Election, political tensions to impact 2020

WASHINGTON—The head of the U.S. Tire Manufacturers Association expects "2020 will be a very interesting year."

The remark by Anne Forristall Luke , USTMA president and CEO, was intended as an understatement. There is no question that other association officials—Roy Littlefield III, CEO of the Tire Industry Association; Roy Littlefield IV, TIA director of government affairs; and Robert L. Redding, Washington representative for the Automotive Service Association—are in total agreement.

Between the November election and the continuing furor over impeachment, the legislative agenda for any business association will have a difficult time getting more than a cursory hearing.

"It's an unusual time in Washington, because of the impeachment and a divided Congress," said Littlefield III. "It will be difficult for anything to get through."

However, all the association officials believe they can achieve progress through diligent lobbying and industry friends on Capitol Hill. Progress, they said, is especially crucial in four areas: infrastructure, tire registration and recalls, recycling/sustainability, and data access.

Infrastructure

The Fixing America's Surface Transportation Act, signed by President Obama in 2015, sunsets in October at the end of the 2020 fiscal year.

This makes passage of a new infrastructure funding bill imperative, officials said. But it is unclear whether the divided Congress can decide on a funding package, let alone on what that package might contain.

Currently, there are two proposals for infrastructure reauthorization before Congress, according to the Littlefields.

The first is to reauthorize the Highway Trust Fund at the current rate of taxation. The second, America's Infrastructure Act of 2019, seeks to address all U.S. infrastructure—not only roads and bridges but also hospitals, schools and electric grids.

The total cost of the plan, they said, could be as high as $15 trillion to $25 trillion, with money allocated to key congressional constituents. "It's kind of like socialized medicine," Littlefield III said.

The biggest problem with America's Infrastructure Act is that it would almost certainly require highway users to pay a wildly disproportionate share of the cost, they said.

One funding proposal would have the federal government turn over 47,000 miles of interstate highways to the states, they said. In previous such cases, states usually have leased those roads to private corporations for 99 years.

To date there are about 800 privatized roads and 200 privatized bridges in the U.S., according to Littlefield III. The privatized bridges alone, he said, have tolls ranging from $14 to $20.

"If more roads are privatized, two things are sure to happen: Tolls will go up, and maintenance will go down," he said.

Other proposals, according to Littlefield III, include raising the fuel tax by up to $1 per gallon and re-establishing the federal excise tax on passenger tires and tread rubber.

"The highway community will be hit hard." "This is going to be such a burden on truckers," he said. "And in turn this will be a burden on consumers, because all our goods move by truck."

The USTMA, according to Luke, is looking at the infrastructure question from a different angle: sustainability.

"We're looking for ways to make tires better, and to work with our partners to make highways better," she said. "We want to learn how to support the next generation of sustainable infrastructure."

With the FAST Act up for reauthorization, Luke said the USTMA has an opportunity to meet with its legislative champions "to look ahead on how to use infrastructure policy to pursue sustainability goals."

Tire registration

For the past three years, TIA and the USTMA have worked together on developing a collaborative proposal to the National Highway Traffic Safety Administration on how to improve tire registration and recall rates.

Luke said she recently had a productive conversation on tire registration with new TIA President Brian Rigney. She hopes to have another meeting of the task force on this issue in the first quarter of 2020.

"Our mutual interest is to have a joint proposal for NHTSA in the coming year," she said.

The goal, according to Littlefield IV, is to find as many points of agreement as possible between tire makers and tire dealers.

"There are so many layers to this," he said.

Small tire dealers, especially, have a lot at stake in a mutual tire registration agreement, because of the potentially ruinous NHTSA fines for noncompliance, according to Littlefield III.

"Our guys are scared to death," he said. "They had no idea the fines had gone up so much."

TIA has issued a resolution proposing that NHTSA fines for registration violations not be issued until after two written warnings, and then not exceeding $500 for the third offense and $1,000 for subsequent violations.

Current NHTSA regulations allow fines of up to $22,329 per violation, to a maximum of $105.9 million, according to the resolution.

The current tire registration rate is 85-90 percent, according to Littlefield III. But something must be done to help small dealers with compliance, he said. Because they depend mostly on mail-in registration cards rather than computerized systems, their registration rates hover at the 10-15 percent level, he said.

