systems which may solve one problem (and create another), but in doing so further increases the likelihood the consumer will have little or no understanding of the function of any system contained in the vehicle. This trend is not expected to reverse itself because of further of government mandates on lower emissions and safety items such as the air bag, the situation is expected to continually grow worse. We realize that there are those within the auto repair industry who take advantage of the consumer and his lack of knowledge. We believe that these "unscrupulous few" can be handled through state consumer protection laws and can be and should be prosecuted whenever fraud occurs. We do not believe that either the licensing of shops, or mechanics will eliminate the problem of consumer fraud. We will discuss licensing more in depth, later in our statement.

We believe the second major problem faced by the auto repair industry is the lack of skill among those who profess to be "mechanics". We cannot disagree with the Department of Labor's assessment that there is no shortage of auto mechanics, only a shortage of qualified mechanics. We do know that our industry is always (and even more so today) searching for and desperately needing more qualified mechanics. As you can see not only does the consumer face this problem of lack of knowledge regarding what's under the hood, but we face it as well in attempting to maintain and repair vehicles as they become more complex. Every year there are tens of thousands who enter the automotive field, very few of whom are qualified. Many of our ALCA state organizations spend inordinate amounts of their yearly membership income on the training and retraining of their members and their employees. Unfortunately, this is not enough to solve the problem.

We do believe, though, there is a way to have a strong impact in this area, which is through "journeymen" training on a massive scale. Of course, there is a large sum of money already being spent on vocational training, but we submit that it is focused on the wrong individuals. Most of today's vocational training tends to be targeted to the "hobbyist" who wishes to tinker with his vehicle on weekends. An extensive vocational training system needs to be developed to train journeymen mechanics. That is, those already employed in the industry. To enroll in one of these courses a student should have to show that he is currently employed in the industry and is not just a "hobbyist". It's been found in checking many mechanic training classes that 90 percent or more of the students are not preparing to become mechanics but are in fact "hobbyists". This is an area in which the federal government could be of the greatest aid to the auto repair industry. We are suggesting that training be taken out of the classroom and offered to those who need it mostthe mechanics working on the cars of today. The success of limited activities in this area by groups such as our state associations and the classess offered by the "Big Four" are just an example. We believe the reception by our industry to such a training opportunity would be overwhelming. We agree with FTC Chairman Mike Pertschuck when testifing on auto repair before Senator Ford last March said, “Our need is for more good mechanics, and that can be met only by more and better training."

This Committee has heard and probably will hear further from those who feel that there are other approaches to solving auto repair consumer problems, such as the licensing of shops and mechanics. We do not believe this would cure any of the consumer's problems. There are numerous current examples to reinforce that belief, such as the experience of TV Repair licensing in Louisiana and such laws as those that prohibit the retailers of eyeglasses in California from price advertising. Mr. Chairman, in Texas a consumer can buy a pair of single vision eyeglasses with metal frames for about $20. The average price of the same glasses (same frame and same lens) averages between $60 and $70 in California. In a study conducted in 1974, the Federal Trade Commission found that there were no significant differences in the number of instances of fraud between Louisiana with its TV Repair licensing system and the District of Columbia which has none. In fact, in a speech to the National Association of Attorneys General, then FTC Chairman Louis Engman said "Occupational licensing-which limits the number of people in the occupation-does not really protect the consumer from fraud and incompetence as often as claimed by proponents-usually those already in the trade-but may in fact do nothing but raise the prices consumers pay for services." It's obvious when faced with a situation of "grandfathering in" current practitioners based on their years of working experinece, that licensing has changed the situation little.

In fact, if "grandfathering" had any merit it would make the call for licensing, which is supposed to insure competence, a moot issue. Unfortunately, as we have said there is some fraud in the industry but we find that more problems are caused by poor communication between the repair facility and the consumer and the consumer's complete lack of knowledge regarding the operation of the vehicle, than

we do out-and-out fraud. Once again we agree with FTC Chairman Pertschuck when, before Senator Ford, he said, "We should find out the real data before any consideration is given to hanging licensing on the backs of the approximately 255,000 small businessmen who operate garages around the country."

An area in which we believe the federal government could be of aid to both the auto repair industry and the consumer would be by developing, in cooperation with the independent auto repair industry, a glossary of repair terms.

