?
Mr. Barton. No, it is the site that has been voluntarily
agreed to, and the repair, the independent repair shop still
has to pay for the computer, has to pay for the software, has
to pay a licensing fee, has to get a PIN number, but when they
do that they go through the protocol, and eventually it just
comes up. They do not get the information.
They call the hot line number, and they get, you know, they
get referred, and get back to you. On the other hand, if you
are a certified dealer, they will get you an answer in about 30
minutes.
Mr. Westmoreland. Okay. The proprietary portion of this,
this is nothing--these requests do not have anything to do with
those types of things such as emissions or security--
Mr. Barton. No.
Mr. Westmoreland. --or whatever?
Mr. Barton. And the bill as drafted now stipulates that.
Mr. Westmoreland. Okay.
Mr. Barton. See, I have dealers too, and I have a GM
assembly plant in my district. I am not trying to--
Mr. Westmoreland. No, sir. I understand.
Mr. Barton. --take unfair advantage.
Mr. Westmoreland. I understand that, but do you happen, and
this is where I am having a little bit of problem understanding
it, do you have a list of specifics that you could give that
would, I guess, make it--to show that it is to a point that has
to have federal legislation to correct it?
Mr. Barton. Well, we could have a laptop computer brought
into your office or probably even on your own computer and let
you run through the protocol. You would have to get the correct
passwords and that kind of thing, and let you see for yourself.
Mr. Westmoreland. I know, but I am talking about the
specific things. Is this like a braking system? Is it for
carburetor adjustment?
Mr. Barton. Oh, it varies. It really varies more by
manufacturer than it does by specific components. You know,
some of the manufacturers have worked very well to try to
comply and some of them have paid lip service to it, but have
not really been--in terms of what is the most difficult
information to get, my understanding is it is not like you can
get information on diagnosing a suspension problem, but you
cannot get information diagnosing an emission problem. I am not
led to be--it is kind of an across-the-board thing by
manufacturer.
Mr. Westmoreland. So it could be more GM or Ford or Mazda
or Toyota?
Mr. Barton. It is really more the--the U.S. manufacturers
have been more cooperative than the non-U.S. manufacturers.
Mr. Westmoreland. Thank you. Thank you, Madam Chairman.
Chairwoman Musgrave. Mr. Lipinski, do you have a question?
Mr. Barton. Is that how you always announce Mr. Lipinski's
questions?
Chairwoman Musgrave. He is a very important member.
Mr. Barton. God comes into the hearing room and says now we
hear from Mr. Lipinski.
[Laughter.]
Mr. Lipinski. Happens all the time.
Thank you, Mr. Chairman, for coming here before our
Committee. I just wanted to--just one thing I wanted to ask
you. What has been the opposition to this legislation?
Mr. Barton. The opposition?
Mr. Lipinski. Why has there been--why has there been
opposition? Why is there opposition to it? And what would your
arguments be?
Mr. Barton. Well, there is a natural tension between the
certified dealers, which we all have in our district, and the
independent auto repair groups. The dealers, you know,
rightfully believe in their--you know, if you are a Ford dealer
and somebody has a Ford, they ought to bring it to your shop to
be repaired. And the manufacturers obviously give preference to
their authorized dealers.
So the tension is really between the independents and the
authorized dealers of the original equipment manufacturers, and
the manufacturers are not--they do not say they have no
obligation to share this information, that would--they agree
that they should. They just do not put as high a priority on
getting the information in a timely fashion, and they do make
the argument that some of what the independents want is
proprietary.
I think the proprietary argument is a specious argument. I
do not--you know, we have got specific language in the bill
that we are not trying to get proprietary information. If they
testify later in the day, their argument is probably going to
be they do not want to give away proprietary information, and
that they have a right to give preference to their authorized
dealers.
I do not argue on the authorized dealers having some
preference, but even having said that I still think the
independent has a right to get the information in a timely
fashion, and I do not think eight to 15 days meets the
definition of timeliness.
My young staffer had a little fender-bender last week, and
he was without a vehicle for a week. That is not right. You
know, you need to get it fixed and get going.
Mr. Lipinski. Okay, thank you for your work on this, and
thanks for coming before the Committee.
Mr. Barton. My pleasure.
Chairwoman Musgrave. Mr. Udall, do you have questions?
Mr. Udall. Just one brief question, Madam Chair.
Chairman Barton, thank you very much for coming today and I
know you are very busy over in your Committee, and we
appreciate you spending a few minutes with us.
As I understood your testimony earlier, it sounded to me
like you really wanted this voluntary system to work.
Mr. Barton. That is true.
Mr. Udall. And that you are saying you would only move the
bill if this system could not be fixed and up and working and
all of that.
I am looking at the--the question I have is at the opposite
side of that, is if you pass your bill, does that do away with
the voluntary system? Do you view it as supplanting the
voluntary system that is in place?
Mr. Barton. Well, it would certainly enhance it. It would
make some of these things mandatory. It would have an
enforcement mechanism to it. I would prefer a voluntary
agreement. I have been waiting three years. I mean, I started
this process in 2001. They had the agreement in 2002. It is now
2005, and again the dealers and the manufacturers say it is all
there, it is working. The people have to use the system say,
well, we can now get on the Internet or the phone and dial up,
but we still cannot get the information.
And to go back to Mr. Westmoreland's question, you really
do not know what you are not going to get until you cannot get
it, so they are very frustrated by this continuing hamstringing
of this so-called voluntary system.
Mr. Udall. So would you view it as supplementing the
voluntary system or doing away with it completely, your bill?
Mr. Barton. I think the straight answer would be it would
replace it.
Mr. Udall. Would replace it.
Mr. Barton. Yes, sir.
Mr. Udall. Thank you very much for your candor and
appreciate having you here today.
Mr. Barton. Sure.
Mr. Udall. Thank you Madam Chair.
Chairwoman Musgrave. Chairman Barton, has the legislation
changed significantly since you first introduced it?
Mr. Barton. We have tried to take the concerns of the
manufacturers and the dealers on the proprietary nature, and
the original bill had a mandatory enforcement provision that we
have taken out. So we have really tried to work with the
manufacturers and the dealers to address the problems that they
have talked about in the testimony before my Committee.
I think if we move the bill, at least some of the
manufacturers would be supportive, and I think some of the
dealers groups would be supportive.
Chairwoman Musgrave. I believe Mr. Westmoreland has another
question, and thank you for answering that one.
Mr. Barton. Sure.
Mr. Westmoreland. Mr. Chairman, kind of what Mr. Udall said
as far as the voluntary and the mandatory. I have sat down with
both groups and both groups have told me they were willing to
sit down.
Mr. Barton. They have been telling me that for four years.
Mr. Westmoreland. So from talking to you it seems like they
did not. Do you know--they have both been telling you the same
thing, that they are willing to sit down and do something?
Mr. Barton. And progress has been made. I do not want to
mislead this Committee. The system works better today than it
did four years ago. You can get information. Sometimes you can
actually get it on a timely basis, but there are a lot of times
that you cannot.
