Motor & Equipment Manufacturers Association

Your First Call for Global Intelligence on the Motor Vehicle Supplier Industry

1030 15th Street, NW, Suite 500 East  Washington, DC 20005

202-393-6362  Fax: 202-737-3742  www.mema.org

January 10, 2010

The Honorable Darrell Issa

Chairman
Committee on Oversight and Government Reform
House of Representatives
Washington, D.C. 20515

Dear Chairman Issa:

The Motor & Equipment Manufacturers Association (MEMA) represents over 700
companies that manufacture and remanufacture motor vehicle parts for use in the light vehicle
and heavy-duty original equipment and aftermarket industries.1 Motor vehicle parts suppliers are
the nation’s largest manufacturing sector, directly employing 685,892 U.S. workers and
contributing to over 3.2 million jobs across the country. On behalf of this industry, I thank you
for your letter, dated December 29, 2010, regarding the efforts of the Committee on Oversight
and Government Reform to examine existing and proposed regulations that have negatively
impacted the motor vehicle parts manufacturing industry.

MEMA believes that regulations must provide a balanced framework from which
manufacturers can operate and flourish while addressing statutory requirements outlined by
Congress. MEMA member companies are not opposed to regulations when applied in this
manner, but the industry opposes legislating through the regulatory process. Motor vehicle parts
manufacturers have worked closely with the National Highway Traffic Safety Administration
(NHTSA) on the implementation of rules focused on updating the stopping distance
requirements for heavy-duty vehicles and adding the stability control technology requirement for
passenger vehicles. These rules have not created onerous costs to industry or the economy and
will make our roads safer. At the same time, MEMA has raised objections regarding the
proposal and implementation of rules from agencies when the burden on manufacturers
outweighs the stated policy objectives. Without appropriate regulatory policy, the global
competitiveness of the United States will continue to decline and more manufacturing jobs will
be lost.

1
MEMA represents its members through four affiliate associations: Automotive Aftermarket Suppliers Association (AASA),
Heavy Duty Manufacturers Association (HDMA), Motor & Equipment Remanufacturers Association (MERA) and Original
Equipment Suppliers Association (OESA). The motor vehicle parts supplier industry is a leader in developing technologies
critical to making today’s vehicles safer and more fuel efficient and is investing in product development to help meet future
consumer demand. Suppliers also manufacture the aftermarket products necessary to repair and maintain over 247 million cars
and trucks on the road today.

Automotive Aftermarket Heavy Duty Original Equipment

Suppliers Association Manufacturers Association Suppliers Association
 MEMA Letter to Chairman Issa
January 10, 2011 Page 2

Environmental Protection Agency

A number of regulations from the EPA would have significant negative impact on the
industry. The most troubling of these are the greenhouse gas (GHG) regulations on stationary
sources, which will dramatically increase the cost for suppliers to manufacture components,
systems and parts. While this rule will not directly apply to the vast majority of motor vehicle
supplier facilities, the indirect costs will be substantial. Price increases for fuel and electricity
will in turn lead to increased manufacturing costs. Furthermore, the price of feedstocks, such as
steel, glass, aluminum, chemicals, plastics, etc., that are necessary to manufacture motor vehicle
parts, will also increase.

Although MEMA is concerned about the GHG regulations on large stationary sources and
believes that the regulation should be delayed, MEMA supports the implementation of the
national program for light-duty vehicle emissions and fuel efficiency requirements, a
collaborative, joint rulemaking between NHTSA and EPA. Without this national program
approach, there will be no national certainty in vehicle emissions and fuel efficiency
requirements from state to state. The current program, which covers vehicle model years 2012 to
2016, requires emissions and fuel efficiency standards that are attainable by the auto industry
while also improving our air quality and decreasing our reliance on foreign oil. As EPA and
NHTSA begin work on the next phase of light vehicle emissions and fuel economy standards,
MEMA has continued to support a uniform program that not only allows vehicle manufacturers
to invest in the appropriate technologies needed for their vehicles to reach or exceed fuel
economy and emissions targets, but also to help the supplier base convert research technologies
into commercially viable products.

Additionally, EPA and NHTSA are working to develop a joint national program to establish
the first-ever fuel efficiency and GHG emissions standards for medium- and heavy-duty vehicles
and are currently accepting comments on the Notice of Proposed Rulemaking covering model
years 2014 to 2018. While MEMA applauds the proposal as the appropriate first step, we are
concerned about the impact and feasibility of future mandates addressing vehicles beyond model
year 2019. Historically, EPA regulations have had a dramatic impact on employment and
vehicle sales within the heavy-duty sector. For example, the 2002, 2007 and 2010 EPA
requirements to lower heavy-duty engine emissions of nitrogen oxides and particulate matter had
a direct, negative impact on the employment and financial viability of many heavy-duty parts
manufacturers.

