IMPORTANT INDUSTRY CORRESPONDENCE REGARDING MOTOR VEHICLE SAFETY RECALLS
From the Automotive Recyclers Association (ARA)
July 10, 2015
Regrettably, the number of defective automotive parts in today’s marketplace is increasing at alarming rates, as indicated by the over 100 million vehicles recalled since the beginning of 2014 in the United States alone. ARA understands that these recall campaigns create multiple challenges for our members – professional automotive recyclers who provide safe and quality OEM recycled automotive parts to the marketplace – and we are writing today to let you know how your association has and will continue to aggressively work to help protect and promote your inventory of safe and quality OEM recycled parts in this era of continuous automotive safety recalls.
Please know that this email will be one of several that ARA will share with you in the coming months to keep you informed of the latest actions that your association has taken to address the implications that recalls have on the automotive parts supply chain, and also in the context of the three major laws passed providing for the federal regulation of the recall process (see side text box).
First and foremost, to minimize the effects of safety recalls on the automotive parts supply chain, your inventories, and the consumers who rely on recycled OEM parts, ARA is aggressively promoting the need for access to bulk VIN recall data and parts data so that you are able to identify in a streamlined, integrated and efficient manner those OEM parts which have been recalled.
ARA has also taken steps forward to ensure that auto manufacturers adhere to the law as written and provide ARA members with fair market value for recalled parts that recyclers must remove from their inventory. High level meetings with Congress and the automakers are ongoing to consider how best to address the fair market value of those parts that ARA members have and continue to take out of the market.
Furthermore, ongoing conversations with the National Highway Traffic Safety Administration (NHTSA) – the federal agency established by the U.S. Department of Transportation to carry out vehicle and consumer safety programs – and consumer groups are occurring during which ARA has emphasized the industry’s need to be able to integrate bulk VIN data into inventory management systems so that those VINS/parts that have been recalled can be flagged throughout the automotive recycling process to avoid possible market penetration.
The Association also is working to educate federal officials and industry stakeholders about the need for access to parts data, as noted below.
- In response to a question asked on behalf of ARA by a Member of Congress, U.S. Department of Transportation Secretary Anthony Foxx recently stated for the record that automakers should provide “parts numbers related to recalls” in an “efficient and easy to use format directly to recyclers and others who need this information.”
- In December 2014 and June 2015, again on behalf of ARA a Member of Congress asked automakers as well as organizations representing domestic and foreign auto manufacturers why professional automotive recyclers do not have access to the automakers parts data. We are awaiting the answers to those questions that will be entered into the official hearing record.
- During a May 2015 NHTSA Recall Workshop, ARA argued the case and a consensus of participants agreed with the position that stakeholders should have access to both bulk VIN data and parts data.
ARA’s demands for automotive recyclers’ access to bulk VINs and OEM parts data are unrelenting and continuous. ARA is proud to continue to lead the charge to meet these demands so that the automotive parts supply chain is streamlined, quality driven and protects the safety of the nation’s drivers.
ELVS recently announced the launch of a toll free hotline to assist auto recyclers and dismantlers with responsible management of the high voltage batteries used in hybrid and electric vehicles. Objectives of the hotline include 1) directing dismantlers to information and training resources for safe and compliant HV battery removal, handling, packaging, and shipping, 2) assisting dismantles with information regarding compliant HV battery recovery and disposal, and 3) connecting dismantlers with battery scrap experts who can help assess the value of scrap HV batteries.
Callers to the hotline will also be directed to visit the ELVS website at www.elvsolutions.org where they will find links to OEM dismantling guides and training resources.
The new MICAR Plus program launched jointly by Automotive Recyclers of Michigan (ARM) and the Michigan Automotive Service Association (ASA) can help you substantially increase sale of recycled parts to the automotive collision and repair industry. MICAR Plus members will also be identified and recognized as recyclers who are committed to not only meeting environmental and safety standards, but also providing consistent quality parts and exceptional service.
Currently, Michigan’s collision and repair shops do not use nearly as many recycled parts as they could. Despite pressures from the industry to use more recycled parts, repair shops often only consider certain types of recycled parts, or only purchase parts from a few long-term trusted recyclers. There are a variety of reasons why there is a reluctance to use more recycled parts: limited parts availability, poor or inconsistent quality of parts, incorrect parts, uncertain delivery times that interfere with scheduled repair cycle times, and difficulties with returns and credits. Similarly, recyclers can become frustrated with selling parts to repair shops that fail to understand the nature of recycled parts, do not order the correct parts, and expect unreasonable delivery times and return policies. ARM and ASA concluded that using more recycled parts would benefit both the recycling and repair industries, and that many of these obstacles to using recycled parts could be solved by improving communication and developing agreed-upon quality and service standards.
