U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

96–097PDF 2004

REPAIRING THE 21ST CENTURY CAR: IS

TECHNOLOGY LOCKING THE CONSUMER OUT?

HEARING

BEFORE THE

SUBCOMMITTEE ON

COMMERCE, TRADE, AND CONSUMER PROTECTION

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

SEPTEMBER 22, 2004

Serial No. 108–120

Printed for the use of the Committee on Energy and Commerce

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON ENERGY AND COMMERCE

JOE BARTON, Texas, Chairman

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

RALPH M. HALL, Texas

MICHAEL BILIRAKIS, Florida

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

CHARLIE NORWOOD, Georgia

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi, Vice Chairman

VITO FOSSELLA, New York

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

CHARLES F. BASS, New Hampshire

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

DARRELL E. ISSA, California

C.L. ‘‘BUTCH’’ OTTER, Idaho

JOHN SULLIVAN, Oklahoma

JOHN D. DINGELL, Michigan

Ranking Member

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

LOIS CAPPS, California

MICHAEL F. DOYLE, Pennsylvania

CHRISTOPHER JOHN, Louisiana

TOM ALLEN, Maine

JIM DAVIS, Florida

JANICE D. SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

CHARLES A. GONZALEZ, Texas

BUD ALBRIGHT, Staff Director

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION

CLIFF STEARNS, Florida, Chairman

FRED UPTON, Michigan

ED WHITFIELD, Kentucky

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

JOHN B. SHADEGG, Arizona

Vice Chairman

GEORGE RADANOVICH, California

CHARLES F. BASS, New Hampshire

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

DARRELL E. ISSA, California

C.L. ‘‘BUTCH’’ OTTER, Idaho

JOHN SULLIVAN, Oklahoma

JOE BARTON, Texas,

(Ex Officio)

JANICE D. SCHAKOWSKY, Illinois

Ranking Member

CHARLES A. GONZALEZ, Texas

EDOLPHUS TOWNS, New York

SHERROD BROWN, Ohio

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

BART STUPAK, Michigan

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

JIM DAVIS, Florida

JOHN D. DINGELL, Michigan,

(Ex Officio)

(II)

C O N T E N T S

Page

Testimony of:

Cabaniss, John, Chairman, National Automotive Service Task Force, Director, Environment and Energy Association of International Automobile Manufacturers ................................................................................... 61

Cardwell, Lynne, Chief Executive Officer, Car Care Center, on behalf

of Coalition for Automotive Repair Equality, Automotive Aftermarket

Industry Association and CARQUEST Tech-Net Professional Auto Service Center ....................................................................................................... 65

Dana, Greg, Vice President, Environmental Affairs Alliance of Automobile

Manufacturers ............................................................................................... 56

Donovan, Edward C., Director of Technical Services, AAA Automotive

Technical Services ......................................................................................... 47

Haas, William J., Vice President, Service Repair Markets for the Automotive Service Association ........................................................................... 42

Merrill, Bob, Horsepower Auto Care, National Federation of Independent

Businesses ..................................................................................................... 53

Scaler, Dave, Director, Mechanics Education Association ............................ 11

Seyfer, Donald L., Seyfer Automotive, Inc ..................................................... 49

Material submitted for the record by:

Dingell, Hon. John D., letter dated October 5, 2004, to Hon. Deborah

Platt Majoras, requesting views for the record, and response to same .... 118

Retail Industry Leaders Association, letter dated September 22, 2004,

to Hon. Cliff Stearns ..................................................................................... 114

Service Station Dealers of America and Allied Trades, prepared statement of ........................................................................................................... 115

Tire Industry Association, prepared statement of ......................................... 116

(III)

(1)

REPAIRING THE 21ST CENTURY CAR: IS

TECHNOLOGY LOCKING THE CONSUMER

OUT?

WEDNESDAY, SEPTEMBER 22, 2004

HOUSE OF REPRESENTATIVES,

COMMITTEE ON ENERGY AND COMMERCE,

SUBCOMMITTEE ON COMMERCE, TRADE,

AND CONSUMER PROTECTION,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:06 p.m., in room

2322, Rayburn House Office Building, Hon. Cliff Stearns (chairman) presiding.

Members present: Representatives Stearns, Upton, Shimkus,

Bass, Bono, Issa, Otter, Barton (ex officio), Schakowsky, Gonzalez,

Towns, Green, McCarthy, Strickland, and Dingell (ex officio).

Staff present: Chris Leahy, majority counsel and policy coordinator; David Cavicke, majority counsel; Brian McCollough, majority

professional staff; Shannon Jacquot, majority counsel; Will Carty,

legislative clerk; Jonathan Cordone, minority counsel; and Ashley

Groesbeck, minority research assistant.

Mr. STEARNS. Good afternoon, everybody.

I wish we had a little bit more seats for all of you, so we will

work it through here.

For most of us our car is an absolute necessity for our busy lives

providing a safe and efficient means of going from point A to point

B, whether that is the grocery store or grandma’s house. Cars are

also used for personal expression, usually expressed as horsepower.

And for some simply a practicality. But when we have a breakdown, and that is a disabled car—no matter how fast or how practical this can mean major disruption for all of us.

When we lose our wheels, many of us go straight to the local garage and dealer technician or mechanic, as I remember calling

them, to get us back on the road. I believe that a consumer has

a right to choose that mechanic and shop that does the service on

and repairs on his or car.

When one considers that from 1980 until the year 2004 the number of light-duty cars and trucks in the United States has almost

doubled to over 220 million vehicles with Americans spending

about $38 billion a year on auto care and repair, it is clear that

these consumer choices are big business, very big business in a

very competitive market.

The 21st century family car in our driveway is no longer just engine wheels, chrome and steel. Today’s car is probably the most soVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 96097.TXT HCOM1 PsN: HCOM1
2

phisticated piece of machinery we own and has on the average 15

on board computers that rival the computing horsepower that the

Apollo Space Craft used for the moon landing. To tackle those repairs and service jobs today’s automotive technician, not unlike a

NASA engineer, is a well trained specialist armed with the latest

in high tech tools and gadgetry. Gone are the days when a monkey

wrench, timing light and firing orders from your repair manual

were all you needed to handle that occasional stall or sputter.

The use of computers in cars became more common place after

passage of the Clean Air Act in 1990. This law required for the

first time the computerized engine and system management known

as on-board diagnostic systems, OBD, be integrated into a car in

an effort to regulate and improve air quality.

The OBD system originally was designed to monitor certain engine and transmission events that could worsen air quality, such

as an engine misfire. Record them and ultimately alert the driver

to have his or her car serviced. The driver is usually alerted by a

check engine light or malfunction indicator lamp, MIL. And so

when the car is serviced the auto technician uses a device known

as a scan tool to harvest the recorded data through a port in the

car, not unlike downloading data from your desktop onto your PDA.

These data are typically codes known as fault codes that tell the

technician what system or component is malfunctioning.

Since the introduction of OBD in the 1990’s car manufacturers

have begun integrating systems other than admissions into their

car computer networks. Today safety systems such as antilock

brakes and convenience systems such as antitheft alarms are all

part of the electronic network of a car’s brain. All of this complexity

makes a diagnosis and repair of car problems a very technical and

sometimes capital intensive business that requires the right training, the right tools, and the right data.

The problem we are focused on today relates to access. Access to

the complex and sometimes expensive tools of the trade and the

critical data that now acts as a key and the Rosetta Stone for diagnosing problems and servicing your automobile.

Those advocating Federal legislation, particularly many in the

aftermarket service repair and parts industry, claim both the tools

and codes are at best hard to track down and at worst, not readily

available for all but the car and the truck dealers. In contrast, the

car manufacturers and others involved in the aftermarket service

and repair industry say that the tools and data have been and are

accessible with virtually all of the relevant information currently

provided over the Internet. So there continues to be a real difference of opinion about the current state of affairs and the ability

or inability to access to the tools and data necessary to service and

repair our modern cars and trucks.

I think the following questions attempt to summarize our subcommittee’s focus today:

Are scan tools available to independent repair shops and the general public? If so, are these the same tools provided to the car dealers? Are they prohibitively expensive?

Are the fault codes and other diagnostic data available to independent repair shops in the general public? And if so, why are

there reports of tools showing ‘‘code undefined.’’

3

If there is a problem with the tool and data availability, how extensive is the problem?

Are there currently lawsuits or complaints to the Federal Trade

Commission?

What is their quantifiable impact on small independent repair

shops in terms of lost business, and what is the quantified economic impact on unsatisfied customers?

Are there legitimate public health and safety concerns that

should be considered if we allow access to safety, emissions and security systems on cars and light trucks? Obviously, is there a

chance to tampering?

Are there legitimate risks to the intellectual property invested in

the programs and technologies that are used in OBD and other diagnostic systems?

And finally, my colleagues, will Federal legislation provide a solution to this ongoing issue or are there current programs at the

Federal/State level with adequate enforcement available.

I would like to thank our witnesses for coming here and taking

their valuable time to join us. And we look forward to your testimony and presentations.

And with that, I recognize Ranking Member Schakowsky for her

opening statement.

Ms. SCHAKOWSKY. Thank you, Mr. Chairman.

As you know, the opportunity to make opening statements has

long been recognized by the Committee on Energy and Commerce

on a bipartisan basis as a member’s right. And I appreciate the opportunity this afternoon to make an opening statement. Nonetheless, this right which is vital for the minority in Congress and to

our democracy was unfairly denied by Chairman Barton on

Wednesday, September 15, at the full committee markup of House

Res. 745, the resolution of inquiry into Vice President Cheney’s secret energy task force.

Chairman Stearns, as I have said on a number of occasions, the

manner in which you have lead this subcommittee have been nothing if not curious and respectful. And although we disagree on a

number of issues, you have worked with me and with Ranking

Member Dingell to ensure that the minority has had a voice in the

happenings of the subcommittee. That is why I must say that I was

surprised and disappointed to hear that Ranking Member Dingell’s

request for just one witness from the Federal Trade Commission

was denied.

The request for this particular witness was not a partisan or political request. The divide on the topic of today’s hearing, how technology changes in the design and maintenance of cars have affected

both the consumer’s right to choose repair shops and independent

repair shops themselves, is not a divide on partisan lines. In fact,

I may not have agreed with what the FTC would have had to say

if a representative of the agency was allowed to testify, but because

the FTC would be affected by any legislation we may decide to undertake, I believe that an FTC witness should be here to share the

agency’s knowledge and perspective on the issue.

Because of our history of cooperation and because we do have a

number of other stakeholders here today, I find the decision to

deny Ranking Member Dingell a witness to be quite unnecessary.

4

Having said that, I do look forward to hearing from the witnesses

who are here today.

Many of the technology changes in car design and maintenance

have made cars safer and more environmentally sound. The

changes have truly been advances. However, they have also created

new challenges for the consumer and for independent repair shops.

Consumers are finding that they cannot take their cars to the repair shop of their choice. Repair shops are finding that they must

refer their customers to dealers for repairs they cannot do. Those

experiences are not because the mechanics are not capable, but because they cannot get the information they need or they cannot get

the information they need in a timely fashion to make the necessary repairs.

I believe that the manufacturers of motor vehicles sold in the

United States should disclose the information necessary to service

or repair vehicles to car owners, repair shops and to the Federal

Trade Commission. I believe that this information should be available while protecting industry trade secrets and intellectual property so that car owners can go to the repair service of their choice.

Some of the witnesses here today will say that the sharing of information is already occurring and that the auto makers and independent repair shops have been working together voluntarily.

While I believe that there have been some positive changes since

this issue came to light a few years ago, thanks in large part to

the late Senator Paul Wellstone’s prodding, I believe there is still

room for improvement.

We need to ensure that the information provided to the car owners and independent repair shops is easily accessible, accurate,

timely and not priced out of reach.

Again, I do look forward to hearing the ideas of our witnesses on

this issue.

It is unfortunate that the Majority has denied us the opportunity

to hear the Federal Trade Commission’s perspective today.

Mr. STEARNS. Thank the gentlelady.

Mr. Upton?

Mr. UPTON. Well, thank you, Mr. Chairman.

As Representative of the great State of Michigan, the birthplace

of the automobile and as Co-Chair of the Auto Caucus, I am glad

to have the opportunity to exercise oversight over matters of the

industry itself.

The auto industry is a driving force in the economy of every

State creating an estimate 6.6 million jobs direct or indirectly and

providing over $240 billion in payroll compensation every year. It

is appropriate that our committee and this subcommittee keep an

eye on the critical engine of commerce.

When it comes to the auto industry and the legislative process,

I am of the mind set that less is more. I look at all the work that

is being done in the area of alternative fuel vehicles without congressional mandate, and I know that this is a market drive rather

than regulatory, and I think that is how it ought to be.

When the concern was first expressed about repair issues and

consumer fairness, I was pleased to see that the auto industry

came to the table, stepped up to the plate, with a voluntary proposal to deal with the issue. It has been little over a year and my

5

understanding is that this voluntary effort is working very well.

The auto companies are already providing the same repair information to independent repair shops that they supply to their own

dealers. Auto makers make available the same service and training

information related to vehicle repair as is provided to franchised

dealers and the same diagnostic tools related to vehicle repair that

are provided to franchised dealers.

Progress has also been made with regard to tool information

availability for the aftermarket industry. I am told that the auto

makers are making factory tools available to independent repair

ships and/or providing information to the Equipment and Tools Institute so that third parties can develop diagnostic tools with the

same capability as factory tools.

And finally, auto makers are making training materials available

either through their websites as an 800 number to ensure independent technicians throughout the country have access to all

needed service, repair and training materials.

I look forward to hearing an update on the progress of that voluntary agreement and availability of tools to perform necessary

auto repair.

As Chair of the Subcommittee on Telecommunications and the

Internet, I am also aware of how evolving technology can revolutionize an industry. That often means that an industry can wide

up on the bleeding edge of technology. With that in mind, I am also

interested in hearing how proprietary information on parts can be

protected so that we protect consumers against counterfeit parts.

And finally, I am curious just how widespread that problem actually is. I certainly have not hear from any of my constitutes about

it. And although the statistics on post-warranty repairs would indicate that a huge number of repairs, over 75 percent, are done at

independent stops rather than at dealers. So that if you think that

there really is a big problem, you would think that we would hear

about it.

Thank you, Mr. Chairman, I look forward to the hearing and appreciate the time that our witnesses are committing to us. I yield

back my time.

Mr. STEARNS. I thank my colleague.

And now the distinguished ranking member of the full committee, Mr. Dingell also from Michigan.

Mr. DINGELL. Mr. Chairman, your courtesy to me is much appreciated, and I thank you for recognizing me and for recognizing all

members for opening statements.

We had a very unfortunate experience in this committee last

week, which I am pleased to see is at least not being repeated

today. And, of course, I will continue to maintain an active interest

in seeing that committee rules and their interpretation properly reflect the traditions of this committee, and that members are permitted to be heard on important matters of national concern.

On another procedural matter, I regret that we will not be hearing today from the Federal Trade Commission, despite my request

that the FTC be allowed to offer its views. Therefore, minority

members are delivering to you this afternoon a letter pursuant to

Rule 11 of the House of Representatives requesting at least 1 additional day of hearings on the subject of today’s hearing.

6

I am not altogether sure I can understand or explain why the

leading Federal consumer protection agency was not invited to a

hearing on the availability of automobile repair information. Moreover, the proposed legislation on this matter sponsored by our good

friend and chairman, Mr. Barton, and Mr. Towns would give significant new authority to the FTC. Without an understanding of

the position and views of that agency on the powers to be given and

whether they are in fact needed or whether they would be adequate, it would be hard for us to come to a clear judgment as to

what it is this committee ought to do with regard to the legislation.

Members and the public are entitled also to hear from the FTC

on this entire subject.

Despite my misgivings with regard to the FTC’s absence, I am

pleased that we are holding this hearing today, and I thank you

for it, Mr. Chairman. H.R. 2735, the Motor Vehicle Owners’ Right

to Repair Act of 2003, was reportedly introduced to help small

independent repair shops. There are, however, questions surrounding this legislation which I am hopeful our witnesses will be

able to help us understand.

For example, why is the most vocal and well funded supporter

of the bill, the CARE Coalition, primarily composed of and funded

by large corporations, many of which sell inexpensive replacement

parts from overseas?

Moreover, why does the leading trade association representing

independent service shops for whom this legislation was supposedly

created oppose the bill?

These are questions which peak my curiosity, as I am sure they

will anyone who looks at these matters. And I know that you will

want to have answers to these questions, Mr. Chairman.

The issue is not as simple as it may appear. The publicly stated

objectives of this legislation are laudable, indeed. Consumers

should be able to choose who repairs their automobiles. It is not,

however, the bill’s stated objectives with which I am concerned. It

is the means through which this legislation seeks to achieve its

stated objectives and the consequences, whether intended or not,

that give me real pause.

It is possible to help the consumers and to assist independent repair shops without jeopardizing the rights of automobile manufacturers and suppliers. Independent service stations across the Nation have joined with the world’s automobile manufacturers to create the National Automobile Service Task Force. This task force

has designed a nonlegislative means through which the objectives

of the bill can be and are being achieved. I am told that independent service stations are now receiving the information they

need to repair all makes and all models of motor vehicles.

No one should expect that an undertaking of this magnitude is

going to be perfect from inception. There will be errors and there

will be flaws. This requires communication, perseverance and, most

importantly, the willingness of all stakeholders to succeed. It is, I

think, therefore a matter into which this committee should be

going, and I commend you for your leadership.

To the current members of the task force I say continue to work

diligently. Keep us appraised of your progress. To those who are intent upon criticizing the goodwill of others, I suggest that you use

7

a portion of the vast resources you have spent on multimedia presentations and high priced lobbyists to help the task force achieve

a real victory for consumers and independent repair shops. This, I

believe, can be much better done by cooperation amongst the parties than it can by us enacting legislation unless there is extraordinary reason therefore.

Mr. Chairman, I look forward to hearing from our witnesses, and

I look forward to a more thorough and complete examination of this

issue in the near future.

And I thank you for the recognition.

Mr. STEARNS. I thank the distinguished ranking member. And

we have your letter, and we will certainly look at it carefully.

Let me ask you as a suggestion, what happened if I offered unanimous consent to allow the subcommittee members to submit questions to the Federal Trade Commission for their answers? Would

that be acceptable to you as a alternative approach.

Mr. DINGELL. Does my good friend direct these questions to me?

Mr. STEARNS. I do, indeed. And I recognize the gentleman.

Mr. DINGELL. If the Chair would yield to me. I think that is a

splendid idea, and I would of course actively avail myself of this.

When we commenced the process, however, Mr. Chairman, of trying to get the views of an agency like the Federal Trade Commission on a question as complex as this, it may be that the answering

of those questions will leave us with more questions than we have

when we start. And I appreciate what I am satisfied is a genuinely

good faith effort to meet my concerns, but the FTC is the agency

that will be designated to engage in the enforcement of this matter.

And I have no idea what they are going to say, but if there is something to be said on the enforcement and other judgments and a critique of the legislation, certainly the agency selected by the statute

to address this and the principle consumer representative organization inside the Federal Government I believe should be here. Because I think all the members would want——

Mr. STEARNS. I respect your years of experience. So I am taking

that to assume you would like an unanimous consent?

Mr. DINGELL. I really would, Mr. Chairman.

Mr. STEARNS. Okay.

Mr. DINGELL. I say this with both respect and affection.

Mr. STEARNS. No. I understand.

By unanimous consent so ordered that all the members will be

able to submit questions to the Federal Trade Commission.

With that, the gentleman from New Hampshire.

Mr. BASS. Thank you, Mr. Chairman.

This is an interesting hearing. Clearly, as my friend from Michigan Mr. Dingell said, it is more complex than it appears to be at

first. There are issues of safety and competitiveness involved, as

well as good consumer oversight.

As one who is familiar personally with the problems that car

owners face when they try to make repairs to systems that cannot

be handled by any other entity than a dealer, I think it is important to seek to achieve an appropriate balance so that modern

automobiles can be repaired and maintained safety outside of the

dealership structure to help keep the cost of maintenance down

while at the same time assuring that the motoring public is safe.

8

This is an excellent hearing and I look forward to hearing the

views of our witnesses here today. And I thank Chairman for holding it.

Mr. STEARNS. Mr. Issa?

Mr. ISSA. Thank you, Mr. Chairman. And thank you for holding

this hearing.

I am not a co-sponsor of the bill. I am here to decide whether or

not this piece of legislation is necessary. But I do have an obligation to express two things.

First of all, many people on the committee know that I have a

long history in the aftermarket industry designing manufacturing

for the automobile. First of all, I have no financial interests any

long in any company that is involved in that industry. So, hopefully, that puts aside any questions of conflicts.

However, in my 10 years on the Board of the Consumer Electronics Industry and my 20 years of manufacturing for the auto

companies, I have personally witnessed a reluctance and a continued reluctance by the auto companies to provide in an expeditious

fashion any technology that would allow anyone to develop a product in competition or even in addition to the auto companies with

rare exceptions. So I come here today with concern that what I

have observed for 20 years in the business and, as I said, about a

decide on the board of the major trade association does tend to

make me believe that there is a possibility that the auto companies

deliver but do not deliver in a timely fashion, and certainly make

very effort to not deliver in a predelivery of vehicle to anyone other

than to their authorized dealers.

