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CHAPTER 12 PRELIMINARY MANUFACTURER IMPACT ANALYSIS

TABLE OF CONTENTS

12.1 INTRODUCTION .............................................................................................................. 3

12.2 METHODOLOGY ............................................................................................................. 3

12.2.1 Phase I: Industry Profile......................................................................................... 4

12.2.2 Phase II: Industry Cash-Flow Analysis and Interview Guide................................ 4

12.2.2.1 Industry Cash-Flow Analysis................................................................ 4

12.2.2.2 Interview Guide .................................................................................... 4

12.2.3 Phase III: Subgroup Analysis................................................................................. 4

12.2.3.1 Manufacturer Interviews....................................................................... 5

12.2.3.2 Revised Industry Cash-Flow Analysis.................................................. 5

12.2.3.3 Manufacturer Subgroup Analysis......................................................... 5

12.2.3.4 Competitive Impact Assessment........................................................... 5

12.2.3.5 Manufacturing Capacity Impact ........................................................... 6

12.2.3.6 Employment Impact.............................................................................. 6

12.2.3.7 Cumulative Regulatory Burden ............................................................ 6

12.3 PRELIMINARY MANUFACTURER IMPACT ANALYSIS OVERVIEW.................... 6

12.3.1 Industry Overview .................................................................................................. 7

12.3.1.1 Industry Cost Structure ......................................................................... 7

12.3.1.2 Inventory Levels ................................................................................... 8

12.3.2 Interview Topics and Preliminary Findings............................................................ 9

12.3.2.1 Market Shares and Industry Consolidation........................................... 9

12.3.2.2 Equipment and Profitability................................................................ 10

12.3.2.3 Conversion Costs................................................................................ 10

12.3.2.4 Cumulative Regulatory Burden .......................................................... 11

12.4 OVERALL KEY ISSUES ................................................................................................ 12

12.4.1 Core Steel Availability.......................................................................................... 12

12.4.2 Copper Die Cast Rotors........................................................................................ 12

12.4.3 Increase in Equipment Repair............................................................................... 12

12.4.4 Enforcement.......................................................................................................... 12
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LIST OF TABLES

Table 12.1 Motor and Generator Manufacturing Industry Employment and Earnings...................7

Table 12.2 Motor and Generator Manufacturing Industry Material and Payroll Costs...................7

Table 12.3 Motor and Generator Manufacturing Industry End-of-Year Inventory.........................8

Table 12.4 Motor and Generator Manufacturing Industry Full Production Capacity Utilization 

Rates...............................................................................................................................8
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0BCHAPTER 12 PRELIMINARY MANUFACTURER IMPACT ANALYSIS

12.1 1BINTRODUCTION

The purpose of the manufacturer impact analysis (MIA) is to identify and quantify the 

likely impacts of amended energy conservation standards on manufacturers. In the notice of the 

proposed rulemaking (NOPR), the United States Department of Energy (DOE) considers a wide 

range of quantitative and qualitative industry impacts that might occur due to an amended energy 

conservation standard. For example, a particular standard level could require changes in 

manufacturing practices, equipment, raw materials, etc. DOE fully analyzes these impacts during 

the NOPR stage of analysis.

DOE announced changes to the preliminary analysis MIA format through a report issued 

to Congress on January 31, 2006 (as required by section 141 of the Energy Policy Act of 2005 

(EPACT 2005), entitled “Energy Conservation Standards Activities.”0F

1 As a result, DOE collects, 

evaluates, and reports preliminary MIA information in the preliminary analysis prior to the 

NOPR stage. Such preliminary information includes market data, market shares, industry 

consolidation, equipment mix, key issues, conversion costs, foreign competition, and cumulative 

regulatory burden information, if available. DOE solicits this information during the preliminary 

manufacturer interviews and reports the results in this chapter. Appendix 12A includes a copy of 

the interview guide that DOE distributed to manufacturers.

To the extent appropriate for this rulemaking, DOE plans to apply the methodology 

described below to evaluate amended energy conservation standards for electric motors rated 

from 1 to 500 horsepower.