Mr. Westmoreland. Do you think this may be like the
settling of lawsuits on the courthouse steps, that it will be
only after the dropping of a bill or whatever before an
agreement can be reached where one side or the other side is
willing to make concessions?
Because evidently from talking to both groups, you know,
they both say they are ready to sit down, and one says the
other one will not, and the other one says the other one will
not.
Mr. Barton. I am sorry you have gotten in the middle of
that. I thought I was the only one that had that problem.
Mr. Westmoreland. Well, we share that enjoyment, and it has
been fun meeting and hearing both sides of it.
Mr. Barton. The difference is that my patience is about
exhausted.
Mr. Westmoreland. You have been dealing with it a lot
longer than I have.
Mr. Barton. Now that I Chair the Committee instead of just
a Subcommittee--
Mr. Westmoreland. Yes, sir.
Mr. Barton. --I am very confident that if we cannot get an
agreement, that we can move the bill. I mean, you folks know as
much as I do about how the vote would be on the House floor,
but we have got a lot of support from consumer groups and low-
income groups. A lot of members of the Black Caucus are either
sponsors or willing to be sponsors. I think this bill on the
floor probably gets 350 votes.
It is a question if you are a Republican, do you believe in
volunteerism or do you believe in another federal mandate? And
I have been trying not to have to resort to a federal mandate.
But if we do not get them together pretty quick, we are going
to start moving the bill, and I have got a couple of senators
have said they will introduce the bill in the Senate, so I
think we could make this a law pretty quick if we had to.
Mr. Westmoreland. Yes, sir. Well, I agree with you. I think
volunteerism is certainly the approach. We hope it will take,
and I really cannot get a good grasp on the magnitude of the
problem, and if this is one person or two people or 100 people
or whatever going without their car for three or four or five
days. You know, I have been without mine that long, so I
understand that.
But you know, I hope that the magnitude of it is out there
that would warrant something like this, and I am sure that you
have heard all the evidence and feel comfortable that that is
the case. And so, you know, it is something that we need to
look into, and I appreciate the Chairman having this meeting so
we can hear the different sides of it.
Thank you very much.
Mr. Barton. Thank you, sir.
Chairwoman Musgrave. I just would ask you a couple more
things. Are there specific things that would just remedy this
situation? Could you give me any specifics of what you would
like to see happen?
Mr. Barton. You have to have a system that if the
independent repair entity pays the appropriate amount of money,
gets the software, gets the code words, gets all of the proper
documentation so that they have access to the system, not
trying to rip them off, not trying to get something for free,
not trying to do something back door. But you go through all
the certifications, and that can cost 30 to 40 - 50 thousand
dollars. I mean, it is a non-trivial sum. But if you do that,
and a vehicle comes into your shop, you should be able to
access the system through the various websites that have been
authorized with the appropriate software, and get an answer
that day. Get an answer as soon as you get logged into the
system; not get the answer--these endless do-loops that they
just get the run-around and run-around, and you have provided
all the certification and all the documentation, and you just
end up--the system does not provide you the information.
So my litmus test is, you know, that I do not think it has
to be as fast as the dealer network. I respect that. You know,
if I am authorized dealer of General Motors, I think I should
have priority. I am okay on that.
But if the dealer gets it instantaneously or gets it within
30 minutes, the independent ought to be able to get it within a
couple of hours, something like that. That is kind of where I
am.
Chairwoman Musgrave. Okay, anymore questions for the
Chairman?
Mr. Shuster is here.
Mr. Barton. Is that ``Home run Shuster?''
[Laughter.]
Mr. Barton. You know he could have had an inside the park
home run in the congressional baseball game.
Mr. Shuster. Speedy Shuster. Well, I just want to tell you,
Mr. Chairman, that was the first lay-down triple in the history
of baseball.
[Laughter]
Mr. Shuster. Because after I hit it, I had to go in the
dugout and lay down.
[Laughter.]
Mr. Barton. Well, you know, I saw you coming around second
base. The ball is still out at the outfield fence, but it did
not look to me like you had the steam to make it to home.
Mr. Shuster. I did not. I did not.
Mr. Barton. But you did hit it far, that is the good news.
Mr. Shuster. That is what counts, and Putnam scored.
Mr. Barton. He did. He did.
Chairwoman Musgrave. Mr. Shuster, after hearing about your
personal physical condition, I am wondering if you have any
questions.
[Laughter.]
Mr. Shuster. I think I bring a perspective to this that
other members may not. My family had a tire business which was
a repair shop. I went to work for the Goodyear Tire and Rubber
Company in a repair shop, and then I owned an auto dealership
for 13 years.
My concern is that we are going to set up a new bureaucracy
in the federal level, and I do not know that we already have
not solved our problem with the industry and what they are
doing, because I know we were able to get that information,
maybe not as quickly--when I was in the repair business--as
quickly as a dealer does.
But on the other side of that coin the dealers spend a lot
of money, and the manufacturers spend a lot of money developing
these things, and the notion that private car owners do not
have a choice, I do not think is accurate because they do have
a choice. There is six Chevy dealerships within an hour of my
house, or five Chrysler dealerships, so I think there is choice
out there, and I know from experience that the independent
garage can get that information, maybe not as quickly, but on
that same point.
I do not know that they have spent the money and have the
investment that a dealer has that they should get it.
Mr. Barton. You missed some of my opening statement.
Mr. Shuster. I apologize.
Mr. Barton. I do not--you do not have to apologize. It was
not that good of an opening statement, you know.
But I am not quibbling with the dealer having access to the
information instantaneously or as quickly as possible. You
know, if your care is under warranty, most people are going to
take it to the dealer.
It is these cars that are secondhand, used cars that are
not under warranty, a moderate income family does not have the
means to take it into the authorized dealer because of the
higher labor cost and the overhead cost and all of that, so
they take it to an independent repair shop.
The independent repair shop, if they paying the licensing
fee, if they pay for the software, if they get the proper code
words and passwords and PIN numbers, that independent repair
shop, in my opinion, as a right to get the information as long
as it is nonproprietary in a timely fashion. It does not have
to be--if the Chevrolet dealer can get it in 15 minutes, I do
not think the independent ought to get it in 15 minutes, but
they ought to get it some time that day.
Mr. Shuster. Right.
Mr. Barton. They ought to be able to get it and get the
part and repair the vehicle, and diagnose the problem, and get
it back to the owner. And again, I have had the laptop computer
set up in my office, and watched them try to get access to the
information, and they finally get to a screen, and it just--it
just dead ends. It is just kind of the straight line on the
heart monitor. It just is not going to happen.
Mr. Shuster. And I would say too coming from a dealer's
point of view, sometimes the dealer does not get the
information as quickly as we should for a number of different
reasons.
But still I wonder too, I know that CARE, the Coalition for
Automotive Repair Equality, I am not--I think I know who they
are. My concern is is that these huge automotive parts
companies that--what they are doing by trying to get this
information is to reverse engineer these parts, and be able to
get these parts cheaper, and take that--take a lot of that
business away from dealers.
Mr. Barton. But the bill specifically says that is illegal.
