Opinion ID: 426343
Heading Depth: 4
Heading Rank: 3

Heading: Financial Stability of Parts Manufacturers

Text: 70 MVMA argues that EPA should require parts manufacturers to demonstrate their financial stability before being allowed to certify their parts. Without reasonable assurances that parts manufacturers are financially able to meet potential reimbursement obligations, MVMA believes vehicle manufacturers will incur expenses because of the failure of a certified part and never obtain reimbursement. Specifically, MVMA recommends that parts manufacturers be required to post bonds or otherwise demonstrate their ability to pay as a condition of certification. 71 In rejecting this suggestion in the final regulations, EPA countered that the financial instability of certified parts manufacturers is purely speculative. 45 Fed.Reg. 78,457 (1980). The agency indicated its willingness to alter the regulations if specific evidence is presented indicating the occurrence or potential occurrence of significant problems in this area. Id. at 78,458. We find this to be an adequate explanation of EPA's action and a reasoned application of the statute. 72 A central purpose of the certification regulations is to make certification as quick and inexpensive as possible so that small parts manufacturers will be able to overcome the competitive disadvantage of the performance warranty program. See 45 Fed.Reg. 78,449 (1980) (EPA has purposefully structured the program so that any party who manufactures sound parts and uses reasonable quality control should be able to certify with minimal expense or difficulty.). Posting a bond could have anticompetitive effects on small businesses in the aftermarket parts industry even though their parts may be qualitatively superior--from an emissions standpoint--to parts manufactured by companies that can afford to post bond. Given the pro-competitive purposes of the certification provision and the lack of any evidence suggesting widespread bankruptcies by small parts manufacturers, EPA's decision not to require parts manufacturers to demonstrate their financial stability is consistent with the statute. 73