12.2 2BMETHODOLOGY

DOE conducts the MIA in three phases. In Phase I, DOE creates an industry profile to 

characterize the industries and conducts a preliminary MIA to identify important issues that 

require consideration. Section 12.3 of this chapter presents initial findings of the Phase I 

analysis. In Phase II, DOE prepares an industry cash-flow model and a detailed interview 

questionnaire to guide subsequent interviews with manufacturers. In Phase III, DOE interviews 

manufacturers and assesses the impacts of amended energy conservation standards both 

quantitatively and qualitatively. DOE assesses industry and subgroup cash-flow impacts and 

industry net present value using the Government Regulatory Impact Model (GRIM). DOE also 

assesses impacts on competition, manufacturing capacity, employment, and regulatory burden 

based on manufacturer interviews and discussions. The Federal Register NOPR and technical 

support document present results of the Phase II and III analyses.

 

1 This report is available on the DOE website at: 

http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/congressional_report_013106.pdf.
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12.2.1 5BPhase I: Industry Profile

In Phase I of the MIA, DOE collects pertinent qualitative and quantitative financial and 

market information. This includes data on wages, employment, industry costs, and capacity 

utilization rates for manufacturers of electric motors. Sources of information include reports 

published by industry groups, trade journals, the U.S. Census Bureau, and Securities Exchange 

Commission (SEC) 10-K filings. In addition, DOE relies on information from its own market 

and technology assessment, engineering analysis, life-cycle cost analysis, shipments analysis, 

and equipment price determination to characterize the electric motor manufacturing industry. 

12.2.2 6BPhase II: Industry Cash-Flow Analysis and Interview Guide

In Phase II, DOE performs a preliminary industry cash-flow analysis and prepares written 

guidelines for interviewing manufacturers.

12.2.2.1 14BIndustry Cash-Flow Analysis

DOE uses the GRIM to analyze the financial impacts of amended energy conservation 

standards. Amended energy conservation standards may require additional investment, higher

production costs, and could affect revenue through higher prices and, potentially, lower 

shipments. The GRIM uses several financial parameters to determine a series of annual cash 

flows for the year that amended energy conservation standards become effective and for several 

additional years. These factors include annual expected revenues, costs of goods sold, selling and 

general administration expenses, research and development expenses, taxes, and capital 

expenditures. Inputs to the GRIM include those financial parameters, manufacturing costs, 

shipment forecasts, and markup assumptions. The financial information is developed from

publicly available data and confidentially submitted manufacturer information. DOE compares 

the GRIM results for the standards case at each trial standard level against the results for the base 

case in which no amended energy conservation standards are in place. The financial impact of 

amended energy conservation standards is the difference between the two sets of discounted 

annual cash flows.

12.2.2.2 15BInterview Guide

DOE conducts interviews with manufacturers to gather information on the effects of 

amended energy conservation standards on revenues, costs, direct employment, capital assets, 

and industry competitiveness. Before the interviews, which occur in Phase III, DOE distributes

an interview guide to help identify the impacts of amended energy conservation standards on 

individual manufacturers or subgroups of manufacturers. Interview guide topics include: 

production costs; shipment projections; market share; equipment mix; conversion costs; markups 

and profitability; competition; manufacturing capacity; cumulative regulatory burden; and other 

relevant topics.

12.2.3 7BPhase III: Subgroup Analysis

Phase III activities take place after publication of the preliminary analysis. These 

activities include manufacturer interviews, revision of the industry cash-flow analysis, a 
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manufacturer subgroup analysis, and an assessment of the impacts on industry competition, 

manufacturing capacity, direct employment, and cumulative regulatory burden.

12.2.3.1 16BManufacturer Interviews

DOE conducts detailed interviews with manufacturers to gain insight into the potential 

impacts of amended energy conservation standards on sales, direct employment, capital assets, 

and industry competitiveness. The interview process is critical to the MIA because it provides an 

opportunity for interested parties to privately express their views on important issues. Interviews 

are scheduled well in advance to provide every opportunity for stakeholders to be available for 

comment. Although a written response to the questionnaire is acceptable, DOE prefers 

interactive interviews, which help clarify responses and provide the opportunity to identify 

additional issues not specifically addressed in the interview questionnaire. A non-disclosure 

agreement allows DOE to consider confidential or sensitive information in its decision-making 

process. Confidential information will not be made available in the public record. At most, 

sensitive or confidential information may be aggregated and presented in industry-wide 

representations. 

DOE uses information gathered during manufacturer interviews to supplement the 

information gathered in Phase I and the cash flow analysis performed in Phase II.

12.2.3.2 17BRevised Industry Cash-Flow Analysis

As discussed, DOE requests information about profitability impacts, changes in capital 

expenditures, and other manufacturing impacts during the interview process. DOE revises its 

industry cash flow model based on the feedback it receives in written comments and during 

interviews.

