Does anyone know what the purpose of H.R. 3059, otherwise named the Access to Repair Parts Act, is? Does anyone care? Why is this bill important to the auto glass industry? Why is it telling that the powers that be within our industry have had so little to say or to disseminate information about this potential law?
First of all, what is the purpose of this bill? As summarized by Govtrack.us, The Access To Repair Parts Act was introduced to: “make it not an act of infringement of any design patent to make, use, offer to sell, sell or import into the United Sates any article that is a component part of another article, if the sole purpose of the component part is for the repair of the article of which it is a part so as to restore its original appearance.”
What does passage of this bill mean to us? Simply put, without any respect to structural integrity, it will allow any aftermarket auto parts manufacturer to copy for sale and installation those parts they deem fit. They can do so without impinging on the intellectual property rights of the designing car manufacturer or their authorized vendors.
Supporting the bill are “consumer” groups, aftermarket parts manufacturers and insurers. One gentleman, Jack Gillis, actually represents two of those interests. He is the public relations director for the Consumer Federation of America (CFA) but surprise, surprise, he is also executive director of the Certified Automotive Parts Association. (I wonder whose interest he serves first.) He stated in his testimony that aftermarket parts save the consumer money. If aftermarket competition were ended, replacement parts would rise; and insurance premiums also would rise with the increased cost of repairs. There was no mention of parts quality equity being an issue as well as fit or finish of those parts.
Damien Porcari of Ford took the opposing view. He spoke about how copycat parts rarely are recognized by the average consumer. He spoke about making exceptions to the intellectual property rights body of law because it simply benefits those who copycat. He then made a rather bold statement about insurers.
“Some background about the insurance industry will illuminate what’s really spurring foreign parts copiers and unscrupulous insurance companies. Ford provides insurance companies with its genuine Ford replacement part pricing for every new Ford vehicle. Insurance companies use genuine Ford replacement part prices to set their insurance rates,” he said. “After state regulators approve these rates, insurance companies then refuse to pay for genuine Ford parts and steer body shops to use cheap, copycat parts…This entire discussion about consumer choice and right to repair is merely a distraction from the basic unethical business practice of pricing insurance premiums and using genuine Ford parts and then giving consumers cheap foreign parts.”
Huzzah for Mr. Porcari! He brings up perhaps the most salient point about aftermarket parts. The odious question of fact is, to whom is “fair and reasonable” actually fair and reasonable to? The other vacuous phrase of insurer legal legerdemain is promising to: “restore a vehicle to pre-loss condition.” To whose standards are those vehicles being restored—the car manufacturers’ or the insurers’? Honda has made declarations that the use of non-OE parts could void their warranty, but too many manufacturers have not been publicly expressive on this issue. If these uses of cheap aftermarket parts by direct repair vendors of insures became common knowledge among the general public, you might be very surprised at the amount of outrage it would generate. That certainly would include glass.
What is distressing to me is the absolute deafening silence that has come from some of our industry associations on this issue. The Independent Glass Association (IGA) has at least addressed this issue in some directives. How many distributors would be affected if there were some restrictions or limitations placed on purely aftermarket windshields and sidelites? These issues should be of great interest to anyone in our industry due to the great gulf in quality of fit and finish of available product that exists within our spectrum. To use one example, NAGS has designated a premium pricing status for some foreign glass parts, yet none exists for any domestic ones. Is there something wrong with cars that are built with Carlite, Guardian or MOPAR glass? Why does that inequity exist? To take that argument further, why isn’t there a manufacturer’s list for OE parts that is accepted by insurers?
HR 3059 does absolutely nothing to improve aftermarket parts in respect to quality. It only endorses the ability of anyone, domestic or foreign to make copycat parts to restore the appearance of a damaged vehicle. That means anything from widgets to windshields and should concern us all. Is it “fair” for some aftermarket glass producer to take a tint only OE windshield, reverse-engineer the part, put a shade band in it and pay no royalties to the first party?
I would have absolutely no argument with aftermarket parts if a high level of quality existed throughout. Sadly oftentimes there is a wide disparity between OE and non-OE. One can merely pick up many alphabet windshields and compare just their raw weight to the glass that is being replaced. Many times they are noticeably lighter. Is the fit the same? Is the visual acuity any different? Many of us have run into all sorts of installation problems with mis-attached or poorly bonded hardware for tempered parts. Non-OE moldings often are made of lighter materials, which also lack a stiffening wire base. Yet there are too many retailers that welcome the chance to sell product based on low acquisition cost and make little excuse for its shortcomings. The demand for such aftermarket commodities is not going to slack off simply due to the harsh economic times we currently are enduring. Much of the public simply either not aware that many of these parts are not equal to the original or, due to the pervasive Wal-Mart mentality accented by our serious recession, many are convinced that price is everything.
While glass people bemoan the lack of fit and finish, the problem is much larger and has a greater impact on the auto collision repair industry. I hear complaints on a daily basis from body techs of the unnecessary time and effort they spend in trying to get a replacement part to fit properly and are uncompensated for that extra effort.
The sad fact about HR 3059 is that it is an overt attempt to steal intellectual property rights rather than reform or even mandate proper standards for “knock-off’ parts. If it were, it might merit consideration. The auto glass industry should be standing in the forefront alongside the collision repair sector in either opposing or at least adding our opinions. The consumer needs to be protected and, at a minimum, informed about what goes back into his car during the repair procedure. He/she should be made aware that insurers are either mandating a non-OE part for financial reasons or, if making the selection themselves, they can make an informed choice on the materials used. So if a mirror bracket falls off a year later, taking some glass with it, a client can be reminded that his insurance company had a solution that worked for him on his previous claim.
In two related events this past week of interest to the auto glass industry, St. Gobain-Autover received a favorable ruling in a patent case against the aftermarket Chinese glass manufacturer Xinyi. Xinyi has been assessed a $22 million judgment for violating two patents that St. Gobain holds in auto glass glazing. What effect that will have in the auto glass aftermarket remains to be seen but I doubt that the ruling will stop the flood of cheap international glass that washes onto these shores (usually at the expense of our domestic manufacturers).
The U.S. Treasury Department also waffled at the last minute in declaring China guilty of currency manipulation, most likely due to our status as a debtor nation to the Chinese. This subject alone could make for a very long essay. However, experts note if the Chinese yuan were properly valued, meaning not pegged to the U.S. dollar, the cost of imported goods from that country to the United States would rise between 25 to 40 percent. That large disparity also is partially responsible for the loss of manufacturing jobs that have permanently left the United States for the Chinese mainland.