Having said that, I am not signed on the bill. I look forward to

finding out whether this particular piece of legislation is the best

solution and, of course, whether or not the problem is sufficient is

sufficient to justify a mandate of a Federal agency. But I come here

with a history that I wanted to make sure I disclose.

And thank you, Mr. Chairman. I yield back.

Mr. STEARNS. I thank the gentleman.

The gentleman from Texas, Mr. Green.

Mr. GREEN. Thank you, Mr. Chairman.

I would like my full statement be placed into the record.

Mr. STEARNS. My unanimous consent, so ordered.

Mr. GREEN. I want to thank you for allowing this opportunity to

give opening statements today. I think my colleagues from both

sides of the aisle have a great amount of respect for the legislative

processes. I am glad to see it being upheld here today in light of

our last week’s events.

I would like to thank the Chairman and also Congressman

Towns for their leadership on this issue. About 2 months ago I met

with about 20 repair shop owners from my own district asking me

about the legislation. And since then we have received probably a

lost of about 100 shops in the district I represent in Houston.

I have a pretty blue collar district and I grew up working on

cars. And my constituents still do. And we have a lot of shade tree

mechanics. And I guess my concern about it is that today the technology has changed.

When I was growing up, I would go pay $35 for a Chelton manual to be able to see how I repaired my vehicle. But nowadays with

9

everything else, you have to have a computer program or whatever.

And my concern is if someone purchases a vehicle or a computer

or anything else, they ought to be able to have someone that they

want to repair that, and they ought to have the ability to get the

information to do it.

Now, granted, auto dealers or auto manufacturers make it and

they have a proprietary right to the information. But they ought

to make it available just like I have to pay, at least in the 1970’s,

$35 which was a lot of money then for a book. But today I know

it would be a lot more. But the goal I think is simple to make sure

that the manufacturers provide this to not only my constituents,

but also the folks that may be hired to repair those vehicles. And

I would hope that they would be able to get a reasonable amount

of money to compensate them for that, but also make sure that

folks could repair their cars.

And with that, Mr. Chairman, I will not take my whole time and

put the full statement in the record.

Thank you.

[The prepared statement of Hon. Gene Green follows:]

PREPARED STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF TEXAS

First, I’d like to thank the Chairman for giving us the opportunity to make opening statements today. I think many of my colleagues from both sides of the isle have

a great amount of respect for the legislative process and I’m glad to see it being

upheld here today in light of last week’s events.

I’d also like to thank the Chairman and Congressman Towns for your leadership

in bringing attention to the issue of auto repair.

It was about 2 months ago that I met with 20 repair shop owners from my district

asking me about this legislation and what Congress could do. Since then, I have received a list of almost 100 shops in my district voicing concerns over having access

to information that would enable to repair today’s high-tech automobiles.

Like most large cities in the United States, Houston has as many independently

owned repair shops as we do shade-tree mechanics. However, with the level of technology used in today’s automobiles, the shade tree mechanic is often led to their

nearest repair center which is most often an independent shop.

When I got my first car, I was able to buy a Hanes or Chilton manual that

showed how the car could be repaired. These manuals included wiring diagrams,

clock times to adjust the timing, and torque specifications for everything from the

lug nuts on the wheels to the bolts securing the engine block.

Things have changed and computer systems in newer vehicles control everything

from Air bag deployment to emissions.

I’m supporting this bill because I’m concerned about the consumer. If my constituents own a newer model car or truck, they should be able to take it to their local

mechanic to be repaired. High tech advances shouldn’t make repairing your vehicle

at a neighborhood shop out of reach.

The goal of this legislation is simple: auto makers should be able to supply information to local repair shops so those shops can repair a vehicle. However, auto makers should also be fairly compensated for this information due to their investment

in developing and engineering the cars and trucks in the first place.

I understand the Alliance of Automobile Manufactures and the Automotive Service Association are working towards this goal through the National Automotive

Service Task Force. I hope you continue your efforts to resolve these issues regardless of what happens with this legislation. It’s important for consumers and small

businesses alike.

Thank you Mr. Chairman and I yield the balance of my time.

Mr. STEARNS. I thank my colleague.

And the gentleman, Mr. Otter.

No statement.

[Additional statement submitted for the record follows:]

10

PREPARED STATEMENT OF HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY

AND COMMERCE

Mr. Chairman, thank you for holding this important hearing today on the complex

issue of information availability and access to auto repair information.

I have some indication after reviewing the testimony of our distinguished panel,

that there are very strong opinions about the degree of progress that has been made

in terms of information availability and access for independent repair shops.

Let me say before we evolve into a contentious debate that I have a wonderful

General Motors plant in my district, in Arlington, TX. And, like most Members, I

have local dealers I hear from occasionally. So this is not a constituency whose

views I have failed to hear on the underlying legislation referenced in the testimonies of the witnesses here today. And so we are clear, I am not out to harm the

technological advances made each day by our automakers or give away their trade

secrets.

I have been involved in this issue since August of 2001, solely on the principle

that I believe consumers need to have choice in auto repair, whether foreign or domestic, and they should be able to choose where they have the vehicle repaired and

whether they choose aftermarket replacement parts or Original Equipment Manufacturer (OEM) parts.

Since introducing this legislation, I have been openly working with all parties to

facilitate an agreement that would negate the need for legislation. However, let it

be said, that we are here today discussing progress made on a voluntary industry

agreement chiefly because of a hearing that was held by Senator Dorgan in July

2002. That hearing, and the fear that the late Senator Wellstone’s companion legislation would be moved, persuaded the automakers (the Alliance and AIAM) to

broker a deal with a smaller group of service providers, known as ASA—whose

members are with us today.

Though, the Alliance, AIAM (the international automakers) and ASA declared the

problem was solved, this agreement did not alleviate the primary concern of a larger

group of aftermarket repair folks, known as the CARE coalition. Their concern is

that this is a voluntary agreement and not enforceable. Rather, there is no recourse

if the automakers decide not to continue supplying information. They along with

AAA, NFIB, The Retail Industry Leaders Association, and the 60 Plus Senior Citizens Association support the legislation.

This voluntary agreement, reached in September of 2002, set a deadline of August

31, 2003, when all information necessary to diagnose, repair and service vehicles for

both emissions and non-emissions related repairs would be made available in the

same manner and to the same extent as it is to franchised dealerships.

The automakers, I believe, have been acting in good faith, but acknowledge that

this is a mammoth undertaking, and possibly have not to date managed to get all

the information to independent repairers. I have, from the automakers’ task force

(NASTF), an On-Board Diagnostic Scan Tool Table from September 9, 2003, that

shows the spotty availability of scan tool information based on the efforts of individual automakers to get it out there. While I do not doubt their good faith efforts

to do so, it is not clear that the Alliance and AIAM—which are trade associations—

can ‘‘voluntarily’’ compel these companies to do what is in the agreement. In other

words, what is the recourse for independent repairers and consumers, or the penalty

for the automaker, if it is not done?

I appreciate the efforts the automakers have made to use the NASTF process as

a conduit for independent repairers and the various automakers, however, it is simply not practical and not realistic to think that a consumer is going to wait 8 to

15 days (based on NASTF’s best and average response time) for an independent repair shop of their choice to get the adequate information to repair their car. Sure,

they may eventually get the information—but if the customer has already gotten

tired of waiting, it is a moot point. We all know as consumers, when our car breaks,

we want it fixed and back within a day or two. I question why it takes so long, and

why independents have to go through this process—when dealers do not. In my

opinion, this does not fully meet the voluntary agreement requirements.

The issue today is access and availability. It is NOT about gaining proprietary information, as some suggest. I personally take issue with some of the testimony exploring that notion. That argument is easily resolved by reading my legislation. But

more so, I believe that argument keeps parties entrenched and distrustful of one

another. If legislation is to be negated, agreements have to be improved and enforced. Automakers comply with the EPA rule that requires similar information for

emissions related repairs, and it is written in a way that does not require them to

release proprietary information. It states: ‘‘Information for making emission related

11

repairs does not include information used to design and manufacture parts, but may

include OEM changes to internal calibrations, and other indirect information . . .’’

I believe the same could be true for non-emissions repair information.

I am interested in brokering a solution today, as I have been since the beginning—some three years ago. I want to echo the comments from the 2002 Senate

hearing . . . I want a solution that satisfies all parties or I will reluctantly move legislation. I know from personal dealings that my legislation would have been done

away with had there been some coming to the table on the issue of private, thirdparty arbitration and dispute resolution—which did not involve the potential for litigation. But the Alliance felt that they could never get all their companies to agree

to that.

So, instead of questioning my motives and those of others here today, I suggest

we look at ways to reach a more lasting solution. It is easy to see why 9 of my colleagues on this Subcommittee, and 21 Members of the Full Committee support the

underlying legislation.

The reason is simply that we want to know that as car technology advances more

each day, the relevant information for aftermarket repair shops remains accessible,

is provided at a reasonable cost, and is current. The EPA has already done this for

emissions related repairs. The framework is there to protect proprietary information, and the same could work for non-emissions information.

Fear of Congressional action has gotten us to where we are today, and I commend

automakers that have improved availability and access. Let’s work together to see

that it continues and can be improved upon to the extent that legislation is truly

not necessary. I remain open to ideas to do so.

Thank you all for your participation today. And thanks to Chairman Stearns for

holding this hearing.

Mr. STEARNS. With that, we will move right to our witness. And

I would say to my colleagues and to the panel, we have two presentations before we start the opening statements. Mr. Dave Scaler,

Mechanics Education Association in Maplewood, New Jersey and

Mr. William Haas, Vice President Service Repair Markets Automotive Service Association.

I welcome both of you. And, Mr. Scaler, you are first. So your

presentation, we look forward to seeing it.

STATEMENT OF DAVE SCALER, DIRECTOR, MECHANICS

EDUCATION ASSOCIATION

Mr. SCALER. Mr. Chairman, members of the committee, it is a

great pleasure to be here today to share some experiences that we

have——

Mr. STEARNS. You might just pull the mike a little closer to you,

just for those in the back.

Mr. SCALER. Is that better?

Mr. STEARNS. That is better.

Mr. SCALER. My name is Dave Scaler. I am the Director of Mechanics Education Association in New Jersey. We are a support

center for independent repair shops throughout the country providing telediagnostic support, onsite troubleshooting as well as

training.

I just want to share with you very briefly some experiences that

we have in the best that I can in the brief time that we have, encapsulate some of the difficulties that we are having in getting real

people’s cars fixed.

This presentation is called ‘‘Real People, Real Cars, Real Problems In the World of Using OE Websites.’’ Essentially everyone of

these situations is a customer of ours that has a problem that we

tried to address by fixing it through use of the equipment tools and

information we currently have available.

12

The first care is 2000 Dodge Neon. The problem with the car, it

has a check engine light on, a federally mandated light. There are

over 50 different reasons this light could come on.

In this particular case, we followed the Chrysler factory procedures which is available on the web. That procedure tells that this

car has an oxygen sensor problem. And we follow through the procedure. One of the options on the bottom suggests that the control

unit or the engine controller could be faulty. In this particular case,

that is what is faulty. In order to replace that controller, what is

required according to the factory service information found on the

website, is the use of the factory Chrysler tool. Very fortunately, we

own the factory Chrysler tool with the latest updates and were able

to continue with the process.

So at that point when we look at the factory tool, and this a

screen shot from the factory diagnostic tool, it tells me if I replace

the controller on this car, that the engine will not start unless I

perform or enter a PIN number into the computer.

Now, right there it tells me on the next slide, it says enter PIN,

personal identification number and contact Chrysler for this number. So, of course, the number is right on the tool. We called Chrysler, and unfortunately Chrysler was unable to provide that PIN

number to us. They said they can only provide that to the dealership.

So in this case it was particularly disappointing because one of

our technicians that worked for us owns the car. So in this case we

have paid for the subscriptions, we have bought all the factory necessary equipment, we have the vehicle owner repairing the car and

we still could not complete the repair because of the fact that I

needed a PIN number.

So you can see while on the surface, particularly for those fixing

cars, it may appear that a lot of there. But all that needs to be

missing is one of step of the process and the repair cannot be finished.

The solution to this is often viewed in this example, which is a

1998 BMW. It failed the federally mandated I/M program for states

that are non-attainment.

In this particular case, this is a 1998 car. It is important to note

these are not all brand new vehicles. This is years of history here.

This is a SAE code made by EPA for secondary air or air pump

problem. So the car fails inspection, in this case in New Jersey, for

this problem.

We go the BMW website. Here I punch in the number for the

code, it gives me a description, which is good. I am pleased with

that. When I go to find repair documentation for it, it suggests that

there are no documents found. I go through every page that I can

of the repair information there. I cannot find any repair information, meaning a procedure to fix this car. So I complain to BMW,

and this is basically a copy of an email to BMW suggesting what

I am looking for. The BMW’s response to me was P code information is found on the website. Now, I’ve just spent a tremendous

amount of time looking for it, they are suggesting that it is there.

So once again I feel well it must be me. I go back and try again.

I still cannot find it after literally hours and hours of looking. So

13

I complained to NASTF, which is coined the solution to the problem.

This is my confirmation to NASTF of the problem. This is my

complaint showing documenting exactly what I was looking for and

in hopes that they can clarify this, and obviously confirmation of

that.

I get an email from Mr. Haas to my left here, who I have known

for a long time, I was very pleased to get that email. He suggest

that he is going to send this to BMW and take a look at it and we

are going to be able to straighten this out. And knowing Bill, I was

very pleased at that.

As time went on, I got additional emails and while I was a little

disappointed in this particular one that the email got reduced to

not a problem with the BMW but the Scaler complaint, in this case

I was well aware that the other leader members of NASTF were

aware of my complaint. So at least in that respect, that was good.

Bill came back and asked me, you know, is it not there, is it

something you cannot find, are you are the right website? Of course

I was, so I replied to him. ‘‘The complaint is that it is not on the

website. I have searched every corner on the site, on and off for

days (literally) and it is not there. There are descriptions but no

troubleshooting procedures. I can access the website. I have sent

them emails.’’ And once again essentially I am being told that it

is okay.

Now BMW responds, and this is important to me. It says ‘‘Mr.

Scaler, you recently submitted a complaint through the IATN and

the NASTF.’’

And they post it, because I did complain in November of last

year, and that is important. I am a member of NASTF and last

year in November at the meeting it was the understanding that we

needed to give them time. So my complaint in November I let slide.

I recomplained again. And they are giving me the same answer.

And that answer is, the information is exact same, is at the BMW

website.

It is important to note that I know it is not there, but once again

I am being told that it is. It is very important to note at the bottom

that this email is always, every response to me, is copied to every

leader of NASTF as well as to me. BMW attaches the email they

saved from me in November suggesting it is there.

I tried to help them understand, so I send a reply, and this is

a copy of my reply explaining exactly what I am looking for, and

I copy every leader of NASTF to try—and this is the third time

now that I have been told, and I know it is not there, that it is

there. So I am trying to clarify that particular situation.

Once again BMW comes back with a public announcement that

says ‘‘We provide the exact same information’’ and everything is

there. And I am very disappointed at this point that no one else

has tried to access it other than me, and this is the third time I

am told it is not there.

So at this point I decide to let them know where the problem

probably lies. So I suggest to them that perhaps, and I copied everyone here also, that the problem may be that it is not there and

I need a special tool in order to get.

14

Well it is very important to note that BMW acknowledges this,

and this time after the fourth time, this is the only time they acknowledge it without copying the rest of the people. And it says:

‘‘Mr. Scale, I believe you are correct.’’ After four times of being

stonewalled, ‘‘A connection to the vehicle is needed to identify the

problem,’’ which means that the information was not available in

order to get it. And needless to say, I was very disappointed and

I have other examples of that.

And, again, I am trying to be brief in order to bring us through.

Just so you know, it did say that if I have a tester, I could do this. And my subscription, which was $20, has now become $15,800

at the time, which is now $18,900 if I want the tool to connect to

get the federally mandated repair procedure for this vehicle. While

I am okay with that, because in all of my scenarios I am willing

to spend whatever it takes, unfortunately I have been told that

there are certain pieces that I still cannot get which I will address

in later testimony. But this is where we run into some of the problems what is coined as ‘‘the solution.’’

And finally where I will leave this in order to be brief, is that

it is very important to note that there are often times two different

levels of service information. In the case of Ford, I will use as

prime example there is the Motorcraft website for the Ford

aftermarket. Along with the Ford Motorcraft website there is also

fmcdealer.com. The technicians at the Ford dealers use

fmcdealer.com to repair vehicles, not motorcraft.com.

I can tell you from very technical experience, and that is important because realize while I am a technician, I still repair cars, and

many people that are auditing this do no longer fix cars. And this

site is where I go now to fix cars. Unfortunately, I had to make arrangements with friends, because I am not allowed in here. As you

can see, it is a secured website not to be accessed but anybody but

Ford or technician at Ford. And the information that I use currently today to fix many cars, including programming of vehicles,

I get from this website and I cannot get from the Motorcraft

website. So once again we have two different playing fields on this

issue.

[The prepared statement of Dave Scaler follows:]

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

Mr. UPTON [presiding]. Thank you.

Now Mr. Haas.

STATEMENT OF WILLIAM J. HAAS, VICE PRESIDENT, SERVICE

REPAIR MARKETS FOR THE AUTOMOTIVE SERVICE ASSOCIATION

Mr. HAAS. Good afternoon. Mr. Chairman, subcommittee members, and I appreciate your invitation to make this presentation at

today’s hearing on House Resolution 2735, The Motor Vehicle Owners’ Right to Repair Act. I am the Vice President of Service Repair

Markets for the Automotive Service Association.

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.

After a vehicle is out of warranty consumers prefer independent

shops to the alternatives 74 percent of the time. As for the confidence that consumers place in independent repair facilities, I

would like you to consider this: In the J.D. Powers and Associates,

Service Usage and Retention Study independent shops rate exceptionally high in customer service satisfaction. When compared to 56

alternatives, they beat out every aftermarket chain, mass merchandiser and the OEM franchises. You can imagine how proud I am

to work for and represent those small businesses. Families that are

living the American dream.

I have an extensive background in the automotive industry. Prior

to joining the staff of ASA my career included 26 years as an automotive technician, shop manager, shop owner and automotive instructor. I have successfully tested and been certified by the National Institute of Automotive Service Excellence since 1976. I have

also completed the required courses to earn my accredited automotive manager designation from the Automotive Management Institute.

It is a special honor for me to be here today as I was also a witness in the July 2002 for the hearing on Senate bill 2617, the

Motor Vehicle Owners’ Right to Repair Act of 2002. The late Senator Paul Wellstone from Minnesota introduced Senate Bill 2617

because he believed in fighting for the small guy and equal opportunity. At that time the Automotive Service Association came to

Congress with a strong message that independent automotive repair businesses were in trouble. Those entrepreneurs were challenged to have a future continuing to provide for the needs of

America’s motoring public.

After the Senate subcommittee heard all of the testimony, Subcommittee Chairman Dorgan of North Dakota closed the hearing

with an important message for the automotive industry. I will

quote Senator Dorgan: ‘‘Let this hearing stand as an expression of

concern that this problem be resolved. It can be resolved legislatively by us passing legislation here in Congress, or it can be resolved through the negotiations and the determination that were

described here today. I would agree with Senator Wellstone that if

progress is not made or if we face a circumstance where we are discovering independent shop are systematically being frozen out of

the information, I think that Congress will take a hard look at

passing legislation of the type Senator Wellstone has introduced.’’

43

In the testimony I provided for the Senate in July of 2002 I was

able to provide very clear cases of auto makers that were prohibiting the release of information or restricting access that prevented

independent repairers from having the same capabilities as their

counterparts in the franchised dealership. My testimony include

specific situations with several major auto manufacturers. Fortunately, for the automotive service industry I cannot cite those examples today.

My testimony in 2002 also illustrated the infringement on consumer choice. When an independent repair shop was not able to

perform a diagnosis or repair because of the limitations created by

the auto manufacturer, independent shops had no alternative other

than refer their customer to the franchised dealer. And now I must

tell you that such an anti-competitive environment no longer exists.

As a result of the Senate hearing, ASA and the auto makers discussed what could be done to satisfy the needs of independent repairers and ultimately resolve the problem. Through negotiation

and determination, ASA and the associations representing all of

the major automobile manufactures reached an agreement in September of 2002. The ASA/OEM agreement specifies that auto makers will make available to independent repairers the same service

information, training and tools as are available to their franchised

dealers.

The decision to exercise the agreement with the auto makers was

unanimously approved by the ASA Board of Directors. Twelve individuals from: Pittsburgh, Pennsylvania; Laguna Hills, California;

Mankato Minnesota; Milwaukee, Wisconsin; Brookville, Ohio; Augusta Georgia; Lubbock, Texas; Tallahassee, Florida; Dublin, California; Chino, California; Raleigh, North Carolina, and; Eugene,

Oregon that were elected by their peers to represent them. Twelve

individuals that understand and face the same daily challenges as

anyone who owns and operates an independent automotive service

and repair facility.