12.2.3.3 18BManufacturer Subgroup Analysis

Using average cost assumptions to develop an industry cash flow estimate will not 

adequately assess differential impacts among manufacturer subgroups. Smaller manufacturers, 

niche players, and manufacturers exhibiting a cost structure that differs greatly from the industry 

average could be more negatively affected. Ideally, DOE would consider the impact on every 

firm individually; however, it typically uses the results of the industry characterization to group 

manufacturers with similar characteristics. During the interviews, DOE discusses the potential 

subgroups that have been identified for the analysis. DOE asks manufacturers and other 

interested parties to suggest what subgroups or characteristics are most appropriate for the 

analysis.

12.2.3.4 19BCompetitive Impact Assessment

Section 342(a)(6)(B)(i)(V) of the Energy Policy and Conservation Act, as amended, 

(EPCA) directs DOE to consider any lessening of competition likely to result from the 

imposition of standards. EPCA further directs the U.S. Attorney General to determine the 

impacts, if any, of any decrease in competition. DOE makes a determined effort to gather and 

report firm-specific financial information and impacts. DOE bases the competitive impact 

assessment on manufacturer cost data and other information collected from interviews. When 
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assessing competitive impacts, DOE’s interviews generally focus on assessing asymmetrical cost 

increases, the potential increase in business risks from an increased proportion of fixed costs, and 

potential barriers to market entry (e.g., proprietary technologies). The competitive analysis may 

also focus on assessing any differential impacts on smaller manufacturers.

12.2.3.5 20BManufacturing Capacity Impact

One of the significant outcomes of amended energy conservation standards can be the 

obsolescence of existing manufacturing assets, including tooling and other investments. The 

manufacturer interview guide presents a series of questions to help identify impacts on 

manufacturing capacity, specifically capacity utilization and plant location decisions in North 

America with and without amended energy conservation standards. The interview guide also 

addresses the ability of manufacturers to upgrade or remodel existing facilities to accommodate 

the new requirements, the nature and value of any stranded assets, and estimates for any onetime restructuring or other charges, where applicable.

12.2.3.6 21BEmployment Impact

The impact of amended energy conservation standards on employment is an important 

consideration in the rulemaking process. To assess how domestic employment patterns might be 

affected, the interview process explores current employment trends in the electric motor industry

and solicits manufacturer views on changes in employment patterns that may result from new or 

amended standards. The employment impacts section of the interview guide focuses on current 

employment levels at production facilities, expected future employment levels with and without 

an amended energy conservation standard, differences in workforce skills, and employee 

retraining.

12.2.3.7 2BCumulative Regulatory Burden

DOE seeks to mitigate the overlapping effects on manufacturers of energy conservation 

standards and other regulatory actions. DOE analyzes and considers the impact on manufacturers 

of multiple, equipment-specific regulatory actions.

12.3 3BPRELIMINARY MANUFACTURER IMPACT ANALYSIS OVERVIEW

During the preliminary analysis phase, DOE conducted a preliminary evaluation of the 

impact of potential new and amended energy conservation standards on the electric motor 

industry.

The primary sources of information for this analysis are the U.S. Census Bureau, industry 

reports, and interviews with manufacturers of electric motors conducted in the first quarter of

2011. To maintain confidentiality, DOE only reports aggregated information here. DOE does not 

disclose company-specific information, nor does it identify the individual manufacturers that 

disclosed information.
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12.3.1 8BIndustry Overview 

The following section summarizes publicly available industry data.

12.3.1.1 23BIndustry Cost Structure

DOE is unaware of any publicly available industry-wide cost data specific to only 

manufacturers of electric motors. Electric motor manufacturing is classified as a subset under the 

North American Industry Classification System (NAICS) code 335312 (Power Motor and 

Generator Manufacturing). Therefore, DOE presents the data below as a broader industry proxy 

for the electric motor industry, which, in combination with information gained in interviews, 

inform DOE’s analysis of the industry cost structures. For simplicity, DOE will refer to these 

broader categories by the equipment they represent, namely motors. DOE obtained the below 

data from U.S. Census Bureau, Annual Survey of Manufacturers, Statistics for Industry Groups 

and Industries from 2005-2009.

Table 12.1 presents the motor and generator manufacturing employment levels and 

payroll from 2005 to 2009. The statistics show a 26.8 percent decrease in the number of 

production workers from 2005 to 2009 with a corresponding 14.5 percent decrease in the overall 

industry payroll.

