July 28, 1976
Page 24301
Mr. MUSKIE I yield myself 15 minutes.
Mr. President, I wish to make this point with reference to the Senator's amendment. In the first place, the aftermarket industry now controls 80 percent to 85 percent of the business which is involved. It does that notwithstanding the fact that the modern automobile has many complex systems: the ignition system, the transmission system, the brake system, and the air conditioning system. We go through the list. The automobile has become more and more complex, tempting one to the conclusion that, more and more, the consumer would turn to the manufacturer to correct any deficiencies or difficulties that developed in those complex systems.
Yet, according to the sponsor of this amendment, the aftermarket industry now has 80 percent to 85 percent of the business with which it is dealing. He argues that this performance warranty would have an effect different from the complexity of all these other systems, that this would turn the consumer away from the aftermarket industry to the franchised dealer. I think that is quite a tough case to make.
Second, this performance warranty has been on the books for 5 years, and the aftermarket industry has flourished in that 5-year period.
Mr. President, why do we need a performance warranty? If we have learned anything in the 13 years that we have tried to prod the automobile. industry to clean up automobile emissions, it is that the industry will not do anything voluntarily. It will not do anything that public policy does not require. The deadline for achieving standards was one such public mandate that Congress overwhelmingly approved; and although we postponed the deadlines, we have stuck to the mandate because we all know that.
In addition, the performance warranty is a way of making the manufacturer stick to his commitment as mandated by public policy.
At the rear of the room is a chart. (The same information was printed in table E on page 23864 of yesterday's RECORD.) What does that chart tell us? It tells us that, notwithstanding the standards required by the 1970 law, the automobiles manufactured since 1967 have not actually met those standards in use.
For example, with respect to hydrocarbons, the black line indicates what the current law requires in terms of standards. The red line indicates the actual in-use performance. It is clear that the cars that the manufacturers put on the road do not meet the standards for which they are certified when they ask EPA to clear their models for the next production year. That is the gap, Mr. President.
The second one indicates the same story on carbon monoxide, which is the most deadly of these pollutants. Again, the black line indicates what the current law requires. The black line indicates the standards for which the automobiles were certified by EPA, and the red line indicates how they actually performed on the road with emissions far in excess of the standard.
I remind Members of the Senate that the standard is set by public health requirements; so that these automobiles that have been certified under public law since 1967, in actual use, have been violating public health requirements.
What is the answer to that? The do-it-yourself garage mechanic? Or do you put the burden on the automobile manufacturers? I ask a simple question: The present performance warranty requirement is that the car shall be manufactured to meet those standards for 50,000 miles. I ask this question: If we change that requirement from 50,000 to 18,000 miles, what is your guess as to what the manufacturer's response will be? What is your guess, given the record of the last 13 years? What is your guess? You know very well that the manufacturers will tailor their automobiles to meet an 18,000-mile performance standard and then leave it to the consumer and his mechanic to meet whatever penalties are thereafter imposed upon the consumer because the manufacturer has cut back on his own effort. It is as simple as that.
Do the sponsors of this amendment really believe that if the standard is dropped from 50,000 to 18,000 miles, the manufacturer is going to feel the same pressure to upgrade the performance of his cars that he does with a 50,000-mile warranty? Nobody can make that argument with a straight face.
So, Mr. President, this amendment would undermine the objective of the Clean Air Act. The existing warranty helps to protect public health by making the manufacturer responsible for building cars to meet the standard for 50,000 miles. This eliminates any incentive for the manufacturer to design and build cars that meet the standard beyond 18,000 miles. It shifts the burden and the expense of repairing a faulty emission control system from the manufacturer to the owner of the car.
As the Senator from Texas has pointed out, an adequate in-use test has not yet been perfected, but when it is, if the automobile of any individual owner fails to meet the public standards, that owner will be harassed and prodded by whatever enforcement agency the State creates to do whatever that State agency deems necessary to put that car into condition to meet that standard.
With respect to safety, we have put into public law policies which require the manufacturer to recall automobiles that do not meet safety standards, and we have seen story after story of hundreds of thousands of cars being recalled by manufacturers because they did not meet the safety standards.
