Boundless pursuit

Features - Automotive Recycling Update

The automotive recycling industry’s pursuit of OEM data knows no boundaries, according to the Automotive Recycling Association.

August 31, 2016
Michael E. Wilson
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In life, it is always nice to share our challenges with supportive friends or colleagues. As professional automotive recyclers continue their quest for access to unequivocal part identification information, it is beneficial to know that our industry is not alone. Stakeholders in the United States along with our global partners agree with the need for automobile manufacturers to provide vehicle parts data, and they understand that this information is critical in light of the growing complexity of vehicles, the increasing number of parts and increased use of on-board electronics. European Union (EU) regulations already require vehicle manufacturers to ensure that independent operators have easy, restriction-free and standardized access to vehicle repair and maintenance information.

Changing the mindset

As recyclers are well-aware, original equipment manufacturers (OEMs) have been withholding essential part number data for decades to make it much more difficult for consumers and others to service or repair their vehicles by reusing parts from total loss or end-of-life vehicles. Recently, the “ownership” mindset of manufacturers has come to light.

In comments submitted to the United States Copyright Office regarding the Digital Millennium Copyright Act (DMCA), John Deere & Co. advocate that because the company’s proprietary computer coding is incorporated throughout the DNA of the tractors and other agricultural machinery the company manufactures, purchasers of that equipment receive only “an implied license for the life of the vehicle to operate the vehicle.”

Alarmingly, John Deere is not alone in this mode of thought. Makers of smartphones and other electronics have made similar arguments, and trade groups representing almost every major automaker have stated to the Copyright Office that proponents of copyright reform mistakenly “conflate [fuse or mix together] ownership of a vehicle with ownership of the underlying computer software in the vehicle.”

General Motors states in its comments that the company had endorsed the participation of the Alliance for Automobile Manufacturers with the Memorandum of Understanding and Rights to Repair Agreement, which requires automakers to provide the same repair and diagnostic information to the automotive aftermarket as the auto manufacturers provide to their dealers. However, GM says that “because in-vehicle telematics and communication systems serve fundamentally different functions than smartphones or other mobile computing devices, the justification for jailbreaking [the process of removing software restrictions imposed by manufacturers and carriers] smartphones or other mobile connectivity devices does not apply to vehicles.”

Consumers around the world have been outraged by these positions, and growing numbers of them are calling on legislators and regulators to protect an individual’s right to repair and reuse parts and components, which builds support for the automotive recycling industry’s quest for original equipment (OE) part identification information.

Many manufacturers also have taken the position that part numbers are proprietary, either as trademarks or trade secrets, and therefore they cannot be shared with the automotive recycling industry. Yet this information is shared with others in the insurance estimating software industry and the collision and service repair industries, undermining any argument that part numbers are in any form intellectual property. Furthermore, while in theory it is possible for a part number to be a trade secret, and likewise theoretically possible for a part number to be trademarked, it is legally not possible for a part number to be both a trade secret and a trademark simultaneously.

FAST act victory

In November, the Automotive Recyclers Association (ARA), Manassas, Virginia, of which I am CEO, scored a significant hard-fought victory in the House of Representatives when Congressman Adam Kinzinger (R-IL) secured passage of an amendment to the comprehensive highway bill, Fixing America’s Surface Transportation (FAST) Act, that would require automakers to provide access to OE parts’ numbers, names and descriptions.

In early December, House and Senate conference representatives brought the compromise highway bill to both chambers for consideration and a final vote. ARA was extremely happy to help secure a provision in the 1,300-page compromise legislation, ultimately signed by President Obama, that requires automotive manufacturers to provide OE parts data for recalled components.

The new law, when enacted, will require automakers to make publicly available the OE part names, descriptions and numbers of a vehicle’s defective components that are subject to a recall. This language is a critical step as it provides a basis for ARA action in the coming months to work with regulators to secure electronic access to part numbers of recalled components tied to specific vehicle identification numbers (VINs).

