WASHINGTON—2013 will be a rollercoaster year for the tire industry, full of both opportunities and perils, according to Washington representatives of two trade associations.
Congress didn't change much in November, but President Obama's victory portends a continuance and even a strengthening of the Obama administration's aggressive regulatory agenda, according to representatives of the Rubber Manufacturers Association.
"We're expecting a full regulatory agenda on environmental issues," said Daniel E. Zielinski, RMA senior vice president.
In a president's second term, there often are changes in the administration's approach and tone, according to RMA President Charles A. Cannon.
"Of course there's a continuation of the policies of the first administration, but there are also opportunities for change," Cannon said. "The emphasis may change, and personalities may change. The congressional response may also be a little different."
Representatives of the Tire Industry Association are spending lots of time on Capitol Hill, making its positions known on a number of major issues, according to Roy Littlefield, TIA executive vice president.
"We are expecting a floodgate of regulations," Littlefield said. "The deck is really stacked against us right now. We think we're in a better position than in recent years, insofar as our visibility on the Hill, but we need every ounce of influence we have."
The two associations are watching the Hill closely to monitor negotiations between the White House and Congress on the so-called "fiscal cliff." TIA is especially concerned about what would happen to individual income tax rates and the estate tax—two tax issues of supreme performance to its members—in the fiscal cliff negotiations.
"Philosophically the president doesn't agree with us, and I don't think he wants to compromise much on this," Littlefield said.
President Obama has a Biblical belief in the redistribution of wealth, and truly believes children shouldn't live off the wealth of their parents, Littlefield claims. The president tends to lump inheritors of small businesses in with the children of tycoons, he said.
"A small business may be worth $3 million, but it doesn't mean the owners have that kind of cash," he said.
NHTSA and EPA
Even more in 2013 than in past years, the National Highway Traffic Safety Administration and the Environmental Protection Agency are the federal agencies the entire industry is watching.
March 15, 2013—a full three years after NHTSA issued the final rule on tire fuel efficiency labeling—is the date the agency has set to issue proposed rules on the standard's tire labeling and consumer education provisions, said Tracey Norberg, RMA senior vice president, environmental and resource recovery.
However, Norberg pointed out, this is the latest of several dates NHTSA has issued for release of those proposals. When asked if she thought the agency would meet that deadline, she said, "I'm not a betting person.
"They update their regulatory schedule on the Secretary of Transportation's website every month," she said. "According to the latest schedule, the proposal should have gone to the (Office of Management and Budget) already, and I don't think that happened."
The tire fuel efficiency bill remains TIA's top issue, whenever the labeling and consumer education provisions appear, according to Littlefield.
"This is very frustrating," he said. "Everyone in the industry wants it to appear, and it could be a very good thing for the industry if it's done right. It's very hard to understand why it's taken so long."
In particular, the consumer information requirements are far too important to TIA for it to give up on them, Littlefield said. TIA has offered itself to NHTSA as the logical third-party organization to handle distribution of point-of sale and other information on fuel efficiency grading.
"We're worried this could end up like Uniform Tire Quality Grading," he said. "You can't come up with a bunch of posters and say you have a consumer information program. It didn't work with UTQG, and it won't work with this."
The RMA and TIA also are waiting on revised truck tire safety and performance standards from NHTSA, though there is no specific date for that rule to be issued.
"Our issue with the truck tire standard was that tires used at low speeds might be required to pass high-speed tests," Norberg said. "They couldn't meet H-Speed standards, which they aren't expected to meet anyway."
Early in 2013, the industry will watch for the Maximum Achievable Control Technology rule on industrial boilers to come down from the EPA, according to Norberg.