REGULATORY REPORT         SUPPLIER NEWS                    

ECONOMIC TRENDS                  PEOPLE IN THE NEWS

ASSOCIATION NEWS            FACTOID

REGULATORY REPORT

State Judge Denies Heavy Duty Engine Petition

A California Superior Court judge has denied a motion filed by heavy duty diesel engine manufacturers for an injunction to halt requirements enacted by the California Air Resources Board (CARB) to replace software on their engines. The retrofits were part of a 1998 settlement to resolve allegations that the manufacturers had designed engines to pass federal and state emissions certification tests, while producing higher levels of nitrogen oxide emission in-use. 

Originally, the retrofit program was voluntary; however CARB, frustrated with the small number of engines actually retrofitted, made it mandatory last spring. Under the rules, owners and operators of trucks, school buses and motors with 1993-1998 model year diesel engines and 1999 model year vehicles equipped with engines built in 1998 must install computer chips that reduce emissions of nitrogen oxide (NOx). The chips must be available upon request from distributors and dealers and are paid for by the engine manufacturers.

In denying the motion, the judge stated that state law bars the court from enjoining the enactment or enforcement of a valid public statute or ordinance; and that the defendants must first seek relief through a trial on the merits of the rule. The Engine Manufacturers Association contended that the injunction was only the first step in the legal challenge to the rule and pointed to the fact that the judges ruling had nothing to do with the merits of the case.

Source: Capital Report, May 9, 2005

EPA SmartWay Transport Program Announces $5 Million in Grants to Reduce Truck Engine Idling

The U.S. Environmental Protection Agency (EPA) announces a first-of-its kind initiative to demonstrate innovative idle reduction technologies along the spectrum of the trucking industry, from the manufacturer level to trucking fleets and at truck stops, ports, and borders. EPA will award up to $5 million in grants as part of its SmartWay Transport Partnership, a voluntary, government-industry initiative aimed at reducing emissions and conserving energy.

Recognizing that truck drivers idle to maintain a comfortable temperature inside the sleeper compartment, EPA�s grant program will study how a variety of idle reduction technologies in different applications will perform. The grants will be available to states, nonprofits and academic institutions demonstrating strong partnerships, among other criteria, with the trucking industry.

EPA is requesting proposals for initiatives to deploy and demonstrate three kinds of commercially-available technologies:

• Technologies that small trucking fleets can use to equip trucks they already own.
• Technologies that can be packaged by truck engine manufacturers into an easily-used installation kit for aftermarket use.
• Technologies designed for use by trucks parked at truck stops, terminals, ports and borders.

The full proposal solicitation is available at www.epa.gov/air/grants/05-09.pdf. The deadline for receipt of proposals is June 6, 2005. EPA anticipates announcing the grant awards in fall 2005.

For more information on the SmartWay Transport Program, visit www.epa.gov/smartway.

Source: www.epa.gov, April 27, 2005

House Passes Measure to Replace Old Trucks Bill Includes $100 Million in Incentives for Fleet Upgrades

The House of Representatives has approved an energy bill that includes $100 million for a new program to provide financial incentives to fleets to replace their older trucks with newer, cleaner-burning models or to retrofit their older diesel engines to meet current emission rules.

The program, added as an amendment to the energy bill by Rep. Juanita Millender-McDonald, D-Calif., would �authorize $100 million in funding between fiscal year 2006 and fiscal year 2008� as incentives to upgrade the U.S. truck fleet.

That funding would be used to �create an [Environmental Protection Agency] program for awarding competitive grants,� said Rep. Ralph Hall, R-Texas, who supported the amendment.

Source: Transport Topics, May 2, 2005

High Court Hears Michigan Truck-Fee Case

The U.S. Supreme Court heard arguments recently over the legality of the fees Michigan charges truckers who deliver goods within the state�s borders.

In two companion cases, American Trucking Associations (ATA) and Mid-Con Freight Systems challenged separate portions of the Michigan fees before the nation�s highest court, in appeals of lower state court rulings that favored the state.

Robert Digges, ATA�s deputy general counsel, told the court April 27 that a $100 flat fee Michigan charges interstate carriers making point-to-point deliveries within the state �discourages� those carriers from coming into the state and was unconstitutional.

Source: Transport Topics, May 2 & 4, 2005

SUPPLIER NEWS

Dart Transit Joins American Trucking Associations Company Cites Critical Legislative Issues

Citing urgent issues that face the trucking industry, Dart Transit Co. said this week it had joined American Trucking Associations (ATA), to support ATA initiatives on current and pending legislative issues. Dart is ranked number 53 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.

Dart president Donald Oren said pending changes to federal driver hours� rules regulations, federal highway bill reauthorization and rising fuel costs �are examples of why the trucking industry needs to speak with a clear and articulate voice.�

ATA president Bill Graves said Dart's action represented an important step forward for the association.

Source: Transport Topics, May 9, 2005

ECONOMIC TRENDS

March Tonnage Drops 0.2 Percent

Revised truck tonnage rates released this week by American Trucking Associations (ATA) showed a 0.2 percent drop in March, less than a preliminary 3.3 percent decline reported April 27.

