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REGULATORY REPORT SUPPLIER NEWS
ECONOMIC TRENDS PEOPLE IN THE NEWS
ASSOCIATION NEWS FACTOID
REGULATORY REPORT
Emissions Legislation Introduced in Washington
Two new bills were recently introduced into Washington state legislature. Washington Senate bill 5397 was introduced by Sen. Phil Rockefeller, D-Silverdale, and Washington House bill 1397 was introduced by Rep. Ed Murray, D-Seattle. If passed, both bills would change Washington�s vehicle emission standards and would implement the same vehicle emission standards found in California that includes a 15-year/150,000-mile super warranty.
Source: CollisionWeek, March 14, 2005
EPA Confident 2010 Standards Will Be Met
Speaking at the WestStart-CALSTART Clean Heavy Duty Vehicles conference in California on March 4, a leading official from the U.S. Environmental Protection Agency (EPA) said that he was �very confident� that the truck and engine manufacturers will be able to produce viable products that will meet the stringent 2010 on-road heavy-duty vehicle emission standards.
Chet France, director of the assessment and standards division, EPA, said that �based on a confidential survey, the manufacturers are pursuing a variety of approaches, including Selective Catalytic Reduction (SCR) and Homogeneous Charge Compression Ignition (HCCI).� In terms of SCR, he said that the industry was moving forward with creative strategies to ensure the technology would be used and that urea could be available on a nationwide basis.
While he said that final SCR strategies haven�t been clearly established yet, EPA had �fruitful dialogue with industry� and hasn�t ruled out SCR as a possible solution. The trucking industry will be watching � when the 2003 standards were due to hit the market, there was a swell of pre-buying because of uncertainty about the reliability and fuel economy of the new engines.
Source: Automotive Fleet, March 7, 2005
EPA Might Ban Lead Wheel Weights
The U.S. Environmental Protection Agency (EPA) is considering a ban on lead wheel weights, according to Tire Industry Association (TIA) officials, who say the organization has not provided any scientific evidence that would justify such a move.
Becky MacDicken, TIA director of government affairs, told moderntiredealer.com that EPA is examining the possibility of a lead wheel weight ban based on an article that appeared in the October 2000 issue of a newsletter called Environmental Health Perspectives. The article discussed a study that allegedly monitored the rates at which weights fall off vehicles and are ground into lead dust, which author Dr. Robert Root called "a major source of lead exposure."
�If the EPA tries to go with a voluntary ban, some wheel weight manufacturers won't comply because it may put them at a (competitive) disadvantage," MacDicken said.
Zinc and steel weights, which have been proposed as more environmentally friendly alternatives, are more expensive than lead weights.
Source: Modern Tire Dealer, March 8, 2005
President Bush Names Steve Johnson EPA Administrator
President Bush named acting Environmental Protection Agency (EPA) chief Steve Johnson to lead the agency, EPA said March 4. Johnson, a career government employee who has been with the EPA for 24 years, became its acting administrator about six weeks ago. His nomination is subject to confirmation by the Senate.
Johnson assumed the position with the stated goal of promoting and maintaining the utilization of sound science while using collaborative, innovative approaches to solving environmental problems, the Associated Press reported.
Source: Transport Topics, March 4, 2005
SUPPLIER NEWS
Axle Brake Technology Corp. Opens Alabama Offices
Axle Brake Technology Corp. announced it has opened executive offices in Hayneville, Ala., and will expand North American manufacturing operations later this year. Axle Brake Technology (ABT) will provide heavy-duty axles and a complete line of axle and brake components to original equipment truck and trailer manufacturers and the aftermarket.
According to ABT�s press release, company management sees significant opportunities for innovation and success from an area which is rapidly becoming a global center for vehicle and component manufacturing. Opening the manufacturing operation in or around the Central Alabama Enterprise and Renewal Zone is one key to ABT�s long-term vision. The other is ABT�s ability to apply innovative design, engineering and manufacturing concepts. According to the release, the company is building a North American management team.
ABT�s product line will include heavy-duty axles and brake components for Class 6, 7 and 8 trucks and trailers for original equipment manufacturers and the aftermarket. These components include heavy-duty axles, automatic slack adjusters, custom forgings, S-cams, brake shoes, brake kits and other heavy-duty truck and trailer associated componentry.