We are not trying to do that. We are not trying to take the
best engineering of Detroit, and as you put it, reverse
engineering. That is not the concept that we are attempting to
get.
What we are trying to do--I mean, everybody in everybody's
district, you have got a lot of authorized dealerships, and you
also have a lot of independent repair shops, and that has built
up over 100 years.
Mr. Shuster. Right.
Mr. Barton. The technology has changed. It used to be--I am
old enough that I actually could work on my cars. You know, I
could actually go out and change the spark plugs, and adjust
the timing, and change the timing belt, and put in new rings
and all this kind of stuff.
Now when the car stops you have to plug it into a computer,
okay, and the computer is going to tell you what the problem
is, and what I am saying is the independent shop, if they are
willing to make the investment, needs to have access to that
same diagnostic ability and be able to pinpoint the problem and
get the part and get the car repaired. If we can work that out
on a voluntary basis, fine.
I have been trying for four years to get a voluntary
agreement that actually works. The people on the manufacturing
and the dealer side say that it works. The people on the
receiving end say it does not work.
Mr. Shuster. Well, I--and again, with all due respect to
the Chairman, I think that that information is out there. It is
available. It is not always as smooth and as easy as it could
be, but as a former dealer, and there were times when we could
not get that information as quickly as we wanted to, and I
would just caution us against the federal government going out
there and doing something, setting up a new bureaucracy, trying
to force things down peoples' throats.
And I think that you are right that the manufacturers, and
I think they do, they want--they have customers out there that
do not always want to go to the dealers for various reasons
that you have mentioned, and they want them to have other
opportunities. So I hope we can do this without legislation.
Mr. Barton. All right. I have a feeling in the next week or
so some of these independent repair shops may contact you.
Mr. Shuster. Well, I look forward--
Mr. Barton. We may let them show you their system.
Mr. Shuster. I look forward to that. Thank you.
Mr. Barton. Thank you, sir.
Chairwoman Musgrave. Thank you, Mr. Chairman. We appreciate
you being here today.
Mr. Barton. I appreciate the opportunity.
Chairwoman Musgrave. At this time I would like the second
panel to come up. Mr. Westmoreland mentioned that he had
someone here from Georgia today. Well, I have someone here from
Fort Collins, Colorado. So the second panel will come up,
please. Mr. Houska, Fred Bordoff, Eddie Ehlert, Aaron Lowe,
John Cabaniss and Kathleen Marvaso.
[Pause.]
Chairwoman Musgrave. Welcome all of you, and when you speak
if you would pull the microphone a little closer to you. The
acoustics are not that good in this beautiful room, but then we
can all hear you.
Mr. Houska, welcome. Proud to have a Coloradan here today
from my district, and we are looking forward to hearing from
you.
We will adhere to the five-minute rule, so if you will
watch the light, and that will give you an indication of when
you should sum up. Thank you. Go ahead.
STATEMENT OF DENNIS HOUSKA, HOUSKA AUTOMOTIVE SERVICE
Mr. Houska. Madam Chairman, members of the Subcommittee, I
am Dennis Houska, President of Houska Automotive Services Inc.
located in Fort Collins, Colorado. Thank you for the
opportunity to address you today on an issue that is vital to
my business.
My father started our auto repair over 50 years ago in a
two small bay garage. I am the second generation in the
business and my son will be the third. I have grown up in and
spent my whole life in the auto repair business. Our shop has
grown up over the years to be a 24-bay facility that works on
all types of vehicles.
Houska Automotive now has 25 employees. We pride ourselves
in being a one-stop auto repair for all of our customers'
needs. We have built our base on loyal customers because of our
quality work, convenience, and competitive price. But, even
more, based on trust.
Our shop has many business affiliations. We are a AAA
Preferred Auto Repair, AC Delco Service Center, Bosch Repair
Center, and a member of the Better Business Bureau, and a
member of the NFIB.
I have been a member of ASA for many years. Even though I
am a member of ASA, I strongly disagree with their position on
this bill. For some reason, they do not believe that there is
that bad of a problem in getting timely information, but my
years of experience has told me otherwise.
We are also a NAPA Auto Care Center since the
implementation of the program. To be a NAPA Auto Care Center,
you must employ ASE certified technicians, have an ongoing
training program and adhere to the NAPA's code of ethics.
I am also a member of the Bottom Line Impact Group. This is
a collection of independent auto repair businesses from around
the country and we get together to discuss automotive
management problems and the future of our industry.
We have technicians who are specialized in the different
areas and makes of automobiles. Our technicians are ASE
certified--most are master techs with an L1 certification. Many
of our employees have been factory trained in different makes
of cars. We have an ongoing education through classes offered
by NAPA, AC Delco, Automotive Training Groups, Car Quest,
Bosch, our state education programs, and even through ASA.
We also have an on-line and N.I.A.T. self-study courses
available. Several of our employees have received the Top Tech
Award for our community for their commitment to further their
education. Each employee is required to continue his or her
education every year.
Being an independent auto repair business owner has great
rewards and sometimes great challenges. But one challenge that
I believe is unnecessary is the challenge of accessing all the
information in all the model lines of all the different
manufacturers. This challenge can be overcome by the passage of
the Motor Vehicle Owner's Right to Repair Act.
There is no one diagnostic tool that gives us enough
information for all the makes. Several years ago we made the
decision to invest in the scan tools of the different
manufacturers, at a great expense to us. If the information was
accessible for the tool manufacturers, they would be able to
develop and produce one tool that could access and reprogram
all the different makes of cars, saving us an our customers a
great deal of added expense.
We have purchased the Snap-on scanner, the Master Tec, the
Tec 2, the Val Tec, the DRB-3, Pro Link, Genisus, and NGS, just
many other manufacturers' tools. Not only do we have the
initial cost of each tool, but also the cost of the year
update, but another problem is that the manufacturers are also
always changing the scan tools, so every few years we have to
repurchase an additional scan tool for the make.
But this is not the main reason I support the bill. Tools
are part of the challenge no doubt, but the main challenge and
the one I am left--if left uncorrected could put me and my
business--put me out of business information.
We subscribe to several information systems. We have
Alldata, On-Demand, IATN, and Identix. We also use service of
hot lines, which we can call when we need more information.
These are great resources, but there are times when we need
more precise information that is absolutely necessary to
properly diagnose and repair the vehicle.
Chairwoman Musgrave. Okay, your time has expired, and
perhaps in questioning you will get an opportunity to say some
more things. Thank you.
Mr. Houska. Thank you.
[Mr. Houska's testimony may be found in the appendix.]
Chairwoman Musgrave. Okay, our next witness is Mr. Fred
Bordoff.
STATEMENT OF FRED BORDOFF, SERVICE STATION DEALERS ASSOCIATION
Mr. Bordoff. Good afternoon. My name is Fred Bordoff. I am
Vice President of the Service Station Dealers of America and
Allied Trades, known as SSDA-At. SSDA-AT represents over 15,000
independently owned service stations and repair facilities in
over 50 states, either through direct membership or through
affiliation with affiliated state associations.