The consumer sees widely varying prices advertised for a "tune-up" and cannot understand how the variance in these prices can be so major. Actually, no one really knows what a "tune-up" encompasses. At one repair facility this could simply be the replacement of points, condenser, and the setting of dwell and timing. In another operation it may include the items just mentioned along with adjustment of the carburetor for air-fuel mixture, idle settings to the vehicle's specifications, including cleaning the carburetor and other adjustments to fully complete the job. In fact, there's no real agreement of the definition by either the auto repair industry or the consumer of what encompasses a "tune-up".

It can be labeled either minor or major and still create confusion. In these areas, most often used by the consumer, a definition would benefit both the industry and the consumer. The consumer could then objectively compare advertised prices for the same job. Definitions could also be valid consumer aids in other routine maintenance operations such as front-end alignment and brake jobs.

Since 1966, when the Highway Safety Act was passed, the government has, in following the mandate of the law, attempted to urge state's to implement Periodic Motor Vehicle Inspection (PMVI) and has used the authority under the law to threaten the withholding of Federal-Aid Highway funds from any state that did not initiate a PMVI program. Unfortunately, this was only a threat. No state has ever had the federal sanction applied to it and to make matters even worse, a change in the law has now allowed PMVI to be optional for state safety programs instead of mandatory as it was under the original law. We would urge that NHTSA seek legislative reform to reinsert in the 1966 Safety Act (Section 402) which mandated periodic motor vehicle inspection on the states, licensed by the states, and performed by privately operated inspection stations in independent garages, with provisions to ensure strict enforcement of inspection violation. We believe the independent garage inspection station concept has numerous advantages over the stateoperated facility such as is currently in operation in Arizona-not the least of which is the cost of establishing the system and the cost to the consumer for the inspection. PMVI can be more easily and inexpensively done through the independent garage system which is already in place, with strict enforcement of inspection violations.

Currently, the states of Texas and Virginia are perfect examples of this type of system operating well. Inspections in these two states could be more stringent, but any consumer who feels his or her car has been incorrectly inspected and failed by an inspection station can have that verified by a simple call to the state police. The officer will inspect the vehicle and either agree or disagree with the inspection station's decision. If there is a blatant violation by the inspection station, the state police through the state government, take corrective action and that inspector is no longer allowed to inspect vehicles. We believe PMVI does enhance the safety of vehicles on the road and affords the consumer the opportunity to have serious problems brought to his or her attention before they might become the cause of a major accident.

Many question the use of independent garages, again because of the fear that the vehicle will be failed so the garage can do the work in order for the vehicle to be passed. We believe a simple sign located in every inspection facility, in large print, informing the consumer that if he or she feels an inspection is unfair in any way, he or she may contact the state police for validation, would eliminate the often raised question of fraudulent inspections to obtain repair work.

One of the questions asked by the committee in its invitation was, "What role can diagnostics play in addressing these problems?" We believe diagnostics can play a major role, if there is some way the equipment can be made available to our industry. Today, most of it is prohibitively expensive and short-lived. More and more vehicles are coming off the production line with the onboard capacity to plugin to diagnostic equipment which gives readouts on a varying number of vehicle systems, indicating whether or not there are possible problems in any of these areas. Unfortunately, there is no standardization in this area and what is useful on a Volkswagen, is of no use on a Chevrolet. Until there is standardization in this area, diagnostics as a solution remains highly questionable.

The Motor Vehicle Information and Cost Savings Act Amendments in 1975 mandated the National Highway Traffic Safety Administration to aid in the development of low-cost diagnostic equipment for use by independent repair facilities. Unfortunately, NHTSA has taken little, if any, action in this area. We feel that if there is to be any progress in standardization and use of this equipment by the independent auto repair industry, the government must take the lead.

We believe that since our industry does approximately 75 percent of the service work in this country (we disagree with recent DOT claims of 50 percent) it is imperative that we be able to obtain low-cost equipment to be able to diagnose problems in today's complex vehicles. Unfortunately, not only is the equipment available today extremely expensive, but it is limited as to its use on different vehicles. In fact, it changes significantly from year to year. The purchase of such major diagnostic equipment every year for every type of vehicle, is obviously beyond the means of our small business members.

After carefully looking at the statistics used by NHTSA in its broad-headlined"$20 billion rip-off" we believe this type of headline publicity is of no service to the public. When looking at those statistics you'll find that fraud was a very minor part of the so-called "compilation" of those figures. Supposedly, unnecessary maintenance, either over-maintaining or under-maintaining a vehicle, had questionable amounts tagged to them. The idea of calling replacing all four, eight, or six spark plugs on a vehicle, when only one was bad, a "rip-off"" is ludicrous. If one plug has been in for its prescribed life and has worn out, then there is little question the others will also soon fail. It would be fraud on the public if one of our members replaced only that one spark plug and forced the consumer to return three, five, or seven more times to replace each plug as it gave out. There would be an extreme amount of added inconvenience to the consumer, which cannot be determined in dollars and cents and an increase in the consumer's cost as each time he brought the vehicle back the problem would have to be diagnosed as to which plug had failed and then have it replaced. There is no question but that to do this eight times would definitely be a "rip-off" on the consumer as it would raise his cost astronomically. Yet this very situation was cited by NHTSA as an example of "unnecessary or over-maintenance.'

