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mandatory emissions testing, that is, testing upon transfer of ownership.

The Bureau of Automotive Repair system involves both the use of computers and trained personnel. They will obtain at the time of free reinspection all of the repair data, including costs of labor, parts, and the type of repairs conducted. The data will further contain the specific identification of the repair facilities and the mechanic's number.

The State has calculated, for example, what the typical frequency of emissions-related repair should be, and if, for example, it determined that there may be an average of two carburetor overhauls in 500 emission repairs and a particular facility suddenly shows selling 60 rebuilt carburetors in a particular period of time, this would be used by the State Bureau of Automotive Repair to contact this repair facility and determine why that particular incidence is so high. That contact would also include interviews with the consumer to determine precisely what work the consumer authorized, whether the consumer was satisfied with the work, and so forth.

The contract that exists between the inspection diagnostic contractor and the States typically runs for a period of 5 years. The State has privileges for expansion of the system. The State may buy out the system at any time. There are some 21 areas of control in the case of the California contract, such as State approval of the choice of all locations for inspection centers. The State approves all procedures, and establishes all test standards. The State also oversees and approves all calibration mechanisms and procedures.

Hours of operation are determined and approved by the State, and all materials used in public relations and public education must be approved in advance of their use by the State. Personnel training, the type of people conducting the inspections and the content of consultations with the consumers must be approved by the State.

Both the Arizona and California networks, by design, as requested by the State, are expandable to also test for safety and mechanically related items. In the case of Arizona, the program, having now been in effect for over 2 years, 1,100,000 vehicles are tested per year. The State reported recently that they have detected a 41 percent reduction in carbon monoxide at idle, and 23 percent reduction in hydrocarbons at idle, directly attributed to the program. The average repair cost for the program is $23.02 for those who fail.

One last group of statistics: Approximately 20 percent of the motorists in Arizona fail to meet the State standard. Seventy-five percent of those vehicles pass the free reinspection. I should also indicate that the Arizona repair industry is not licensed or certified as is the case in California, but they have done an outstanding job.

Of the 75 percent passing reinspection, this brings the total level of compliance in Arizona to 95 percent of the vehicles tested. Two and one-half percent get waivers, as described, because their repair cost would exceed the $75, and 272 percent represent problems which have to be resolved. Incompetent work, and a great percentage of do-it-yourselfers are included in that 2/2 percent.

In conclusion, I would like to stress the importance of public education in these kinds of programs. It is a combination of enforcement program and public service program. It is very important to emphasize the public service function much more heavily than the enforcement functions.

A diagnostic inspection network beyond the emissions tests operations that I have described in Arizona and California could be annual, plus used as needed by consumers, prior to a tuneup, prior to vacation, prior to buying or selling a used car.

Part of the public relations must start with a precise explanation of what the Federal Government intends in the way of objectives, potential benefits of legislation and, in particular, this, I believe, must be explained to the State government.

I have recently seen examples of State government confusion over the requirements of the Clean Air Act. The Environmental Protection Agency is attempting nationwide to explain what it perceives to be the requirements of the Clean Air Act, but it would seem very effective if there were some method for Congress to communicate with State legislatures, perhaps directly, in addition to through its agencies.

There are certain deadlines and dates required in the Clean Air Act and several States at this point are attempting to arrange for compliance, but they must have the specific requirements explained to them, obviously there are some sanctions and penalties associated with the Clean Air Act amendments.

This is especially necessary when the Federal Government desires to have the State enact legislation as a result of Federal action.

Finally, to assist an agency like EPA or the National Highway Traffic Safety Administration in explaining their objectives and intent, it perhaps would be appropriate at some point to provide a direct explanation from a congressional representative to help sell and to help justify the intent of any legislation that might be created

Thank you!

[Mr. Stone's prepared statement follows:]

STATEMENT OF DANIEL C. STONE, MANAGER, MOTOR VEHICLE INSPECTION PROGRAMS, HAMILTON TEST SYSTEMS, A SUBSIDIARY OF UNITED TECHNOLOGIES CORP.