On behalf of our members, I want to thank the Chairman and
Members of the Subcommittee for the opportunity to present our
views on the challenges and difficulties encountered by the
independent auto repair technicians as a result of the refusal
of the auto manufacturers to share with us the same technical
information furnished to their own dealers.
The direct result is that the independent technician is not
able to perform repairs on these automobiles. In instances when
manufacturers do grant access to information and programs, it
is done at costs which are often prohibitively high to the
small independent auto repair shops, thus effectively causing
them to be unable to render these services, and forcing their
customers to have repairs done at auto dealerships.
The complex computerized systems of the modern automobile
render it essential to have the proper information and
training.
I am the President of the New York Center for Automotive
Technology, an independent general repair shop located in
Queens, New York. Because my facility is engaged to perform
repairs for a major dealership in New York, which sells great
numbers of used cars and which owns several new car franchises,
I am granted some access to information which allows us to
perform repairs, but in general the average independent
technician often cannot tend to a customer's repair needs. I
will offer a few examples to illustrate the problem.
A Volvo owner complains that the driver's side window does
not go down. After testing, the diagnosis is a bad window
switch. A new switch is purchased from Volvo and installed. The
new switch does not work. Further investigation reveals that
the switch has to be programmed by the Volvo dealer. The car
then has to go to Volvo to complete the repair. This is likely
to cause delay and frustration to the customer, who will resort
to Volvo services in the future instead of the independent
facility.
Another example is that of a motorist driving a BMW, who
experiences poor performance on the road, and then sees the
service engine light go on. He or she pulls into a convenient
diagnostic facility. It is determined that the throttle body is
at fault. A new throttle body is purchased from the local BMW
dealership and installed. The car will not even start now
without being programmed by at the BMW dealership. Imagine the
reaction of that customer who drive on a car and has to see it
towed out.
On many of today's cars, if the battery goes dead, the
radio loses its memory. After a new battery is installed, it is
discovered that the radio now does not operate. The radio now
has to be coded by a dealership service facility since they are
the ones with access to the code. Obtaining the radio code
takes between one and four minutes, depending on the speed of
your Internet access. Most dealership service facilities charge
one hour labor for this service. Is there any wonder why they
want to keep this information to themselves?
Manufacturers have two information systems, and for a fee,
they will allow independent repair shops to access the
Technician Information Service. The other system is the Dealer
Information System. I can tell you that they are not the same
at all. The Dealer Information System is more complete and
easier to use. The dealership service facilities also have
access to tech support, which the independent repair facilities
do not, again, leaving the independent at a disadvantage.
With companies like Alldata and Mitchell supplying
information to the independent shop at a reasonable cost, it is
the same as the Technician Information System that the
manufacturer also supplies to the independent. Another
difficulty with Alldata and Mitchell is the lag between getting
information, publishing it, and distributing it to the shops.
There can be a three to six month lag by the time the shop gets
the information.
While access to information is a problem, the greater issue
is that of the programming ability, or lack thereof, available
to the independents. Without it, the entire repair at the
independent facility is viewed as useless by the customer.
Last year, our facility spent in excess of $65,000 on
manufacturer's specific scanners and we still have difficulties
with some cars. These costs are not something that small
independent repair shops can insure as a cost of doing
business, and keep costs down to the motorist.
Chairwoman Musgrave. Your time has expired. Thank you for
your testimony.
[Mr. Bordoff's testimony may be found in the appendix.]
Chairwoman Musgrave. Our next witness is Eddie Ehlert from
Chamblee, Georgia. Welcome to the Committee. And if you will
pull that microphone closer, we will be able to hear you very
much. Thank you.
STATEMENT OF EDDIE EHLERT, MAZDONLY, LTD.
Mr. Ehlert. Good afternoon, Chairman Musgrave, Members of
the Subcommittee. My name is Eddie Ehlert. I am President and
owner of Mazdonly, Limited in Chamblee, Georgia. I have been in
the automotive repair industry since 1977, and have owned my
own repair facility for 20 years. I am immediate past president
of the Automotive Service Association of Georgia and currently
serve on their board of directors.
I am here today representing the Automotive Service
Association, ASA, our national association. Our association
represents 13,000 independent repair facilities nationwide
employing 65,000 technicians in all 50 states. ASA is the
oldest and largest trade organization in the automotive
industry with the distinction of serving only those businesses
that perform service and repairs for the motoring public.
Independent repairs typically receive in their shops those
cars coming out of warranty. We repair approximately 75 percent
of all cars out of warranty. Franchised new car dealers repair
approximately 25 percent. This structure of the repair
marketplace is stable now and for the foreseeable future.
The ASA testified before the House Commerce Committee's
Subcommittee on Commerce, Trade and Consumer Protection on
September 22, 2004, on the Right to Repair issue. Our message
today mirrors our testimony of 2004. The ASA-Automaker
Agreement for service information, tool, tool information and
training is working.
I want to make three points this afternoon.
There is a viable industry solution already in place for
the service information. Service information opportunities have
expanded under the ASA-Automaker Agreement, and independent
repairers want less federal government bureaucracy in their
businesses, not more.
The 1990 Clean Air Act protected independent repairers in
the area of emissions service information. Unfortunately, it
took the United States Environmental Protection Agency 13 years
to develop a regulation that it could enforce with the
automakers. The act did not give the authority to EPA in the
area of non-emissions information. This is the area of
contention.
After a U.S. Senate Commerce Committee hearing in July of
2002, members in the House and Senate ask ASA and the
automakers to try to resolve this issue prior to the next
Congress.
The ASA and the automakers were successful in signing a
voluntary, industry service information agreement in September
of 2002. This agreement ensured independent repairers the same
service, tool, tool information and training provided
franchised new car dealers, including both emissions and non-
emissions information.
With 451 million repairs handled by independent repairers
each year, a process had to be in place for allowing any issues
or complaints that might arise. An industry organization, the
National Automotive Service Task Force, NASTF, is in place to
address consumer, technician or shop owner complaints relative
to service information.
The NASTF is an industry success sorry. Repairers,
automakers, new car dealers, parts distributors, and
information providers work together in face to face meetings,
conference calls, and via the Internet to resolve industry
issues. Of the 451 million repairs in 2004, the NASTF had 48
complaints, less than a fraction of one percent of all repairs.
Of those 48 complaints, 48 were resolved in 2004.
In March of this year, ASA and the National Automobile
Dealers Associations, NADA, sent a letter to every member of
the U.S. House of Representatives. We are the two largest trade
associations representing the repair industry segments in the
United States, independent repairers and franchised new car
dealers, respectively. Our association stated in this joint
letter that, ``NADA and ASA want to make perfectly clear to all
parties, and most importantly to their customers, that they can
repair vehicles because the service information and diagnostic
tools needed are available to them in the marketplace.''
Since the more complex vehicles have entered the repair
marketplace, information availability has expanded rather than
contracted for independent repairers. The Clean Air Act
amendments directed EPA to regulate automaker websites for
emissions service information.
The ASA-Automaker Agreement expanded this to non-emission
service information, tools, and tool information and training.
But in actuality, day by day, independent repairers still go to
the same source for service information they have gone to for
many years, third party information providers.
