government affairs blog
A few weeks ago, Kathleen Schmatz, AAIA president and CEO, joined the board of the National Automotive Service Task Force (NASTF). Taken in context of years of battling on Right to Repair, this is truly a significant development.
First, a little history. NASTF was born in 1999 due to efforts in Arizona by some aftermarket groups to obtain passage of Right to Repair legislation. The goal of what was called the “Arizona Pilot Project” was to address many of the issues voluntarily instead of by enacting legislation. The pilot project morphed into a national organization as the effort to pass Right to Repair moved to the U.S. Congress in 2001. There is no doubt that NASTF has tackled some important issues including the development of:
- An infrastructure to resolve problems being experienced by independent shops obtaining information from vehicle manufacturers; and,
- A solution to the issue of locksmiths and repair shops obtaining codes to reset vehicle security immobilizer systems.
However, the organization also has, at times, crossed the border into becoming politically involved in efforts to fight Right to Repair, both federally and in the states. I believe that such action was not intended by many of those that participated in the organization, but rather a minority of groups that saw the political advantage of using the efforts of NASTF to lead legislators into determining there was no need for right to repair legislation.
While I have always seen the value of NASTF, I also have thought that the organization would actually be more effective if there was a law behind it that forced the manufacturers to work with the independent aftermarket to ensure the availability of information, software and tools. With passage of the Massachusetts Right to Repair law, that issue is finally settled. Now, NASTF can play an active role in making sure that the implementation of the Massachusetts law is effective in achieving its goals of ensuring that aftermarket shops has the ability to repair late model highly sophisticated vehicle systems. Further, if a national agreement is reached between the aftermarket and the car companies, NASTF will have the opportunity to play a big role in its success as well.
That role, in my opinion, is to ensure that the aftermarket does not have to resort to legal action in Massachusetts to obtain access to information or tools. Such legal action will be time-consuming and expensive for both sides. Instead, it is better for the two sides to work out the issue, with the knowledge that if the manufacturer is not cooperative, the threat of a legal action in Massachusetts is real and could be used by independents. NASTF also could help educate independent shops and technicians on upcoming requirements that car companies make information and diagnostic software available using a standardized vehicle interface and a cloud based system where repair software can be downloaded on a subscription basis.
One of the biggest impediments to NASTF fulfilling its role in Right to Repair implementation is the fact that the vast majority of the industry is not aware that it exists. Therefore, one of the first orders of business will be improving the knowledge of NASTF by the hundreds of thousands of repairs shops around the country. Clearly, reaching a majority of these shops will be quite a challenge. Second, as more of the industry uses NASTF, it will need to have the resources to effectively work to resolve issues where information or tools are difficult to locate or in some cases not available. Nothing could jeopardize the future of NASTF more than the perception by the industry that the organization is ineffective in fulfilling its role of resolving information issues.
So as new board members, look for AAIA to continue its fight for Right to Repair, only now the goal will be ensuring that the legal framework which was created in Massachusetts will work in the everyday world of the independent shop which wants to get that vehicle in the service bay repaired quickly, correctly and at an affordable price.
The earliest building codes date back to Babylonian times when it was decreed that builders should be put to death should one of their structures collapse. While the punishment for violating the code in this day and age isn’t quite as severe, the complexity of today’s codes and the fact that they are constantly changing often results in businesses falling behind in their compliance efforts. AAIA has begun to monitor the wide array of standards and codes, specifically those addressing fire hazards, in an attempt to assist our members in complying with the law.
It is difficult to fully explain the complex process by which these regulations come into being, but the gist of it has to do with federal, state and local governments adopting rules recommended by non-governmental organizations, such as the National Fire Protection Association (NFPA) and the International Code Council (ICC). The NFPA, established in 1896, is a membership-based organization that develops and publishes more than 300 standards aimed at addressing fire risks prevalent in buildings and certain processes. The ICC, established nearly a century later in 1994, is a non-profit group devoted to creating and updating a single set of codes, such as the International Building Code and International Fire Code, which reference hundreds of standards, some of which come from NFPA, and are used in the construction of new buildings. Both of these organizations rely on committees made up of volunteers from industry, manufacturers of safety equipment and full-time code officials, all of which deliberate over comments from the public on specific standards and discuss potential changes to the code.
In order to stay on top of the ever-changing fire codes that impact the aftermarket, AAIA is working with Marshall Klein, P.E., of Marshall A. Klein & Associates, Inc. Klein has more than 30 years of experience serving on a variety of NFPA and ICC committees while also handling personal consultations with aftermarket businesses that experience compliance problems. While you may already have your own way of complying with the various codes, it helps to have someone like Klein on the inside to ensure that our industry has input on these discussions. He also provides us with a heads-up on changes to the code so that our members can be prepared before any revisions go into place.
Why is having input on fire codes important? Whether it is a distribution or repair facility, a substantial portion of our membership must adhere to a set of strict fire standards that are constantly in flux. For warehouses, sprinkler requirements based on the type and height of the commodity stored, as well as special storage height limits for flammable liquids, are two matters of compliance that are far-reaching and continue to be modified. In terms of repair shops, the storage and use requirements for flammable and combustible liquids, ventilation of flammable vapors, and electrical wiring are all serious issues that must be taken into account a daily basis.
We hope that this newly-acquired expertise will serve as a valuable benefit to our membership. If you would like additional information about any of these matters or are in the process of having to comply with any new regulation, feel free to reach out to us at email@example.com.