Those 12 individuals are representative of over 115,000 businesses that have an average of five service bays, five employees

and annual sales of approximately $1 million.

You should find great comfort in knowing that the solution to

this problem came from within the industry by the people who live

and work in it everyday. I want to point out to you that you will

see those people here today, and there is a good reason. The owners

and technicians of those shops are home, they are busy, they are

at work servicing their customers’ vehicles because the information,

the training and the tools that they need are available.

All of the automobile manufacturers service information websites

were launched by April 1, 2003. This was far in advance of August

31, 2003 date that was set forth in the ASA/OEM service information agreement. These websites allow anyone, automotive service

professional or a vehicle owner to access the information, training

or tools necessary to diagnose and repair the complex systems in

today’s automobiles. Access to the websites is subscription based

and subscriptions may be purchased for a short, mid or long term

period.

The average cost of a short term subscription is $18.50. When

one consider the incredible amount, the volumes of service informaVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6602 96097.TXT HCOM1 PsN: HCOM1
44

tion produced by an automobile manufacturer every year, it appears that the subscription rates to access all the information for

all models for multiple years is more than reasonable.

You should also be aware that the OEM website is not the only

place that the independent repairers access service information.

Auto makers continue to license the use of service information to

third party information providers, companies like Motor publications, ALLDATA, which is owned by AutoZone and Mitchell1,

which is partly owned by NAPA.

Regardless of whether a shop decides to purchase the information directly from the OEM or a third party information provider,

it has a cost. In fact, the cost to purchase the first Motor manuals

in 1927 was $3.

The National Automotive Service Task Force was identified in

the ASA/OEM agreement to continue to provide a forum for the industry and aftermarket to resolve service information issues. Established in October of 2000, the NASTF is a voluntary effort

among the automotive service and repair industry, the equipment

and tool industry and the automobile manufacturers.

As a side note, the cooperation demonstrated by the automobile

manufacturers participating in NASTF weighed heavily in ASA

Board of Director’s decision to execute the agreement with the auto

manufacturers.

As you might expect, nothing is perfect and on occasion someone

may encounter difficulty finding the information that they need.

NASTF makes a complaint process available for the automotive industry for these situations. The NASTF service information

committee——

Mr. STEARNS. Mr. Haas, I am going to ask you summarize. We

are trying to keep everything within 5 minutes. Now your colleague

had about 8 minutes, so you are over eight——

Mr. HAAS. I apologize, Mr. Chairman.

Mr. STEARNS. No, I understand. I mean this hearing is a long

time in coming, so now is your chance. But if you do not mind, if

you can, just sort of summarize so we can get Mr. Donovan and everybody else.

Mr. HAAS. Sure. Be happy to.

Mr. STEARNS. I do not want to lose the members here.

Mr. HAAS. Okay. I think what is important is that NASTF does

have a complaint process. I can show you quickly there is a report

from 2003 the complaints that were received and the responses by

the manufacturers. Here is what we have to date in 2004. And this

is a recent NASTF complaint, this just took place on September

14th. This was a complaint that was filed by a shop. They were

looking for a specification at an Nissan website and they could not

find the information they needed. This was the response they got

from Service Technical Publications that refunded their money.

This was a response from Nissen that showed them exactly

where the information, it explained where to find the information

that they were looking for. And if you were to go to the Nissen

website, which this is their homepage, and go into their website,

the upper most photo gives you exactly the information that that

particular shop was looking for that day.

45

And is often times the case, it is not always necessarily that the

information is missing. We might not find it where we expect to

find it.

So I would summarize in saying that, you know, the process that

we have is working. We have every indication that it will continue

to work. We understand that it is far from perfect, but I think you

will find that all the parties that are dedicated to NASTF want to

see this be successful.

[The prepared statement of William J. Haas follows:]

PREPARED STATEMENT OF WILLIAM J. HASS, VICE PRESIDENT, SERVICE REPAIR

MARKETS AUTOMOTIVE SERVICE ASSOCIATION

Good afternoon Mr. Chairman and committee members. My name is Bill Haas

and I appreciate your invitation to make this presentation at today’s hearing on

H.R. 2735, the Motor Vehicle Owner’s Right to Repair Act. I am the Vice President

of Service Repair Markets for the Automotive Service Association. 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. After a vehicle is out of warranty consumers prefer independent shops to the

alternatives 74% of the time. As for the confidence that consumers place in independent repair facilities, I would like you to consider this, in the J.D. Powers and

Associates, Service Usage and Retention Study independent shops rate exceptionally

high in customer service satisfaction when compared to 56 alternatives they beat

out every aftermarket chain, mass merchandiser and the OEM franchises. You can

imagine how proud I am to work for and represent those small businesses. People

that are living the American dream.

I have an extensive background in the automotive industry. Prior to joining the

staff at ASA in 2000 my career included 26 years as an automotive technician, shop

manager, shop owner and automotive instructor. I have successfully tested and been

certified by the National Institute of Automotive Service Excellence since 1976. I

have also completed the required courses to earn my Accredited Automotive Manager designation from the Automotive Management Institute.

It is a special honor for me to be here today as I was also a witness in July 2002

for the hearing on Senate bill 2617, the Motor Vehicle Owner’s Right to Repair Act

of 2002. The late Senator Paul Wellstone from Minnesota introduced Senate bill

2617 because he believed in fighting for the small guy and equal opportunity. At

that time the Automotive Service Association came to Congress with a strong message that independent automotive repair businesses were in trouble. Those entrepreneurs were challenged to have a future continuing to provide for the needs of

America’s motoring public. After the Senate Subcommittee heard all of the testimony Subcommittee Chairman Mr. Dorgan of North Dakota closed the hearing with

an important message to the automotive industry. I will quote Senator Dorgan, ‘‘let

this hearing stand as an expression of concern that this problem be resolved. It can

be resolved legislatively by us passing legislation here in Congress, or it can be resolved through the negotiations and the determination that were described here

today. I would agree with Senator Wellstone that if progress is not made or if we

face a circumstance where we’re discovering independent shops are being frozen out

of the information systematically, I think that Congress will take a hard look at

passing legislation of the type Senator Wellstone has introduced.’’ End quote.

In the testimony I provided for the Senate in July 2002 I was able to provide very

clear cases of automakers that were prohibiting the release of information or restricting access that prevented independent repairers from having the same capabilities as their counterparts in the franchised dealership. My testimony included

specific situations with companies like BMW, Daimler Chrysler and American

Honda. Fortunately for the automotive service industry I cannot sight those examples today.

My testimony in 2002 also illustrated the infringement on consumer choice. When

an independent repair shop was not able to perform a diagnosis or repair, because

of the limitations created by the auto manufacturer, independent shops had no alternative other than to refer their customer to the franchised dealer. And now I

must tell you that such an anti-competitive environment no longer exists.

As a result of the Senate hearing ASA and the automakers discussed what could

be done to satisfy the needs of independent repairers and ultimately resolve the

problem. Through negotiation and determination ASA and the associations representing all of the major automobile manufacturers reached an agreement in SepVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6621 96097.TXT HCOM1 PsN: HCOM1
46

tember of 2002. The ASA/OEM agreement specifies that the automakers will make

available to independent repairers the same service information, training and tools

as are available to their franchised dealers. The decision to exercise the agreement

with the automakers was unanimously approved by the ASA board of directors.

Twelve individuals from Pittsburg PA, Laguna Hills CA, Mankato MN, Milwaukee

WI, Brookville OH, Augusta GA, Lubbock TX, Tallahassee FL, Dublin CA, Chino

CA, Raleigh NC, and Eugene OR that were elected by their peers to represent them.

Twelve individuals that understand and face the same daily challenges as anyone

that owns and operates an independent automotive service and repair facility. Those

twelve individuals are representative of over 115,000 businesses that have an average of five service bays, five employees and annual sales of approximately one million dollars. You should find great comfort in knowing that the solution to this problem came from within the industry by the people who live and work in it everyday.

I want to point out that you will not see those people here today and there is a

good reason. The owners and technicians of the BEST shops in America are at work.

They are busy servicing and repairing consumer’s vehicles and they are able to do

that because service information, training and tools are available.

All of the automobile manufacturers service information Web sites were launched

by April 1, 2003. This was far in advance of the August 31, 2003 date that was set

forth in the ASA/OEM service information agreement. These Web sites allow anyone, automotive service professional or a vehicle owner to access the information,

training or tools necessary to diagnose and repair the complex systems in today’s

vehicles. Access to the Web sites is subscription based and subscriptions may be

purchased for a short, mid or long term period. The average cost of a short-term

subscription is $18.50. When one considers the incredible volume of service information produced by an automobile manufacturer every year it appears that subscription rates to access all the information for all models for multiple years is more than

reasonable. You should also be aware that the OEM Web site is not the only place

that independent repairers access service information. Automakers continue to license the use of service information to third party information providers, companies

like MOTOR publications, ALLDATA which is owned by AutoZone and Mitchell1

which is partly owned by NAPA. Regardless of whether a shop decides to purchase

the information directly from the OEM or a third party information provider it has

a cost. In fact the cost to purchase the first MOTOR manuals in 1927 was three

dollars.

The National Automotive Service Task Force was identified in the ASA/OEM service information agreement to continue to provide a forum for industry and

aftermarket to resolve service information issues. Established in October of 2000 the

National Automotive Service Task Force is a voluntary effort among the automotive

service and repair industry, the equipment and tool industry, and automobile manufacturers. As a side note—the cooperation demonstrated by the automobile manufacturers participating in NASTF weighed heavily in the decision of the ASA board of

directors to execute the ASA/OEM service information agreement. The willingness

of the automakers to engage in a process of identifying concerns and working towards solutions for those problems has earned them the trust of the independent

repairer. As you might expect nothing is perfect and on occasion someone may encounter difficulty finding the information that they need. NASTF makes a complaint

process available to the automotive industry for these situations. The NASTF service information committee monitors complaints submitted to NASTF. The complaint

is forwarded to the automaker for their investigation and they are asked to respond

directly to the complainant. The complainant is notified that the complaint has been

received and they can expect a reply directly from the automaker. They are also

asked to notify NASTF if they are not satisfied with the response from the automaker for any reason. During 2003 NASTF received eighty-eight complaints and

automakers have responded to all of them. You can see on the slide that sixty-seven

percent of those complaints were logged against a single automaker of which thirtyone were submitted during a nine day period. That particular automaker was Volvo

and the problem was compounded by the fact that the nine days was the start of

the Christmas holiday. As quickly as possible Volvo’s technical staff worked to investigate, resolve and then respond to each individual complaint. The eventual outcome led to a NASTF meeting of Volvo representatives and the owners of nine independent Volvo repair specialists. That meeting started the dialogue that continues

today and offers independent Volvo specialists a forum to have their issues addressed.

From January 1, 2004 through last Friday, September 17, 2004 NASTF has received thirty-three complaints. Automakers have already provided responses to thirty-one of those. Allow me to show you the most recent complaint that was submitted

to NASTF and how the process worked. A shop in Tukwila, Washington submitted

47

this complaint on September 14, when the shop was not able to find a torque specification for replacing a cross member. Service Technical Publications, the company

that maintains the site for Nissan processed a credit for the subscription on Sept.

15 and on Sept. 16 Nissan contacted the shop to apologize for the inconvenience and

provided the shop with directions on where the information was located on the Web

site.

All of this was accomplished quickly because the automaker just wanted to do the

right thing. It did not require regulation or oversight of a government agency. This

is a system that can work and is working. I am optimistic that until such time that

independent repairers present evidence to Congress that the ASA/OEM service information agreement has failed our industry will not incur the burden of regulation

that will result in delays and increased costs for small businesses.

I will close with one more example of what is being accomplished through our voluntary and cooperative efforts. At the start up of NASTF there were four committees established. They are service information, training and education, tools and

equipment and communications. This year NASTF established a fifth committee.

After members of NASTF had two meetings with the locksmith community to discuss their concerns with reproducing keys and unlocking vehicles for consumers it

was apparent that NASTF could provide locksmiths with a forum to work directly

with the automakers and a vehicle security committee was established in July. As

all NASTF committees are co-chaired by a representative of the aftermarket and a

representative of the automobile manufacturers. I believe the issues locksmiths face

will be well represented as one of the co-chairs of the committee is the government

affairs representative for the Associated Locksmiths of America.

Mr. Chairman there are two kinds of people in the world. Those that solve problems and those that make problems. I believe the majority of people in the automotive service and repair industry are problem solvers. As you can see the problems

that the service and repair community have experienced have been, and continue

to be, addressed by people that engage in a process of solving problems. Having said

that it is clear that this legislation is NOT necessary. So if there is more to H.R.

2735 than access to service information, training and diagnostic capabilities, I hope

this committee will discover what it is and expose it for what it really is.

I appreciate your attention and I am available for questions. Thank you.

Mr. STEARNS. I thank the gentleman.

Mr. Donovan, AAA Automotive Technical Services for your opening statement.

STATEMENT OF EDWARD C. DONOVAN, DIRECTOR OF TECHNICAL SERVICES, AAA AUTOMOTIVE TECHNICAL SERVICES

Mr. DONOVAN. Good afternoon. I am very pleased to be here this

afternoon on behalf of AAA to discuss our support of H.R. 2735.

AAA, who is a member organization of over 47 million members,

strongly supports the Right to Repair Bill for three important reasons: Consumer choice, vehicle safety and the right of car owners

to own the information generated by their automobiles.

My name is Edward Donovan, and I serve as Director of Technical Services for the Mid-Atlantic region of AAA. I have worked

with consumers for over 25 years helping them manage one of their

largest and most needed assets, their automobile. Throughout my

career I had the opportunity to repair vehicles, direct a vehicle fleet

repair group, manage our customer relations division and oversee

a large scale operation of independent repair facilities for AAA. I

know the firsthand the importance that consumer placed on having

a trust service advisor to help them.

Mr. Chairman, technology has made the cars we drive smarter.

A car can tell you when it is time for an oil charge, whether your

tire pressure is too low, or identify an impending problem with

your breaks before there is a critical safety breakdown, before you

have to call AAA from the side of the road.

48

Now if you will for just a moment, imagine you and your family

are traveling on a Saturday afternoon. The dashboard light comes

on warning of a malfunction with the antilock breaking system.

The technology you, the vehicle owners have paid for, is now paying off by identifying a potential problem.

You go into the local shop and the technician checks the car and

discovers the problem. But the problem is in a system that only a

dealership can address. Not because the dealership technician is

more skilled, but because the independent technician cannot acquire the information required to accurate diagnose and repair the

system. You find out that the nearest dealership is 25 miles away,

and it will not be open until Monday morning. What should you do?

Is it safe to pack your family in the car and continue driving to

your destination? Should you have your vehicle towed, and then

what? You may be risking your families’ safety, but maybe not. It

might just be a simple fuse. At that point you have wasted and delayed your outing for the unnecessary trip to the dealership.

Mr. Chairman, why should only some people be able to obtain repair information while others do not have access to it? AAA believes that when you drive off the lot with your vehicle, you the

consumer own the information to have it repaired correctly at the

repair facility of your choosing. That is not to say that AAA is here

today to say that motorists should not have their vehicles serviced

at a dealership. Quite the contrary. Many of our members enjoy the

relationship and service offered by our dealerships, and many dealerships receive the AAA approved designation because of the outstanding service they provide.

We are simply saying that motorists should have a choice. Today

you have heard compelling testimony regarding the parts, diagnostic tools, intellectual property and websites and how the necessary information is now available to all technicians. However,

while progress has been made, we still have a long way to go. The

information available on the websites is difficult to navigate, costly

and incomplete. In the end, consumers end having to go to a second

facility or paying for unneeded repairs because technicians are trying to satisfy a consumer’s automotive need without the required

information available. We must resolve this problem to provide consumers with the complete quality repair service that they deserved

after paying for the vehicles.

When Congress deliberates over these important issues, AAA

only asks that you remember that the consumers who rely on their

vehicle everyday to get to work, to care for their family and our future, support Right to Repair.

Thank you for your opportunity.

[The prepared statement of Edward C. Donovan follows:]

PREPARED STATEMENT OF EDWARD C. DONOVAN, DIRECTOR OF AUTOMOTIVE AND

TECHNICAL SERVICE, AAA MID ATLANTIC

Good afternoon, Mr. Chairman and members of the subcommittee. I am very

pleased to be here today on behalf of AAA to provide testimony in support of H.R.

2735, the Motor Vehicle Owner’s Right to Repair Act. As you may know, AAA has

advanced the interests of car owners for over 100 years, and currently represents

more than 47 million members, or one quarter of all US households.

My name is Ed Donovan. I am the Director of Automotive Technical Service for

AAA Mid-Atlantic, the local AAA affiliated club. AAA strongly supports the Right

to Repair bill for three important reasons: consumer choice, vehicle safety, and the

49

right of car owners to own the information generated by their automobiles. The

measure before you today will ensure that motorists receive the kind of service that

is best suited to meet their particular needs.

Members look to AAA for advice and assistance on a variety of automotive-related

issues. We offer guidance regarding the proper maintenance and servicing of their

vehicles, finding quality repair facilities, and shopping for a vehicle that best meets

their needs. Our goal is to take some of the mystery out of finding, buying, operating and maintaining a vehicle.

Consumers are often uncertain about how to communicate with repair providers.

Study after study reveals that consumers find automotive repair and maintenance

stressful. Having confidence in a trusted service technician goes a long way to alleviating that stress.

Technology has made the cars we drive today smarter. A car can tell you when

it’s time for an oil change, whether your tire pressure is too low, or identify an impending problem with your brakes—before there is a problem or critical safety

breakdown. Before you have to call AAA from the side of the road.

Now imagine traveling on a Saturday afternoon. The dashboard light comes on

warning of a malfunction with the anti-lock brake system. You stop at the first service station and ask the technician to fix the problem. The technician checks the vehicle and discovers the problem is in the electrical system on which only a dealership can perform the necessary repair—not because dealer technicians are more

skilled, but because the independent technician cannot acquire the appropriate repair information. Then you find out the closest dealership is 25 miles away, and it

won’t open until Monday morning. Is it safe to keep driving the car? Is it safe to

drive the car to the dealer and wait until Monday or should you get a tow truck?

Can the dealer service the car on Monday, or are they already booked up?

Your weekend is likely ruined, and you learn first-hand a little known fact—not

every repair facility can service your vehicle because the technician does not have

access to the needed repair information.

That is not to say that AAA believes motorists should not have their vehicles serviced at a dealership. Quite the contrary, many of our members enjoy the relationship and service offered by dealerships. We simply believe that motorists should

have the choice, and that safety and consumer confidence is best served by having

this choice.

AAA believes that when you drive off the lot with your car, you, the consumer,

own more than just the vehicle; you should control the information the vehicle generates so that it can repaired by a trusted service advisor of your choosing—whether

it be at an independent facility or a dealership. The diagnostic information should

not be accessible only by the dealerships.

The members of this panel are keenly aware of how a downturn in the economy

or recent increases in gasoline prices directly impacts the wallets of your constituents. In tough economic times, repairs can be put off as household expenses are

prioritized, often exacerbating the initial mechanical problem. If motorists do not

have an adequate choice of repair facilities, they may not be able to gain a second

opinion or would have to return to a facility that provided unsatisfactory service.

Many must juggle expenses on a fixed income, and others are faced with economic

challenges that demand competitive prices for parts and labor. Let’s face it—some

people simply cannot afford to go to the dealership for every repair.

Lower cost doesn’t mean lower quality if all service technicians have the information necessary to diagnose and repair problems. Consumers have a right to high

quality repairs as well an opportunity to seek a second opinion. They should not be

compelled to use service facilities that have previously delivered poor service.

AAA knows that buying a vehicle is a major investment for consumers and for

families. It’s what keeps us mobile and what we hope will keep us safe. Let’s allow

consumers to protect that investment and maintain choice for safe, reliable, and enjoyable operation of their automobiles by supporting the Right to Repair bill.

Mr. STEARNS. I thank the gentleman.

Mr. Seyfer?

STATEMENT OF DONALD L. SEYFER, SEYFER AUTOMOTIVE,

INC.

Mr. SEYFER. Good afternoon, Mr. Chairman and members of the

subcommittee. My name is Donnie Seyfer, and I am honored to

have the opportunity to speak to you today about auto repair.

50

Mr. Chairman, with your permission I would like to quickly summarize the statement that I provided for you, and then make a few

short comments that I think might help you to understand what

goes on in independent repair facilities everyday.

I believe that I am uniquely qualified to provide some of this information for you because in addition to managing my family’s

business, Seyfer Automotive, which is a AAA approved repair facility, a member of NFIB and we are also a NAPA AutoCare center,

I am the business consultant and marketing director for 41 of Colorado’s NAPA’s AutoCare centers. And I am also the education director for 385 shops for ASA Colorado. So I deal with their educational issues everyday, it is part of my job.