Prior to the 1990 Clean Air Act amendments and prior to EPA
regulations, prior to the ASA-Automaker Agreement, third party
information providers were available such as Alldata, Mitchell
I and Identifies for their service information needs.
For those shops choosing not to directly access the
automaker websites, these companies still provide service
information to the independent repair technician.
Chairwoman Musgrave. The time has expired. Thank you very
much for your testimony.
Chairwoman Musgrave. Our next witness is Aaron Lowe, Vice
President, Government Affairs, Automotive Aftermarket Industry
Association. Welcome.
STATEMENT OF AARON LOWE, AUTOMOTIVE AFTERMARKET INDUSTRY
ASSOCIATION
Mr. Lowe. Thank you. Good afternoon. My name is Aaron Lowe
and I am vice president of government affairs to the Automotive
Aftermarket Industry Association.
The AAIA is a Bethesda-based trade association with more
than 7,566 member companies and affiliates that manufacture,
distribute and sell motor vehicle parts and accessors. AAIA
represents more than 54,000 parts stores and repair shops
nationwide. Many of these shops are family-owned operations and
have been in business for generations.
We are placed to be here to discuss the Motor Vehicle
Owner's Right to Repair Act that was introduced by
Representative Barton. Passage of this legislation is critical
not only to the thousands of small businesses that comprise the
automotive repair industry, but also their customers who depend
on local repair shops to keep their vehicles operating safely,
cleanly and dependably.
I will not go over the history of this legislation since I
think you made some really good points, but as you said
earlier, the bill was brought about because of the expansion of
the use of computers beyond just emissions-related items, to
brakes, air bags, entertainment systems to anti-theft systems.
The computer chips control virtually every aspect of the
vehicle. No longer is it just enough to have information on
emissions-related items, you need information on computers
impacting all aspects of the vehicle.
A little over one year following introduction of the Right
to Repair bill in 2001, the car companies issued a letter
promising to make emissions and non-emissions-related
information available by August 31, 2003.
Clearly, this letter was a major step forward for the
aftermarket in that it was the first time, short of regulation,
the manufacturers had ever promised to make any information
available to our industry. However, the promises of the car
companies, while progress, do not go far enough to either
resolve our current issues or ensure a future of the
competitive repair market.
Our central issue with the letter is that it is not
enforceable. Should any of the car companies determine to walk
away from it, there is nothing the industry could do or the car
companies to hold them to their promise.
Today, you have heard only a few of the specific instances
where critical information is being withheld by the
manufacturers. These examples and others that have been brought
to our attention call into serious question the car company
performance in meeting their own promises.
A recent survey of repair shops performed by the Tarrance
Group found that 59 percent of respondent had problems getting
access to repair information and tools needed for repairs.
Sixty-seven percent reported that they had been forced to send
their vehicle back to the dealer. Ninety-three percent of the
respondents that said they wanted the Right to Repair bill were
ASA members.
Our further concern is the National Automotive Service Task
Force that was cited in the letter as the enforcement entity
for the promise. By nearly any objective measure, NASTF is an
enforcement group, but simply a clearinghouse for information
requests from the technicians that are routed to the
responsible car company. Once there, it is up to the car
company to decide how to answer.
NASTF as a entity does not force nor negotiate resolution
on behalf of the independent technician. And in April 22, 2005,
letter to Kirland & Ellis that represents the vehicle
manufacturers, FTC stated for a third party review system to be
effective they must be impartial and objective, be public, and
apply standards consistently.
Clearly, NASTF is neither impartial nor objectives since it
is operated and controlled by the vehicle manufacturers.
I have to add that because of the time it takes, which is
eight to 15 days by NASTF's own testimony at the Energy and
Commerce Committee, most independent repair shops cannot wait
that long to get the information to get their customers out the
door.
The bottom line is that while promises helped move the ball
forward, our industry cannot rest its future on them without
some hammer to ensure everyone stays at the table. Car
companies have racked up a long track record of withholding
needed information and tools, and they make too much money in
the aftermarket to accept anything else.
According to the NADA, National Automotive Dealers
Associations, even though dealership parts and service
departments comprise just 11.8 percent of typical dealer's
total sales, it contributes 48 percent of total operating
profit. New car sells make up 60 percent of total sales, but
only contribute 35 percent of total profit.
Our fear is that the marketing and competitive interests of
the manufacturers will override their current promise to make
information and tools available should the threat of
legislation disappear.
The Right to Repair legislation was revised this year, but
the goal is the came--ensure car companies keep their promises
that they made in their letter, to make all information
available.
Over the past couple of months we have worked hard with the
Federal Trade Commission to make sure it is easily implemented
and fair to the car company. Particularly important, the newly
drafted bill provides significant protection to the car
companies trade secrets.
During last year's discussions, the car companies thought
that this is was parts bill because it would require the use of
trade secrets. I want to be clear that it has never been our
intention to have any parts information, and we have provided
clarification in the current bill to make sure that is true.
Only information that they provide to the new car dealers must
be made available to the independent aftermarket.
We hope that this legislation will not add to the
regulatory burden but just simply expand what has already been
done in the emissions-related information by EPA be provided to
the independent aftermarket, and that the non-emissions-related
would also be included on those websites.
Thank you.
[Mr. Lowe's testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you. Our next witness is John
Cabaniss, Jr. of the National Auto Service Task Force, and
welcome to the Committee.
STATEMENT OF JOHN M. CABANISS, JR., ASSOCIATION OF
INTERNATIONAL AUTOMOBILE MANUFACTURERS, INC.
Mr. Cabaniss. Thank you. My name is John Cabaniss. I am
testifying for the Association of International Automobile
Manufacturers.
I have been with AIAM for 10 years. Prior to that I worked
for EPA for 15 years, and I began my experience working on cars
in my dad's auto shop when I was 11 years old. For five years,
I have been the chairman of the National Automotive Service
Task Force.
The U.S. auto industry is highly competitive, more so today
than ever before. About 70 to 80 percent of all non-warranty
vehicle service is performed in independent shops. Because of
this, automakers must respect the aftermarket industry as their
partners in ensuring customer satisfaction and protecting brand
loyalty. To do otherwise would be contrary to their own
interests.
Let us review some of the proponent's claims.
First, the proponents claim modern vehicle technology is
limiting consumers' choice for vehicle repair and service. The
reality is consumers continue to have the choice of where to
get their vehicles serviced and repaired. Independent shops
continue to provide quality services at competitive prices,
performing over 400 million successful repairs annually.
Internet and e-commerce technologies are being used today
to provide these shops with the latest technical information
faster and cheaper than ever before.
Second, the proponents claim automaker service websites do
not include complete information. The reality is automakers are
doing all that they reasonably can to make the same service
information, training materials and factory tools available to
independent shops as to dealers.
All automakers have service websites containing service and
training information available 24 hours a day, seven days a
week.
Is every manufacturer's information perfect? Of course not.
There are millions of data points and from time to time
something will fall through cracks. Like any complex data
network, improvements are continually being made to benefit
dealers and independents alike.
