The National Association of Manufacturers has signed a letter from a coalition of original equipment manufacturers (OEMs), intellectual property organizations and other business groups asking U.S. Sens. Patrick Leahy, D-Vt., and Jeff Sessions, R-Ala., chairman and ranking member of the U.S. Senate Committee on the Judiciary, respectively, to oppose S. 1368, the Access to Repair Parts Act.

The groups also oppose H.R. 3059, the House companion. The letter states:

Manufacturers of unlicensed automobile parts have to meet only one basic threshold, to produce a copy that looks similar to an original part. Those who produce such parts incur no costs attributable to original design, research and development and most importantly, product safety testing. Accordingly, the manufacturer of the original product for whom such unlicensed replacement parts are made does not know how these parts will perform and how their use will impact the quality and integrity of the original product. Automotive collision repairers are very concerned about the quality of replacement crash parts. Permitting this intellectual property infringement also exposes consumers to significant safety, performance or durability risks.

A copy of the letter is here.

The Automotive Service Association has more details on the legislation here and here.

A House Small Business Committee hearing Wednesday, “The Role of Small Business Suppliers and Manufacturers in the Domestic Auto Industry.”

Many good witnesses from the industry and trade associations. It’s important to remember that parts manufacturers often serve more than one auto company, so troubles with one company can reverberate throughout the supply chain of the entire sector.

Writing at the Aftermarket Business website, D.C. attorney Paul Laurenza talks about another provision of the Consumer Product Safety Improvement Act that will have a sweeping impact on business — the certification requirements. And one industry that’s bound to be hit is automotive supplies

From “Product safety law imposes major burdens on auto suppliers“:

Applying to both importers and domestic manufacturers, CPSIA section 102 requires that all product shipments carry outlined certification information that must be furnished to U.S. distributors and retailers upon delivery. The certificates require various information, including identification of all CPSC-administered standards applicable to the product, testing entities and contact information.When first enacted in August 2008, the provision was generally viewed as applying only to children’s products. However, the U.S. Consumer Product Safety Commission (CPSC) later announced that the section would be applied to any product that falls under a similar CPSC ban, standard, rule or regulation.

Through public comments, manufacturers, distributors and retailers pushed back on the determination, which applied the section 102 requirements to many non-children-related items, including automotive chemical specialty products. These products already must meet stringent regulations under the Federal Hazardous Substances Act (FHSA) and Poison Prevention Packaging Act (PPPA) for distribution.

So yet another unintended consequence: A burdensome, expensive and duplicative system of certification for products with no connection to children.

For the CPSC’s materials on Section 102, start here.

The Treasury news release Thursday, “Treasury Announces Auto Supplier Support Program”

The Motor Equipment Manufacturers Association issued a release praising the announcement, “Parts Suppliers Praise Administration for Acting to Assist Industry“:
 

WASHINGTON, D.C. – The Motor & Equipment Manufacturers Association praises the Obama Administration for taking quick action to assist motor vehicle parts suppliers, the nation’s largest manufacturing sector. Reacting to the U.S. Department of Treasury announcement of the creation of the Auto Supplier Support Program which will provide up to $5 billion in financing, MEMA President Bob McKenna stated, “This is a tremendous step toward stabilizing the supply base, which will benefit the domestic automotive manufacturing industry.” 

According to materials provided by the Treasury Department, the program will:
 

• Provide eligible and participating suppliers with access to government-backed protection that money owed to them for the products they ship will be paid;
• Allow participating suppliers to able to sell their receivables into the program at a modest discount, providing funding to operate their businesses and help unlock credit more broadly in the supplier industry.

Neil De Koker, president of the Original Equipment Suppliers Association, also praised the Administration’s actions. “This program comes at a very critical time and will help suppliers as they struggle to continue operations,” De Koker stated. “We are very optimistic that this will provide many companies with the relief they need.”

The National Association of Manufacturers also issued a statement from NAM President John Engler:

We greatly appreciate the announcement today by U.S. Treasury Secretary Timothy F. Geithner of the Auto Supplier Support Program that will provide up to $5 billion in financing to auto suppliers, enabling them to continue shipping parts, paying their employees and producing the diverse products essential to the auto industry.

We believe this is a common sense proposal that assures suppliers they will be paid for work already done, and have the confidence to invest in the necessary equipment for restructuring and reengineering the cars of the future.

The economic challenges facing the auto industry in America have a significant ripple effect on suppliers that provide vital auto components for the major auto companies, and without which the auto companies could not operate. This action will help us preserve many important, highly-skilled jobs and lay the groundwork for economic recovery.