Table 12.1 Motor and Generator Manufacturing Industry Employment and Earnings

Year Production Workers All Employees Payroll for All Employees

thousand current year dollars

2005 34,193 47,799 1,836,194

2006 33,764 46,477 1,784,902

2007 31,201 44,451 1,732,333

2008 31,121 43,997 1,868,738

2009 25,018 37,640 1,570,853

U.S. Census Bureau. 2009 Annual Survey of Manufacturers: 2009 and 2008. December 2010; 2008 

Annual Survey of Manufacturers: 2008 and 2007. March 2010; and 2006 Annual Survey of 

Manufacturers: 2006 and 2005. November 2008.

Table 12.2 presents the costs of materials and industry payroll as a percentage of 

shipment value from 2005 to 2009. The cost of materials as a percentage of shipment value fell 

by 1.9 percent from 2005 to 2009. During the same time period, the cost of total payroll and the 

cost of payroll for production workers decreased by 12.5 percent and 22.6 percent, respectively.

Table 12.2 Motor and Generator Manufacturing Industry Material and Payroll Costs

Year Cost of Materials

(% of shipment value)

Cost of Payroll

for Production Workers

(% of shipment value)

Cost of Total Payroll

(% of shipment value)

2005 51.67 10.18 16.53

2006 58.10 9.41 15.24

2007 56.96 8.11 13.66

2008 56.44 7.66 13.33

2009 50.70 7.88 14.47

U.S. Census Bureau. 2009 Annual Survey of Manufacturers: 2009 and 2008. December 2010; 2008 
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Annual Survey of Manufacturers: 2008 and 2007. March 2010; and 2006 Annual Survey of 

Manufacturers: 2006 and 2005. November 2008.

12.3.1.2 24BInventory Levels

Table 12.3 shows the year-end inventory for the motor and generator manufacturing 

industry obtained from the U.S. Census Bureau and Annual Survey of Manufacturers: Value of 

Manufacturers' Inventories by Stage of Fabrication for Industry Groups and Industries and

Annual Survey of Manufacturers: Statistics for Industry Groups and Industries. The industry’s 

end-of-year inventory from 2005 to 2009 increased 32.5 percent when expressed in dollars, and 

grew 5.1 percent when expressed as a percentage of shipment value.

Table 12.3 Motor and Generator Manufacturing Industry End-of-Year Inventory

Year End-of-Year Inventory

thousand current year dollars

End-of-Year Inventory

percent of shipment value

2005 1,539,507 13.86%

2006 1,740,148 14.85%

2007 1,780,086 14.03%

2008 1,494,506 13.77%

2009 2,040,169 14.56%

U.S. Census Bureau. 2009 Annual Survey of Manufacturers: 2009 and 2008. December 2010; 2008 

Annual Survey of Manufacturers: 2008 and 2007. March 2010; and 2006 Annual Survey of 

Manufacturers: 2006 and 2005. November 2008.

DOE obtained full production capacity utilization rates from the U.S. Census Bureau, 

“Current Industrial Reports,” Survey of Plant Capacity from 2002 to 20061F

2

. Table 12.4 presents

production capacity utilization rates for NAICS code 335312. Full production capacity is defined 

as the maximum level of production an establishment can attain under normal operating 

conditions. In the Survey of Plant Capacity report, the full production capacity utilization rate is 

a ratio of the actual level of operations to the full production level.

Table 12.4 Motor and Generator Manufacturing Industry Full Production Capacity 

Utilization Rates

Year Motor and Generator Manufacturing (%)

2006 70

2005 59

2004 75

2003 62

2002 60

U.S. Census Bureau. 2007 Current Industrial Reports: Table 1a - Full Production Capacity 

Utilization Rates by Industry: Fourth Quarters 2002 through 2006. November 2007

 

2 Report from the U.S. Census Bureau is available at 

http://www.census.gov/manufacturing/capacity/historical_data/index.html
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12.3.2 9BInterview Topics and Preliminary Findings

The following section summarizes information gathered during interviews held during 

the first quarter of 2011 for the preliminary MIA.

12.3.2.1 25BMarket Shares and Industry Consolidation

Amended energy conservation standards can alter the competitive dynamics of the 

marketplace, prompting companies to enter the market, exit the market, or merge with other 

companies. The preliminary MIA interview questions asked manufacturers to share their 

perspectives on industry consolidation both in the absence of amended energy conservation 

standards and assuming amended standards at various efficiency levels. The interview questions 

focused on gathering information that assessed:

 current and anticipated market share in the event of standards,

 potential disproportionate cost increases to some manufacturers,

 likelihood of industry consolidation,

 increased proportion of fixed costs potentially increasing business risks, and

 potential barriers to market entry (e.g., proprietary technologies).