Let us project an in-use test for emission standards. Poor Joe Blow buys a car, puts it on the road, runs it for 18,000 miles, then the emission controls fail and the in-use test identifies the failure. Would the manufacturer be required to repair the car under the Bentsen amendment? Of course not. That burden will fall on the consumer.
It does not matter what it cost, it does not matter whether or not the engine was basically so far off standard that it could not be restored to the standard. The owner would be stuck with it. We take the position that the manufacturer has the obligation.
The Senator from Texas is concerned that the performance warranty would drive the consumer into the hands of the franchised dealer. It would have that effect only if the manufacturer has a way of intimidating the consumer to take that course of action. If the manufacturer cannot intimidate the consumer into going to the franchised dealer, what reason in heaven would push the consumer in that direction? I am one consumer who does not go to a franchised dealer if I can avoid it, and if I have a good mechanic who can deal with my car himself. If the manufacturer cannot intimidate the consumer into going to the franchise dealer, he is not going to go. It is with that in mind that the committee, in the pending bill, wrote in these provisions:
The first provision requires all owners' manuals to contain instructions that maintenance does not have to be performed by the dealer or with the manufacturer's own parts.
Second, the bill makes illegal — makes illegal — any warranty provision that attempts to tie coverage to the use of the dealer's service and parts.
Third, the bill provides for the establishment of a program which will enable aftermarket parts manufacturers to certify that their parts perform as well as the auto manufacturers' parts, and the auto manufacturers have no role in approving such certification.
Finally, the bill provides for a Federal Trade Commission study of any anti-competitive effect that might still exist, notwithstanding these provisions.
So, what have we done in this bill? We have said to the automobile aftermarket parts dealers and manufacturers, "We understand that you applaud the objectives of the Clean Air Act and that you would want your parts to be consistent with the objectives of the Clean Air Act, so we shall make provision for certification of your parts so that you can consistently support your own objective of implementing the Clean Air Act."
Now, if they do not want to meet the objectives of the Clean Air Act, then they will object to that certification procedure. But if they mean what they say, that they subscribe to the objectives of the Clean Air Act, then the certification procedure would be a service to them and would eliminate whatever pressure there may be in that respect on the consumer to go to the franchised dealer.
The other two provisions that we have written into the law insure that the manufacturer cannot, through the written provisions of the warranty or through any arrangement with his dealer, create the impression, or even mandate, that the consumer has to go back to the dealer in order to get service, or in order to get parts replacements if they relate to emission control.
These provisions were put into the bill after careful study and analysis, and I think they eliminate any potential for the manufacturer to so intimidate the consumer that the consumer will be driven into the arms of the franchised dealer.
An amendment to be offered by the distinguished Senator from Tennessee (Mr. BAKER) , I think, will add to these safeguards in an important way and he will present that as a substitute or perfecting amendment to the Bentsen amendment, as I understand it. I shall leave it to him to explain that amendment.
I have undertaken to restrict myself to the explanation of the committee amendments. But the heart of the difference between my good friend from Texas and myself is reflected in that chart, the problem of assuring that 110 million automobiles in this country that are on the road meet the standards required by law for their useful life.
From the first time that I wrote a law dealing with auto emissions, we have always conceded that the big problem was not the new car coming off the line but the tens of millions of used cars on the road, because if the new car coming off the line was not adequately engineered and built, it would add to the family of 110 million used cars that do not, and likely cannot in their lifetime, meet those standards. Those curves show that since 1967 that conclusion has been right, and borne out by the record.
I mean, a new car becomes an old car the minute it changes hands, and unless it has been engineered up to that point so that it would meet those standards during its useful life, it is simply going to continue that red curve into the indefinite future.
The actual life of a car is more than 50,000 miles. We all know that. It approaches 100,000 miles, I think, increasingly, but it was our feeling that a 50,000-mile warranty would put sufficient pressure on the manufacturers to meet the standards so that if they met them for 50,000 miles, the chances were that the standards would be met pretty closely for the car during all of its useful life, even if it extended beyond 50,000 miles.