ATA�s seasonally adjusted truck tonnage index fell to 115.3, its second straight decline and the third in four months.

There was more evidence in March that industrial output is still growing at a reasonable rate but has slowed in recent months, ATA said.

Year-over-year the adjusted index improved 2.9 percent in March. The index rose 5.4 percent in 2004.

Source: Transport Topics, May 11, 2005

Heavy-Truck Sales Increase 42.8 Percent in February

Continuing the momentum established in January, heavy-duty truck sales rose 42.8 percent to 17,184 units compared with a year earlier. Sales of medium- and heavy-duty trucks, Classes 4 through 8, totaled 35,736 units in the month, up 20.8 percent from February 2004.
 
However, total truck sales, including Classes 1 through 3, were down 1.7 percent from a year earlier to 701,661 units. Sales of Class 1 through 3 trucks totaled 665,025 units for the month, down 2.7 percent from February 2004.

Freightliner was the number one seller during February in Class 8. The company's sales were 5,694 units, up 49.5 percent from a year earlier.

Source: Automotive News, April 21, 2005

PEOPLE IN THE NEWS

Remy Names McCann Director of Marketing for Heavy Duty Systems Unit

Remy Inc. has named Dan McCann director of marketing for its Heavy Duty Systems business.

McCann joins Remy from ECCO, a manufacturer of emergency warning products, where he was vice president of global sales and marketing. McCann joined as OEM sales manager in 1990 and became OEM and aftermarket sales manager. Prior to ECCO, McCann held a series of sales assignments with Grote Manufacturing Co. (now Grote Industries) and was a member of the sales team at Searle Air Brake. McCann is a U.S. Coast Guard veteran, having served in search and rescue operations in the San Francisco Bay area in the early 1970s. He is an active member of the Heavy Duty Business Forum, Industrial Truck Assn. and SAE.

Source: Truckinginfo.com, May 13, 2005

ASSOCIATION NEWS

Aftermarket Factbook to Be Mailed in June

The AAIA 2005/2006 Aftermarket Factbook will be mailed in June to members who are current in their dues payment. To ensure that you receive your free copy of the Factbook, make sure that you renew your membership in a timely manner. 

If you have any questions regarding your membership status, call the AAIA member services department at 301-654-6664.

Right to Repair Bill Re-Introduced in House

The Motor Vehicle Owners� Right to Repair Act (H.R. 2048) was re-introduced in the U.S. House of Representatives on May 3 by Reps. Joe Barton, R-Texas, Edolphus Towns, D-N.Y. and Darrell Issa, R-Calif. The legislation would require that the car companies make the same service information and tools capabilities available to independents that they provide to franchised dealer network.

New language has been added to the bill this year which clarifies that car company trade secrets are protected unless that information is provided to the franchised new car dealer. The measure also clarifies the role of the Federal Trade Commission in enforcing the provisions of the bill. A Senate companion bill is expected to be introduced next week by Senator Lindsey Graham, R-S.C.

For further information, visit AAIA�s Legislative Action Center at www.aftermarket.org.

AAIA Chair David Caracci Retires From Robert Bosch Corp.

David Caracci, vice president of sales - national accounts, Robert Bosch Corp., will retire on May 15. The company said Caracci may continue to support the firm occasionally on various aftermarket initiatives, but plans to spend much of his time yacht racing. An aftermarket veteran of 32 years, and currently chairman of the AAIA Board of Directors, Caracci said he is also looking forward to investing more of his time into industry volunteer projects.

�While I am retiring from Bosch and full-time employment, I do not intend to sail into the sunset,� Caracci said. �I will now have additional time to increase my activities as chairman of the AAIA board. This is an excellent opportunity for me to devote much more time to the association leadership, and you have my commitment that I intend to do exactly that for my final year as chairman and in the future as a past chairman. We are entering what many of us hope to be our last and successful fight for the Motor Vehicle Owners� Right to Repair Act. I know that it is going to take a lot of work to fight this battle, so I am organizing my priorities to meet the needs as often as possible.�  

Less Than One Month Remains to Participate in the 2005 Financial Benchmarks for Success Survey

Less than one month remains until the June 1, 2005 deadline for participating in the AAIA Financial Benchmarks for Success survey. This survey of distributors is the best source of financial benchmarking data in the industry, covering key information such as gross margins, operating expenses and average collection period. There is no charge to participate, and in exchange for submitting data, you will receive a free report of the survey results. This report is only available to those who participate in the survey.

This year�s survey is being conducted by the Profit Planning Group, a leading financial benchmarking firm with an unblemished record of maintaining data confidentiality.

If you would like to participate in this survey and have not yet received a survey form, contact Dan Kaplan at 301-654-6664 or e-mail dan.kaplan@aftermarket.org. Don�t delay; the deadline for participating is June 1.

FACTOID

Senate Republicans joined Democrats this week in rejecting a spending ceiling set by the White House for a six-year highway and mass-transit funding bill, the Associated Press reported. The Senate voted 76-22 to allow an extra $11 billion above the to the House-passed $284 billion highway bill level, bringing the bill�s total to $295 billion.

Source: Transport Topics, May 12, 2005