I hold the ASE Master and Advanced Diagnostic Certifications as

well as the ASE Service Consultation designation, a test I actually

helped ASE development. And I am a graduate of the Automotive

Management Institute’s Accredited Automotive Manager program.

In addition, I have the pleasure of being in my eighth year

hosting a call-in consumer car show in Denver that is, we speak

to over 20,000 listeners every Saturday morning.

I’m here representing Automotive Service Association. ASA represents 12,000 independent repair facilities and about 55,000 technicians, and it is the oldest and largest trade association independent automotive repairers in the United States.

I want to thank Chairman Barton, who is not with us today, but

for introducing this Vehicle Owners’ Right to Repair Act in the last

Congress. The support and leadership of Congressman Barton and

others was the catalyst for the agreement that put information

right on my computer.

I have four ASE certified master technicians and two have also

the O/1 advanced diagnostic certification as well. Cars do not roll

out of our shop unrepaired. If we choose to send a car to a dealership, it is usually because we cannot rationalize that we work on

enough of them to buy that piece of equipment, so we simply have

an arrangement with the dealership to do the flashing, if you will,

or replacing of software in many of the machines. We take them

for our customer, and the car is on its way.

We have 1200 customers and work on about 2200 cars per year,

so we are not a small facility but we are not gigantic facility either.

The process for gaining that information through websites and

all data and all of our sources that we use, it is not perfect. But

because it is built by people who design and build cars, they are

also the ones that bring us the information. It is not going to be

perfect. It just takes some time to work out all the details.

But I have had two opportunities to work with online information providers to correct inaccuracies on their sites. I did not go

through NASTF because I was able to make direct contact with

them. I contact forwarded on their OE website on a situation I

found where there was a diagram that had been swapped inadvertently which would have caused me to break apart if I followed the

torque spec that was there. I emailed them and said, hey I think

this is wrong. I got a response back within 2 hours that not only

was it wrong, they had already fixed it.

I sent the same information to ALLDATA, because I referenced

the two sources to find that. ALLDATA also found the same probVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6602 96097.TXT HCOM1 PsN: HCOM1
51

lem, the pages had been scanned and reversed when they put them

in, and they fixed it. It took them a couple of days.

In 2002 we were in a crises. Many of our shops could not access

information, but more importantly they could not get hold of the

scan tools to really get to the bottom of problems. We were able to

do generic information, but not the real specific items that were

body controls and HVAC systems, and engine controls and those

sorts of things. Now today I own every factory scan tool for all the

domestic models that I work on because 80 percent of my business

is domestics. I do flashing and PCM reprogramming for other shops

in my AutoCare group and we just do not run into many issues.

There is some tools that I would love to see come to the market,

they have not yet. I feel that being able to buy these tools suddenly

become a real small issue. I was able to buy my tools from NAPA.

I did not have to go to a dealer. I did not have the price the dealer

was asking. NAPA got me a pretty reasonable price for them, I

thought. In one case the Chrysler tool was 30 percent less than

what the dealer wanted to sell it to me for.

So if I run into an information issue where I cannot find it on

OE website, we use ALLDATA, we subscribe to them. I use

ALLDATA to access information. If I cannot find something, you

can email them and say, hey, I cannot find this. Here is where I

am at. Cannot find this information. They will have that information on my fax machine faster than a pizza can get there.

The opponents to letting this agreement work want you to believe that it is expensive and difficult to access the information that

we use to diagnose and repair our customer’s cars. They have published statistics that I feel are skewed to cause fear and resentment within the industry. I ask you to take the time to read between the lines and encourage these people to remove their blinders and look at the vast amount of information that is available

and work the system with the National Automotive Service Task

Force and become a partner with them.

The car makers have brought the goods to my shop. It is my responsibility as a shop owner and consumer of their product to advise on improvements their product needs.

I will leave you with this thought in my willingness to answer

any question that I can: The number of dollars that appear to have

been spent to lobby for a law that will only make my information

costs go up and the complexity of the process increase would have

paid for someone in the neighborhood of 500,000 days of information access and would have kept Seyfer Automotive connected for

1369 years.

I rest easy knowing that if this agree were to fail, my elected officials, you, would be able to take swift action because the service

industry in this country had made every effort to make it work.

Thank you for your time.

[The prepared statement of Donald L. Seyfer follows:]

PREPARED STATEMENT OF DONALD L. SEYFER, SEYFER AUTOMOTIVE, INC.

Good afternoon, Mr. Chairman and Members of the Subcommittee my name is

Donny Seyfer and I am grateful for the opportunity to participate in today’s hearing

on automotive repair. I manage our family business, Seyfer Automotive, Inc., which

was founded in 1961. We are now in our 43rd year of business in the Denver, Colorado area. I am a second generation small business owner and a ASE certified techVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6621 96097.TXT HCOM1 PsN: HCOM1
52

nician. We are members of the Automotive Service Association, the National Federation of Independent Business, an AAA Approved Repair Facility, an ASE Blue Seal

of Excellence Facility and a NAPA AutoCare Facility. I also host a local NAPA

AutoCare radio show in the Denver area.

All of our technicians are ASE certified and four members of our staff hold the

ASE Master and Advanced Diagnostic Certification. I write training materials used

by technicians all over the country in preparation for the ASE Certification Tests.

I have written 14 books on automotive repair. I am also a graduate of the Automotive Management Institute’s Accredited Automotive Manager program.

I am here today representing the Automotive Service Association. Our association

represents 12,000 independent repair facilities nationwide employing 55,000 technicians. ASA is the oldest and largest trade association representing independent

automotive repairers in the United States.

I want to thank Chairman Joe Barton for his leadership in introducing the Motor

Vehicle Owners Right to Repair Act in the last Congress. We believe it encouraged

independent repairers and automakers to begin talking about service information

availability. As we testified before the U.S. Senate Commerce Committee’s Subcommittee on Consumer Affairs in July of 2002, ASA was very concerned about the

number of repairs the independent repairer had to turn away because of a lack of

service information. Independent repairers perform 70% of all automotive repairs.

We estimate that our market contains 115,000 mechanical and collision repair facilities nationwide. In 2002, ASA determined there were over one billion repair orders

or incidents of service. This is the number of service opportunities when a consumer

drives a vehicle to our business. Today, this would represent total sales of $131 billion nationally.

We determined prior to the Senate testimony in 2002 that we were losing 15%

of all incidents of service, rejected due to a lack of information or access to a diagnostic tool. This was an annual loss of over 160 million incidents of repair. This is

significant in the loss of technician positions to our industry and the local economies.

In 2002, ASA brought several hundred repair shop owners to Capitol Hill asking

their members of Congress for help. Members of the House and Senate encouraged

ASA to sit down with the automakers and work out an agreement that would meet

the needs of the independent automotive repairer and the concerns of the automakers. ASA did this and in September of 2002 reached a written agreement with

the automakers.

The agreement with the automakers is working. The automakers committed to

make a good faith effort at providing service information, tools, tool information and

training to the independent repairer just as they do to the new car dealer. To date,

they have kept their word. Is it perfect? No. Have we established a structure to resolve problems that do arise in an industry serving 224 million vehicles? Yes. The

mechanism for addressing complaints is the National Automotive Service Task

Force. ASA and the automakers pledged to use the National Automotive Service

Task Force as a conduit for resolving any specific service information issues that

arose. This is an organization open to the public and the media with representation

from all the automakers, new car dealers, the aftermarket, independent repairers

and the federal government.

ASA, the automakers and the automotive trade press have gone to great lengths

to educate repairers and technicians as to the availability of the complaint process

and the National Automotive Service Task Force resolution procedure. ASA has a

full-time staff person traveling the United States conducting meetings demonstrating to repairers how to best use the automaker Websites. To date he has conducted meetings in 23 states. We are committed to this voluntary, industry process.

In 2003, the NASTF received a total of 88 complaints. Automakers have responded to all 88. Please recall that this is 88 complaints in a universe of over one

billion repair orders. This year, through June 30, the NASTF has received 27 complaints and automakers have responded to 27 of those complaints.

Why so few complaints? Two reasons. First, repairers still use the same mechanism for problem-solving they used prior to the 1990 Clean Air Act Amendment’s

dramatic changes to the automobile’s technology. Repairers use third party information providers such as: Alldata, which is owned by AutoZone, Mitchell 1 in which

Genuine Parts has a significant stake and Indentifix. Parts distributors who argue

there is a decline in service information in the aftermarket continue to increase

their profits. Both AutoZone and Genuine Parts reported increases in earnings in

recent publications.

These third party information providers continue to move timely information into

the repair marketplace. Second, because of the ASA-Automaker agreement and the

U.S. Environmental Protection Agency’s 2003 final regulation on emissions service

53

information, the automakers’ Websites provide the same service information the

new car dealer receives.

The 1990 Clean Air Act Amendments’ assurance that independent repairers

would receive the same emissions service information as the new car dealers sets

the tone for this debate. The U.S. EPA published its 1990 Clean Air Act Amendments’ final emissions service information regulation in 1995. In their own words,

the final regulation was flawed and lacked sufficient enforcement authority. Despite

the recognition of the flaws, it was the summer of 2003 before the EPA published

a new final emissions service information regulation that worked.

If we go through a contentious legislative process, a lengthy regulatory review and

possible litigation, many independent shops will not survive. We see this only as a

last resort.

Our 2002 agreement with the automakers is working. If it fails, we will come back

to Capitol Hill and ask for your help. We are entrepreneurs. Many independent repairers begin as technicians, then buy an existing shop or start a new one. As small

businesspersons, we all share the American Dream. We believe in free markets and

commit to you that we will not come to Capitol Hill unless we are in a crisis as

in 2002. Your encouragement to seek an industry solution has been successful.

Please accept our gratitude.

Many organizations have a natural tendency to seek new legislation or even litigation. ASA does not represent those values. We believe in solving our industry

problems by working them out within the industry if at all possible. Only if that

process fails would we look to the government for help. This past week, we were

proud to see the U.S. House of Representatives highlight and address the excess litigation occurring in our country that chokes the business community.

The Congress’ leadership and encouragement in the development of this agreement has resolved a serious problem for the automotive repair industry. Please

allow this agreement and the NASTF to continue improving the plight of the independent repairer. Thank you.

Mr. STEARNS. Thank you.

Bob Merrill, Horsepower Auto Care.

STATEMENT OF BOB MERRILL, HORSEPOWER AUTO CARE,

NATIONAL FEDERATION OF INDEPENDENT BUSINESSES

Mr. MERRILL. Yes, Mr. Chairman and members of the subcommittee. My name is Bob Merrill and I own the Horsepower

Auto Care in Windham, Maine. I am here on behalf of the National

Federation of Independent Business whose 600,000 members and

20,000 small automotive repair businesses just like mine strongly

endorse the H.R. 2735, the Motor Vehicle Owners’ Right to Repair

Act. When NFIB polled its members on this issue in January, 2003,

77 percent of the NFIB members agreed that automobile manufacturers should be required to disclose to car buyers and repair shops

information needed to repair or maintain their vehicles.

My business, Horsepower Auto Care is a full service automotive

repair facility that has been operating since 1979. We provide services ranging from oil changes to engine replacements and everything in between. I have worked on vehicles for more than 40

years, starting my career as a field service technician for Caterpillar Tractor Company. I am a Master ASE Technician, I have

earned my accredited Automotive Managers Degree from the Automotive Service Association Management Institute. I recently

named the 2004 NAPA ASE Technician of the year presented by

NAPA Auto Parts and the National Institute for Service Excellence.

The auto repair business is changing. With the increased use of

computers and cars automobiles have become more complicated to

service and repair. Like many shops across the United States

Horsepower Auto Care works on many different makes and models

54

of vehicles. To serve my customers I need to be able to repair many

different kinds of cars and the current system of accessing repair

data makes that very difficult. Unfortunately, it is ultimately the

customer who suffers. With little competition in the marketplace

customers are forced to pay whatever the dealerships charge them.

If the right information were provided at a reasonable cost, there

are thousands of qualified independent repair shops that would be

able to service these vehicles and save the driving public serious

money.

The current voluntary system created by the manufacturers has

no enforcement mechanism to guaranteed to the driving public that

manufacturers are, in fact, making all repair data available. Even

if the independent mechanics were willing to pay for information

that is currently available, how can they be assured that they are

really able to access all the information available and how can we

be assured that the flow of information will continue? For many

small repair shops a lack of repair data really comes down to a

timeframe problem. We cannot tie up a customer’s vehicle for several days while we wait to obtain repair data. This puts us in the

uncomfortable position of having to refer to our customers to a local

dealer who has access to all the repair data. We lose business and

the customer loses choice.

In my area of Maine we have a network of shops that talk regularly about our problems accessing repair data. I have pages of examples but would like to share just a few.

A very, very qualified auto body shop in our area, Coachworks

cannot get air bag access to the following vehicles: A 2002 Volvo,

a 2000 Jetta, a 2001 Mercedes, a 1992 Volvo. These cars all had

to go back to the dealer.

One shop, Autoworks in Kittery, has spent thousands of dollars

to purchase equipment only to find that they cannot perform all

the functions and still must return to the dealers to complete the

job. This shop indicated that Saab would not sell a factory tool to

an independent shop.

Now these are top notch shops unable to service their customers,

a problem that should not be happening.

Another example is Cumberland Avenue Garage in Portland.

Tried to turn off an ABS break light on a 1997 Mitsubishi. After

trying different scan tools and calling the diagnostic hotline, the

car still had to go back to the dealer.

Also State inspections are becoming a problem for us because our

State law dictates that no warning or emission lights can be on. I

have had to send some of our Audi customers back to the dealer

because we could not turn off the light with our equipment.

Small businesses are just asking for a system that is fair for all.

We are not looking for a competitive advantage over the manufacturers or the dealers. We just want to be able to serve our customers and run our business.

Thank you, Mr. Chairman, for the opportunity to testify today.

[The prepared statement of Bob Merrill follows:]

PREPARED STATEMENT OF BOB MERRILL, OWNER, THE HORSEPOWER AUTO CARE, ON

BEHALF OF THE NATIONAL FEDERATION OF INDEPENDENT BUSINESS

Mr. Chairman and members of the Subcommittee, My name is Bob Merrill, and

I own The Horsepowerautocare in Windham, Maine. I am here on behalf of the NaVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00058 Fmt 6633 Sfmt 6621 96097.TXT HCOM1 PsN: HCOM1
55

tional Federation of Independent Business (NFIB), whose 600,000 members, and

20,000 small automotive repair businesses just like mine, strongly endorse H.R.

2735, The Motor Vehicle Owner’s Right to Repair Act. When NFIB polled it’s members on this issue in January 2003, 77% of NFIB members agreed that the ‘‘automobile manufacturers should be required to disclose to car buyers and repair shops

information needed to repair or maintain their vehicles.’’

My business, Horsepowerautocare, is a full service automotive repair facility that

has been operating since 1979. We provide services ranging from oil changes to engine replacements, and everything in between. I have worked on vehicles for more

than 40 years, starting my career as a field service technician for Caterpillar Tractor company. I am a Master ASE technician, and I have earned my Accredited Automotive Manager’s degree from the Automotive Service Association’s management institute. I was recently named the 2004 NAPA/ASE Technician of the Year, presented by NAPA Auto Parts and the National Institute for Automotive Service Excellence.

The auto repair business is changing. With the increased use of computers in cars,

automobiles have become more complicated to service and repair. Like many shops

across the United States, Horsepowerautocare works on many different makes and

models of vehicles. To serve my customers, I need to be able to repair many different kinds of cars, and the current system of accessing repair data makes that

very difficult.

While some data is available through the Original Equipment Manufacturer’s

(OEM) websites, the data is incomplete and extremely difficult to navigate. As a

small business owner, I cannot afford to spend all my time searching through 25

different websites with 25 different formats every time a vehicle comes into my

shop. I would have to spend all my time in front of a computer screen instead of

repairing cars—and this is no way to run an auto repair business.

Unfortunately, it is ultimately the customer who suffers. With little competition

in the marketplace, customers are forced to pay whatever the dealerships charge

them. If the right information were provided—at a reasonable cost—there are thousands of qualified independent repair shops that would be able to service these vehicles and save the driving public serious money.

H.R. 2735 is a simple, needed fix that restores the right of consumers to have

their vehicle serviced at the repair facility of their choosing by requiring automobile

manufactures to release to small businesses and mechanics any data that they provide to franchised dealerships or other repair shops. The auto manufacturers have

claimed that they are making all repair data available voluntarily, but unfortunately, as I stated earlier, this information is not being provided fully nor in an accessible format.

Furthermore, the current voluntary system created by the manufacturers has no

enforcement mechanism to guarantee to the driving public that manufacturers are

in fact making all repair data available. In reading one manufacturer’s website,

under Terms and Conditions it says that they reserve the right ‘‘at their discretion’’

to change these Terms and Conditions at any time.

Even if independent mechanics were willing to pay for information that is currently available, how can they be assured that they are really able to access all of

the information available, and how can we be assured that the flow of information

will continue? Enactment of H.R. 2735 is crucial to ensuring that all automobile repair data is being made available to consumers and independent repair shops.

For many small repair shops, the lack of repair data really comes down to a time

frame problem. We can’t tie up a customer’s vehicle for several days while we wait

to obtain repair data. This puts us in the uncomfortable position of having to refer

our customers to a local dealer who has access to all the repair data. We lose business, and the customer loses choice.

In my area of Maine, we have a network of shops that talk regularly about our

problems accessing repair data. I have pages of examples, but would like to share

just a few. A very qualified auto body shop in our area, Coachworks, cannot get airbag access to the following vehicles: 2002 V40 Volvo, 2000 VW Jetta, 2001 E 320

Mercedes, and a 1992 940 Volvo. These all had to go back to the dealer.

One shop, Autoworks in Kittery, has spent thousands of dollars to purchase equipment, only to find that they cannot perform all functions and still must return to

the dealers to complete the job. This shop indicated that Saab would not sell a factory tool to an independent shop. These are top-notch shops unable to service their

customers—a problem that should not be happening.

Another example: Cumberland Avenue Garage in Portland tried to turn off an

ABS brake light on a 1997 Mitsubishi. After trying different scan tools and a call

to the diagnostic hotline, the car still had to go back to the dealer.

56

Also, state inspections are becoming a problem for us because our state law dictates that no warning or emissions lights can be on. I have had to send some Audi

customers back to the dealer because we could not turn out the light with our equipment.

We need a more common sense approach to this problem and I think HR 2735

is the answer.

Small businesses are just asking for a system that is fair for all. We are not looking for a competitive advantage over the manufacturers or dealers, we just want to

be able to serve our customers and run our business. It is important to note that

H.R. 2735 does not require automobile manufacturers to disclose any trade secrets

or proprietary information, and does not affect their warranty agreements with their

dealer network.

By restoring competition to the automobile repair market, the Motor Vehicle Owner’s Right to Repair Act would make the system more fair—for small businesses and

customers.

Thank you Mr. Chairman for the opportunity to testify before you subcommittee

on an issue vital to small, independent auto repair shops.

Mr. STEARNS. I thank you.

Mr. Dana?

STATEMENT OF GREG DANA, VICE PRESIDENT, ENVIRONMENTAL AFFAIRS ALLIANCE OF AUTOMOBILE MANUFACTURERS

Mr. DANA. Thank you, Mr. Chairman and members of the committee. My name is Gregory Dana, I am with the Alliance of Automobile Manufacturers.

There are over 220 million vehicles registered in the United

States. To repair and service these vehicles quickly and properly

we need the broad network of independent repair shops,

aftermarket part suppliers and dealerships as partners. Over 75

percent of vehicle service and repairs is performed in independent

repairs shops. While there may always be a few instances where

needed information to perform a particular repair is difficult to obtain, the vast majority of repairs occur without incident or problem.

Based on these facts alone we do not understand why this bill is

needed.

Instead of Federal legislation, the Alliance and our member companies are working with the service industry through NASTF and

stand ready to work today with any effected party in the marketplace to resolve any remaining communication issues surrounding

repair of cars and light trucks.

Member companies of the Alliance and AIM committed to provide

the same repair training and diagnostic tool information to independent repair shops that they supply to their dealers. Our commitment has been honored and the industry has no intention to reverse these actions. It was the right decision for our business, but

more importantly it was the right decision for our customers.

As a result of our actions the Automotive Service Association and

is 12,000 members dropped its support for Federal legislation for

the simple reason that they are getting information they need to

repair vehicles in a timely basis. Rather than spending years battling in Congress on relegislation, ASA recognized that a voluntary

agreement and a regular dialog with auto makers is in the best

short term and long term interest of its members and American

consumers.

The Alliance also had meetings with representatives of the Coalition for Automotive Repair Equity or CARE in an attempt to unVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6602 96097.TXT HCOM1 PsN: HCOM1
57

derstand CARE’s concerns and to resolve any issues or problems

that their members may be experiencing.