Hamilton Test Systems is pleased to submit this statement to the Subcommittee on Consumer Protection and Finance of the Committee on Interstate and Foreign Commerce in response to the invitiation of Congressman Bob Eckhardt (letter dated 8/23/78).

IDENTITY AND QUALIFICATIONS United Technologies Corp.

Hamilton Test Systems is a wholly-owned subsidiary of United Technologies Corporation. The Corporation is a diversified, multi-market industrial organization with headquarters in Hartford, Connecticut. It designs, develops, manufactures, and markets a broad variety of technological products for industrial, commercial and governmental customers worldwide. United Technologies Corporation employs more than 138,000 people, operates more than 180 plants, and maintains marketing and service representation throughout the world. Hamilton test systems

Hamilton Test Systems was established in 1974 to spearhead the Corporation's diversification into motor vehicle inspection and automotive testing products and services.

The organization is devoted to fulfilling the requirements of:

Governmental agencies desiring to implement motor vehicle emissions, safety and/or diagnostic inspection programs;

Governmental agencies or private concerns requiring engineering services in design, analysis, study or scientific experimentation relating to motor vehicle emissions control, fuel economy, noise pollution or safety-related vehicle component deterioration;

Automobile manufacturing industry in areas of advanced production acceptance test systems;

Automotive repair industry in areas of computerized test systems.

A partial list of Hamilton's motor vehicle inspection and automotive diagnostic programs includes:

State of Arizona Motor Vehicle Emissions Inspection Program (Annual);

State of California Motor Vehicle Emissions Inspection Program (South Coast Air Basin);

U.S. EPA Short Test Correlation and Effectiveness Program (Emissions)-in cooperation with the State of Oregon; U.S. DOT NHTSA-funded Diagnostic Inspection Demonstration Program (Emissions, Safety & Diagnostics)-under contract to State of Arizona;

State of California Emissions Inspection Surveillance Program;
U.S. Postal Service Mobile Emissions Inspection Systems;

U.S. Army Tank Automotive Command (engine inspection and diagnostic facilities); and

Vehicle and/or engine inspection and performance analysis programs (facilities and/or systems) for: British Leyland, Caterpillar, Chevrolet, Chrysler, Cummins, Detroit Diesel Allison, Ford, G.M. Tech Center, John Deere, and Perkins.

OVERVIEW The concepts of periodic motor vehicle inspection and related diagnostic services are certainly not new ones. They have been the subject of a great deal of discussion and speculation. There have been a wide variety of opinions regarding the merits of periodic motor vehicle inspection. It is understandable, considering the lack of agreement among the “experts” concerning what should be the goals, standards, equipment, procedures, and overall structure of a motor vehicle inspection and diagnostic program.

Concerns and questions of a technical, financial and political nature have been raised regarding vehicle inspection. Adequate answers have been a long time in coming. Some of the major areas of concern have been:

Effectiveness of periodic motor vehicle inspection/diagnosis.
Standards, procedures, equipment and scope of the inspection.
Total cost to the consumer.
Adequate protection against fraud, improper or unnecessary repairs.
Public acceptance and support.

Each of the above concerns (and others not listed) are certainly legitimate. However, we are of the opinion that a combination of: (1) significant advances in inspection/diagnostics technology, (2) more sensitivity on the part of government to consumer needs, (3) rapidly changing automotive designs, and (4) a sincere desire on the part of the vast majority of the repair industry to provide competent, costeffective repairs--has set the stage for a new era in high-technology, consumeroriented diagnostic inspection systems.

The diagnostic inspection program of the near future may very well encompass a combination of safety, emissions, noise, fuel economy and diagnostic measurements using highly-automated and computerized systems. The program will employ major consumer protection mechanisms to maximize repair industry effectiveness at a fair cost to the consumer. The “near future” can be the late 1970's and early 1980's.