Well, 18,000 miles falls so far short of the actual useful life of an automobile that if the Bentsen amendment is adopted, for all practical purposes enforcement of the clean air standards will be in the hands of the individual consumer in this country, and there is ample evidence on the record that many consumers resist these standards; that they have asked their mechanics to disengage air pollution controls on their cars; that they have disconnected air pollution controls on their cars, and that their mechanics have worked with them to do so.
I can understand their frustration, but their frustration stems directly from the fact that the manufacturers have picked the wrong technology to meet those standards, and because they failed to use the right technology, you have had the performance shown on those charts. The only way you are going to force the manufacturers to move toward the clean air technology is to keep the pressure on and not relax it in the way the Bentsen amendment would propose. That would relax the pressure; it would intensify that problem. It would delay the day when the 100 million used car population of this country begins to come close to what the public health requires in terms of clean air performance.
Mr. President, I think I have said about all that I have to say on the subject, and I reserve the remainder of my time. I yield at this point to my good friend from New York, Senator BUCKLEY, for whatever time he may need.
(Mr. BIDEN assumed the chair at this point.)
Mr. BUCKLEY. Mr. President, I thank my friend from Maine. As a matter of fact, he has stated the case so well in opposition to Senator BENTSEN's amendment that I find it very hard to add to it. I shall try to approach it from a different view.
What we are coming down to is really a question of durability. We have to have some kind of mechanism to make sure that the auto manufacturers engineer into their products durability, which will carry forward, with some degree of reliance, throughout the useful life of the automobile. I can think of no device other than this guarantee, the 5-year, 50,000-mile warranty, better suited to do that.
I believe the arguments utilized by the Senator from Maine, addressed to the questions of the effects on the after market, are persuasive. I share the sentiments of the Senator from Texas (Mr. BENTSEN) about the need to protect that after market and the independent dealers. I utilize them and shall continue to utilize them whether or not this amendment is enacted. But I would like to focus — as I know the Senator from Tennessee will be addressing the broader sphere — on one matter that was touched on by the Senator from Texas in his citation of a report issued by the House Committee on Small Business.
I totally disagree with the conclusions he has drawn from that study. The hearings upon which the House committee made its findings demonstrated no drift toward lack of competition as a result of the performance warranty, particularly in view of such legislation as the Magnuson-Moss Act.
I would like to examine, for the purpose of clarifying the record, some of the testimony given before that House subcommittee.
Mr. D. A. Jensen is the director of Ford Motor Co.'s auto emissions office. He testified as follows:
Ford believes that any part which meets the original component performance specifications, regardless of its source, may be used in the maintenance and repair of Ford vehicles without voiding the warranty coverage on that vehicle. We believe that the use of performance, as opposed to design, specifications for purposes of determining component equivalency is highly desirable.
To assist in resolving this problem, the bill contains language establishing a parts certification process.
Another witness was Mr. Edmund Doyle, vice president and general manager for parts and service of Chrysler Corp. This is what he said in his testimony:
In order to keep the warranty in effect, an owner must, among other things, maintain his vehicle in accordance with certain specified instructions issued by Chrysler, a copy of which is also attached. Among therequired maintenance services are the following :
(1) Engine oil and filter changes;
(2) Service of the carburetor choke shaft, fast idle cam, and pivot pin;
(3) Maintaining or replacement of drive belts;
(4) Cleaning and replacement of carburetor air filters;
(5) Service of the engine idle speed, ignition timing and idle;
(6) Service and replacement of the PCV valve;
(7) Replacement of the filter element (in the vapor storage cannister) ;
(8) Service of the crankcase inlet air cleaner, the exhaust gas recirculation system and the choke;
(9) Spark plug replacement;
(10) Inspection of the orifice spark advance control valve;
(11) Replacement of the fuel filter; and
(12) Service EGR system.
An owner is free to have all of the above referred-to maintenance requirements performed at any servicing agency of his choice and none need be performed at a Chrysler Motors Corp. dealership. Further, any replacement filter, spark plug, belt, valve, et cetera, necessary as a result of the performance of this required maintenance, need not be one manufactured or sold by Chrysler Motors Corp.