Source: Truckinginfo.com, March 11, 2005
Michelin, Other Tiremakers to Boost OTR Production Capacity
Due to "unprecedented growth of the surface mining industry worldwide," Michelin North America Inc. (MNA) has announced company plans to increase production capacity of its earthmover tires. This new capacity increase will complete the measures already taken in 2003 and 2004 to boost capacity, say MNA officials. Other tiremakers have announced plans to ramp up OTR production or have already taken steps to do so:
- Bridgestone/Firestone Off-Road Tires added new building and curing machines to several of its OTR plants last year. Parent company Bridgestone Corp. also has announced a capacity expansion at its OTR plant in Hofu, Japan.
- Continental Tire North America Inc.'s (CTNA) plant "was producing both OTR radial and bias tires at maximum capacity for most of 2004 and continues to pursue higher levels," says Bob Harnar, CTNA director of sales and marketing, global OTR business unit.
- Goodyear Tire & Rubber Co. is investing "limited capital" to boost production capacity of 25-inch radial OTR tires globally, according to Rob Andrew, Goodyear global marketing manager, OTR tires.
- Yokohama Tire Corp. is planning to increase production by 8 percent, says Gary Nash, Yokohama director of OTR.
Source: Modern Tire Dealer, March 4, 2005
ECONOMIC TRENDS
U.S. Trade Deficit Soared in 2004
The U.S. trade deficit soared to an all-time high of $665.9 billion in 2004, the Commerce Department reported this week. Commerce reported the nation�s current account deficit was 25.5 percent higher than the previous record $530.7 billion deficit, set in 2003. It said the deficit was growing as the year ended, with a fourth-quarter shortfall hitting a record $187.9 billion, up 13.3 percent from the third quarter.
The Bush administration contends the soaring trade deficits reflect a U.S. economy that is growing faster than the rest of the world, pushing up imports and dampening demand for U.S. exports, the Associated Press reported. But economists are concerned that high levels of resources being transferred outside the country could erode U.S. living standards.
Source: Transport Topics, March 16, 2005
Sales, Orders From Trucking Companies Still Rising
Several information technology companies that provide software, tracking and communications systems to the trucking industry said their sales and orders increased sharply last year and were headed even higher in 2005. Higher motor carrier profits, increased tractor and trailer sales and driver-retention problems converged, they said, making tech products more attractive to fleets.
Technology and software providers interviewed at the Truckload Carriers Association�s annual convention on March 6-9, said booming sales were helping to make up for ground lost the past few years when a variety of factors kept carriers from investing heavily in technology.
Source: Transport Topics, March 14, 2005
Iron, Steel Prices May be Peaking
An oversupply of iron ore may lead to steel price drops, the Wall Street Journal reported last week. Rising steel prices have boosted trucking-related costs for everything from trailers to engines over the past year. Less than a month ago, iron ore producers received 71.5 percent increases on their contracts, but expansions at mines and smaller companies ramping up production could lower prices by next year.
Source: Transport Topics, March 10, 2005
Transportation Services Index Falls in December
The Department of Transportation (DOT) said last week its transportation services index (TSI) fell 0.2 percent in December, the first decline after three consecutive monthly increases. The drop to 127.3 still left the index 5.1 percent higher than a year earlier, DOT said.
DOT said the freight index fell 0.4 percent to 128.4 in December, also the first drop after three months of increases. It was 4.5 percent higher than a year earlier.
The December TSI for passengers rose 0.1 percent to 125.3 in December from November. December�s figure was 6.6 percent over the previous December.
Source: Transport Topics, March 7, 2005
PEOPLE IN THE NEWS
Todd Dunn Promoted to CEO of FleetPride
Heavy-duty truck parts distributor FleetPride has named a new CEO following the news that its CEO Gordon Ulsh was leaving the company to become CEO and president of Exide Technologies.
Todd Dunn has been promoted to CEO from his previous position as senior vice president, CFO and chief administrative officer. Dunn joined FleetPride in October 2003 and served the prior four years as CFO of Tartan Textile Services, Inc. Prior to joining Tartan, Dunn was CFO of QDSP, Inc., one of the companies that merged to form FleetPride. Dunn has more than 11 years of experience in parts distribution to the heavy-duty aftermarket, serving in various financial and operational roles with the SLM Group.
Source: Aftermarketnews.com, March 4, 2005
Changes Announced in Snap-on Management
Alan Biland has been named president of Snap-on Tools Company, LLC, responsible for the company's worldwide dealer organization. He has also been named a senior vice president of Snap-on Inc., effective immediately. Biland succeeds Michael Montemurro, senior vice president of Snap-on, who recently announced plans to retire in the near-term after serving the company for nearly 35 years.