CONCLUSIONS AND RECOMMENDATIONS This statement briefly deals with the history, current status and future of motor vehicle inspection and diagnosis as a means to

Enhance repair industry effectiveness;
Minimize overall cost of vehicle ownership and operation;
Reduce motor vehicle emissions;
Improve fuel economy;
Enhance operational safety;
Reduce vehicle-caused noise pollution; and
Force technology advancements to serve the above objectives.

The significant conclusions and recommendations contained in this statement may be summarized as follows:

Emissions inspection and maintenance programs are producing impressive, measurable results at cost-effective levels.

(Inspection) Contractor-operated programs in Arizona and California (1979) employ high-technology inspection systems/centers with heavy (program) emphasis on consumer protection.

Although no high-technology, high-throughput safety inspection programs are operational, the knowledge and tech gy exists to implement such programs in a cost-effective manner.

Program designs must emphasize highly accurate, repeatable test methods, maximum public convenience, minimum cost (of test and repair), repair industry training and surveillance and consumer protection mechanisms.

Public education and public acceptance are among the most vital ingredients for a successful inspection and maintenance program.

The inspection function should be separated from the repair function to insure total objectivity (and the resulting public confidence in the insection/diagnostic results).

The entire spectrum of motor vehicle inspection, diagnosis and repair services can and should be done by private enterprise with (federal and state) government specifying performance criteria, convenience factors, cost objectives, quality assurance and consumer protection mechanisms.

Government must develop and implement programs to up-grade the capabilities of the (various diverse elements of the) repair industry. Incentives, and where appropriate, deterrents, should be employed to motivate the industry.

EMISSIONS INSPECTION AND MAINTENANCE PROGRAMS In our urban areas, motor vehicles are typically one of the largest sources of carbon monoxide, hydrocarbons and nitrogen oxide. Environmental Protection Agency data indicates that motor vehicles account for as much as 90% of these pollutants in some cities. For this reason, several state or local agencies have implemented emissions inspection and maintenance programs as a means of controlling vehicle pollution. Data collected from special test programs conducted around the country indicates that the Federal Motor Vehicle Control Program, by itself, is not adequate to ensure the long-term emissions reductions required. This can be explained, in part, by the fact that even though new vehicles meet Clean Air Standards when they leave the factory, many become excessive polluters after a period of use by the general public. Improper maintenance, lack of maintenance, emission control device failure, and tampering all result in vehicles becoming excessive polluters.

Vehicle emissions inspection and maintenance (I/M) programs are designed to periodically inspect vehicles and identify gross polluters. These vehicles then receive the needed maintenance. An I/M program may include repair industry training to upgrade the industry's ability to make effective repairs. New Jersey

In February 1974, the State of New Jersey added mandatory emissions inspection to a safety program which has been in effect for many years. In a June 1976 report entitled "New Jersey Motor Vehicle Emission Inspection Program, Summary and Report-Phase I,” the New Jersey Department of Environmental Protection reported an average 14 percent reduction in ambient carbon monoxide readings which they attributed to the vehicle emissions inspection and maintenance program. This reduction occurred while neighboring New York State (with a similar mix of vehicles and industry) reported no reduction over the same time period. New Jersey, in 1978, has revised its air quality improvement figure to a 26 percent reduction in carbon monoxide. Oregon

The State of Oregon implemented a mandatory vehicle emissions I/M program in the Portland metropolitan area in July 1975. They have experienced a 15 percent reduction in ambient carbon monoxide levels and a 7 percent reduction in hydrocarbon and oxidant concentrations. Arizona

In November 1974, the State of Arizona contracted with Hamilton Test Systems to implement a mandatory emissions inspection program in the Phoenix and Tucson areas. Testing began in January of 1976. One million vehicles are tested each year. Average fleetwide reductions at idle of 25 percent carbon monoxide and 41 percent hydrocarbons have resulted in the program achieving its goal of removing more than 250 tons of pollution from the air daily, according to Arizona Department of Health Services officials. (A copy of a report summarizing the 1977 program operation is attached as Exhibit 1.)