So far in 2013, news from Washington, D.C. has been plagued by disagreement on a host of hot-button political issues including tax reform, budget proposals, immigration and gun control. While there is no shortage of proposals from either side of the aisle on these issues, most of the proposals will face stiff resistance from various elements on the Hill and their fate is questionable at best. One key proposal that has a good chance of surviving – enjoying broad support from both parties and from the business community – is the proposed free trade agreement (FTA) between the United States and the European Union (EU). Earlier this year, President Obama and EU leaders committed themselves to launching negotiations on a Transatlantic Trade and Investment Partnership (TTIP). Formal negotiations are scheduled to begin in the latter half of 2013, but the groundwork for negotiating objectives is already being laid.
While a trade agreement is not a magic formula for prosperity, the removal of trade barriers across a large volume of trade can contribute significantly to economic recovery. As with any trade agreement, tariff reduction will be a major part of the TTIP. But tariff reduction must be coupled with removal of non-tariff barriers such as differing regulatory requirements and standards. As much as 80 percent of the total potential gains come from cutting costs imposed by bureaucracy and regulations. Lower tariffs mean little if products produced on one side of the Atlantic are not accepted on the other because of diverging regulations. Even slight adjustments to the production process to comply with different regulations add significant costs and undermine the benefits of an FTA.
An ambitious and comprehensive TTIP could bring significant economic gains as a whole for the EU and the U.S. once the agreement is fully implemented. The EU-U.S. economic partnership is the largest in the world with goods and services trade totaling over $1 trillion annually. The EU, as a unit, is the largest merchandise trading partner of the U.S. The U.S. Chamber of Commerce estimates that a significant percent reduction in non-tariff barriers would increase both EU and U.S. GDP by 3 percent.
The biggest relative increase in trade resulting from TTIP is expected to take place in the motor vehicles sector. This is not surprising as the car sector is characterized by a combination of high tariffs and high non-tariff barriers, such as different safety and emissions standards. EU exports of motor vehicles to the U.S. are expected to increase by 149 percent, according to the Centre for Economic Policy Research.
Further integration of the auto industry across the Atlantic means increased opportunities for two-way trade in parts and components and associated services. Increased trade translates to opportunities to businesses at every level of the aftermarket supply chain. The TTIP negotiation process provides AAIA and its members an opportunity to identify and eliminate regulatory barriers to trade in our industry. To realize the full potential of this potentially game-changing agreement, regulatory convergence is needed. Increased regulatory convergence can lower costs, increase trade flows and create jobs in our industry.
AAIA is in discussions with FIGIEFA (Fédération Internationale des Grossistes Importateurs et Exportateurs en Fournitures Automobiles), our counterpart auto aftermarket trade association in Europe, to identify key areas where regulatory convergence is needed. In the coming months, AAIA will be identifying these areas in written submissions and in-person meetings with U.S. trade negotiators. We encourage AAIA members to consider how the TTIP may impact their business and to help us identify any barriers to trade in our industry that might be eliminated, whether through harmonization or mutual recognition. Identifying opportunities for greater transatlantic regulatory compatibility now will help ensure that our industry enjoys the full benefits of the TTIP later.
There are thousands of trade associations in the U.S., just like AAIA, that represent the legislative and regulatory interests of their industry in Washington and in the states. Each industry has a specific point of view on a government initiative. And just like the AAIA government affairs department, the trade association lobbyists bring that point of view to the attention of the regulators and legislators in hopes that they can enact, defeat or shape a piece of legislation or regulation.
Notwithstanding these different points of view on many issues, there are instances where the business community is on the same side on a piece of legislation. Issues such as taxes, healthcare reform and labor laws often impact a broad segment of the general business community that are not defined by a single industry group. In these cases, trade groups pool their resources and act as coalitions, providing a stronger voice to legislators and regulators on key issues impacting the business community. Sometimes these coalitions are coordinated by broader business associations such as the U.S. Chamber of Commerce, National Association of Manufacturers (NAM), National Association of Wholesaler-Distributors (NAW) or the National Federation of Independent Businesses (NFIB). Other times, the coalitions are coordinated by one association or a group of associations that have the resources and interest in an issue to spearhead an effort.
AAIA is a member of numerous coalitions addressing issues related to healthcare reform, repeal of the estate tax, reform of the Toxic Substances Control Act (TSCA), and the efforts by labor unions to strengthen their ability to unionize workplaces. By working with these coalitions, we are able to fortify our lobbying work in these areas, while maximizing association resources to work on issues that have a unique impact on the independent aftermarket. AAIA is also a member of the Chamber, NAM, NFIB and the National Association of Wholesalers-Distributors, which provide us with additional resources and political capital.
In short, when companies decide to join AAIA, they receive not only the work of five lobbying professionals that work directly for AAIA, but also a broad network of hundreds of lobbyists and other government affairs professionals that work in tandem with AAIA on business-related issues that could potentially have a significant impact on our members’ bottom line. These coalitions have helped defeat legislative initiatives such as card check which would have made significantly easier for a labor union to unionize virtually any business, helped effectively rollback the estate tax such that most AAIA members are not impacted and prevented passage of ineffective and outdated TSCA reform bills that might have saddled aftermarket companies with significant and unnecessary compliance costs.
Now that is getting more bang for the buck.