Third, proponents claim automaker service websites are too
expensive. The reality is nearly all automaker websites are
available for a period of 24 to 72 hours for 10 to 20 dollars.
Frequent users have the option for monthly or longer
subscriptions, but obviously they have to consider their own
business case whether to take advantage of that.
Fourth, proponents claim the voluntary approach provides no
enforcement to ensure continued good faith of automakers.
The reality is the continued good faith of automakers is
ensured because the marketplace requires it. Automakers must
ensure that customers can get their vehicles repaired at the
shop of their choice. Due to fierce competition, automakers
cannot afford any bad press that would result in not providing
full support to customers, dealers, and independent shops.
Fifth, proponents claim using the NASTF complaint process
takes too long.
The reality is in virtually all cases shops are getting the
information they need, when they need it, on a 24/7 basis from
either automaker websites or independent providers. In 2004,
NASTF received 48 complaints. This is obviously a very small
number compared to the 400 plus million vehicle repairs
conducted annually.
Most NASTF complaints are handled quickly, but a few take
longer because they require updating documents or making tool
changes. Automakers strive for continuous improvements of their
websites, just as they do their vehicles.
Sixth, proponents claim legislation and regulation are
needed to ensure automakers continue to provide information and
address the problems they have identified.
The reality is the types of problems identified by
proponents, such as the cost of accessing sites, differences in
sites, occasional content errors, and lack of enforcement, are
not issues which will be effectively addressed in regulations
by the FTC or any other agency.
The current cost structure in websites are based on EPA's
current regulations, and approved by EPA, and there is no
reason to believe the FTC would conclude any significant
changes are needed, and federal regulatory processes are laden
with procedural steps that do not lend themselves to addressing
problems quickly.
As noted by the FTC in a recent letter to Representative
Dingell, self-regulatory programs are often the best ways to
address matters. This is especially true in a dynamic area such
as information technology. The only thing that federal
regulation would clearly do is slow down the process and delay
further progress. This outcome benefits no one, not the service
industry, not the automakers, not consumers.
In conclusion, automakers remain committed to the National
Automotive Service Task Force. We welcome the participation of
all parties to improve and expand this voluntary process.
Bringing everyone's efforts and resource to bear on producing
results, not rhetoric, can only improve the process.
If any members of the Subcommittee are contacted by
constituents with any type of service information, question or
problem, please contact me so we can address the issue.
For the record, we oppose H.R. 2048 because we believe it
is unnecessary and counterproductive. We acknowledge that there
have been some modifications to this year's bill, but we
continue to have concerns about the protection of intellectual
property and the potential for excess litigation.
Thanks for the opportunity to address the Subcommittee.
[Mr. Cabaniss' testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you. Our final witness is
Kathleen Marvaso. Welcome to the Committee.
STATEMENT OF KATHLEEN MARVASO, AAA
Ms. Marvaso. Thank you. Good afternoon, Madam Chair and
Members of the Subcommittee. I am pleased to be here today to
testify on behalf of AAA, and provide testimony in support of
the Right to Repair bill.
I am Kathleen Marvaso, the managing director of AAA's
Washington office, where we advocate a wide range of consumer
and safety issues that affect the traveling public's safety and
mobility. AAA has represented the interests of car owners for
more than 100 years, now serving more than 48 million members,
25 percent of all U.S. households.
The AAA has a strong interest in the Right to Repair
legislation because we believe it is necessary to ensure our
members' safety, and their access to high quality, convenient
and competitively-priced auto repair.
The AAA's goal has always been to ensure that manufacturers
make service and training information and the appropriate
diagnostic tools available to any repair facility, not just
those in their franchise dealer network.
Ideally, this should occur voluntarily. Yet our members and
independent repair facilities in our approved auto repair
network continue to tell us that there are many instances where
technicians do not have the information or tools they need to
fix today's vehicles, and as a result consumers are denied
choice among qualified repair options. Often they are
inconvenienced, and some AAA members are left with no choice
but to drive their vehicle long distances for repairs.
Too often today's consumers are essentially denied
something that they buy when they drive off the lot with a new
car--access to the data necessary to get that vehicle repaired.
So AAA supports the Right to Repair bill for three
important reasons: consumer choice, vehicle safety, and the
right of car owners to access the data generated by their
vehicle.
Despite some positive steps towards making the information
available to independent repair facilities, it is AAA's
understanding that much of what is provided is incomplete, it
is difficult to find, or it is prohibitively expensive. So
instead of fixing the problems themselves, repair technicians
are forced to put customers back out on the road searching for
a dealer shop that may not have an available appointment, it
may not be nearby, and it may not even be open.
Many of our AAA members prefer dealer shops, but many also
choose to use the services of independents, and AAA believes
that our members deserve and need choice to ensure good quality
service, and competitive prices in auto repair. This can only
occur if all facilities have access to the same information and
tools.
Technology has made the vehicles that we drive smarter.
More than 80 percent of the systems on some cars are monitored
or controlled by a computer. They tell us about the need for an
oil change, trouble with an oxygen sensor, problems with the
brakes, and even if our tire pressure is too low before there
is a problem or a critical safety breakdown.
It makes sense that information necessary to diagnose and
repair any of these problems should be available to all repair
technicians. But these days it is hard to mention this issue
without someone telling you of their own experience with a
repair problem. Depending on the problem, whether it involves a
critical safety feature like brakes, or the supplemental
restraint system, or a comfort features like climate control,
at best these problems amount to an inconvenience, and at
worst, there are a serious safety issue. Regardless, they
should not happen.
The AAA believes that when you drive off the lot with your
car you own more than just the vehicle. You own the information
necessary to have it repaired by a trusted service advisor of
your choice, whether that is an independent or a dealer.
Opponents of this legislation claim that an information not
released to the independent repair shops is withheld to protect
intellectual property or design secrets. AAA members do not
want access to any of that. They want their car fixed.
Simply put, this legislation is about putting common sense
into the repair process, ensuring that customers get a choice
in auto repair, whether they choose a dealership or an
independent.
Thank you for the opportunity to share AAA's views on this
subject.
[Ms. Marvaso's testimony may be found in the appendix.]
Chairwoman Musgrave. Thank you very much for your
testimony.
Mr. Shuster, do you have any questions for our witnesses?
Mr. Shuster. Yes, I do.
First, I want to start off again, I have spent probably the
better part of 30 years of my life involved with auto repair,
and in an auto dealership selling cars, around cars. I also
want full disclosure. I could not fix a car if my life depended
on it. But I have been around and I have been managing
businesses that have done that some time.
I also want to say that Mr. Houska and Mr. Bordoff, I have
the greatest respect for what you do. I know how difficult it
is. You know, I have been there when a trained mechanic or we
thought it was a trained mechanic, we thought the part was
there, and the car did not get fixed, and I have got a customer
yelling at me why is my car not fixed. You guy do not know what
you are doing.
I mean, I have been there, and I feel your pain, and I have
felt it.
I do have a concern, though, about this legislation. I
think it is the wrong way to go. I think it--as independent
business people, as you are, as I was, small business people,
we do not want the federal government sticking their nose into
our business, because this just leads from one thing to the
next.
