October 7, 2013 by Minuteman Trucks
By: Dick Witcher, CEO of Minuteman Trucks and Chairman of ATD
Source: Massachusetts Auto Dealer
I hate the winter but, I am looking forward to February! My term as leader of the ATD will close at the Convention in New Orleans. During the last five years I have either been vice chair or chair and those responsibilities have occupied a major portion of my time. The time spent was highly rewarding and the experiences I gained were unlike anything I could have achieved as an entrepreneur operating my business.
For example during the last Washington conference, I and two other truck dealers had a very unusual experience matched by very few others: we simultaneously lobbied fifteen representatives of the EPA and the National Highway Traffic Safety Administration. We could see each other during the 90 minute meeting and the regulators were in three different cities. The video conference was pretty cool!
But, what was really cool was having the opportunity to lobby in regard to the next round of emissions regulations announced by President Obama just a couple of weeks ago. In advance of the meeting we did a ton of preparation including fact searching, presentation preparation and rehearsing our roles for the meeting. Some of the research was fortunately also used in preparation of the House Concurrent Resolution 52 limiting further increases in federal excise tax on the sale of new trucks and trailers sponsored by Congressmen Riddle and Walz.
Of course when we arrived at the old Post Office Building – the home of the EPA – we went through the ever present security checks by armed guards. Getting through security to the House and Senate Office buildings is a bunch easier than getting into the EPA.
I have participated in lobbying regulators in the past including the IRS, NHTSA, DOT, etc. So, un-phased by the process which took three weeks of preparation we marched up to the office of the Administrator of Transportation Air Quality. Taking our seats and ready for a combative exchange our expectations were turned upside down!
Instead of a FORMAL presentation: we had a conversation and they truly asked questions about our industry and the process by which transactions take place.
- The assembled group of regulators admitted the first three steps of implementing emissions controls for commercial trucks in Phase One were rushed. The intervals did not allow the engine manufacturers appropriate time to amortize their investments. And further the steps rushed the development of technology not yet invented by the industry making it more expensive.
- In addition, they recognize the cost of adding the emissions systems to commercial trucks was significantly more expense then they anticipated.
- They believe Phase One implementation was much less successful than originally projected not only because of the untried and unreliable technology but the exorbitant cost of acquisition.
- They also recognize Phase One had negative impact on the economy.
A homerun for this new group of regulators would be getting broad acceptance not only of new but current regulations at a very low cost. Personally believing price is a really big issue, during our conversations we advised them the easiest way to reduce the price of commercial class eight trucks is eliminating the federal excise tax (FET) incurred at the time of purchase. FET adds 12 percent to the sales price the truck. It is not unusual for a class 8 tractor to cost $150,000. This high cost hurdle prevents owner-operators from starting new businesses and requires established companies to receive larger profits to achieve traditional rates of return on their investments. Further, we demonstrated to the regulators that adopting natural gas as a commercial fuel is delayed by the same FET.
The time needed to prepare the next set of emissions regulations is unknown to me but, I was greatly encouraged by their asking for additional meetings, the opportunity to visit our dealerships and their request of us to review the regulations while in draft. At some point we will likely butt heads but in the meantime we have a dialogue.