Thomas Ward has been promoted to succeed Biland as president of the diagnostics and information group, and has also been appointed as vice president of Snap-on Inc. Jeanne Moreno has been appointed vice president and chief information officer (CIO) for Snap-on, succeeding Biland as CIO. She joins Snap-on after having served as the senior vice president and CIO for Citrix Software. Mary Beth Siddons has been named to succeed Ward as president of diagnostics.
Source: Aftermarketnews.com, March 15, 2005
Hayes Lemmerz Appoints VP of Sales for its International Wheel Group
Hayes Lemmerz International has appointed Pieter Klinkers to the position of vice president of sales and marketing for the company's International Wheel Group. Pieter replaces Marc Hendrickx who was recently appointed vice president of the International Wheel Group's aluminum operations.
Klinkers joins Hayes Lemmerz from Michelin's Wheel Group where he has worked since 1997. He served in a series of senior level marketing and sales positions with Michelin, most recently as director of sales and marketing, based in Paris, France.
Source: Aftermarketnews.com, March 4, 2005
ASSOCIATION NEWS
Aftermarket-Backed Anti-Counterfeiting Legislation Advances in U.S. House
�The House Judiciary Crime Subcommittee�s vote Thursday in favor of anti-counterfeiting legislation is the first step towards a new law that will help take the profit out of trademark piracy, and the aftermarket salutes them,� said AAIA president and CEO Kathleen Schmatz.
�AAIA supports the Stop Counterfeiting in Manufactured Goods Act, H.R. 32, and we were proud to feature the bill�s sponsor Rep. Joe Knollenberg, R-Mich., as a speaker at the recent Aftermarket Legislative Summit, to discuss his important legislation with industry leaders,� Schmatz said. �Summit participants reported strong support for H.R. 32�s tough anti-counterfeiting measures from both the House and Senate offices they visited.�
Introduction of companion legislation in the Senate is expected.
The subcommittee voted without objection to send the measure to the full House Judiciary Committee. Members also reached a bipartisan agreement to work on bill language that would further protect the interests of product re-packagers.
Some 60 House members have cosponsored H.R. 32, including many House Judiciary Committee members. The business Coalition Against Counterfeiting and Piracy which includes AAIA, Motor and Equipment Manufacturers Association (MEMA), Specialty Equipment Market Association (SEMA) and many other associations and corporate members, was created to gain bill passage. Coalition chairman Paul D. Fox of the Gillette Company provided compelling testimony for the bill.
AAIA first addressed trademark piracy with the 1984 Trademark Counterfeiting Act, which for the first time made counterfeit trafficking a federal crime punishable by fines and imprisonment. But, existing law falls short in that it does not require the destruction of the equipment and materials used to make the fakes. A convicted pirate could quickly resume trafficking. The copyright law already has mandatory destruction provisions and H.R. 32 would add them to the trademark law to help put the criminals out of business.
In addition, sophisticated counterfeiters today can sell the counterfeit versions of the trademarks themselves on labels, patches and medallions, for use by others who affix them to counterfeit products. H.R. 32 would clarify that the law prohibits such trafficking.
�With these changes, the law becomes a greater deterrent to trademark theft by making the potential costs of getting caught much higher than the potential profits of piracy,� Schmatz said.
These important enhancements to U.S. law will empower American trade negotiators to ask similar statutory protections from the many trade partners that currently are seeking, or will seek in the future, to enter Free Trade Agreements (FTAs) with the U.S.
Schmatz urged lawmakers �to seize the opportunity to pass H.R. 32 and get it signed into law this year as a major accomplishment for the global aftermarket and consumers.�
For more information on H.R. 32, contact Lee Kadrich at lee.kadrich@aftermarket.org.
Small-Business Health Plan Legislation Another Step Closer
The U.S. House Committee on Education and the Workforce passed the Small Business Health Fairness Act (H.R. 525) on March 16 by a vote of 25-22, which would allow the formation of Small-Business Health Plans. A vote is expected late this spring or early this summer in the House of Representatives.
H.R. 525 and the Senate companion bill, S. 406 would allow small companies to band together through trade and professional associations to purchase affordable health benefits through small business health plans, known as Association Health Plans (AHPs). By joining together, small employers will enjoy greater bargaining power, economies of scale and administrative efficiencies.