Here we will attempt to answer several other of the questions submitted by the committee in its invitation to appear. The committee asked, "Do the auto manufacturers make available to independent garages the specifications for their new cars (e.g. the specifications needed to tune-up an engine)?" The specifications needed to tune-up an engine are usually contained in the Owner's Manual and in most cases are printed right on the engine in a location easily accessible by either the mechanic or consumer. Other specifications are sometimes more difficult to obtain. Technical bulletins of the "Big Four" are available, but moderately difficult to obtain on occasion. General Motors has just agreed to supply the Automotive Legislative Council of America membership with its technical bulletins and we are seeking distribution of similar material from other manufacturers.

“Do independent garages have difficulty getting parts to repair their cars?" In this question there is some problem with its simplicity. The question must be broken down between domestic and foreign vehicles. There is little problem in our industry in obtaining parts to repair domestic vehicles. There is a problem in obtaining parts for some foreign vehicles for both mechanical and auto body repairs. There is also an unexplained variation in the price of parts between domestic and foreign vehicles. It seems that for no apparent reason, foreign vehicle parts are extremely expensive for both mechanical and body repairs.

At this point we have no specific comments on the committee's final question regarding repair problems traced directly to so-called "defective auto design". Should be we able to develop any specifics in this area we will be delighted to forward them to the committee for its consideration.

In summary, Mr. Chairman, we would repeat our urgent plea for a massive journeyman mechanic training program to educate and keep current those who work on today's vehicles. We believe the funds for this training can be obtained by redirecting money already allocated by the government for so-called "classroom vocational training". We also would urge: the development of a "glossary" of repair terms in cooperation with the industry; mandating of periodic motor vehicle inspection in the states through independent repair facilities with strict enforcement monitoring; and launching by the government of a major program of development of low-cost diagnostic equipment for use by these small independent businessmen. The National Highway Traffic Safety Administration could, instead of using questionable data to obtain "auto repair rip-off" headlines, have a far more constructive impact on the problem it's attempting to highlight by acting in these areas. We

believe our industry, with proper government assistance, can remove auto repair problems as a major area of complaint by the nation's consumers. Mandatory licensing of either mechanics or shops will not mandate either confidence or honesty, instead we believe strong state consumer protection laws can deal with fraud under any name, at that level.

The 5,000 members of the Automotive Legislative Council of America appreciate the opportunity to discuss the problems of the auto repair industry with your committee and Mr. Richey and I will be delighted to attempt to answer any of your questions. Thank you, Mr. Chairman.

INDEPENDENT GARAGE OWNERS OF MASSACHUSETTS, INC.,

Reading, Mass., December 13, 1978. GENTLEMEN: From what we have seen proposed in the state of Massachusetts in regards to automotive repair licensing, we feel it would do nothing to alleviate the consumer's repair problems. Massachusetts has one of the strictest consumer protection laws in the country, our Attorney General's office has also promulgated rules and regulations pertaining directly to automotive procedures and sales. Unfortunately there are people in this country that would have you believe that there is absolutely no protection for the motoring public from unscrupulous characters. As you can see, our state Attorney General's office is handling it very nicely. Our association does not feel there is need for duplication of laws that already overtax the consumer.

We are very cognizant of the concern by both state and federal government over the so called consumer "rip off". Maybe we should take a closer look at what they (Government) are doing for the people.

By creating more bureaucracy, which in most instances is duplication of existing agencies, forces up the cost to the consumer. Lets look at just two areas that could be directly attributed to this:

(1) The creation of a new agency requires a director, personnel, office space and equipment. All these items require extensive funding. Who pays this cost! The consumer in the form of higher taxes in most cases.