In March of 2003 the following meeting with Chairman Barton,

CARE representatives presented six issues involving service information and repair. We successfully resolved all these issues. Additional meetings were held in May of 2003 after which all services

presented by CARE were addressed by the auto makers. CARE has

shown no interest in continuing a direct dialog with auto makers

or in submitting issues to NASTF, the cross industry task force

specifically designed to resolve any difficulties in obtaining service

or diagnostic tool information.

I would like to make an offer again at this hearing as the automobile manufacturers and the NASTF are prepared to meet with

the CARE Coalition or directly with aftermarket parts distributors

who are members of CARE to address any concerns affecting their

business. We know that a dialog directly involving all interested

parties is the best and quickest method to resolving differences. If

the CARE Coalition is truly interested in putting consumers first,

they should welcome the opportunity to sit down with auto makers

because we want our customers’ vehicles to be repaired quickly and

professional by anyone in the repair industry.

In fact, Alliance members are already working to verify and fix

if necessary the issues cited in today’s testimony.

Mr. Chairman, besides believing the legislation is not necessary,

it would also create harm for the industry. First, the legislation

would most likely force the release of proprietary information that

is unrelated to vehicle repair and could result in inappropriate

modifications to the computer systems that control motor vehicle

emissions and safety.

Second, with access to auto maker proprietary design and engineering information, aftermarket parts manufacturers could begin

producing competing parts without bearing any of the costs associated with reverse engineering. This would harm the original equipment parts manufacturers.

And finally, the Private Right of Action clause in H.R. 2735, it

could result in a flood of litigation on these issues.

It is also interesting that the provisions in the bill seek to override existing trade secret provisions and create a new regime that

would effectively require trade secrets created and protected under

the laws of all 50 days either be registered with the FTC or else

disclosed to competing firms. State courts would have the ultimate

jurisdiction of what constitutes a trade secret.

It is our view that the FTC hearing process envisioned under the

bill would ultimately construed to require trial type proceedings

over each and every tested trade secret, thereby upon a filing by

the aftermarket parts industry, motor vehicle manufacturers will

be forced to defend through formal adjudication any trade secrets

they wish to protect. Such a regime invites competitors to use the

FTC as a competitive weapon for obtaining access to manufacturer’s valuable proprietary information. This entire process is far too

uncertain and loose for the auto makers to have any comfort that

they will be adequately protected.

Thank you very much for the opportunity to speak here today.

[The prepared statement of Greg Dana follows:]

58

PREPARED STATEMENT OF GREG DANA, VICE PRESIDENT—ENVIRONMENTAL AFFAIRS,

THE ALLIANCE OF AUTOMOBILE MANUFACTURERS

Mr. Chairman, thank you for the opportunity to testify before the Subcommittee

regarding H.R. 2735, the Motor Vehicle Owners’ Right to Repair Act. My name is

Greg Dana and I represent the Alliance of Automobile Manufacturers (Alliance), a

trade association of 9 car and light-truck manufacturers. Our member companies include BMW Group, DaimlerChrysler Corporation, Ford Motor Company, General

Motors Corporation, Mazda, Mitsubishi, Porsche, Toyota Motor North America and

Volkswagen of America.

Alliance member companies have more than 600,000 employees in the United

States, with more than 250 manufacturing facilities in 35 states. Our industry is

a significant driver of the U.S. economy. Overall, a University of Michigan study

found that the entire automobile industry creates more than 6.6 million direct and

spin-off jobs in all 50 states and produces almost $243 billion in payroll compensation annually.

H.R. 2735 was introduced with the stated objective of promoting the consumer’s

right to choose where his/her vehicle can be serviced. We are pleased to report that

consumers already have this ability to choose and do so hundreds of times each day.

As a result, it would appear on the surface that this legislation is not needed. But,

the industry proponents of this legislation also assert that automakers intentionally

use special codes and other practices to make it difficult for vehicle owners and

independent repair facilities to diagnose problems and repair the vehicles. Unfortunately, these claims misrepresent the actual availability of repair information, tooling and parts. The automobile industry believes that the legislation would allow

aftermarket parts distributors and manufacturers access to the proprietary information and intellectual property of the automakers that is NOT needed to repair the

vehicle, but which would reduce the R&D and engineering costs involved in producing aftermarket replacement parts. Disclosure of automakers’ intellectual property also could enable the vehicle performance characteristics of the operating systems to be altered, which in the case of emissions performance could result in tailpipe emissions to be exceeded. These situations undermine the intellectual property

rights of the auto manufacturers and are inappropriate and competitively unfair.

There are over 220 million vehicles registered in the United States. To repair and

service these vehicles quickly and properly, we need a broad network of independent

repair shops, aftermarket parts suppliers and dealerships as partners. Over 75 percent of vehicle service and repairs are performed in independent repair shops. While

there may always be a few instances where needed information to perform a particular repair is difficult to obtain, the vast majority of repairs occur without incident or problem. Based on these facts alone, we do not understand why this bill is

needed. Instead of federal legislation, the Alliance and our member companies are

working with the service industry through NASTF and stand ready to work today

with any affected party in the marketplace to resolve any remaining communication

issues surrounding the repair of cars and light trucks.

Member companies of the Alliance and AIAM committed to provide the same repair, training and diagnostic tool information to independent repair shops that they

supply to their dealers. Our commitment has been honored and the industry has

no intention to reverse these actions. It was the right decision for our business but

more importantly, it was the right decision for our customers.

As a result of our actions, the Automotive Service Association (ASA) and its

12,000 members dropped its support for federal legislation for the simple reason

that they are getting the information they need to repair vehicles in a timely basis.

Rather than spending years battling in Congress over new legislation, ASA recognized that a voluntary agreement and regular dialogue with automakers is in the

best short-term and long-term interests of its members and American consumers.

The Alliance also had meetings with representatives of the Coalition for Automotive Repair Equality (CARE) in an attempt to understand CARE’s concerns and

to resolve any issues or problems that their members may be experiencing. In

March 2003, following a meeting with Chairman Barton, CARE representatives presented six issues involving service information and repair. We successfully resolved

all issues. Additional meetings were held in May 2003, after which all service issues

presented by CARE were addressed by automakers. But our success in addressing

these issues has not deterred CARE from continuing its pursuit of legislation. In

fact, despite repeated attempts by the Alliance and our member companies, CARE

has shown no interest in continuing a direct dialogue with automakers or in submitting issues to NASTF, the cross-industry task force specifically designed to resolve

any difficulties in obtaining service or diagnostic tool information.

59

In recent months, it is our understanding that they have carefully selected issues

to highlight as reasons this legislation is necessary. However, the CARE coalition

refuses to tell the Alliance, AIAM or individual companies specifically what those

issues are because they know that we will promptly work to solve any issues that

they or any member of the service industry brings to our attention. For instance,

in that same March 2003 meeting with Chairman Barton, testimony was given by

the Associated Locksmiths of America (ALOA). Since that time, NASTF has held

two special meetings with ALOA to identify the needs of security professionals. In

July of this year, NASTF formed a new vehicle Security Committee to tackle the

difficult issues surrounding release of necessary information to security professionals. The commitment to address the issues is there and dialogue is already underway.

Therefore, I’d like to make an offer again at this hearing that the automobile

manufacturers and the NASTF are prepared to meet with the CARE coalition or directly with aftermarket part distributors that are members of CARE to address any

concerns affecting their business. We know that a dialogue directly involving all interested parties is the best and quickest method to resolving differences. If the

CARE coalition is truly interested in putting consumers first, they should welcome

the opportunity to sit down with automakers because we want our customers’ vehicles to be repaired quickly and professionally by anyone in the repair business.

Another claim by the aftermarket is that they are losing sales and business to

dealerships and other competitors. In looking at recent financial statements by leading aftermarket companies who are members of the CARE coalition, it appears that

they are doing quite well in the marketplace. For instance, Advance Auto Parts announced in February that the company posted its best quarterly and year-end results in company history. O’Reilly Auto Parts reported in July that the company had

record revenues and earnings for the second quarter of 2004. In its 2003 Annual

Report, AutoZone highlighted its record sales, record earnings per share, record net

income and record return on invested capital. It proudly stated that it is the clear

leader in the growing do-it-yourself automotive aftermarket. CARE members own

reports confirm that the aftermarket industry is healthy and poised for future sales

growth. Further, the aftermarket repair shop businesses have more than doubled

since the 1990’s and project to grow throughout this decade.

For the purposes of this hearing, it is also important for the Committee to be

aware of an important subsidiary of the AutoZone corporate family. ALLDATA is

a leading provider of automotive repair information and solutions to the automotive

service industry. According to its website, ALLDATA is the ‘‘world-leading provider

of electronic diagnostic and repair information and services for the automotive service industry.’’ The company has access to over 5,000 automaker manuals and Technical Service Bulletins provided to third party service information providers as a

courtesy by some automakers. It also provides illustrated diagnosis and repair procedures and even has a goal of answering repair questions within 30 minutes.

As I stated earlier, automakers view companies like ALLDATA as partners in providing repair information to consumers. The automotive companies enjoy a good

business relationship with ALLDATA and its chief competitor, Mitchell. Numerous

independent shops and ASA members subscribe annually to these services in order

to obtain necessary information. In fact, repair shops can get almost all diagnostic

questions answered through either of these two services. Automakers are not aware

of any deficiencies with the data provided to these multi-manufacturer information

services. Further, if there is a need for additional information which ALLDATA or

Mitchell may chose not to include on their web site, under our 2002 industry commitment, a technician can log on to an automobile company’s web site to find the

necessary information.

We are pleased to report that in March of this year, EPA reviewed and approved

the structure and pricing of the emission related company web sites. We have also

received positive feedback regarding the non-emission information. This is no small

task. Significant financial resources were allocated to develop the Internet sites and

keep them current with the latest information. There are hundreds of makes and

models in the auto industry and the corresponding diagnostic repair information for

each of those vehicles can involve thousands of diagnostic codes and hundreds of

pages in vehicle manuals. There are also new makes and models that enter the marketplace each year and all of the related repair information gets posted on the web

sites. In an undertaking of this magnitude, there are bound to be difficulties from

time to time, but all automobile companies are committed to addressing such problems on a priority basis. The industry has consistently demonstrated it is responsive

to all complaints submitted through the NASTF task force and has a track record

of resolving nearly every issue in a very short amount of time.

60

If the aftermarket service providers have the information they need, what is the

real intent of this legislation? Well, in our opinion, the aftermarket part distributors

and manufacturers, rather than the repair shops, stand to benefit most from the

bill. First, the legislation would most likely force the release of proprietary information that is unrelated to vehicle repair and could result in inappropriate modifications to the computer systems that control motor vehicle emissions and safety.

Aftermarket parts that are not quite up to OEM specifications could require these

‘‘alterations’’ to allow them to function and not trigger warning lights or systems

within the vehicle. But the ‘‘alterations’’ also affect the operation of critical control

systems in the vehicle—threatening warranty issues and perhaps even the proper

performance of these control systems.

Second, with access to automaker proprietary design and engineering information,

aftermarket parts manufacturers could begin producing competing parts without

bearing any of the costs of engineering the parts. This would short circuit the historical and customary practice of reverse engineering replacement parts for

aftermarket use. This ‘‘reverse engineering’’ requirement helps level the playing

field between automakers—who invest enormous resources in the design, testing,

and certification of parts—and aftermarket parts makers—who would gain a significant competitive advantage by not having to invest in the ‘‘reverse engineering.’’

The proponents of the bill assert that this is not the intent and would not happen,

but because of the ‘‘Private Right of Action’’ clause in H.R. 2735, there could result

in a flood of litigation on these issues. It is also interesting that the provisions in

the bill seek to override existing trade secret protections and create a new regime

that would effectively require trade secrets created and protected under the laws of

all fifty states either be ‘‘registered’’ with the FTC or else disclosed to competing

firms. State courts would have ultimate jurisdiction over what constitutes a trade

secret.

Additionally, it is our view that the FTC hearing process envisioned under the bill

would ultimately be construed to require trial-type proceedings over each and every

contested trade secret. Thereby, upon a filing by the aftermarket parts industry,

motor vehicle manufacturers will be forced to defend through formal adjudication

any trade secrets they wish to protect. Such a regime invites competitors to use the

FTC as a competitive weapon for obtaining access to manufacturers’ valuable proprietary information. This entire process is far too uncertain and loose for the automakers to have any comfort that we will be adequately protected.

Meeting today’s very stringent emission and safety regulations requires even more

design, development, testing, and certification of parts. This is just as true for automakers as it is for aftermarket part distributors. Automakers recognize it as the

price of doing business—The CARE coalition sees it differently. Rather than putting

their money in R&D and engineering to develop quality competitive parts, they now

seem to be putting their money into lobbying for legislation and regulation in the

hopes that Congress or the Federal Trade Commission will force automakers to turn

over proprietary design specifications and software. Aftermarket parts manufacturers would have a significant savings every year in avoided costs. However, the end

result would be a devastating blow to the intellectual property rights governing

computer software and inappropriate modifications to vehicle pollution control and

safety systems and the computers that control them. We would expect these changes

to have adverse impacts on U.S. employment as well—since many of the

aftermarket parts would be produced overseas rather than in the U.S. facilities currently used by OEM parts suppliers.

Summary:

Key members of the independent repair community and all automakers agree that

service issues can be resolved without the need for legislation. Moreover, they agree

that cooperative solutions will yield better results in less time than legislation and

regulation.

The automobile industry stands ready to work with all affected parties in resolving remaining differences. We believe we are headed in the right direction and look

forward to keeping the Committee updated on our progress.

Thank you.

Mr. STEARNS. I thank you.

Mr. Cabaniss?

61

STATEMENT OF JOHN CABANISS, CHAIRMAN, NATIONAL

AUTOMOTIVE SERVICE TASK FORCE, DIRECTOR, ENVIRONMENT AND ENERGY ASSOCIATION OF INTERNATIONAL

AUTOMOBILE MANUFACTURERS

Mr. CABANISS. Good afternoon. My name is John Cabaniss. I am

Director for the Environment and Energy at the Association of

International Automobile Manufacturers.

Mr. Chairman, I have consolidated my statement today, but I

would like to have my full written statement entered into the

record of the hearing.

For the past 4 years I have had the privilege of serving as the

Chairman of the National Automotive Service Task Force, a cooperative activity involving auto makers, the service industry and the

equipment and tool industry. I have been with AIM since the

spring of 1995. Prior to that I worked in EPA’s Motor Vehicle Admissions program for 15 years and the State of Virginia Air Pollution Control program for about 10 years. I grew up with an automotive trades background. Both father and my grandfather were

shop owners and technicians in Southern Virginia for many years.

I have been asked to brief you today on the task force and its

activities. The task force is a completely voluntary effort and takes

no positions on issues. Any opinions that may be expressed are my

own, and not necessarily those of AIM members companies.

During the past decade auto makers have faced a technology explosion and a growing volume of information for service and repair.

As a result, some service providers have experienced difficulty in

obtaining necessary information. However, these difficulties primary involve where and how to access information rather than its

actual availability.

The task force originated in 1999 when the Arizona legislature

was considering a service information bill. During this process it

became clear a continuing forum was needed for dialog between

parties at the national level. Thus, in November 2000 the task

force was established with the mission of facilitating the prompt

identification and correction of gaps in availability and accessibility

of service information training, diagnostic tools and equipment and

communications to service professionals.

The task force has made significant and sustained progress.

Early in 2001 a website was launched to provide a ready reference

for anyone requiring information in tools from auto makers. This

reference is updated quarterly and broadly publicized by task force

participants.

One special feature is the inclusion of a complaint form for a

technician to use if the information needed to fix the vehicle cannot

be located. Complaints can be submitted by email or by fax to the

Service Information Committee. Complaints are immediately sent

directly by email to the auto manufacturer for prompt investigation

and response directly to the company or individual that submitted

the complaint. Complainers are notified that the complaint has

been received and forwarded to the manufacturer and that they

can expect a direct reply.

During 2003 88 complaints were received involving 17 manufacturers. To date this year 33 complaints have been received involvVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6602 96097.TXT HCOM1 PsN: HCOM1
62

1 AIAM members include American Honda Motor Company, Inc.; American Suzuki Motor

Corporporation; Aston Martin Lagonda of North America, Inc.; Ferrari North America, Inc.;

Hyundai Motor America. Inc.; Isuzu Motors America, Inc.; Kia Motors America, Inc.; Maserati

North America, Inc.; Mitsubishi Motors North America, Inc.; Nissan North America, Inc.;

Peugeot Motors of America, Inc.; Societe Anonyme Des Usines Renault; Subaru of America, Inc.;

and Toyota Motor North America, Inc. AIAM also represents original equipment suppliers and

other automotive-related trade associations. AIAM members have invested over $20 billion in

new production and distribution capacity in the United States, creating tens of thousands of

high-skill, high-wage jobs across the country in manufacturing, supplier industries, ports, distribution centers, headquarters, R&D centers, and automobile dealerships.

ing 15 manufacturers. Only two very recent complaints are pending.

In addition to these complaints, individual auto makers report

that they receive occasional suggestions about ways to improve content in their service document or navigation of their websites. Manufacturers use such feedback to continually improve their services.

At a July 2002 subcommittee hearing Senator Dorgan challenged

auto makers to work with the service industry to address any service issues. We took that challenge very seriously and within a few

weeks all manufacturers agreed to make all service tool and training information available within a short time. By March 2003 all

auto makers had launched Internet service sites available to anyone 24/7. The access charges are minimal. Users can have immediate access to practically any of these websites for 24 to 72 hours

at a charge of $10 to $20. Frequent users have the option of subscribing monthly or annually.

The success of the task force is due to the participation of a wide

range of parties. Currently over 100 organizations participate in

the task force and participation is growing. These are just a few

examples of the progress being made.

The central question being considered today is whether technology is locking out the consumer and independent shops. I believe just the opposite it true. We are using Internet and e-business

technology to provide needed service information, training and tools

to anyone who needs it much quicker and cheaper today than ever

before. The task force process also ensures a forum for identifying

and addressing problems. I am confident that working cooperatively within the process, we can continue to be successful in bringing together the talents and resources of the stakeholders to address service technology issues.

In conclusion, auto makers are completely committed to the task

force. We believe it is the proper venue for continuing to address

service technology issues and that it is making significant and sustained progress. Therefore, we believe legislation in this area is not

only unnecessary, but potentially counterproductive.

Thank you again for the opportunity to address the subcommittee.

[The prepared statement of John Cabaniss follows:]

PREPARED STATEMENT OF JOHN CABANISS, ASSOCIATION OF INTERNATIONAL

AUTOMOBILE MANUFACTURERS

Thank you for the opportunity to testify before the Subcommittee regarding vehicle service technology issues. My name is John Cabaniss. I am the Director for Environment and Energy at the Association of International Automobile Manufacturers.1

For the past four years, I have had the privilege of serving as the chairman of the

National Automotive Service Task Force, a cooperative activity involving automakers, the automotive service industry, and the equipment and tool industry.

63

I have been in my current job with AIAM since the spring of 1995. Prior to that,

I worked in the U.S. Environmental Protection Agency’s motor vehicle emissions

program for fifteen years and for the State of Virginia’s air pollution control program for about ten years. I grew up with an automotive trades background. Both

my father and my grandfather were shop owners and technicians for many years.

I grew up handing them tools and later using the tools myself.

The Task Force is a completely voluntary effort. We collect no dues and have no

support organization. NASTF itself takes no positions on issues. I have been asked

to brief the subcommittee today on the Task Force and its activities. Any opinions

that may be expressed are my own and not necessarily those of AIAM member companies.

In my presentation today, I will briefly describe who is involved in the National

Automotive Service Task Force, what activities are under way, and what progress

has been made and continues to be made. After hearing my statement, I hope you

will agree that the Task Force is the proper venue for addressing service issues, and

that further legislation or regulation in this area is unnecessary and in fact may

even prove counter-productive.

To begin, I would point out that vehicle manufacturers consider the automotive

service industry their partner in providing vehicle service and repairs to their mutual customers, the driving public. Moreover, automakers do not intentionally withhold service information from the auto service industry. To do so would be contrary

to their best interests. Automakers want their customers to have a positive ownership experience, which logically includes the ability to obtain effective service no

matter where or when their vehicles need maintenance. Automakers have every incentive to make sure that the auto service industry has the information, training,

and tools needed to maintain and repair vehicles. Historically, 70-80 percent of vehicle service and repairs are performed in non-dealer shops. This level has been constant for many years and is not expected to change.

During the past decade, the automakers have had to address the challenge of

managing a technology explosion and the growing volume of information needed to

maintain and repair more complex, modern vehicles. This necessitated changes in

both communications channels and techniques. As these changes have occurred,

some service providers have experienced difficulty in obtaining the necessary information. For the most part, however, these difficulties have involved questions about

where and how to access the information rather than its actual availability.