ARM and ASA are promoting and marketing the MICAR Plus program to their members to support the increased use of recycled parts. To help address concerns about using recycled parts, a set of standards that include delivery requirements, return and credit policies, transaction procedures (digital photographs and body cut sheets upon request), and minimum written warranties (including an optional extended parts and labor warranty) were agreed upon. To administer the program, complaint investigation procedures, an arbitration board, compliance audits, and mandatory training requirements were established. Participating repair shops will attend special I-CAR training that explains the vehicle recycling process and promotes the use of more recycled parts.
MANASSAS, VA – In a letter to ARA Chief Executive Officer (CEO) Michael Wilson, the Federal Trade Commission (FTC) this week affirmed the use of recycled automotive parts in warranty repairs. In the letter, the FTC says: “Warrantors may not claim that a warranty is void simply because a consumer has used an authorized or recycled part.”
“Tying warranties to the use of new, authorized replacement parts is illegal under the Magnuson-Moss Act,” said Wilson. “Several months ago we asked the FTC to review position statements by several automobile manufacturers that implied that recycled parts are lesser quality parts than new OEM parts and that there use could void a manufacturer warranty,” said Wilson.
ARA raised concerns with the FTC that the position statements of the automobile manufacturers might mislead consumers into thinking that using recycled parts in a repair could void their warranty. As a result, the FTC announced the update of a consumer alert entitled Auto Warranties, Routine Maintenance, and Repairs: Is Using the Dealer a Must? The revised alert specifically notes that the mere use of recycled parts does not void a warranty and that it is illegal for warrantors to void a warranty or deny coverage simply because a recycled part was used. An updated version of the alert can be found here.
Since 1943, the Automotive Recyclers Association (“ARA”) represents an industry dedicated to the efficient removal and reuse of “green” automotive parts, and the proper recycling of inoperable motor vehicles. ARA represents the interests of over 4,500 auto recycling facilities in the United States and fourteen other countries around the world. With programs such as the Certified Auto-motive Recycler Program (CAR) and other partnerships, ARA members continue to provide consumers with quality, low-cost alternatives for vehicle replacement parts, while preserving our environment for a “greener” tomorrow.
To learn more about the Association, visit ARA’s Home Page at www.a-r-a.org or call (571) 208-0428.
What is arm working on for the rest of 2011?
We recently met with ARM’s Board to discuss how we can “go on offense” with some pro-active policy ideas. Of course, we will continue to “play defense” on the salvage auto auction issue as we have done successfully for several years now.
Some of our ideas include:
- Allowing electronic record keep for “police books” regarding the sale of major component parts. This likely requires a statutory change.
- Exploring the codification of the MICAR program. A series of bills was recently signed into law which codified (recognized in state statue) the Michigan agriculture environmental assurance program (“MAEAP”). MAEAP is a rigorous industry self-certification program similar in general concept to MICAR. The new law would provide a measure of regulatory relief in permitting and other matters for those Ag industry members who meet MAEAP standards. We are currently working with Barb Utter and ARM’s regulatory guru Dave Kendziorski to develop language for possible bill introduction.
- ARM Lobby Day in Lansing. Look for an announcement soon for a date in the Fall for our 3rd Annual Lansing Lobby Day.
ARA States the Facts on Automotive Recycling*
The Automotive Recyclers Association (ARA) is the leading international trade association of professional automotive recyclers. ARA represents 4,500 automotive recycling facilities in the United States and fourteen other countries around the world. We proudly represent an industry dedicated to the environmentally efficient removal and reuse of automotive parts and the recycling of inoperable motor vehicles. ARA aims to further the automotive recycling industry through various services and programs to increase public awareness of the environmental benefits of automotive recycling and to foster awareness of the industry’s value as a high quality, low cost alternative for the automotive consumer.
The North American Automobile Recycling Industry by the Numbers
- Recycling vehicles in the United States and Canada provides enough steel to produce almost 13 million new vehicles annually.
- Automotive recycling in North America saves an estimated 85 million barrels of oil a year that would have been used in the manufacturing of new or replacement parts.
- Total United States and Canadian annual revenue is estimated to be $22 billion.
- Automotive recycling businesses employ more than 100,000 people in the United States.
- Total annual payroll is estimated to be $3.3 billion in the United States.
- More than three quarters of all automotive recycling companies employ 10 or fewer people.
- Automotive recyclers provide wholesale and retail customers quality parts that range from 20 to 80 percent less than comparable new parts.
- Automotive recyclers are good corporate citizens. Recyclers across the country host first responder training sessions at their facilities. These sessions provide first responders with the opportunity to learn the new procedures required to free trapped victims from car crashes.
*Most recent ARA statistical data regarding the automotive recycling industry.