I mean, what is to stop us from the next thing saying,
okay, if you want to do these repairs, you have got to buy
every Chrysler, every General Motors, every Ford tool and
diagnostic piece of equipment out there.
I mean, it is a huge expense, and I do not think either of
you want that to happen. You probably do not have all of those
tools, because I had quite a few of those tools, and lots of
times we did not use those tools, but we still had to buy them.
So I am concerned about this for that reason. What is the
next steps?
Also, when we look at the market, 75 percent of the repairs
are being done today by independent repair shops. It does not
seem to me that the auto dealers have a monopoly on that
business.
Also, I saw where--I know that there is claims that there
is a lot of people complaining about the dealership not giving
up the information, they cannot get their cars fixed at your
place or the information is not fast enough. But I know the
task force, the numbers I have, there is only about one percent
complaints coming in from repair shops that say they cannot get
the information.
So to get to my question, who makes up CARE? I think know.
I think is it NAPA and Auto Zone and big parts manufacturers
and distributors like that. Is that correct or is that not
correct? Who makes up CARE? I know there is a lot of small,
independent dealers.
Mr. Lowe, maybe you can. I know AAIA, that is who you folks
are, is that correct?
Mr. Lowe. Yes.
Mr. Shuster. And are you part of CARE?
Mr. Lowe. We work with CARE on the legislation. We all
support the bill. We have some of the same members.
Mr. Shuster. Okay.
Mr. Lowe. CARE is one group who is supporting the bill.
They are made up of--you know, as you said, NAPA, and Auto
Zone, and companies like that. We are also comprised of some of
the same companies. We also have other service facility members
of AAIA. We have parts manufacturers, distributors.
So, I mean, CARE is just one group that represents this
bill, and is working on it along with a lot of other groups
that are supporting this legislation.
If you look at the range of support for the bill, it covers
a wide range of the aftermarket.
And to address your other issue about your concern about
the federal bureaucracy, none of my members want to see federal
bureaucracy more than we have to. Our members are staunchly
anti-regulatory in nature. But we have had regulations in place
by the Environmental Protection Agency for years on service
information, so we have already developed an infrastructure for
making that information available and for how the regulation
works.
There has never been any challenges on intellectual
property as part of the implementation of that legislation. So
we already have that in place. And I think it is important to
remember that we did not get as far as we have with information
because of the market forces. It is because of the information
regulations in the Clean Air Act, and then the threat of this
legislation coming into place that really moved us as far as we
have come on service information.
So we would love to be able to not have to deal with
legislation. We are hoping that when the legislation passes we
will never have to have regulatory enforcement action; that the
car companies will come and work with us to get the information
out there. But we do not feel comfortable without having some
kind of hammer to make sure that they stay at the table, and
work toward getting information to the industry.
Mr. Shuster. But again, the information I have is that they
are working with you. It is not perfect. It is never going to
be perfect because of the nature of what we do is fix cars and
it is a very difficult thing to do at times, but it is not out
there.
But I still see things that raise a red flag to me when you
are out there touting to Wall Street that this legislation may
pass. That sounds to me like you are looking for the investors
to invest in your stock because of government action. I do not
have the actual clipping of the Wall Street report saying you
are touting this act coming forward. That is going to be of
great benefit to the NAPA, the NAPA franchisees, the Auto Zones
and those big companies.
I look at the market and I see you have got 75 percent of
the businesses coming your way now. Again, I do not think this
is the right way to go. I think that go back and work, get in
there with the auto manufacturers, and sit down with them, and
let us see it work in the private sector. Let us not see the
government pass a legislation that I think in the end is going
to come back to haunt all of us.
Chairwoman Musgrave. The time has expired.
Mr. Lipinski, do you have questions?
Mr. Lipinski. Yes, Madam Chairman.
Chairwoman Musgrave. You are welcome.
Mr. Lipinski. Thank you, and thank all of you for your
testimony here today.
It seems like there are three major issues of contention.
One is how well would the voluntary system--how well is the
voluntary system working. The second one is will there be
intellectual property concerns, should there be intellectual
property concerns with a mandatory system, such as the one in
this bill. And the third one is will we have problems in the
interim? If we pass this, and make it mandatory, what would
happen to the voluntary system?
So let me just start with the first one, that is maybe all
that I really get to here, but it is probably the most
important one because we heard Mr. Ehlert state that there are
48 complaints to NASTF last year. All of them were resolved.
Only 48 complaints, and NASTF reports more than a 99 percent
rate of accessed information.
So I would ask whoever wants to respond to this, Mr.
Bordoff, Mr. Houska Mr. Lowe, is there a problem? What is wrong
with that data? That data seems to say that there is not a
problem with the voluntary system. What is wrong with that
data?
Mr. Bordoff. Well, one of the problems is that when you are
stating the number of complaints, most of these automobile
repair shops are small, three, four, five employees on a street
corner. They do not either to complaint or they do not even
know how or who to complaint to. So the problem is a lot larger
than the number of complaints.
You mention is it really necessary since it is being done
voluntarily. Some car manufacturers are doing it better than
others, so what we are having, and Chairman Barton said it, we
are having a bigger problem with the foreign companies than the
domestic companies, so that we can take care of some cars, but
not others.
Congressman Shuster said 75 percent of the repairs are done
outside. That is true, but 75 percent of the repairs are done
low tech, and 75 percent are done on older cars. And as the
cars are becoming more complex, more computerized and the newer
cars are coming in, that 75 percent number unless we get help
is going to drop to 60, 50 and even less than that in the
future.
Mr. Lipinski. Mr. Houska or Mr. Lowe, is there anything?
You do not have to add anything.
Mr. Houska. Also, a lot of repair shops do not even know
there is the system to report. ASA knows about it, but a lot of
shops are not ASA members.
Mr. Lipinski. What about the 99 percent success rate that
is reported?
Mr. Houska. Well, you have to wonder why there is only 48
complaints in the whole country. There is something wrong with
that system of reporting if that is the only number of
complaints you get.
Mr. Lipinski. Well, let me ask Mr. Ehlert to respond to
that.
Mr. Ehlert. Repeat the part you want me to respond to.
Mr. Lipinski. Well, I just want you to respond to their
arguments, Mr. Bordoff and Houska, about that there are
problems, and one of the problems--we have this low number of
complaints as you stated, but they do not know how to complain
or who to complain to, or it is difficult to complain.
Mr. Ehlert. Well, the system has been as heavily publicized
as it could possibly be over the last two plus years since it
has been in place. It functions very well at my shop. I do not
have these problems, and I primarily work on foreign-
manufactured vehicles, and I have full access to the stuff I
need.
On the other hand, I do not need the entire bid stream of
an engine control unit in order to repair that vehicle. I do
not need to know every bit of software that was programmed into
it. And I have access to the information that I do need to make
that repair, so I am not running into these brick walls that I
am hearing about.
I do not know what preparation steps the shops that are
having the complaints have not taken, but the information for
me is completely available.
Mr. Lipinski. Let me ask--change very quickly. Mr.