MEMA objected in part to the new and overly stringent standards for industrial boilers from
EPA. These standards will have an immediate impact on our members’ bottom line without
demonstrated environmental benefits. Compliance costs associated with these harsh and
inflexible proposed rules will cost U.S. manufacturing jobs and hurt global competitiveness, just
as the economic recovery attempts to gain more traction.

Changes to how EPA categorizes “Used Oil” are opposed by MEMA. Last year, EPA took
steps to reclassify used oil as a solid waste. The Used Oil regulations, which were developed in
1985, have encouraged recycling by allowing for the development of markets for which both
“On-Specification” and “Off-Specification” used oils are now considered traditional fuels and
have become valuable commodities as a result. This proposed rule will have unintended
consequences that could negatively affect the used oil and used oil filter recycling efforts in the
United States, cause negative environmental impacts and place economic burdens on industry,
 MEMA Letter to Chairman Issa
January 10, 2011 Page 3

states, and local communities that rely on these valuable commodities for cost-efficient
production purposes.

MEMA has also raised questions about EPA’s decision to clarify the Toxic Release
Inventory (TRI) article exemption. Since 1988, EPA has interpreted the articles exemption to
exempt from TRI reporting the normal migration of reportable chemicals from finished goods
that have completed the manufacturing process. The fundamental precept underlying this
position has been that such migration is not caused by the “processing” or use of the item, but
occurs continuously throughout the life of an article. Under EPA’s proposed clarification,
emissions of chemicals from finished goods that are not processed or used, or that are sitting in
storage, would be reportable to the TRI. This proposed clarification would greatly increase
reporting burdens on manufacturers.

Occupational Safety and Health Administration

There are three potentially problematic issues emerging from OSHA. The agency published
an interpretation notice (outside the normal rulemaking process) that will dramatically change
the way it enforces noise level standards. This change would impact businesses of all sizes and
replace a currently effective policy under which employers may provide cost-effective and
efficient personal protective equipment to protect their employees from exposure to high noise
levels. Under the new proposal, employers must do what is “feasible” to reduce overall noise in
the workplace, regardless of cost.

Additionally, MEMA fears that OSHA’s anticipated rulemaking on employer’s safety and
health programs, the Injury and Illness Prevention Program (I2P2), will not take into
consideration the significant efforts that employers are already making in this area and leaves
definitions such as “injury” and “significant risk” open to interpretation by OSHA investigators.
Employee health and safety is a priority for our member companies. However, MEMA views
both of these proposed changes as too broad and overreaching as well as financially
unsustainable for businesses of any size to comply.

In addition, MEMA believes that OSHA is taking a more adversarial approach with
employers, particularly small employers, in its consultation practices. Employers should be able
to consult with OSHA to gain a better understanding of how to comply with workplace safety
standards without fear of citations and fines. A recently proposed rule would subject small
businesses to enforcement based on their voluntary participation in these types of programs.
This action would create a strong disincentive to participate in consultation programs, which can
be a valuable resource for employers.

National Labor Relations Board

MEMA is carefully watching activity from the NLRB. In December, the NLRB proposed a
rule that would require employers to post a notice to employees about their rights to unionize
under the National Labor Relations Act. Moreover, the notice must be posted like other required
employee rights posters and must also be posted electronically, if employers use electronic
communications. Additionally, the Board has proposed establishing a new “unfair labor practice”
liability on employers for failure to comply with this proposal’s requirements for posting. As the
landscape on Capitol Hill has changed, MEMA worries that the Administration may seek to
 MEMA Letter to Chairman Issa
January 10, 2011 Page 4

advance issues related to the Employee Free Choice Act through regulatory channels and
believes that the Board’s authority to issue this proposed rule is unclear.

DOT Pipeline and Hazardous Materials Safety Administration

MEMA believes that the new shipping and handling requirements for the transportation of
lithium ion and lithium metal batteries is unnecessarily excessive in light of existing, stringent
international standards. These regulations will be inconsistent with those previously adopted by
international regulators and U.S. trading partners. Each year, billions of lithium batteries and
products containing them are shipped by air without incident. The estimated cost to shippers to
comply with this proposal would be significant, impacting manufacturers, retailers and
consumers. MEMA would support a rule that seeks to harmonize U.S. rules within the existing
international framework.

In closing, MEMA welcomes the opportunity to provide input to your Committee on existing
and proposed regulations that have or will negatively impact job growth in the motor vehicle
supplier industry. Thank you for your consideration of the issues raised in this letter. If you
require additional information, please contact me at your convenience.

Sincerely,

Ann Wilson
Senior Vice President, Government Affairs