That to me does not sound very dangerous to competition.
Now, Mr. President, Mr. John C. Bates, director of the service section at the other big automaker — General Motors — made this observation:
Third, the existing maintenance instructions, if continued unchanged, would not have the effect of invalidating a section 207 (b) performance warranty for a GM car on which non-genuine GM parts should be installed.
That was followed by the testimony of Mr. Jack Whitaker, president of Whitaker Cable Corp. He testified as follows:
If we can establish that the use of independent aftermarket parts and services is "reasonable maintenance" and if we can administratively induce vehicle manufacturers not to persuade or coerce the consumer into going through only their own market channels, and if we can establish that aftermarket parts are equivalent in the critical areas, which we believe they clearly are, we think we will have dealt with the prime area of concern; namely, the reasonable maintenance area.
Mr. Whitaker's statement continues: So the statement that has been made earlier that the consumer will not pay for something that he can get free, is really beside the point. The heart of the problem, not the entire problem, but the heart of the problem is what constitutes reasonable maintenance, and not what services are performed without charge under the warranty.
In testimony before the House,. Mr. Bertram M. Kaplan, president of Kastar, Inc., testified as follows:
It is a continuing problem which must be watched closely by EPA. We feel that an affirmative statement to the effect that the warranty will be maintained if the prescribed work is done properly regardless of who does it, is necessary.
When asked about the same point, Volkswagen responded as follows: Proper maintenance in accordance with the manufacturer's recommendations and the use of proper parts by an independent service center will not affect the rights of the car owner under the warranty for new Volkswagen vehicles emission control system.
A final viewpoint was presented by Mr. Alan G. Kirk II, who was then Assistant Administrator for Enforcement and General Counsel of EPA. He said:
In conclusion, I wish to emphasize that the agency opposes any weakening of the in-use enforcement provision of the Clean Air Act. We feel that these provisions must remain and must be vigorously enforced, if the clean air goals of the act are to be met. With no sanctions after sale, there would be little incentive for manufacturers to design and build vehicles capable of meeting standards for the life of the vehicle as defined by the act. The warranty and recall provisions provide this incentive. They also provide an incentive to purchasers to comply with the maintenance instructions, thereby increasing the prospects of in-use compliance. We believe that these provisions are essential to achieve the goals of the act and that adequate safeguards can be developed to protect the aftermarket from undesirable side effects of these provisions.
Mr. President, I believe that the criteria I have cited from Mr. Jack Whitaker, regarding the safeguards to make sure the major automobile producers do not insist on the utilization of
their franchise dealers, have, in fact, been met by the legislation we have before us, and by the provisions of the Magnuson-Moss Act.
I believe that further safeguards are incorporated in the amendment that will be offered by the Senator from Tennessee (Mr. BAKER) , an amendment that I have cosponsored along with the Senator from Vermont (Mr. STAFFORD).
I believe that we have those measures, those protections, that are essential to the protection of competition in the aftermarket. I urge that the amendment offered by Senator BENTSEN be rejected.
The PRESIDING OFFICER. Who yields time?
Mr. BENTSEN. Mr. President, I ask for the yeas and nays on my amendment.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. STAFFORD addressed the Chair.
The PRESIDING OFFICER. Who yields time to the Senator from Vermont?
Mr. STAFFORD. Will the Senator from Maine yield me 8 minutes?
Mr. MUSKIE. Mr. President, how much time do I have?
The PRESIDING OFFICER. Thirty-one minutes.
UNANIMOUS CONSENT AGREEMENT
Mr. MUSKIE. Mr. President, I ask unanimous consent that, following the statement by Senator STAFFORD, we put aside the Bentsen amendment temporarily, reserving to Senator BENTSEN and myself whatever time remains to each of us, that we then turn to the Baker amendment for the purpose of discussing it, with all of the previously agreed upon time limitations still to be in force.
Have I put that clearly enough to my colleagues?