"Passage of Association Health Plans is a longstanding priority for AAIA,� said Kathleen Schmatz. AAIA president and CEO. �The president wants AHPs, and we urge lawmakers to get this important bill to his desk this year."
Uniform federal regulation of AHPs will help small businesses lower their administrative costs because, by operating under federal law, these plans can avoid the costs of complying with 50 different sets of state benefit mandates. The legislation will level the playing field and give participating small employers the same advantages as Fortune 500 companies and unions. This will make health insurance more affordable through reduced premiums. More than 170 nationwide trade association representing over 12 million employers and 80 million workers support bill passage.
For additional information, contact Stephanie Salmon at 301-654-6664 or e-mail stephanie.salmon@aftermarket.org.
AAIA Conducts 2005 Financial Benchmarking Survey for Distributors
AAIA is in the process of conducting the 2005 Financial Benchmarks for Success Survey. The survey covers financial data for distributors such as gross margins, operating expenses, average collection period and much more. All participants in the survey receive a free report of the detailed industry benchmarking data. Survey forms will be mailed to all AAIA member distributors this week and the deadline for submitting data is June 1.
For more information about this survey, contact Dan Kaplan at 301-654-6664.
China Poised to Become World�s Third Largest Motor Vehicle Market
China, the most populous country in the world, whose vehicle sales surged 166 percent in five years, has dramatically increased its role in the global automotive industry, and offers lucrative opportunities for aftermarket companies. To assist aftermarket companies investigate potential business in China, AAIA has published a new study, Global Aftermarket Trends: China.
�Since China entered the World Trade Organization in 2001, many obstacles to U.S. aftermarket companies have been eliminated including trading rights restrictions and tariffs,� said Kathleen Schmatz, AAIA president and CEO. �As a result, U.S. auto parts exports to China have more than doubled. With the recent openings of the distribution channels, there is tremendous opportunity for foreign companies to shape China�s aftermarket.�
Global Aftermarket Trends: China is a 134-page comprehensive report providing data and analysis to assist aftermarket businesses that wish to gain a better understanding of China�s market, products and services. The report contains an overview of the social and political climate and economic structure of China.
�In just four years, China�s vehicle output surpassed France, South Korea, Spain and Canada,� said Schmatz. �If its recent growth rate continues, China would pass Germany and become the world�s third largest vehicle producer in the next few years.�
The study reports that automotive products are in high demand in China including tires, key technology such as anti-theft devices and environmental protection, engine-related parts such as fuel injection systems and inlet pipes, and chassis parts like shock absorbers and anti-lock brake systems.
Additional detailed data and information included in the report includes:
- Passenger vehicle parts production and sales data by make and model
- Commercial vehicle production and sales data by manufacturer and segment
- Detailed U.S.-China trade statistics for automotive parts and components
- Important Chinese cultural and business practices
- Key government, business and media contacts
- Recent economic and political trends
Global Aftermarket Trends: China is available to AAIA members for $395 and to non-members for $695. For more information or to order a copy, contact AAIA at 301-654-6664 or visit www.aftermarket.org.
Consumer Reports Magazine Touts Independent Service Providers
Score one for the independent aftermarket in the April issue of Consumer Reports. Advice from both the Car Care Council and AAIA in a full-page article countered the misperception that consumers should return to dealerships for vehicle maintenance and service, according to AAIA.
The Consumer Reports article that appeared in the popular annual new car ratings issue, pointed out that consumers have the right to service their vehicle wherever they like without affecting their warranty. �For maintenance, there�s no reason you must rely on a dealership, which might charge more than an independent shop.�
The article concluded by stating that, �The Right to Repair Act would help independents because it would require automakers to provide them with technical information they need to compete with dealers.�
�It is gratifying to see that a highly reputable and respected publication that consumers look to for no-nonsense and commercial-free advice on how to best spend their money points out the value of independent service providers,� said Kathleen Schmatz, AAIA president and CEO. �Of course, the plug for the Right to Repair Act was most appreciated and underscores the level of interest in this legislation among motorists.�
Consumer Reports, published by the independent, nonprofit Consumers Union, has four million subscribers and reaches millions more through www.consumerreports.org.
FACTOID
Housing starts rose 0.5 percent in February to a 21-year high, according to the Commerce Department. The increase to 2.195 million units at an annual rate exceeded economists� projection of a slowdown to 2.04 million, Bloomberg reported.
Source: Transport Topics, March 16, 2005 |