Sustainability

At its latest scrap tire conference in December, the USTMA called for a 100 percent recycling rate for end-of-life tires. This, according to Luke, is very much part of the association's sustainability efforts, which are in line with the Tire Industry Project of the World Business Council for Sustainable Development.

The USTMA issued its first sustainability report in 2019, and in 2020 it will issue a "Sustainability Vision 2.0" report, refining and expanding its sustainability efforts.

One new feature in 2020 will be a new website targeted at bringing information about the tire industry and its sustainability efforts to legislators, regulatory officials, non-government organizations, academia and other interested parties, she said.

The USTMA and its members are working to develop contacts outside the tire industry to gain new insights and feedback into sustainability.

"We want to look outside our industry to ask what we should be talking about," Luke said.

The scrap tire conference was symbolic of the USTMA's efforts in that area, which began in 1991 under the Rubber Manufacturers Association, according to Luke. The conference had more than 240 attendees, including regulatory officials from 38 states.

The USTMA is working with the states to increase and maximize use of rubber-modified asphalt. It is promoting a recent study that shows rubber-modified asphalt mitigates roadway abrasion, she said.

The association also seeks to educate officials on both the federal and state levels, Luke said. It has ongoing efforts to counter efforts in California to limit zinc, a crucial ingredient in tires. It also continues to monitor efforts in California, Oregon and Washington to establish regulations regarding tire particles in the environment.

"It's important for us to make sure legislators and regulators know about our industry," Luke said. "We want to be a credible resource on any area that relates to tires."

TIA is watching state legislation that would define crumb rubber athletic turf as a hazardous waste, because that would establish recycling requirements impossible for small retailers to meet, according to Littlefield IV.

TIA helped fight passage of one such bill in Maryland in 2019, he said. But the same bill will be reintroduced in 2020, and a lot of states will follow suit, he said.

Autonomous vehicles

Data access for repair and diagnostic purposes is an overriding issue for auto repairers, and the rise of telematics and autonomous vehicles has complicated that issue exponentially, according to Redding.

For the past six years, the ASA has sponsored technology and telematics forums in partnership with the Alliance of Automobile Manufacturers, Redding said. Those forums feature key policy leaders in the telematics field, including the top cybersecurity expert at Ford Motor Co. at the forum earlier this year, he said.

"They are very open about working with us," he said. "We continue to talk to them on the path forward about data access."

The goal is to ensure that electronic vehicle data not only is accessible, but also affordable for small repair shops, according to Redding. "Our shops operate on a thin margin," he said.

While mechanical shops have issues with data access, the problem is even more acute for collision facilities.

"Say that someone knocks the side window off your truck," he said. "It's no longer a matter of just putting a new one back on. Mechanical shops deal with data access post-warranty, but collision shops get those issues from Day 1."

While the ASA seeks an agreement with auto makers on data access, it also looks toward federal or state legislation on that issue, according to Redding.

There are three legislative paths toward data access legislation, he said: a flat-out data access bill, a provision in a more general bill on autonomous vehicles, or privacy legislation that addresses data access.

TIA is very involved in the effort in Massachusetts to amend the state's current Right to Repair law to include access to AV data, according to Littlefield IV. The association is working closely with the Auto Care Association on this issue, which includes both legislation and a measure on the state's 2020 ballot, he said.

"It is crucial for dealers to have access to this," Littlefield IV said.

Other issues

The USTMA will continue to promote state legislation banning the installation of unsafe used tires on vehicles. Ohio and California approved USTMA-backed used tire bills in 2019, making them the third and fourth states—after Colorado and New Jersey—to do so.

TIA is closely watching state efforts to require vehicle manufacturers to inform consumers of their rights under the Magnuson-Moss Warranty Act, which forbids manufacturers from voiding the warranty rights of motorists who use independent repair shops for repair and maintenance.

The New Jersey Assembly passed a bill late in 2019 requiring auto makers to inform consumers of their Magnuson-Moss rights within 90 days of a vehicle purchase.

The ASA will continue to fight state and local efforts to weaken or abolish state safety and emissions inspection regulations, as well as initiatives in cities such as Austin, Texas, to create zoning regulations that banish auto repair shops to distant suburbs.