The National Automotive Service Task Force

The origin of the National Automotive Service Task Force dates back to 1999

when the Arizona legislature was considering a vehicle service information bill. During 1999 and 2000, the automakers and the Arizona auto service industry cooperatively investigated allegations of manufacturers withholding information. It soon became apparent that the real issue for shops and technicians was accessibility, that

is, knowing where to get the information and tools they need. What also became

clear was the necessity for a continuing forum for dialogue between parties on these

issues at the national level. Thus, in November 2000 the National Automotive Service Task Force was established. The mission of the Task Force is to facilitate the

prompt identification and correction of gaps in the availability and accessibility of

automotive service information, training, diagnostic tools and equipment, and communications to automotive service professionals.

At the outset, the Task Force recognized three basic realities. First, despite the

best efforts of everyone involved, some gaps in service information, training, and

tools are inevitable. Second, the rapid pace of changes in vehicle technology, which

will clearly continue, exacerbates this problem. Third, a continuing forum for open

communication and cooperation is the best way to address issues.

The Task Force has made significant and sustained progress. The first issue the

Task Force addressed was that of information accessibility. In May 2001, the

NASTF Service Information Committee teamed with the International Automotive

Technicians Network to launch an Internet website to provide a ready reference for

all service technicians requiring service information and tools from automakers.

This reference is updated quarterly and broadly publicized by Task Force participants.

A special feature of this site is the inclusion of a complaint form for a technician

to use if he/she cannot locate the information needed to fix a vehicle. NASTF complaints can be submitted electronically by Email or by telefax. Complaints are received and monitored by the NASTF Service Information Committee. Immediately

upon receipt, complaints are sent directly by Email to the auto manufacturer for

prompt investigation and response. Manufacturers respond directly to the company

or individual that submitted the complaint. As part of the process, complainants are

64

notified that the complaint has been received and forwarded to the manufacturer,

and that they can expect a reply directly from the manufacturer.

From January through December 2003, NASTF received 88 complaints involving

17 manufacturers. From January through September 20, 2004, NASTF has received

33 complaints involving 15 manufacturers. Only two very recent complaints have

not received a response.

In addition to NASTF complaints, individual automakers report that they occasionally receive suggestions from their website users about ways to improve content

in their service documents or navigation of the websites. Manufacturers use such

feedback to continually improve their services.

In July 2002 Senator Dorgan held a subcommittee hearing on service technology

issues. After hearing the concerns raised by all parties, Senator Dorgan challenged

the automakers to work cooperatively with the auto service industry to address any

service technology issues. We took that challenge very seriously and within a few

weeks were able to get all manufacturers to agree to make all service, tool, and

training information available within a short time frame. By March 2003, all the

automakers had launched Internet service websites, available 24 hours a day, 7

days a week, where anyone can access service and training information as well as

obtain information for purchasing factory diagnostic tools. To facilitate the access

to these websites, the NASTF website www.nastf.org contains links to all the automakers’ websites. Many other NASTF participants have included links on their own

websites, too. The access charges are minimal. Technicians can have immediate access to practically any of these websites for a period of 24 to 72 hours at a charge

of $10 to $20. Frequent users have the option of subscribing monthly or annually.

The availability of this electronic information is also a valuable resource for companies that are in the automotive information processing business. Many independent

shops rely on such third party information providers as a primary source of service

information and the progress of the NASTF has helped to facilitate this.

The success of the Task Force over the past four years is due to the participation

of a wide range of parties. We are fortunate to have a ‘‘Who’s Who’’ of auto service

organizations participating, including the Automotive Service Association, the Automotive Aftermarket Industry Association, the Automotive Service Councils of California, the Society of Automotive Engineers, the Alliance of Automotive Service Providers, the International Automotive Technicians Network, and the Equipment &

Tool Institute, to name just a few. Currently over 100 organizations participate in

the Task Force, and participation is growing. The complete list of participants and

other information is available at the Task Force website and is attached to my written statement.

These are just a few examples of the progress that is being made in the Task

Force. In addition to the Service Information Committee, the other NASTF committees include the following:

• The Training Committee, which focuses on ensuring that all technicians have access to factory equivalent training;

• The Equipment and Tool Committee, which focuses on improving the availability

of generic tools for both dealer and non-dealer shops;

• The Communications Committee, which focuses on getting information out to

shops and technicians about the Task Force project, how to obtain the tools and

service information they need, the progress the Task Force is making, how to

get involved and provide input, and how they can otherwise help; and

• The new Vehicle Security Committee, which was recently formed to address gaps

in access to vehicle security information by automotive security professionals.

The central question being considered today is whether technology is locking out

the consumer and independent shops. I believe just the opposite is true. We are

using Internet and E-business technology to provide needed service information,

training, and tools to anyone who needs it much quicker, and for far less cost, than

ever before. The NASTF process also ensures a forum for identifying and addressing

problems. I am confident that working cooperatively within the NASTF process, we

can continue to be successful in bringing together the talents and resources of the

stakeholders to address service technology issues.

In conclusion, the automakers are completely committed to the National Automotive Service Task Force. We believe this Task Force is the proper venue for continuing to address service technology issues, and that it is making significant and

sustained progress in improving the availability and accessibility of information,

training, and tools to automotive service professionals. Therefore, we believe legislation in this area is not only unnecessary, but potentially counter-productive.

Again, thank you for the opportunity to address the Subcommittee on this important issue.

65

Mr. STEARNS. I thank the gentleman.

Thank you for patience, Ms. Cardwell, and we appreciate your

opening statement.

STATEMENT OF LYNNE CARDWELL, CHIEF EXECUTIVE OFFICER, CAR CARE CENTER, ON BEHALF OF COALITION FOR

AUTOMOTIVE REPAIR EQUALITY, AUTOMOTIVE

AFTERMARKET INDUSTRY ASSOCIATION AND CARQUEST

TECH-NET PROFESSIONAL AUTO SERVICE CENTER

Ms. CARDWELL. Thank you, Mr. Chairman and members of the

subcommittee for the opportunity.

I will be brief. I am mindful that the time is running and so

many of many points have been so well covered by the gentleman

with the video down at the end. There are countless examples of

technicians not being able to actually drill down to the problem.

But as you know, my name is Lynne Cardwell and I have been

in the vehicle automotive repair business for 18 years. And I am

a lady shop owner. I did not end up there looking for that. I ended

up because my husband had a very serious car accident and his

spine was crushed and I needed to come in and hold the thing together. And it worked out so beautifully that we were able to stay

on, and we have grown to one of the largest independent and most

reputable, I think, shops in Sacramento, California.

We have an 18 bay shop. It’s a large facility. It is about the size

of a small dealership. We do not sell new cars or used cars, but we

just work on them. And as a general repair shop, we work on almost every make and model; all of the domestics, most all of the

Asians and some of the Europeans.

But today I am here. I am a member of the Automotive Service

Councils of California and they do have 1500 independently owned

service centers, very much like my own. I have also been asked to

speak on behalf of the Automotive Aftermarket Industry Association, and they have 4400 member companies and affiliates who

make and market equipment and materials, supplies and services.

And they have over 45,000 outlets and shops.

And as a CARQUEST Tech-Net Professional Auto Service Center

myself, I have also been asked to speak on their behalf. There are

3700 of those centers independently owned across the country.

And the Coalition for Automotive Repair Equality also asked to

have me speak on behalf of them. And they represent aftermarket

suppliers that we buy from all over the Nation.

But, of course, primarily I’m here to speak on behalf of our own

business, because we absolutely cannot survive without complete

and consistent service information.

We do have a very high standard for the training that we require

of our own technicians. We are an ASE Blue Seal facility, there are

only three of those Blue Seal facilities in Sacramento.

We are also a State certified Gold Shield smog station and a

State certified small business. We are Tech-Net Professional Auto

Service Center, as I said. And we’re also AAA approved auto repair

facility.

We have 13 employees; all of our technicians save one are ASE

Master certified technicians with a L/1 certificate. Most all of them

are smog licensed as well.

66

We process probably 5,300 cars in a year. We do about 20 a day.

And each technician is required to complete at least three advanced

courses per year. And our shop is very well equipped with the latest diagnostic equipment, the ones that we can lay our hands on.

But times have really changed for us in the auto service industry. So much of that has been already said, I will not go into that

too much. But the scopes and scanners and hand tools that used

to be our stock in trade really now what we are needing so desperately on a consistent basis is the electronically transmitted repair information, and that has become our most important tool.

And if we cannot get that, it is not an overstatement to say that

we are out of business. Maybe not today or next week, but eventually and very soon within a matter of 2 or 3 years.

Every time we send a customer to a dealer because we do not

have repair information for their vehicles, we lose credibility with

that customer.

And the other issue that has not been brought up today, which

I think is a huge concern to anyone in the aftermarket, is that good

technicians will not stay where they cannot get the kind of information on a consistent basis that they need to do their jobs properly. I know that from personal experience. I lost one very good

technician who was with us 12 years. And he left to go to a dealer

because the service information he knew from personal experience

was more accessible there.

According to a poll conducted by the Tarrance Group this summer 92 percent of auto service retailers favor the passage of this

legislation. And interestingly enough, 93 percent of ASA member

shops favor this legislation.

The Motor Vehicle Owners’ Right to Repair Act would ensure

that motorists retain the freedom to choose how and by whom their

vehicles are maintained. Without that, car makers begin to achieve

a virtual monopoly. I am sure no ne of us want that. They are not

probably wanting a monopoly. We want a level playing field, really.

Now we have just what the car makers feel like giving us today.

The word that concerns me here is ‘‘voluntary.’’ I keep voluntary,

voluntary. And while we are very appreciative of the efforts that

have been made to date to provide this voluntarily, without a bill

there is no force of law behind that bill, there is no way to enforce

it. And that is a very, very crucial point that we must not overlook

in discussing this bill.

I am just about finished. I will try to be real fast.

Mr. STEARNS. Sure.

Ms. CARDWELL. If we were to subscribe to just the top 21 auto

makers’ websites, it would cost a small job, any shop, $37,000 a

year. And that is prohibitive for most small businesses. And, of

course, the specialized scan tools are extra on top of that.

So with regard to the tools themselves, there is a copy of a GM

letter in your packet there. I think that explains GM’s intention to

crank up the cost of their data stream information which they feel

has been severely under valued, I think that is their terminology,

raising the price to our tool suppliers from which we buy our tools

from $10,000 to $50,000. That is a 500 percent increase. And I

think that is unconscionable.

67

If they succeed in this and other manufacturers follow suit, the

tools the diagnostic capabilities, we need to stay competitive with

dealers, may be completely out of our reach.

So now we have a statement of intent by the auto makers. And

while we appreciate the attitude and the helpful beginnings that

that represents, it still is entirely on their terms and with no force

of law behind it, it is impossible to enforce it. So they say that we

should just trust them to release the service information voluntary;

there is that word again ‘‘voluntary.’’ But if this was really their

plan to voluntarily release all the information and make it a level

playing field, why are they so opposed to this bill which does that,

except that it provides enforcement.

I think that is probably the real reason for the objection is that

it does provide within an ironclad enforcement mechanism under

the Federal Trade Commission to make sure that all parties are

carrying out their obligations to the motoring public. This feature

is notably absent in everyone of the car company’s paper promises.

So I respectfully ask the subcommittee to give its full support to

H.R. 2735 and let us continue to serve our long time customers,

and at the same time support ourselves and our families.

Thank you.

[The prepared statement of Lynne Cardwell follows:]

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

Mr. STEARNS. Thank you very much.

I ask unanimous consent that we let the chairman of the full

committee have his opening statement. It is bill that we are talking

about, so I think it is appropriate and affirmative. So without

unanimous consent, I so offer Mr. Barton.

Ms. SCHAKOWSKY. Mr. Chairman, if I could.

Mr. STEARNS. Yes.

Ms. SCHAKOWSKY. Just say in accordance with the tradition and

the rules of this committee, I happily ask the chairman of the committee to be allowed to make an opening.

Mr. STEARNS. And I appreciate your affirmative action here and

your spirit.

Mr. Barton, you are working with those high flattery comments

from the other side.

Chairman BARTON. Well, I appreciate Ms. Schakowsky’s generosity. If it really is a problem, I do not have to be recognized by

unanimous consent. I am willing to be recognized to ask the first

5 minute rounds of questioning.

Mr. STEARNS. You have been recognized, Mr. Chairman, and you

are speaking on your time.

Chairman BARTON. All right. Well, I am not going to regurgitate

my opening statement, which was put into the record. But I am

generally going to make a statement and then ask one question.

I have been involved in this issue for the last 3 years when some

of my individual car repair shops in Texas came to me and talked

about the difficulty of getting information to repair their newer

model cars because of all the computer diagnostics that were required.

The gentleman down at the end of the table, Mr. Dave Scaler,

came to my office earlier this year, hooked up his laptop computer

and ran me through a real time demonstration of his attempt to

get some information about a particular part for a particular car

that if I recollect properly, was currently in his repair shop in New

Jersey and he needed to repair, and he could not do it. And he had

gotten all the required—he had paid all the fees and gotten all the

passwords. He had done everything that he could do and he spent

about 15 minutes in my office going through the various screens

and ended up not getting the information.

And the Automobile Manufacturers Task Force that has been

working with the repair shops and the auto repair parts groups admits that on average it takes somewhere between 8 to 15 days to

get this information or get the parts. I do not know many people

that are going to wait eight to 15 days. I guess if you absolutely

have to, you will. But most of us, we take our car into a shop, we

expect that day or the next day or maybe 2 or 3 days depending

on the backlog, our car is going to be repaired.

And, as I said, I have been involved in this for the last 3 years.

And the purpose of this hearing is not to generate enthusiasm for

the bill that I have sponsored, 2735 which I appreciate all the

stickers out in the audience. But this is not a legislative hearing

on a particular bill. This is one last attempt to get the manufacturing community to work with the repair community to solve this

problem.

99

You know, I did not hear the opening statements and I have read

the testimony, although I have not gotten to hear, but from what

Mr. Bass told me when he was here, about the half of the group

were patting me on the back and about half the group were kicking

me in the bottom which means that I am probably right on point.

You know, the bill is about what it ought to be and we do not want

to have to engage in a legislative process. We would rather solve

this through voluntary means. But the facts are the facts.

And my good friends on the automobile manufacturing side, some

of you have dragged your feet and you have made a system that

even when the people like Ms. Cardwell who has a very large shop

pays the fees, buys the equipment, it is very very difficult to get

this information.

Nobody wants proprietary information. My God, what would they

do with it if they had it? General Motors spends billions of dollars

to design some of this equipment in these new models or Ford or

Chrysler or Toyota or Mercedes; pick your manufacturer. No repair

shop in Sacramento, California is going to have $5 to $10 billion

if they got proprietary information to use it. That’s ludicrous on the

face of it.

All these folks want is the ability for people that do not buy new

cars and do not have them under warranty that buy used cars and

have to go to the independents to get their cars repaired because

they cannot afford a new car that is under warranty or go to certified dealer and pay the higher labor costs and all of that. They

just want the ability to take their car in and have it repaired and

inspected and looked at in a reasonable time period at reasonable

cost. And if we can do that by voluntary means, so be it. But if we

cannot do it by voluntary means, the votes are here in this committee and the floor of the House and I think on the Senate to pass

this bill or something similar to it in the very near future and

make it mandatory.

So my question is to the manufacturing representatives what is

it going to take to get a system that does not just look good on

paper, but actually works in a real time basis that people like Mr.

Scaler can actually use it after they paid the right fees and all of

that to get the information, to get the parts to repair the cars in

the independent shops?

So I would ask that to—I guess we would start with—I would try

to Mr. Dana. How about Mr. Dana? Not to pick on you, but——

Mr. DANA. Feel free to pick on me, Representative Barton.

I would like to be able to tell you that in fact we do make all

of our information available today in an agreement with the ASA

as we talked in previous hearing with your committee. We are

making all that information available. In fact, let me point out

one——

Chairman BARTON. So you dispute this 8 to 15 days?

Mr. DANA. Yes, sir I do. These websites are available 24 hours

a day, 7 days a week. You can access them anytime, and you can

access them for either a short period of time for a relatively inexpensive price or you get an annual subscription for a higher price.

Chairman BARTON. Mr. Scaler, do you want to respond to that?

Mr. SCALER. It is our opinion, obviously, that that is not correct.

And unfortunately most of the statements that are made that way

100

are traditionally done by people that are not on the technical level

that need to drill down to get the car done. Traditionally that is

where on the surface it looks okay, but it has been our experience

that the technical end is where that falls short.

Chairman BARTON. I have used more than my time. I will have

some questions for the record. But I think you get my point. I want

a voluntary solution and I want the manufacturers to work with

the repair people so that we get this done so that it actually works

in the real world and not just on paper.

With that, Mr. Chairman, I yield.

Mr. STEARNS. I thank the Chairman.

I will start with the opening questions, and Ms. Cardwell, I cannot resist and this is really a compliment to you. If your mother

told you when you were 12 years old that you would grow up to

be a CEO of a car care center, I do not think you would have ever

believed it, would you?

Ms. CARDWELL. And she would not have believed it.

Mr. STEARNS. Yes.

Ms. CARDWELL. Nor would I.

Mr. STEARNS. No. I know.

Ms. CARDWELL. All of my friends told me when I went to work

there, I cannot even picture you there. But things went well.

Mr. STEARNS. I am going to ask you a question, and Mr. Scaler

when I looked at this issue about the same time Mr. Barton did,

the Chairman, the question came up why has not one of the 50

States passed laws? I mean, if this is such a serious problem across

the United States, why have not one of the States passed laws to

do just what 2735? Why is the Federal the first person to ask it?

Is it because you have been frustrated and you cannot get any

States? And is it possible when you went to the State legislatures

there was not enough justification, you could not convince State

legislature? Because as I understand, you folks have tried on a

State level, particularly California.

So I will start with you and then Mr. Scaler, you might want to

talk about that or anyone else, Mr. Donovan. So go ahead.

Ms. CARDWELL. Yes. Thank you.

I was privileged and they would not have been able to keep me

home from testifying on SBL1146 in California, which was limited

only to emissions equipment.

Mr. STEARNS. Right.

Ms. CARDWELL. And that was federally mandated.

Mr. STEARNS. Right.

Ms. CARDWELL. But frankly it was not having. The system was

not working. And in that way it is a perfect——

Mr. STEARNS. In that case it was probably a more powerful argument than ever before.

Ms. CARDWELL. Absolutely. Absolutely.

Mr. STEARNS. Yes. But yet you could not pass it on the State

level?

Ms. CARDWELL. We did.

Mr. STEARNS. You did pass it?

Ms. CARDWELL. We succeeded.

Mr. STEARNS. Okay.

Ms. CARDWELL. Yes, we did.

101

Mr. STEARNS. Has it passed in any other States?

Ms. CARDWELL. I do not know that any other State has done

that, but they are looking at it.

Mr. STEARNS. Mr. Donovan, do you know? No? Okay. Okay.

Mr. Scaler then?

Mr. SCALER. The only other one that I am familiar with was Arizona.

Mr. STEARNS. Okay.

Mr. SCALER. Lost by two votes, I believe.

Mr. STEARNS. Okay. Okay.

Mr. SCALER. But beyond that I am not qualified to tell you.

Mr. STEARNS. Well, I am just, you know, trying—because generally when we are up here at the Federal level, this is made to—

it has been a battle in the States and sometimes they want the

State preemption because they say we need one bill because there

is 50 different State laws.

And the other thing is if this is such a problem, why has not the

association or anybody sued the automotive manufacturers? It

seems like the courts could solve this problem, too. I am just taking

the devil’s advocate from the standpoint up here we are looking at

another Federal piece of legislation that is going to impact everybody.

Yes?

Ms. CARDWELL. Because I am a shop owner, I am not a lobbyist

or a paid professional and here I did not actually realize, but I understand that the EPA did adopt that on the Federal level——

Mr. STEARNS. Oh, they did?

Ms. CARDWELL. [continuing] SBL46 was passed.

Mr. STEARNS. Mr. Dana, you know you have heard what these

folks have said. And you have heard what the Chairman said. I

mean, it seems to me that it would be very easy to design easy access to these onboard diagnostic systems. I mean, that would be the

first step. Perhaps a USB port, something like computers. Something very easy. It is not so complicated so that the average person

could go in and quickly repair a car on weekends.

By golly, I ran a small business. If I had to wait 4 or 5 hours

to get information, I could not survive every automotive repair to

go in and do that website. I mean, Mr. Scaler is doing yeoman service to go through and take the time. And all these small businesses

have to do it, and Ms. Cardwell’s business. I mean, that is outrageous that they have to spend so much time finding this information; make the call, do the fax, do the email. I mean, you know you

cannot run a business and make any money in America. So I mean

why does not the Alliance work as a first big step to make this a

USB port, simple, just bingo we got it all?

Mr. DANA. Well, let me explain if I can, Mr. Chairman.

Mr. STEARNS. Just short, please.

Mr. DANA. There is a standardized connector on all cars that we

worked carefully with other parties to make sure to design it properly so an OBD tool can be inserted into that port.

Mr. STEARNS. Yes.

Mr. DANA. And you can read up problems to fix the car.

Mr. STEARNS. Yes. But then you get this thing that says unidentified code is needed.

102

Mr. DANA. No, you do not, Mr. Chairman.

Mr. STEARNS. Well, I mean that is what he said. He says he

could not get the code so he has got to go on the Internet.