The need to assess anti-competitive effects of proposed amended energy conservation 

standards derives from the need to protect consumer interests. During the interviews, DOE also 

solicited information to determine whether amended energy conservation standards could result 

in disproportionate economic or performance penalties for particular consumer or user 

subgroups. Manufacturers were also asked if amended energy conservation standards could 

result in equipment that would be more or less desirable to consumers due to changes in 

equipment functionality, utility, or other features.

Market Shares: DOE inquired about the current market shares of manufacturers in the 

electric motor industry and how those shares might change after amended energy conservation 

standards. Manufacturers indicated that increasing efficiency levels would cause domestic 

production market share to dramatically decline. Multiple manufacturers indicated that 

increasing efficiency levels above what is currently available will require the motors to be handwound, which is a labor intensive practice that is only profitable when the motor is made in a 

lower-labor rate country. This may shift the advantage to foreign motor manufacturers, 

decreasing domestic manufacturing market share. Manufacturers also cited tooling upgrade 

investments, availability of lower loss electrical steels, and lack of enforcement of standards on 

imported motors as reasons that may cause market share of domestic manufacturers to decline. 

Industry Consolidation: DOE inquired about the current market shares of 

manufacturers in the electric motor industry and how those shares might change after amended 

energy conservation standards. The electric motor industry is composed of several large 

manufacturers and a few smaller, niche manufacturers. Many electric motor manufacturers have 

merged in the past few years, and some manufacturers stated that they believe this trend will 

continue even in the absence of amended standards. Due to this recent trend of mergers, very few 

independent electric motor manufacturers remain in the United States. These remaining smaller 
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manufacturers could be forced out of the market if higher efficiency standards are implemented 

or the scope of this rulemaking is expanded to include equipment manufactured by these smaller 

companies.

12.3.2.2 26BEquipment and Profitability

DOE requested manufacturers’ feedback on what they perceived to be the possible 

impact of amended energy conservation standards on the equipment that a manufacturer

produces and resultant profits. Higher energy conservation standards would likely result in 

higher per-unit costs that could cause consumers to shift to less expensive alternative equipment, 

if such equipment were available. New standards could result in a change in the utility of the 

equipment to consumers. Manufacturers could also foresee a scenario in which new standards 

caused margin compression, which could threaten the viability of some firms in the industry. 

Equipment Differentiation: Manufacturers indicated that increasing conservation 

standards may cause some manufacturers to exit specialized portions of the market (i.e. U-frame 

motors). Manufacturers cited low profitability due to low equipment volume as a reason for 

exiting the market instead of converting tooling to create motors at higher efficiency levels. 

Equipment Utility: DOE received feedback that increased conservation levels may 

require motors to be built in larger frame sizes for their horsepower rating than those designated 

in NEMA MG1-2009 Table 13.3. Manufacturers indicated that motors made in a larger frame 

sizes will no longer fit into existing space-constrained applications, and that this may lead to an 

increase in motor repair practices instead of replacement with higher efficiency motors. This 

could also lead to entire machinery being redesigned to fit the larger motors, cause foreign 

machinery to become more competitive. One manufacturer indicated that relaxing limits on 

locked-rotor currents may increase efficiency and reduce power consumption but may also 

decrease the power factor, which could reduce stability of the power grid and increase power 

consumption. The manufacturer suggested DOE conduct a study on the increased power demand 

resulting from higher locked-rotor currents. 

Profit Margins: Several manufacturers commented on the adverse negative impact new 

energy conservation standards may have on profit margins. Manufacturers mentioned capital and 

equipment conversion outlays needed to upgrade or redesign equipment before they have 

reached the end of their useful life may create significant conversion costs, resulting in reduced 

cash flow and stranded investments. Higher energy conservation standards could also result in 

higher per-unit costs that could cause consumers to shift to less expensive equipment. These 

higher costs could cause manufacturers to see a decrease in profit margins of their equipment. 

Multiple manufacturers also mentioned users deciding to rewind or repair older motors rather 

than replace with more expensive, higher-efficiency motors. This would cause a decrease in 

production volume and therefore a decrease in profit margins.