(2) The mandates placed on industry by these agencies increase the price of the product to the consumer. Lets take an example: About five years ago when energy absorbing bumpers were mandated and required to absorb a 5 M.P.H. impact, I made a prediction. I mentioned to my fellow businessmen at that time that these bumpers were basically useless and an unnecessary expense. Reason being that with the old style bumper a 5 M.P.H. impact lent to minor damage that in most cases could be lived with. We feel that most accidents occur over 20 miles, and this would necessitate the replacement of a unit. Fact: The old style bumper replacement if damaged above 20 miles per hour would cost approximately $100.00 on the average vehicle at that time. The energy absorbing bumper with it's reinforcement bars and asbsorbers would escalate this cost to beyond $200.00 on the same type vehicle. Show me the justification of this parts cost increase, and yes, the insurance premium increase. If the insurance company pays more for parts you can be sure it is going to reflect it in the consumers premiums.

In general, the feelings of our people is that laws, such as proposed in Massachusetts dealing basically with registration were passed, would do nothing for the motoring public except to give them a false sense of security. By such laws they would perceive that all shops or technicians were competent when in reality they are not. Our association is trying to upgrade the industry and the people in it. We want qualified technicians. We want the incentive to remain with the technicians to prove to themselves and others that they are competent in their field. If the acquiring of a license means only for an applicant to register or pass an oversimplified test, or be grandfathered in, it would be a worthless piece of paper and an insult to the true technician. Most of all, it could be a perpetration of a fraud upon the motoring public.

We feel that a program of voluntary certification is the answer. A program such as that provided by the National Institute of Automotive Excellence which certifies mechanics and Body Repair persons in different specialty areas is the way to go. We wish it were possible for the government to help get the word out to the people in the automotive trades to become certified. This way government would not only be providing a vital service to the consumer, but would be operating to cure the incompetency problems instead of just treating the symptoms with useless prescriptions and restrictions.

I would like to address you on two more items that have been proposed for licensing, namely, towing and damage appraisers. In our state we already have a Department of Public Utility that regulates towing and storage procedures and charges. Towing permits are given based on need and restricted to a certain area. In

some cases we have what is known as "grandfather rights" which is a permit to do towing state-wide. They are very limited.

For about the past six years we have also had a damages appraiser law on the books. Its intention was to provide testing of an individual on his competency as a vehicle damage appraiser. So far, no test has emerged from that law. It has been amended several times, the last giving the Insurance Commissioner power to promulgate rules and regulations. He did so, but in our opinion they are ambiguous, inconsistent and unfair to both the insurance industry and the auto body repair industry. In our opinion they are also going to increase the cost of premiums and repairs if we are made to comply with them as they now stand.

The intents of most laws are good, the intent is usually distorted and not carried out. Bureaucrats do not take advice from both sides of the industry and apply it fairly. They do not have the background.

We feel that state regulations in these areas may be beneficial when and if applied properly by professionals who have worked and lived in that particular industry. Those who promulgate rules and regulations without a working knowledge of the field create nothing but utter chaos and ill feelings. Regulations, if it must be, should be left to each state and must be staffed by those who have lived and worked the automotive industry.

Federal and local intervention is nothing more than duplication of efforts, the end result of which is higher cost to the consumer.

Respectfully,

GEORGE A. FLORENTINE, Executive Director, I.G.O. Mass., Inc.

Mr. METCALFE. Thank you very much, Mr. Florentine.

Mr. Allen Richey?

Mr. RICHEY. I have no statement.

Mr. METCALFE. Thank you.

We will proceed with our next witness, Mr. C. W. Higgins, chairman of the board of the Automotive Parts & Accessories Association in Washington.

Mr. Higgins?

STATEMENT OF C. W. HIGGINS

Mr. HIGGINS. Good morning, Mr. Chairman, and subcommittee members. My name is C. W. Higgins. I am the national automotive merchandise manager of automotive parts and accessories at Montgomery Ward & Co., headquartered in Chicago, Ill. I appear before you today in my capacity as chairman of the board of the Automotive Parts & Accessories Association, a national trade association representing nearly 1,500 members engaged in the volume aftermarket industry. Our segment of the industry provides automotive merchandise and services directly to the motoring public. The size and type of businesses represented in our membership vary considerably. APAA is the only automotive aftermarket association that includes in its membership not only retail outlets, but also manufacturers who sell directly to the retailer and wholesalers who supply the smaller outlets. We cater primarily to the do-ityourselfer, but many of our members provide services and perform repairs. We are not affiliated with automobile dealers, service stations, or garages who are service dealers of a different type.

Our association has historically supported and continues to support State implementation of joint safety and emissions inspection. We are disheartened that comprehensive inspection programs have met political barriers in many States. Considering the fact that "expenditures for the operation of the automobile comprise the fourth largest item of disposable income, amounting to approximately $158 billion annually," the adverse public reaction to addi