Mr. DANA. Can I explain the Dodge problem that Mr. Scaler

brought up?

Mr. STEARNS. Well, I would like to keep it general. I mean, we

have heard enough cases here, and we have even heard from the

Chairman in his office. I mean, it seems like you folks could eliminate this problem, just reach out and make it easier for them.

Mr. DANA. We have eliminated the problem. All service information from all auto manufacturers is available on websites today 24

hours a day, 7 days a week. You can subscribe to it for a short period of time, which is to repair a vehicle for about $20 or you can

do an annual subscription.

It is my understanding that the independent repair shops today

rely pretty much as they did in the past on ALLDATA and Mitchells and other service providers who provide them general information on repairing most cars. If they cannot find the information

they need in those manuals or those websites, they have the ability

to go to the websites of the manufacturers for $20 or less to access

information they need from that manufacturer’s website.

Mr. STEARNS. Okay. Mr. Dana, you heard Mr. Haas say, and I

think you said this, states that the complaints filed with NASTF

this year have an average response time of 15 days. I think that

is what you said. Is that equivalent to response time for franchise

dealership? How does 15 days help a consumer with a car problem?

Goodness gracious. I mean, how is anybody not have their car for

15 days? Does that make sense, that question? It is for you.

Mr. HAAS. Well, I think it makes perfect sense and it is not

simply——

Mr. STEARNS. Could you go without your car for 15 days? Could

you go without?

Mr. HAAS. No, I would not go without my car for 15 days.

Mr. STEARNS. Okay. So——

Mr. HAAS. And I do not think that people are going without their

cars for 15 days. I think——

Mr. STEARNS. But you said in your opening statement that the

average response time is 15 days.

Mr. HAAS. That is a response to a complaint.

Mr. STEARNS. Yes.

Mr. HAAS. So in other words when Mr. Scaler would submit a

complaint to NASTF the average response time, and I think the

correct number is 8 days, but I think the average response time is

8 days for the manufacturer to respond to that complaint. That

does not mean necessarily that it took him 8 days to give him that

information.

I mean, I can also give you examples of manufacturers that have

responded to complaints within 30 minutes.

Mr. STEARNS. No, I know. But you said——

Mr. HAAS. But the point is——

Mr. STEARNS. I am using your words which you said the average

response time is 15 days. At least we got that from your statement.

Mr. HAAS. Yes. Right.

Mr. STEARNS. Those are not my words, those are your words.

103

Mr. HAAS. That is correct.

Mr. STEARNS. I mean, it seems like your case has got to fall and

rise just on what you have said. And if 15 days is the average complaint, then the question is why and what can be done? And I

guess another question is is this same franchise dealers having to

wait 15 days? Probably not. But Jimmie’s Car Garage is going to

have to wait 15 days. So I think a lot of this hearing comes down

to just your little statement there.

Mr. HAAS. Well, Mr. Chairman, I cannot answer how long a franchise dealers would wait for a complaint that would be submitted.

I have no idea.

Mr. STEARNS. Yes.

Mr. HAAS. I think there are a couple of things that are real important here. Is that one manufacturers are doing a better job than

they have when we started. That time of them responding to a

complaint is shorter today than it was back in 2000 when we started the process. So they are improving. That is progress. Okay.

And I think the important point is that once an issue is identified with service information in a manufacturer’s website and a

complaint is initiated and it is responded to, that problem is solved.

We do not have to go back for the next shop or the next consumer

or the next vehicle owner and have that same problem where that

information is still nonexistent. So they are solving problems.

Mr. STEARNS. My time has expired.

The gentlelady, Ms. Schakowsky.

Ms. SCHAKOWSKY. I have to admit to all of you, I am really confused by what is the problem here. Because I am hearing real life

examples, I presume, about the inability to get information from

some people who run independent auto repair shops. And then I

am hearing that no, that simply is not the case, in my experience

it really has not happened. And then I am hearing, I want to follow

up on the Chairman’s comments, that well it can take—yes, the information is there but it can take up to 15 days, maybe it is just

8 days. That seems to me an unreasonable time.

I imagine that complaints are filed when you cannot get information. And so the result of that delay would be that someone is not

getting the information to repair their car.

I was also impressed with what Mr. Donovan said; this notion of

the right of car owners to own the information generated by their

automobiles. Do I really own my car when I pay it off if I do not

have the right to the information to keep that car running? I am

not talking even about dealers now. Do I as an owner own my car

if I do not have that basic information?

And finally, the confusing part that if there is not a problem, if

the information is accessible, then what would be the harm in having legislation that would say that that information must be given?

I mean, if that is already happening and everybody is all on the

same page—oh, and let me ad one ore thing, Mr. Haas. You said

that the people who oppose this legislation are not here because

they are home working.

Now, I look around this room. I do not know anybody here, but

I have to assume that they are not a bunch of slackers. That they

have come here, probably at either their own business costs or out

of their own pockets to say that they are for this legislation and

104

that they are hard working entrepreneurs much as those of you

who oppose this legislation say that you represent.

So I am trying to understand this division among those of you

in the business and where the truth lies. Nobody seems to be willing to say that independent technicians do not have the right to

this information. Everyone seems to agree with that. The disagreement is over whether or not that information is really available.

That seems like an empirical answer ought to be available.

What am I missing here? I am going to let Mr. Scaler and Mr.

Haas gives their views, and then anyone else can chime in.

Mr. SCALER. I think essentially what you are hearing is the fact

of the matter is when the complaints go in, the resolution or

viewed resolution is that the manufacturers responds to the complainant. Now, no one really knows, particularly on that side, if it

was really resolved. They just know that the manufacturer said

they have taken care of it.

And in my case, and virtually every time I have complained to

the manufacturer I have direct examples, many others, that it was

not resolved or it was resolved in a way that I couldn’t do anything

about it. In one case I was told that I could have the equipment

if I can ship the container over from Europe because the two in Indiana were slatted for dealership and not allowed for me. So, you

know, at that point and in this particular case, it was 70 days that

I waited. Then, you know, it becomes a point of it is almost——

Ms. SCHAKOWSKY. But that complaint would be viewed as resolved?

Mr. SCALER. Resolved because the manufacturer contacted me

with a resolution.

Ms. SCHAKOWSKY. I see.

Mr. SCALER. Of course, it was not practical in any form. But at

that point, you know, we have tried everything and at some point

you cry uncle. And certainly the average technician does not go

through most of the times that I go back and back again. I just

happened to be a little more relentless at that. The average technician just says well I guess so——

Ms. SCHAKOWSKY. Well explain to me then, Mr. Scaler, why is it

that some people who seem to be in the same business as others

are saying we do not need this legislation?

Mr. SCALER. Quite frankly I feel it is because they do not fix

cars. They used to fix cars. They no longer do. They have the same

credentials as me, but when we have to do the job.

When we submit a complaint or when I submit a complaint, I expect someone to be there going well first of all, it is probably legitimate if it is from me because I have some history here. And second,

I was hoping that someone was actually trying to get it.

In all the cases, in the example I showed you today, I was just

told that it wasn’t there. And I was convinced by all the parties,

no one actually even checked, nobody tried to click a couple of

clicks to see if I had. And it was just as long as they responded,

then it was okay. And still not resolved.

Mr. DANA. Representative Schakowsky, could I answer that question for you?

Ms. SCHAKOWSKY. Okay. Sure.

105

Mr. DANA. Today other deals and independent repair shops have

access to the same vehicle information, service information tools,

diagnostic equipment. That is the fact of the matter.

One of the issues—and we are not perfect, okay?

Ms. SCHAKOWSKY. Well, wait a minute. But that is not—I know

you keep saying that and I keep hearing that, but we are given examples where they did not have access to that information.

Mr. DANA. Let me give you an example. Mr. Scaler brought up

an issue, okay. We are not perfect. We have thousands and thousands of pages of service information that changes every year, and

we have made some errors.

Ms. SCHAKOWSKY. Yes, but wait a minute. Errors, but he was

told repeatedly that the information was available online and then

he needed to get a PIN number. I mean, I suspect that there are

others who could give many other examples. I am not saying that

you should be perfect. But it seems as if this information is not

routinely available in the same way it is to dealers. You are saying

that is just not true?

Mr. DANA. And I respond particularly in the case you are mentioning. In the case of the PIN number with a Dodge car that he

mentioned. DaimlerChrysler was aware of the issue and is correcting it, okay. It was in fact a problem. DaimlerChrysler is correcting that problem. That was in fact a problem. It was an error

in the software programming that did not allow the repair person

to have the right code.

The PIN is available to the dealership on the website, and the

PIN is given to the owner of the vehicle when he purchases it.

What happened was there was a mistake. DaimlerChrysler became

aware of it. Has notified EPA and ARB, because they have to do

that under the rules that we operate under.

This issue could have been resolved sooner if the CARE representatives were a part of NASTF and worked through the normal

complaint process and told DaimlerChrysler about this, we could

have been working on it sooner than we did.

The way DaimlerChrysler found out about this problem was that

they went to the website, the same website that is available to the

aftermarket independent repair shops and figure out what the

problem was, and they are now fixing it.

Mr. STEARNS. All right. The gentleman from Michigan.

Mr. UPTON. Well, thank you, Mr. Chairman.

As I listen, I appreciate the testimony, I appreciate the hearing

as well. And I got to say that my dad was once in charge of service

for a Fortune 100 company. And one of the things that his team

did was develop the 800 number. They did it. And I know that

when I call that 800 number for service as a consumer, I get a certain individual and I can ask questions and be directed to the closest repair shop. And I also know that there is another number that

I sometimes ask for that the mechanics can use themselves. I think

you can more detailed information and specifically to apply for

parts and how to install those if they need to do it.

And 1 day next week I am intending to take my Trail Blazer to

my favorite mechanic in St. Joe, Michigan. I have been going for

decades to a place called All American Shell, and they do a good

106

job. And I have put hundreds of thousands of miles on my vehicles

in the decades that I have been taking my car there.

And I am going to ask the mechanic on Monday if they have ever

had a problem, and I will report back what his answer was. I got

an unsolicited fax a little bit earlier this morning saying from Dr.

Dan’s Service Station in Kalamazoo, Michigan, pretty big operation. He’s on Stadium, which is the major road in Kalamazoo. And

it says business owners for 20 years—as business owners for 20

years we have made some agreements with the auto makers to

make available through the Internet and other sources the information we need to repair the newer cars. I feel we should give this

a try before we start to change the laws on this subject.

My bet is that my mechanic on Monday will tell me the same

thing. And, again, I will report his answer. But as I listen to Mr.

Scaler’s comments and I walk through the review of your testimony, I am surprised that a dealer—I believe that was a what?

Was it Volvo. What was the brand?

Mr. SCALER. BMW.

Mr. UPTON. BMW. I am surprised that a manufacturer of that

size would not have someone available to walk someone who is a

professional—you versus me—through the process of how to fix

that car. And I guess I need to ask Mr. Dana as you say that your

service information is on websites 24/7 for less than $20. You think

you have a pretty good system in place. Why is it that someone like

Mr. Scaler, who I think everyone could identify with the description that he provided, why could not someone like that get that

provided under the system that is in place now under a voluntary

agreement? And I presume that BMW is a member of the auto Alliance, are they not?

Mr. DANA. Yes. He should be able to get access to that information, Mr. Upton. Let me point out something. One thing about——

Mr. UPTON [presiding]. Well, hold on 1 second.

When you, Mr. Scaler, when you described your situation in Mr.

Barton’s office, how long ago was that? This year, last year, 2 years

ago?

Mr. SCALER. This year.

Mr. UPTON. This year. Okay. All right.

Mr. Dana?

Mr. DANA. What we are hearing about in this hearing are one

or two problems that exist, not about the millions of repairs that

are done everyday, every year to fix cars properly. You can always

one or two faults in any system. But the real important story here

is that most independent repair shops, dealerships, everybody who

repairs cars has better access to information today than they had

in the past, can get the information they need to repair cars properly. But pointing out the one or two problems is the purpose of

the NASTF. That is why we have the complaint form. That is how

we can make sure that we fix all the problems that exist.

But keep in mind that——

Mr. UPTON. How many complaints usually come in the course of

a month?

Mr. DANA. John’s testimony had that in.

Mr. HAAS. Last year there were 88. To date this year we have

had 33.

107

Mr. UPTON. Thirty-three complaints out of hundreds of thousands?

Mr. HAAS. Right. Actually millions.

Mr. DANA. Millions.

Mr. UPTON. Millions. I guess it goes back to the old saying that

is popular in our family: Was you always perfect? That’s a pretty

decent record.

Mr. Donovan?

Mr. DONOVAN. Thank you for recognizing me, Congressman.

If I may just address it. I think that some of the problem is that

the facilities in the industries have done as Mr. Seyfer have identified and said that we know that there are a certain amount of vehicles we cannot do. We take them to the dealership for the customer

to eliminate the inconvenience. But our concern is the bottom line

is who ends up paying for that? The consumer is the one that ends

up paying for it for the cost in many cases.

At some point Mr. Scaler had talked about all the hours and

hours to find the problem. There is a cost associated with that.

Some of it is eaten by Mr. Scaler and Mr. Seyfer, some of it goes

to the individual customer. And that is our concern as we move forward.

Mr. UPTON. Well, I know my time has expired, so I yield back.

Mr. STEARNS. The gentleman from Michigan, Mr. Dingell.

Mr. DINGELL. Mr. Donovan, in the situation that you have just

been describing to my colleague, you are not alleging that there is

a failure on the part of either the dealer or the manufacturer to

make the information that is needed by the independent repairman

available to that independent repairman, are you?

Mr. DONOVAN. I am not making that suggestion. I think that was

already made by both Mr. Seyfer and——

Mr. DINGELL. You are not making it today? You are not making

that suggestion?

Mr. DONOVAN. Yes. The information as I said in my opening

statement, that information we have come a long way in the last

couple of years. There is a lot more information available today.

The problem that we do have is that the information is costly, it

is difficult to manage on the Internet as well.

Mr. DINGELL. Now, Mr. Scaler, how many complaints have you

filed with NASTF?

Mr. SCALER. The complaints that I have I will be happy to share

with you?

Mr. DINGELL. How many?

Mr. SCALER. Realistically, I have had three complaints.

Mr. DINGELL. Over what period of time?

Mr. SCALER. Over a 3-month period of time. One complaint,

which I just shared with you, another complaint which I waited 70

days for the response which I can also share with you. And at that

point got——

Mr. DINGELL. So you had three complaints. This was three complaints out of what size universe of transactions?

Mr. SCALER. But, no, you do not understand something here.

Mr. DINGELL. No. You have a lot of transactions, you file three

complaints. How many transactions were the geneses of those three

complaints?

108

Mr. SCALER. Probably a better way to——

Mr. DINGELL. Fifty thousand?

Mr. SCALER. [continuing] put that——

Mr. DINGELL. Ten thousand?

Mr. SCALER. Certainly. Because in the case of Chrysler and this

example, that is every Chrysler product we work on.

Mr. DINGELL. Okay.

Mr. SCALER. So that we continuously, we do not go back over and

over. And in the case of BMW, it is every BMW that comes into

the store.

Mr. DINGELL. Well, three out of all the cases that you dealt with,

is that right? Three?

Thank you.

Now, gentlemen—this question to Ms. Cardwell. You are aware

of the fact that the FTC has authority over restraint of trade, unfair and deceptive acts in commerce and also violations of the antitrust laws, are you not?

Ms. CARDWELL. I understand that.

Mr. DINGELL. Have you made any complaints or has anyone at

the table made any complaints to the FTC about the situation to

which you complain today?

Ms. CARDWELL. Well, I think that it is inexperience on most of

our parts as shop owners as to how to make the complaint process

work for you. I understand NASTF has a process. But the average—all of my technicians decide very quickly when they get onto

a website, OEM or otherwise, as to whether they can drill down in

a fairly effective way to get the information. It takes them a heartbeat.

Mr. DINGELL. So what you are telling me is that no one at this

table has filed a complaint with the FTC over these matters?

Ms. CARDWELL. That’s true as far as I have not made a complaint, no.

Mr. DINGELL. Now this to all the panelists here, and I would appreciate a yes or no or I do not know.

To the best of your knowledge the FTC—really does the FTC

have any expertise in defining what a trade secret is or in determining what information qualifies as a trade secret?

Would you answer yes or no or you don’t know, starting with Mr.

Scaler and going through Mr. Haas?

Mr. SCALER. I do not know that.

Mr. DINGELL. Sir?

Mr. HAAS. I do not know that.

Mr. DONOVAN. Do not know.

Mr. DANA. From my reading would indicate no.

Mr. DINGELL. Sir?

Mr. CABANISS. I don’t know, sir.

Mr. DINGELL. Ms. Cardwell?

Ms. CARDWELL. No, sir I do not know.

Mr. DINGELL. Okay. Are you aware, and again yes or no, that

H.R. 2735 would weaken existing laws that protect trade secrets of

American manufacturers by instituting new processes within the

FTC? Is your answer yes or no, Mr. Scaler, and then going across

or you do not know?

Mr. SCALER. I do not know.

109

Mr. HAAS. Yes.

Mr. DONOVAN. I don’t know.

Mr. SEYFER. Yes.

Mr. MERRILL. I do not know.

Mr. DANA. We have our expert attorney here to answer questions, if that is appropriate for you, sir.

Mr. DINGELL. Okay. Sir?

Mr. STEARNS. You certainly can use your counsel to advise you

and then you could answer for the ranking member.

Mr. DINGELL. I will be happy to have the answers later if you

wish.

Mr. CABANISS. Yes, it would.

Mr. DINGELL. And, ma’am?

Ms. CARDWELL. My reading of the bill it would not.

Mr. DINGELL. Okay. Mr. Chairman, those are the questions I

have. I thank you.

Mr. STEARNS. I thank the member.

Gentlelady from California, Ms. Bono.

Ms. BONO. Thank you, Mr. Chairman, very much. And thank all

of our panelists for your time today.

And, Mr. Chairman, we appreciate the sun tan we are getting

from these extremely bright lights.

Mr. STEARNS. I apologize for the heat here. We have asked—the

maintenance people came up and they said the thermostat is set

at 50 degrees. So that is all we can do.

Ms. BONO. I would just like to sort of restate some of what my

colleagues have said. I think, too, this is a little bit confusing for

the most part. But I was encouraged to hear Chairman Barton talk

about a voluntary system as it currently is. And I think we in

Washington feel is if we offer legislation, you will hear our footsteps and make sure you are doing the right thing. And that we

will not need to enact the legislation.

On the presentation that the first panelist Mr. Scaler did, I think

I am a little bit—what I see here is something that we are plagued

with as Americans any longer, and that is the wonderful world of

the Internet.

All you have to say to tech support to anybody longer, and we

all shutter, because we know it is a 45 minute wait. You go to a

website any longer, you cannot find a telephone number. Nobody

is going to be willing to help you. As Chairman Upton said, is there

a number at the end of the day that you can call.

When you said that you went to the website, everything was

right with the diagnostic on the Chrysler. You got to the final

webpage that asked you for the PIN number. And I think you did

say in your testimony, but where would that PIN be found?

Mr. SCALER. Let me clarify. That PIN number is found in the

tool. So in order to complete that repair, I needed to have a subscription to the website, I needed to own the factory tool which is

approximately $8,000 depending on how it is equipped.

Ms. BONO. And does the legislation that is being under consideration, does that address that specifically?

Mr. SCALER. It does, because it would allow me to get that number, which currently I cannot get. And there is many numbers like

110

that which is the final step of the repair that do not allow the repair to get completed.

Ms. BONO. Well, could this be a simple fix of the manufacturer

that it is a little bit of a reverse that the PIN belongs with the

hardware or whatever—I do not remember what it is in this case.

It is a gasoline engine controller.

Mr. SCALER. In other words, when we replace the engine’s computer, the final step is to put in the PIN number otherwise the vehicle will not start. Without that PIN, we have to tow the car

away.

Ms. BONO. But that PIN should be on your side of the equation,

not on the——

Mr. SCALER. That is correct. How we get that currently, just so

you know, is negotiation with the dealer parts center. And depending on that, determines our success in getting the PIN.

Ms. BONO. On the BMW PowerPoint here you have, it seems to

me as I am trying to follow out, you move from in full disclosure—

my brother is a mechanical engineer with the automotive industry,

and some of this I have heard complaints of around the dinner

table.

But you ask to the P coding, you move to the next website and

it was a 320-3I and then it says M52 I guess was the model number coop. But the next page you went to an M73. Is that an error

or is that a confusing website that took you from the M52 to M73

or are they one in the same?

Mr. SCALER. No. Those are chassis numbers. And one things that

shows is all the pages. What that particular section represents was

the amount of times I went back suggesting it was not there and

the amount of times that the response was yes it is.

And, of course, the final response only copied to me was well, you

were right.

Ms. BONO. Except that the jump from the M52 to the M73 seems

like perhaps a little—could that be input error when you were

searching the information?

Mr. SCALER. No. It was not a matter of the wrong chassis number. It was a matter of showing the extent that I went to to try

to find any repair information for that code.