12.3.2.3 27BConversion Costs

DOE asked manufacturers to quantify and explain both the capital and the equipment

conversion costs necessary to raise the energy efficiency of their equipment-lines. Depending on 

the stringency of any amended energy conservation standard levels, manufacturers may be able 
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to meet the levels with existing equipment or they may have to completely redesign their 

equipment-lines. In either case, more stringent energy conservation standards would cause 

manufacturers to incur one-time capital and equipment conversion costs. Capital conversion 

costs are one-time investments in property, plant and equipment. Equipment conversion costs 

include one-time investments in research, equipment development, testing and marketing. 

All manufacturers stated that the conversion costs associated with amended standards 

would depend on the efficiency level established by those standards. At the highest efficiency 

level, one manufacturer cited conversion costs as possibly exceeding $100 million, and the time 

needed for compliance exceeding five years. Copper rotors would require a significant 

investment in additional die-casting machines, and copper rotors could also cause a decrease in 

production volume as the process time for each rotor is longer and consumes more energy than 

the current, aluminum die-casting process. At lower efficiency levels, manufacturers stated that 

minimal capital investment may be necessary if manufacturers can switch to a more laborintensive process. Changing the labor content, however, is likely to result in production being 

moved off-shore.

Manufacturers were also concerned about the potential for assets to be stranded due to 

higher energy conservation standards for motors. For every new capital investment made by 

manufacturers, some portion of the manufacturers’ existing equipment for core production would 

be stranded. Additionally, manufacturers indicated that there are often very long lead times for 

obtaining advanced machinery. Specifically, manufacturers estimated that it would take two 

years for installation of new machinery to be completed after the purchase request is made for 

some of these capital investments.

12.3.2.4 28BCumulative Regulatory Burden

While any one regulation may not impose a significant burden on manufacturers, the 

combined effects of several impending regulations may have serious consequences for individual 

manufacturers, groups of manufacturers, or entire industries. Assessing the impact of a single 

regulation may overlook this cumulative regulatory burden.

Expenditures associated with meeting other regulations are an important aspect of DOE’s 

consideration of the cumulative regulatory burden the industry faces. The manufacturer 

interviews helped DOE identify the level and timing of investments manufacturers are expecting 

to incur because of these regulations. Manufacturers were also asked under what circumstances 

they might be able to make expenditures related to regulations and energy conservation 

standards.

Manufacturers expressed concern about the 2015 compliance date for small electric 

motors being within three years of this rulemaking’s effective date. Manufacturers stated that 

adopting these two regulations in a short timeframe would strain research and development for 

motor manufacturers. Manufacturers also noted several existing regulations with which they are 

required to comply: National Fire Protection Association (NFPA) 70, National Electrical Code; 

NFPA 20, Standard for the Installation of Stationary Pumps for Fire Protection; and U.S. 

Occupational Safety and Health Administration regulations.
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12.4 4BOVERALL KEY ISSUES

Perhaps the most important aspect of the preliminary MIA is the opportunity it creates for

DOE to identify key manufacturer issues early in the development of amended energy 

conservation standards. During preliminary interviews, manufacturers identified three major 

areas of concern: core steel availability, equipment conversion costs, and intellectual property.

12.4.1 10BCore Steel Availability

Manufacturers commented that there is limited global supply for the types of core steel 

necessary to build higher efficiency electric motors, particularly high-grade lamination steel. 

This shortage of higher grade steel could be exacerbated if efficiency standards for other 

equipment require more widespread use of this steel, causing a sudden increase in demand.

12.4.2 1BCopper Die Cast Rotors

Manufacturers commented on the impracticability of die-casting copper rotors. Namely, 

they were concerned with the rising cost of copper, the health hazards of die-casting copper, and 

the difficulty of purchasing copper die-casting equipment. Several manufacturers noted that 

copper die-casting equipment cannot be purchased; instead, copper die-casting companies 

require manufacturers to contract out this procedure.

12.4.3 12BIncrease in Equipment Repair

Manufacturers stated that higher efficiency standards would likely increase the price of 

electric motors, which would drive consumers to consider rewinding older, less efficient motors 

rather than purchase a new, more efficient motor. This could not only decrease the shipments of 

electric motors but also decrease the potential energy savings of higher efficiency standards, 

particularly because repairing or rewinding a motor may not return that motor to its previous 

efficiency.

12.4.4 13BEnforcement

Several manufacturers stated that NEMA manufacturers may be disproportionately 

affected by amended standards because DOE may not enforce penalties on foreign manufacturers 

who choose not to comply. Without proper enforcement of standards, domestic manufacturers 

may incur compliance costs that foreign manufacturers do not incur, decreasing the 

competitiveness of domestic manufacturers.