These results have been achieved with an average repair cost for those vehicles failing the inspection of $23.02. An estimated 30-35 million gallons of gasoline are being conserved annually as a result of the program. The fuel savings experienced by the individual motorist frequently offsets the cost of any needed maintenance.

The Arizona motorist is charged $5.00, which provides for the initial inspection plus one free retest, if necessary. The Contractor is paid a portion of the $5.00 fee and the State uses the balance for its program administrative costs. In 1976, Hamilton was paid $4.45 per test; in 1977, $4,54 per test; and in 1978, $4.66 per test. The contract provides for a fixed price per test, with the only adjustment being made as a result of inflation. California

The State of California is recognized as having the most aggressive motor vehicle emissions control measures in the country. Included are assembly-line testing activities and programs designed to monitor the performance of in-use vehicles.

In the late 1960's, California established a limited vehicle emissions inspection program which applied only to vehicles undergoing a transfer of registration. It was implemented in licensed repair garages. The test consists of: (1) an underhood inspection to determine if all required emission control devices are installed, (2) minor adjustments, and (3) a tailpipe emissions measurement. (Beginning in 1979, this type of testing in the South Coast Air Basin (greater Los Angeles) will be replaced by a contractor-owned and operated network of inspection centers, as described below.)

In 1973, California passed legislation mandating a three-phase program to culminate in annual vehicle emissions inspection of all light-duty vehicles registered within the Los Angeles area's South Coast Air Basin. A major departure from the previous program structure was the planned use of state-owned and operated inspection centers to conduct the inspection process in place of repair garages.

The first phase (1975-1977), a pilot program, resulted in the construction of two inspection centers by the State in Riverside, California, for the purpose of evaluating facility designs, inspection equipment and procedures, and emissions standards. During this same time frame, the California Air Resources Board and the Bureau of Automotive Repair began to investigate a private contractor approach for implementing the next phase: transfer-of-registration testing in the Los Angeles area.

In 1976, the State's Legislature instructed the Air Resources Board to evaluate the advantages and disadvantages of a contractor implementation approach. The ARB's subsequent report stated that "operation of the motor vehicle inspection system by a private contractor has several clear advantages over a state-operated program. Cited were: expedient implementation; responsiveness to inspection hours, procedures and other program changes which are required periodically; builtin profit incentives for efficient, smooth-running operation of the system; and a cost savings of 8 to 13 percent. Based on these figures, the cost difference of having a contractor finance, build and operate the system would save motorists between $800,000 and $1.3 million a year in inspection fees.

In 1976, the earlier (1973) statute was modified to allow the State to contract for vehicle inspection services after conducting a competitive bidding process.

A Request for Proposal was released in January 1977. Hamilton was selected and awarded a contract in June 1977 to implement the second phase of the three-phase plan. Subject to the emissions inspection requirements are an estimated one and one-third million light-duty motor vehicles which annually transfer registration within the geographical boundaries of the South Coast Air Basin. A network of 16 inspection centers having a total of 44 automated inspection lanes and a mobile test unit are presently under construction for this phase. (The State has required that the centers be constructed to facilitate the possible future addition of safety and/or noise inspection systems.)

Inspection operations are scheduled to commence on January 2, 1979. Hamilton will be paid from $4.49 to $6.70 per vehicle, with the fee dependent upon the actual number of vehicles inspected each year. The State intends to charge an additional amount per test to cover program administrative costs.

California's vehicle emissions inspection program, like Arizona's, will feature automated, computerized inspection equipment, procedures, and data handling. A record of each vehicle and its emission levels will be stored on magnetic tape to allow for timely analysis of program operation and effectiveness. In addition, vehicle repair information collected during the vehicle reinspection procedure will be en

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