Ms. BONO. But if you are trying to find the repair information

and you tell it is an M52 and an M73 comes up, could that not be

a problem?

Mr. SCALER. Yes, that would be a problem. But that was not the

case and is not the case.

Ms. BONO. Well, that is how it indicates to me under your

PowerPoint.

My confusion is, is again if it can be voluntary because I fully

understand with everybody’s consideration would like to see exactly

what we are all trying to achieve here. But first and foremost is

this just the lack of the true inter-operability of a human being

with solely numbers on the Internet, can you pick up the phone

and call somebody and get the answer? And if we can achieve it

in that way, it seems to me with a voluntary system maybe we

could go a long ways. But I think when you say you called—I forgot

whether you said BMW and you pointed out there was an error on

111

the website and they did correct it, to me that is a little bit encouraging as well.

Mr. SCALER. You did see, though, that ultimately it is not corrected. Just so you know that the $20 number you could not

achieve that task for $20. And I think that is important. So that

there is a significant difference. And what I think is important

there is the fact that, again, it was four times. Now, quite frankly

you know in that particular case I was very diligent. But once they

come back and once I knew that no one on the other side was

checking this, auditing it other than myself, then I realized that

the response was always going to be the same. And it is the response we are hearing today, is that everything is there.

Ms. BONO. I believe I am over my time.

So thank you, Mr. Chairman.

Thank you.

Mr. STEARNS. Thank the gentlelady.

Mr. Gonzalez.

Mr. GONZALEZ. Thank you very much, Mr. Chairman.

About a month and a half ago I had a meeting with members of

the Texas branch of the Automotive Aftermarket Industry, and of

course it is an interesting group because some are parts, obviously

they deal it parts, the others are actually the repair person. And

then you had another contingent that just basically work on parts;

like what we refer to as the machinists and such. There was not

really any agreement as to the need for this legislation. They pointed it out to me and they were telling me about. It looked like an

attractive proposition at first blush, especially since someone by the

name of Barton happens to be the sponsor. But I asked what is the

need. Because the last thing that we really want to do, contrary to

popular belief, is really pass something that is not necessary. And

I think this is what this hearing today is all about, is information

gathering and trying to get that message out.

What I asked the members at that meeting was supply me with

specific instances of individuals who have encountered problems in

not having access to information to repair a consumer’s automobile.

Now I know they are busy and they have not gotten back to me

and maybe they will. But I just have not hear anything. And there

was disagreement as to the real need.

I am going to break up my questions quickly, because we only

get 5 minutes. But it is an important issue.

You know, we all love cars. They got to get repaired. Consumers

would like to have choice, this is what it is all about, it is about

competition and so on.

I guess the first question is for Mr. Donovan. A dealer and a

manufacturer have a special relations, would you not agree?

Mr. DONOVAN. Yes.

Mr. GONZALEZ. And certainly responsibilities that they have, and

it is one obviously based on economics and other duties and responsibilities. Should that place a dealer in a special position available

for more information, easier access? And the other thing, too, is of

course their mechanics are trained by, my understanding is that

they are trained on one particular product by that manufacturer.

There is going to be more information. Should they enjoy any kind

112

of advantage as opposed to those that do not have a relationship

with the manufacturer?

Mr. DONOVAN. Not at the expense of consumer’s choice. We believe that the consumer should have the right to choose the repair

facility that they can go to and without this, it does not give them

that choice.

Mr. GONZALEZ. So whatever process the manufacturer may have

so that the dealer can have easy access to the information necessary to repair the cars should be available to an individual that

does not enjoy that same relationship or is basically paying for that

same relationship?

Mr. DONOVAN. Keep in mind the independents are paying for it

as well. And what we are asking for is full access to that information at a reasonable price so that that cost—so that the consumer

vehicle can get repaired at their choice of facility and the costs associated with that to get the information is passed on at a lesser

amount than is sometimes the case, as Mr. Seyfer and Mr. Scaler

allege, the hours and hours that are spent trying to get these cars

resolved. That obviously has to go somewhere and our fear is that

too often it goes back to consumer, the cost of that.

Mr. GONZALEZ. Thank you very much for your answer.

And this one will be, I guess, to Mr. Scaler. You indicated you

needed this PIN number, this information. If I am the owner of the

car, and I am not sure we are talking about the same thing, Mr.

Dana, that that is available to me in the glove compartment somewhere, you are my agent. Are you not authorized in my behalf to

act on my behalf and use that information?

Mr. SCALER. No. In the example I used, unfortunately that was

a case where we had all the information, the equipment and one

of my technicians was the owner of the vehicle, and still could not

get the number even though he owned the vehicle.

Mr. GONZALEZ. All right. Mr. Dana, given that same example,

again I mean they are my agent. I think you have indicated that

information should be available to me as the owner of the vehicle.

Mr. DANA. The owner of the vehicle gets the PIN when the car

is bought new. It may be if it is a second hand car that the second

owner does not know where the PIN is. But the owner of the car

when it is bought new has a PIN that can be accessed, at least access that information.

Mr. GONZALEZ. I purchase the car at a later date, I do not know

where the PIN information is, but I am the owner. Should I not

be entitled to that information?

Mr. DANA. Again, I will point out that the problem that was

brought up by Mr. Scaler is one which is a real problem. It was

a software problem. It is being fixed by Chrysler. And if CARE

would have been a participant in NASTF and notified us through

the complaint form system we have, we would have been able to

start repairing this problem sooner than we are now. It simply was

a fault of the system that needed to be fixed, one of the many

faults we have found, but one of the few faults we have found in

millions of cars that are repaired every single year.

Mr. GONZALEZ. Back to my basic question, though. The owner of

a vehicles, regardless of whether they are the first owner, the secVerDate 11-MAY-2000 08:10 Nov 15, 2004 Jkt 000000 PO 00000 Frm 00116 Fmt 6633 Sfmt 6602 96097.TXT HCOM1 PsN: HCOM1
113

ondary owner or whatever it is, is entitled to get whatever information relating to necessary repairs of the car from the manufacturer?

Mr. DANA. Anyone can access these websites that has all the

service information and diagnostic information on them.

Mr. GONZALEZ. But not based on his relationship as the owner

of the car or anything like that. It’s just Charlie Gonzalaz can go

there and I can check out what it takes to fix an Explorer, even

though I do not own an Explorer, as long as I have paid whatever

fee?

Mr. DANA. Yes, that is correct.

Mr. GONZALEZ. Okay. And the other thing, Mr. Dana, why would

this law expose manufacturers to some sort of sort of proprietary

infringement that you have not already experienced given the wide

access that you have described?

Mr. DANA. We have been dealing with this issue since 1990 and

the aftermarket parts markers who are the ones really behind this

bill want access to our proprietary information by which we calibrate our vehicles. This information is not necessary to properly repair a car. It is simply something that they could use to make replacement parts more cheaply than they do today.

Mr. GONZALEZ. Okay. I do not think anyone here is talking about

information that it is not necessary to repair the vehicle. And I am

over my time, but that is an interesting area to leave off on.

Thank you.

Mr. STEARNS. You want to continue, you want to answer, Mr.

Scaler?

Mr. SCALER. No. Unfortunately, I may have to be excused.

Mr. STEARNS. Well, you’re in luck. We are getting ready to close

down the hearing.

Mr. SCALER. Okay.

Mr. STEARNS. I think in conclusion we finished our questions for

all of you. And I thank you for your patience.

Ms. SCHAKOWSKY. If I could, Mr. Chairman?

Mr. STEARNS. Sure.

Ms. SCHAKOWSKY. Just ask, make a unanimous consent request

for all members to be able to submit opening statements for the

record.

Mr. STEARNS. By unanimous consent, so ordered.

We started with the hearing with the idea of how big is this

problem and where is this problem. And we have attempted to do

that.

I would ask Mr. Merrill, you are sitting next to Mr. Seyfer. Mr.

Seyfer has indicated that he is getting all the information he needs.

I think that was your question.

So, Mr. Merrill, I think you indicated that independent repair

shops account for over 75 percent of the vehicles repaired in the

United States. And that percentage is increasing, is it not? I mean,

there are more and more people repairing automobiles. Is that fair

to say as a real overview that, you know, most of the repairs are

being done by these independent repair shops? Seventy-five percent

are done by independent repair shops and that number is increasing. And so how big is the problem and where is it? The gentleman

next to you saying that he is not having any problems and you are

saying there is a whole lot of people that do not seem to have any

114

problem because 75 percent is being done by independent people.

Is that an accurate statement?

Mr. MERRILL. Before I came I made a telephone call to a number

of different shops.

Mr. STEARNS. Yes.

Mr. MERRILL. And I asked I am going to Washington, will you

give some help and give me some ideas of what kind of problems

you are having throughout the whole State of Maine.

Mr. STEARNS. Right.

Mr. MERRILL. And these fellows came about and they gave me

explanations of what kind of problems they were having. The fact

that the cost of this information, the way it is going right now, the

way it is looking right now, is a small independent repair shop my

size if I were to purchase information on these cars, I would not

look at the yearly figure but I would look at the monthly figure.

And we are looking at $3,800 just to have access to this information.

So the fact that maybe the information is available but I do not

know any shop that is in our size, and there is a lot of shops across

the country that are the same size shop as we have, I do not know

how they are ever going to be able to afford the information.

Mr. STEARNS. Yes.

Anything you would like to add?

Mr. SEYFER. Well, I would. You do not go to those sites everyday.

It is not necessary.

Mr. STEARNS. Yes.

Mr. SEYFER. Over half of my billed time—we work sort of like

lawyers, we charge by the hour for diagnostic time. Over half of my

billed time is in diagnostic work. We do specialize in diagnostic

work. I do not need to hit a site every single day. In fact, maybe

2, 3 times a week. $20 in and out. Some of the manufacturers give

you 3 days for that.

Mr. STEARNS. Yes.

Mr. SEYFER. So it is just not that significant of expense. I am already paying for ALLDATA. That is my significant information expense. And training my technician is my biggest. I spend over $150

a month per member of my staff to train them.

Mr. STEARNS. Yes.

Mr. SEYFER. That is my biggest expense.

Mr. STEARNS. Well, on that note I have given both sides an opportunity. And we try to be fair and balanced on this hearing, but

it is not a legislative hearing. It is just really an oversight to see

what the situation. I think it has been very valuable. I want to

thank all of you for your time.

And with that, the subcommittee is adjourned.

[Whereupon, the subcommittee adjourned at 4:16 p.m.]

[Additional material submitted for the record follows:]

RETAIL INDUSTRY LEADERS ASSOCIATION

September 22, 2004

The Honorable CLIFF STEARNS

Chairman, Subcommittee on Commerce, Trade and Consumer Protection

Energy and Commerce Committee

U.S. House of Representatives

Washington, D.C.

Re: ‘‘Repairing the 21st Century Car: Is Technology Locking the Consumer Out?’’

115

DEAR CHAIRMAN STEARNS: On behalf of the Retail Industry Leaders Association

(RILA), I am writing to commend the Subcommittee for holding today’s hearing entitled ‘‘Repairing the 21st Century Car: Is Technology Locking the Consumer Out?’’

I would like to ask that this letter be placed into the official hearing record.

The Retail Industry Leaders Association (RILA) is an alliance of the world’s most

successful and innovative retailer and supplier companies—the leaders of the retail

industry. RILA members represent more than $1 trillion in sales annually and operate more than 100,000 stores, manufacturing facilities and distribution centers nationwide. Its member retailers and suppliers have facilities in all 50 states, as well

as internationally, and employ millions of workers domestically and worldwide.

Through RILA, leaders in the critical disciplines of the retail industry work together

to improve their businesses and the industry as a whole. The mission of RILA is

to lead and serve the most successful and innovative retailers and suppliers through

the delivery of world-class education, innovation and advocacy.

We applaud you for bringing attention to this important issue through this hearing. While current automobile technology undoubtedly provides many benefits to

consumers, we understand that the inaccessibility of information related to those

technologies is preventing car owners from repairing and maintaining their own vehicles. It may also be preventing them from choosing their own auto mechanic or

the parts needed to make repairs. Currently, only automobile manufacturers and

their dealers—not independent repair shops or owners themselves—have complete

access to all of this information.

We believe it is unfair to deny consumers access to information about the products

they purchase. In order to make informed decisions, consumers ought to be provided

with as much information as possible about the products that they wish to purchase,

including information about the proper care and maintenance of automobiles. Toward that end, RILA has endorsed H.R. 2735, the Motor Vehicle Owners’ Right to

Repair Act, by Representative Joe Barton. This legislation will ensure that car owners and repair facilities have access to the information necessary to properly diagnose and repair vehicles.

While several RILA members are in the automobile aftermarket business—including AutoZone, Inc., AutoNation, Inc., CSK Auto Corporation, and PEP BOYS

AUTO—the majority of our members do not carry auto parts. The chief reason our

association has endorsed the Motor Vehicle Owners’ Right to Repair Act is our commitment to improving consumer choice and access to price competitive, quality merchandise. H.R. 2735 is completely consistent with those goals, because it would give

consumers who wish to repair and service their own automobiles access to the information they need to fully exercise that choice. Restricting consumer access to this

vital information serves only to restrict competition and will inevitably lead to higher repair prices. It could also force drivers to forego needed repairs, leading to an

increased number of inefficient and unsafe vehicles.

For these reasons, we urge both this subcommittee, and the full Energy and Commerce Committee, to move quickly to favorably report H.R. 2735—to the House before Congress adjourns for the year.

Thank you for the opportunity to submit these views on behalf of the Retail Industry Leaders Association. If you have any questions about this matter, or any

other legislative issue, please contact Paul T. Kelly, Senior Vice President, Federal

and State Government Affairs.

Sincerely,

SANDRA L. KENNEDY

President

PREPARED STATEMENT OF THE SERVICE STATION DEALERS OF AMERICA AND ALLIED

TRADES

The Service Station Dealers of America and Allied Trades (SSDA-AT) represent

over fifteen thousand independently-owned service stations and repair facilities.

Over seventy-five percent of our membership consists of repair facilities. Through

direct membership and with state affiliations, SSDA-AT has members in all fifty

states. We want to thank the Chairman and Members of the Subcommittee for the

opportunity to submit testimony for the record.

Our membership has struggled with the developments at issue here today for

many years. They agree wholeheartedly that the inability to procure the information

necessary to effectively and efficiently repair late-model automobiles must be remedied. We are well aware of the efforts by the National Automotive Service Task

Force (NASTF) to help provide an efficient delivery of this information and you will

hear detailed testimony today about the associated costs involved. Our membership

116

would like it known that they find these costs to be exorbitant and prohibitively expensive. To add insult to injury, allow us to provide a telling observation. Our New

York affiliate has a member that is considered such an expert in auto repair that

his business does sublet repairs for six different manufacturers’ dealerships. These

dealerships allow him into their own websites and he has discovered that there is

a distinct difference in the amount and quality of information about specific diagnosis and programming when compared to the information available at the NAST

sites. Much of the necessary programming information is simply not available from

the NAST sites.

You will also hear testimony today about situations encountered by independent

repair facilities in there attempt to perform repairs on 1994 and newer vehicles. If

current trends continue, one must ask if the average consumer will be left with any

choice at all in deciding where to have their vehicle serviced. As more neighborhood

repair facilities have the experience of correctly diagnosing a failed part only to find

it necessary to drive or tow the vehicle back the dealership for programming, they

will become less and less willing to attempt these repairs. In the worst case scenarios they don’t have access to the information necessary to even begin a diagnosis.

These situations are compounded by the fact that virtually every system in a new

vehicle today (brakes, steering, ignition, etc.) has become another opportunity to

shut out the independent repair facility by withholding critical information. We believe a clear distinction can be made between what is truly proprietary and what

is not. A close reading of H. R. 2735 should make it clear that this is in no way

an attempt to provide parts manufacturers with patented information. It is a genuine effort to ensure that consumers are able to have a real choice when deciding

where to have their vehicles repaired.

When one considers the nature of the landlord/supplier relationship that has governed service station dealers over the years in their dealings with major oil companies, we are comfortable in stating that we know what it like to exist in an inequitable relationship. The U. S. Congress has recognized in the past that these power

imbalances do, in fact, exist in many industries and has responded with fair and

just legislation. We believe that this disagreement between the automobile manufacturers and the independent repair facilities is a classic example of what takes place

in an inequitable relationship. It has also been our experience that without the necessary oversight provided by legislation these power imbalances will continue and

they will be exploited. We therefore ask for your support and passage of H. R. 2735,

the Motor Vehicle Owner’s Right to Repair Act.

Please contact Paul Fiore at 301-390-4405 with any questions pertaining to this

testimony.

PREPARED STATEMENT OF THE TIRE INDUSTRY ASSOCIATION

Mr. Chairman, Members of the Subcommittee, on behalf of the 5,000+ members

of the Tire Industry Association (TIA) thank you for the opportunity to submit testimony for the record. This hearing, ‘‘Repairing the 21st Century Car: Is Technology

Locking the Consumer Out?’’ is very important to the automotive industry and specifically the tire industry.

TIA is an international association representing all segments of the tire industry,

including those that manufacture, repair, recycle, sell, service or use new or

retreaded tires, and also those suppliers or individuals who furnish equipment, material or services to the industry. The Tire Industry Association (TIA) has a history

that spans more than 80 years and includes several name changes. Originally

known as the National Tire Dealers & Retreaders Association (NTDRA), the organization gave birth over the years to the American Retreaders Association (ARA) and

the Tire Association of North America (TANA). ARA changed its name to the International Tire & Rubber Association (ITRA) and merged with TANA in 2002 to form

the current Tire Industry Association (TIA), which now represents every interest in

the tire industry. The majority of TIA members are independent tire retailers who

also perform automotive service. Our members have found it increasingly difficult

over the years to service new vehicles due to the limited ‘‘sharing of information’’

from the automobile manufacturers. As new technology develops, this information

is not readily disseminated outside the network of automobile dealers. This is why

TIA fully supports the Vehicle Owner’s Right to Repair Act (H.R. 2735/ S. 2138).

The House version of the bill, introduced by Representative Joe Barton (R-TX), currently has 113 bipartisan cosponsors and we urge every Member of Congress to support this crucial legislation.

The Vehicle Owners’ Right to Repair Act would mandate that the auto manufacturers—including all original equipment manufacturers (OEMs)—provide affordable

117

access of all vehicle service information to independent repair facilities. At this time

the bill could not be more important to our members.

On September 15, just one week ago, the National Highway Traffic Safety Administration (NHTSA) issued its final Tire Pressure Monitoring System (TPMS) rule.

The Transportation Recall Enhancement, Accountability and Documentation

(TREAD) Act passed as a result of the Ford/Firestone crisis in 2000 included a mandate that all new passenger vehicles be equipped with a TPMS. According to latest

version of this regulation, all passenger and light truck vehicles must be equipped

with a direct TPMS system by September 1, 2007. One of TIA’s largest concerns

with the latest TPMS ruling is that the government is ignoring the need of independent tire dealers and automotive service providers to be given the OEM information necessary to install, service, maintain, recalibrate and fix these TPMS systems.

Our members will be dealing with these monitoring systems, yet there are a variety

of different companies that manufacture them, and all are slightly different. TIA

members will need information from the OEMs to figure out each TPMS system and

that information is not always easily accessible or available. The time for passage

of the Right to Repair Act has never been more important to the tire industry or

more critical to our members.

We are aware of the automobile manufacturers’ agreement with the Automotive

Service Association (ASA), promising that repair information and tools would be

forthcoming—implying that there is no need for this bill. TIA, while viewing that

agreement as a step in the right direction, sees no enforcement mechanism in the

agreement and therefore still fully supports the Motor Vehicle Owners’ Right to Repair Act. TIA remains concerned that without the legislation, the auto manufacturers could back out of this agreement at any time, forcing the industry to start the

battle all over again from the beginning. TIA is also aware that many of the auto

manufacturers are putting service information on the Internet but we hear from our

independent dealer members that the information is not complete and still very

costly. Furthermore, some auto manufacturers never signed the ASA agreement and

therefore feel no obligation to provide any information to any independent dealers.

The automobile manufacturers that signed the letter of agreement with ASA oppose passage of the Right to Repair Act. THIS MAKES NO SENSE! If these manufacturers plan to keep their end of the agreement and make information accessible

and affordable to independent service providers, this legislation only backs up their

commitment to the automotive service industry. The fact that these manufacturers

oppose this legislation causes TIA to question their commitment to the agreement

and forces us to keep supporting the legislation.

Consumers deserve the right to take their vehicle to the mechanic of choice. They

should not be forced to return to auto dealerships for service because independent

providers do not have access to the tools and information they need to repair a vehicle. This is another critical aspect of this legislation.

TIA urges this Committee to act on the Right to Repair Act, moving this important legislation on to the next level. TIA is committed to seeing this legislation

pushed through Congress for the betterment of businesses performing automotive

repair.

If you have any questions about our testimony, please contact Roy Littlefield or

Becky MacDicken at 800-876-8372.

118

119

120

121

122

123

124

Æ