Mr. BAKER. Mr. President, I am sorry to impose on the Senator from Maine, but I was talking to staff on this matter when he made the proposal. I wonder if he can state it again.
Mr. MUSKIE. My proposal is that, following the statement of the Senator from Vermont, we put aside temporarily the amendment of the Senator from Texas, reserving to both the Senator from Texas and myself whatever time remains to us on that amendment, that we proceed to the Baker amendment under the time limitation previously agreed upon, and, finally, that votes on the two amendments take place at the completion of the debate, back to back, the Bentsen amendment to be voted on first and the Baker amendment to be voted on second.
Mr. BAKER. Mr. President, reserving the right to object, and I do not expect to object, that is fine with me. I think procedurally it might be attractive to take up the Baker amendment and then see if the distinguished Senator from Texas would like to offer the Bentsen amendment as a substitute to the Baker amendment. In that way, the Bentsen amendment—
Mr. BENTSEN. I understand there may be a minor modification to my amendment.
Mr. BAKER. I think that would be fine.
The request, I suppose, would be that we temporarily lay aside the Baker amendment and make the Bentsen amendment the pending amendment, with the expectation that the Senator from Texas would offer his amendment as a substitute to the Baker amendment. His vote would occur first on the substitute. Following that, and depending on the outcome of that amendment, the Baker amendment would or would not be voted on at that time.
Mr. MUSKIE. It occurs to me if the agreement is approved as I put it, those parliamentary options are available to us without including them in the agreement.
Mr. BAKER. I think that is fine.
Mr. DURKIN. I would like to request 2 minutes to present a statement.
Mr. MUSKIE. May I change this to propose that following the Stafford statement and a 2 minute statement by the distinguished Senator from New Hampshire (Mr. DURKIN)we turn from the Bentsen amendment, each of us reserving whatever time remains, to the Baker amendment, under the time limitation previously agreed to, and the votes to occur when all time has expired on the Bentsen amendment and the Baker amendment, in that order.
The PRESIDING OFFICER. Is there objection?
Mr. McCLURE. Reserving the right to object, Mr. President, I want to understand what it is we have done here and how it changes the previous unanimous consent agreement. My understanding is that the Bentsen amendment is now pending. What we are trying to do under this new agreement is to agree that the Baker amendment may be called up as an amendment to the bill and voted on not as an amendment to Bentsen?
Mr. MUSKIE. That is correct.
Mr. BAKER. Mr. President, reserving the right to object, in answer to the distinguished Senator's question, I understand that the parliamentary situation is that the Bentsen amendment is now pending.
The PRESIDING OFFICER. That is correct.
Mr. BAKER. The proposal by the distinguished Senator from Maine was that at the conclusion of the remarks by the Senator from Vermont, and the Senator from New Hampshire, each side reserving any remaining time, that we temporarily lay aside the Bentsen amendment. The Baker amendment, No. 1586, would then become the pending amendment under the previous time order. It would be in order and we would expect the Senator from Texas would then offer the Bentsen amendment as a substitute, or a perfecting amendment in the nature of a substitute, to the Baker amendment.The voting sequence would be first on the Bentsen substitute to the Baker amendment and, secondly, on the Baker amendment.
Mr. McCLURE. I would understand that the new amendment to be offered by the Senator from Texas would have the time limit of the remaining time on the original amendment.
Mr. BAKER. That is my understanding.
Mr. BENTSEN. That is correct.
The PRESIDING OFFICER. Is there objection? Without objection, the unanimous consent request is agreed to.
The Senator from Vermont.
Mr. STAFFORD. Mr. President, how much time has the Senator from Vermont?
Mr. MUSKIE. Mr. President, while we have enough Senators in the Chamber, could I ask for the yeas and nays on each of the amendments?
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. McCLURE. Is it in order to ask for the yeas and nays on the Baker amendment at this time?
If not, I ask unanimous consent that it be in order to ask for the yeas and nays on the Bentsen amendment.
The PRESIDING OFFICER. Without objection, it is in order to request the yeas and nays.
Mr. BAKER. Mr. President, I ask for the yeas and nays on the Baker amendment.