The fight over SB1059

Jan. 1, 2020
The California/Nevada/Arizona Automotive Wholesalers' Association (CAWA) is known for its ability to sniff out legislation that could pose a threat to its members long before the suggested bills have a negative impact on the aftermarket. Recently, th

The California/Nevada/Arizona Automotive Wholesalers' Association (CAWA) is known for its ability to sniff out legislation that could pose a threat to its members long before the suggested bills have a negative impact on the aftermarket. Recently, the group and industry power players banded together to take on SB 1059, a bill seeking to make it unlawful for any insurer to require the installation of an aftermarket part — if the part to be replaced is under the existing original manufacturer's warranty — during the first three years of a vehicle's life. The bill was soundly defeated within the California legislature, and is (in legalistic jargon) "dead."

"The coalition is proud of what it achieved, and would like to thank everybody for their effort in this battle," says Rodney Pierini, CAWA president and CEO. "This was truly a coalition effort, with a lot of people involved in the process. One of the keys to our success in regards to this bill is that our members rallied together to defeat this bill by writing and calling their legislators to talk about the impact it would have on their businesses. This was clearly an integral part of our success."

In addition to CAWA's members, Pierini says that the Automotive Aftermarket Industry Association (AAIA), the Coalition for Auto Repair Equity (CARE), the Association of California Insurance Companies, the Auto Body Parts Association, the California Retailers Association, the Center for Auto Safety, the Certified Automotive Parts Association, LKQ Corporation/Keystone Automotive and the Personal Insurance Federation of California joined together in opposition to SB 1059. Interestingly enough, the California Autobody Association (CAA) parted ways with CAWA on this issue and lobbied in support of the bill, along with the Collision Repair Association of California (CRAC).

At first glance, the bill's language doesn't seem intrusive — at least, it doesn't seem intrusive enough to warrant the full-court press CAWA and its cohorts unleashed to oppose it. But Norm Plotkin, an advocate with CAWA and AAIA, calls what the bill was trying to accomplish "insidious" and "invasive."

"The bill's language tried to prohibit insurers from requiring the installation of an aftermarket part and it tried to prohibit the purchase of an OE part while only paying for an aftermarket part," he adds. "But what that is doing, albeit in a very subtle manner, is telling consumers that aftermarket parts are bad, and OE parts are superior to them. If it had passed, the bill would pretty much have guaranteed the sale of OE parts to customers in a repair situation by making aftermarket parts appear less attractive to drivers."

Still, Plotkin says that the coalition didn't come out against the bill immediately, because — as originally worded — it would have mainly affected the collision segment of the aftermarket. But when proponents of the bill altered the language to include both collision parts and mechanical parts in the three-year parts replacement moratorium, the coalition geared up for battle.

"It's war. These folks [CRAC] invested a lot in this fight," says Plotkin, an ex-marine who has no problem comparing his stint in the political arena to his combat experiences. "And I don't just mean that they invested time, money and energy — I mean that they invested ego. Because this was such a personal fight for them, the defeat is just that much more bitter. We're being very vigilant to make sure that this language doesn't crop up as an amendment in the other bills they may choose to support."

The flip side of the coin

For David McClune, executive director of the California Autobody Association (CAA), the defeat of SB 1059 was a disappointment. McClune and his organization choose to lend their support to the bill because, if passed, it would have prohibited insurers from requiring the installation of an aftermarket crash part on a vehicle.

"We feel that the consumer should be able to decide whether or not to put an aftermarket crash part on their car," he says. "You have to consider it from the consumer's perspective: If you have a brand new car, you may not want an aftermarket part put on it. You may want to use an OE part. We supported the bill because it would have given consumers the ability to make the final decision about the parts that are used during the repair process."

However, McClune adds that during the legislative proceedings, the bill's language was altered quite a bit — effectively altering the original intent of the bill and making it difficult for the CAA to fully support. So, while he is disappointed by the outcome of this current legislative session, McClune is hopeful that it can be reintroduced in the future in a format that is more effective and beneficial to consumers.

"Although we were not the author of this bill, we feel that it is a potentially good bill that can help consumers," adds McClune. "Our hope would be that there could be an alternative approach introduced in the next session that would benefit consumers as well as the aftermarket and collision repair industries."

According to McClune, the association plans to speak with legislators during the next session and seek out someone to author just such an alternative approach. But, until then, they are simply looking ahead to the future and working to cultivate even more support for the coming legislative sessions.

A golden opportunity

But what does the defeat of SB 1059 mean for consumers? In simple terms: The government is not going to determine the type of replacement part that can be put on a vehicle three years or younger. Instead, the market will drive that decision, Pierini says.

"These are the types of issues we try to keep our ear to the ground on," he adds. "Especially when the government is trying to impact our members and their customers in a negative way."

In addition, Plotkin says, the fight over SB 1059 brought CAWA members together and united them in a grassroots effort to defeat the bill. According to Plotkin, such a collaboration is a "huge shot in the arm" for the aftermarket, and was critical to the defeat of the bill. By working closely together, the coalition was able to strengthen relationships among members and empower them with a sense of what it means to work together at the grassroots level to cause real political change.

"You don't want to do this too often, because you'll burn out your troops," adds Plotkin. "But when you do and it works, it shows your members how they can help protect the aftermarket in a big battle."

But more importantly, the fight that centered on SB 1059 was a blessing in disguise, concludes Plotkin, giving the aftermarket a rare opportunity to meet face-to-face with legislators and explain how the bill would affect the industry.

"We were able to share the story of the aftermarket with politicians, which frankly, is an opportunity you just can't buy," he adds. "Sure, you can mail them some information, but getting in their space and interacting with them one-on-one was an incredible opportunity for us. At the end of the day, hearing from their constituents is what matters most to legislators. And when you can connect the local NAPA store that they've probably visited once or twice with the aftermarket, that's where you can begin to make some real headway with them."