Cabaniss, you had mentioned Chairman Barton here said they have
changed the bill to protect intellectual property. What
concerns--you raised concerns though in your testimony. Why do
you think this bill does not protect the intellectual property
rights?
Mr. Cabaniss. Well, the problem with the bill as it is
currently written is that there is still some ambiguities
there, so we are not sure which part to read one way and which
part to read another way.
For instance, there is some language that says that trade
secrets are protected, but there is also language in the bill
that is somewhat vague. It says ``No information necessary to
repair vehicles shall be withheld by a manufacturer if such
information is provided directly or indirectly to franchised
dealerships or other facilities.''
The problem there, the word ``indirectly''. Manufacturing,
design and repair processes are all integrated, so where do you
draw the line on what is protected and what is not protected?
These kind of ambiguities that are in the law give us
concern because we do not want to have to go and fight
plaintiffs in courthouses all across the country where they are
challenging trade secret issues.
Chairwoman Musgrave. The time has expired.
We are advocates of small business, and one thing that we
always have before us though is what is best for the consumer,
and I would like a proponent of the bill to say why passage of
the bill is the best thing for consumers, and an opponent to
give their case as to why it would not be good for consumers if
the bill passed.
Would a proponent go first?
Mr. Bordoff. Without going into a long thing here, again,
we need rapid repair for the consumer, and when he has to wait,
especially now with the warranties of these new cars are
getting longer and longer, some are up to 10 years and 100,000
miles, four years, 50,000 mile warranties are becoming very
common. Chrysler has gone to seven years, 70,000 miles. The
dealership are getting busier doing warranty work, which they
have to do. Warranty work is not allowed to be done on the
outside.
So as they are getting busier, it is getting harder and
harder for the consumer to get his car in for a repair that is
not under warranty. So again, it is the time it is going to
take the consumer if he cannot bring it to his local shop to
get repaired. And we are trying to cut this off before the
problem really becomes bad.
As the cars, again, become more complex, this problem is
going to get worse. Right now most of the repairs are low tech
repairs, brake repairs, and that is why you are not seeing the
complaints, and most repairs are successful.
Chairwoman Musgrave. Thank you. Now an opponent of the
bill, please?
Mr. Cabaniss. The auto industry is all for consumer choice.
We support wholeheartedly the consumer having the choice of
getting their vehicle fixed anyplace that they choose, and that
is why we support working with the aftermarket for solutions.
Given the volume of information that is involved in
covering 600 models or so that are sold each year there is an
extensive amount of effort and resources on the part of
manufacturers needing to make this information available. If we
introduce bureaucratic processes into this, the outcome will
simply slow down the process by diverting manufacturers'
attention and resources away from solving service problems and
instead dealing with regulatory matters.
Our experience also indicates that regulatory processes
tend to create adversarial relationships among the parties
rather than supporting and working cooperatively together,
which is what we need to reach--to identify any problems and
work toward resolution. We need a voluntary cooperative
process, which we have in place today with the NASTF.
We do need the support of other organizations. Right now we
have over 100 organizations involved in that process, but many
of those choose not to participate fully for one reason or
another.
What we need to keep consumers happy, and believe me, the
auto manufacturers are all for having happy consumers, making
sure that they have good driving experiences, and come back to
the showroom the next time around to buy the next car. So you
know, that is what we need to keep consumers happy is a good
system that works.
Chairwoman Musgrave. Thank you very much.
Mr. Udall?
Mr. Udall. Thank you, Madam Chair.
When the Clean Air Act amendment was passed in 1990, it
took five years before any regulations were promulgated, and
then it took 13 years before they were finalized. As you heard
Chairman Barton testify before you, he said that if his bill
was enacted, it would take away the voluntary system that is in
place, and he was urging that the voluntary system come in
place, but he said if the law is passed, then the voluntary
system goes away.
My question to any of you that are willing to answer it
here is if this bill were to pass the current voluntary system
under the National Automotive Service Task Force goes away, how
would independent repair shops get any service information?
I mean, we are going to have a long period of time to get
this up and running. Please, anybody.
Mr. Lowe. May I comment on that?
Mr. Udall. Yes, please.
Mr. Lowe. I think it is important to remember that the
legislation really mirrors the promise that the vehicle
manufacturers made to make all their service information
available. So if the bill passes, they do not have to
necessarily just stop making information available. That
information as they promised should still be enough to comply
with the legislation.
So in reality, when the bill passes nothing really changes
if they do what they say they are doing.
The issue really gets to the car companies that are not
complying with the promise or who are not putting their effort
into making information available. They are the ones that would
have something to worry about.
So those that are now doing their best to get information
out there, and some are doing a much better job than others,
they will be able to continue to do that.
One other issue I just want to address is the issue of the
testing of the lawsuits that NASTF representative brought up.
Since the Clean Air Act has passed and the information
availability regulations were enacted, which were actually in
1995, and they were revised recently, there has never been any
challenges, legal challenges by the car manufacturers to some
of the requirements. There have not been court battles.
This has gone through--this information is out there, and
it has worked. It is not perfect. There are problems, but it
has worked.
So I really take issue with that statement that there are
going to be problems with this bill passing. I simply think it
will make sure that everybody does--lives up to their promise.
Mr. Udall. Any--yes, please.
Mr. Ehlert. Currently, the system we have in place is here
because of voluntary business agreements. If the legislation
were to pass, there is no reason, there is no mechanism within
the voluntary agreement for it to continue.
If I were to lose information access today, it would be
disastrous. Previous to 2003, I had a large room in my shop
dedicated to original equipment manufacturers' manuals. I do
not have to keep those anymore. Any questions that come up are
readily available on each of my technician screens as they are
needed. That has been a substantial improvement in the
efficiency of the operation of my business.
Without that information, I could go out of business.
Mr. Udall. Do any of the other panelists have comment on
those issues?
Mr. Cabaniss. I would add that with regard to EPA's
regulations being in place for the past period of time the
regulations came from the Clean Air Act, as was explained at
the outset of the hearing. The Clean Air Act has just a couple
of sentences in it about service information. It does not have
the pages and pages of language that is in the H.R. 2048. And
when you have pages and pages of a language it causes a number
of issues when you have the vague pieces, an example of which I
provided earlier.
The interesting thing is is that today the automakers are
all, everyone of them, there are no exceptions, are providing
information for non-emission systems on the same basis as EPA's
regulations require it for emissions-related information.
Therefore, we do not understand how there is--why there are
these complaints about the lack of information being available.
It is available bumper to bumper for the car on the service
websites of the auto manufacturers. So we do not understand
what there is to be gained by this legislation other than to
establish a bureaucratic process that will simply cause delay
after delay. It took EPA 13 years to get that second rule
through after the Clean Air Act. So it just makes no sense to
us to have that kind of situation repeat itself.
Mr. Udall. Thank you.
Chairwoman Musgrave. The time has expired. Thank you, Mr.
Udall.
Thank you, witnesses, for your testimony today. We
appreciate it very much, and this hearing is adjourned.
[Whereupon, at 3:35 p.m., the Subcommittee was adjourned.]
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