While the desire to reduce greenhouse gases and noxious vehicle emissions is a good thing in and of itself, the California Air Resources Board's (CARB) push to convince state governments to adopt environmental legislation that includes super warranty regulations will do more harm than good to the aftermarket industry and, in turn, to consumers, according to opponents.
But that push is exactly what CARB is doing in states like California, which has adopted a set of strict vehicle emissions standards and passed regulations requiring car companies to extend emissions warranties for defective vehicle parts.
Although CARB has argued that extending warranties on the useful life of vehicle parts will improve their durability, The California/Nevada/Arizona Automotive Wholesalers' Association (CAWA), along with nine other national aftermarket trade associations, has filed a lawsuit against the organization, saying that it will cause financial damage to the state's aftermarket industry. CAWA also charges that CARB has not been able to provide any proof that extended warranties will translate into the production of better-built vehicles in the future.
"This type of legislation will cause a negative economic impact on both the distribution and repair side of the aftermarket," CAWA's Director of Government Affairs, Jennifer Zins, told Aftermarket Business magazine in an exclusive interview. "It will drive customers away from the aftermarket and back to the dealerships, which would negatively impact our member's customers.";
Although asked to comment on the lawsuit, Karen Caesar, CARB's Public Information Officer, declined the opportunity, saying that it is the organization's policy not to comment on pending legislative matters.
The latest development in the battle of the super warranties took place in Phoenix, when CAWA members testified before the Arizona Department of Environmental Quality (ADEQ) in an effort to ensure that no super warranty regulations are passed in that state. ADEQ is currently developing regulations that will significantly increase vehicle emissions standards in Arizona, and has proposed a ruling that will most likely contain provisions similar to the ones now under review in California.
"With Arizona's interest in mirroring California's approach to emissions, we felt it was necessary to get the aftermarket's voice to the table with regulators who will be developing policies in 2008," says Rodney Pierini, CAWA's president and CEO. "We assembled a team of members and staff to communicate our concerns over the adoption of extended warranties, and we think we were successful in halting any language that would extend warranties beyond the federal standards in Arizona."
In addition to Zins and Pierini, CAWA's Legislative Advocate Stuart Goodman attended the Feb. 5 meeting with ADEQ. David Nunez, from APW International; Terry Porco, from the Phoenix NAPA Distribution Center; and Traci Quick, from Star Distributing, were also present at the meeting. According to a previous release, the group made a strong and convincing case that extended warranties would cause debilitating revenue decline for the independent aftermarket on primary repair and maintenance work with significant shifts in revenue from the independent aftermarket to vehicle dealers.
"Prior to this meeting, ADEQ was not familiar with the aftermarket industry, nor how the super warranty legislation would affect it," Goodman says. "By meeting with them, we were able to explain how the aftermarket industry is related to the independent repair industry, and how both would suffer if super warranty legislation was put into effect within the state."
Goodman adds that CAWA's representatives are quite pleased with ADEQ's reaction to their testimony, especially their willingness to investigate the best practices of other states, and to pick and choose from among the legislations that will not hurt Arizona's economy.
"This is certainly a victory for the aftermarket parts and repair industries in Arizona, Washington and Oregon," adds Pierini. "We hope the other states will follow Arizona and not include any super warranty requirements as they consider adopting California’s emissions standards."
So what happens next? On March 3, ADEQ will hold a public hearing on the ruling, where they will take public comments and combine them with comments they received prior to the meeting, then submit their research for final rule to the Governor's Regulatory Review Council (GRRC). According to Goodman, he feels that GRRC will ultimately approve the ruling, although he is quick to point out that a rubber stamp approval is not a complete certainty.
"GRRC has a very high approval rate," Goodman adds. "The vast majority of issues that go before this body do get approved. Still, it's not a guarantee — but if you're betting, the odds are with you."
But all of these regulatory shenanigans are moot if California doesn't receive the waiver it requested from the Environmental Protection Agency (EPA) that will allow the state's government to impose stringent emissions regulations upon its residents in lieu of the Federal Clean Air Act. Still, states like Arizona are busy getting their ducks in a row in the event that California does receive the waiver and they are allowed to pick which legislation they want to implement.
"Everything depends on California," Goodman says. "Arizona's goal is to be ready in the event California is successful in its fight against the EPA."