In 2016, ARA leaders and staff have been hard at work spreading the word about last year’s significant step forward in securing access to parts data for every motor vehicle. The enactment of the 2015 FAST Act and ARA’s involvement in the crafting of that legislation means that for the first time in the United States federal statutory language ultimately will mandate automotive manufacturers to make OE part numbers available to the public.

ARA testimony

In April, I testified on behalf of ARA before Congress regarding what is needed to effectively implement the new law. My testimony discussed the three main features that need to be incorporated in a final rule to make the provision effective. I outlined in some detail that an automated data system linking recall part data to specific VINs—not VIN ranges—was necessary. I further stated that it was important for the automakers to be required to provide data dating back to 2000.

While this is a historic step for the recycling industry, ARA continues to press U.S. policymakers to follow the lead of our European colleagues and adopt regulations that require automakers to provide access to the VIN, OE parts numbers, OE parts names and validity attributes for every motor vehicle.

As I mentioned in my September 2015 article for Recycling Today, “Recall Concerns,” available at www.RecyclingToday.com/article/rt0915-automotive-recyclers-recall-data, access to parts numbers can improve consumer safety and supply chain decisions. It is more critical today than ever before as the expansion of automotive electronics challenge the professional automotive recycling community to secure the necessary data to compete in this emerging parts sector. This will be at the forefront of the automotive agenda for years to come. Automotive recyclers have a large stake and a critical role in the life cycle of OE parts, and ARA will not stop in its efforts to get manufacturers to release the parts data to recyclers.

European Union ELV Directive

It has been more than 15 years since the EU adopted its Directive on End-of-Life Vehicles (ELVs), a groundbreaking agreement that addressed the life cycle of a motor vehicle and set performance targets for EU member countries for reuse, recycling and recovery rates. A key component of the ELV Directive was the establishment of regulations requiring automobile manufacturers to provide access to OEM parts identification information.

In March, I represented ARA at the 2016 International Auto Recycling Congress (IARC) in Berlin, where a number of discussions focused on the implementation of the ELV Directive over these past 15 years and the actual effects on automotive recyclers in Europe.

Understanding how advancements that have been made elsewhere in the world between automakers and the replacement parts industry already have paid dividends at home, Kinzinger referenced the European Commission’s action when he spoke on the floor of the House of Representatives in support of automotive recyclers gaining access to OEM parts data. That moment and the subsequent passage of the FAST Act would not have been possible without ARA members’ regular dialogue with and education of Congressional staffers.

Opportunities abound to build support for our pursuit of all parts data. Also in March, ARA participated in the G7 Alliance on Resource Efficiency Workshop on the Use of Life Cycle Concepts in Supply Chain Management to Achieve Resource Efficiency in Washington. The two-day workshop used the automotive sector as a case study and focused on exploring key challenges to implementing life-cycle concepts.

China moves for disclosure

At the International Automotive Recycling Roundtable (IRT) in Malaysia in April, I sought to find out more about recent Chinese government demands for increased disclosure on spare parts and repair information from the automakers. The new policy, announced last October, is the latest in a series of measures Chinese government officials have taken to crack down on price fixing in spare parts and repairs after fining several automakers since 2014.

China will require automakers to publish technical information, such as repair manuals and spare part catalogues, that will make it easier for consumers and independent repair shops to fix cars. Analysts predict that this countermeasure will make it easier for third-party repair shops to identify suppliers and to source replacement parts directly.

The current lack of transparency in parts identification throughout the world creates an undue impediment to competition that benefits vehicle manufacturers. These opportunities are examples of ways in which the ARA is engaged every day on the local, state, national and international levels to protect and promote automotive recyclers’ parts inventories by securing access to OEM parts data.

ARA is encouraged by the steps taken by consumer advocates and other stakeholders to obtain access to data and will continue to shine a spotlight on the actions of automobile manufacturers that continue to engage in deceptive, unfair and restrictive trade practices around the world.

Michael E. Wilson is chief executive officer of the Automotive Recyclers Association, Manassas, Virginia. He can be contacted at michael@a-r-a.org.