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penalties available, should they exceed three violations within any 180-day period.
Mr. ECKHARDT. With respect to your warranty provisions, it would seem to me to track and, in fact to provide enforcement of the Magnuson-Moss Act.
Ms. Gist. That is exactly what we are trying to do.
Mr. ECKHARDT. There is a somewhat similar ordinance in the city of Dallas as we have discovered from our hearings in Houston. There, the licensing procedure is rather easy with respect to obtaining a license originally. But then, violations of the provisions of the ordinance may result in revocations. Have you looked at something like that?
Ms. Gist. Right. In fact, I met the consumer protection people from Dallas in a conference, and we looked at their ordinance. As it is one of only two jurisdictions that have local ordinances, as opposed to State statutes, of course we looked very closely at Dallas.
It will be relatively simple to get a license in order to continue in the auto repair business in the city of Chicago. Basically, all you will have to do is meet the zoning requirements set forth by the city, saying that you can have these kinds of garages only in certain areas, and come forth with the information that we request.
However, should we get an unusual number of complaints, and should they be found to be engaging in deceptive practices, and if those are held up in court, then our department has the ability to recommend license revocation to the mayor's License Commission, in which case revocation hearings would be held.
Mr. ECKHARDT. You do not envision any licensing of mechanics?
Ms. Gist. We do not. We have looked at that very carefully. We have looked at the statutes of the State of Michigan where they do have mechanic's licensing. We have looked at the statute of the State of Hawaii, where they have mechanic's licensing. We do not feel that the route Hawaii chose to be wise, where you simply grandfather in everyone who has been in the business for 2
years, or some other period of years because you are grandfathering in the incompetents as well as the competents and have to wait a generation for them to go out of business.
At the city level, at the local level we determined that it would be impossible to have mechanic's certification, or mechanic's licensing because we do not feel that you have the number of mechanics who are competent available to pass a test that was worth anything. If you are going to have mechanic licensing, we firmly believe you have to do what the State of Michigan did, and that is set up within your Department of Vocational Education, or some other department, programs to train mechanics. The city does not have that ability. It does not have the funds for it, nor does it have the personnel to undertake a task of that size.
Mr. ECKHARDT. I think your conclusions are pretty much sustained by the consensus of most of the witnesses who testified before our subcommittee in Washington.
I note that you require a statement in legible form as to what repairs are done. Do you intend to do anything about some uniform definition of types of repairs? For instance, a minor tuneup, et cetera?
Ms. Gist. We intend to set forth, probably in regulations, for those kinds of repairs we feel are so minor that you need not have an invoice, or statement of manufacturer of parts; other than that we do not envision in this ordinance setting forth what constitutes a tuneup, or what constitutes wheel alignment, or what constitutes some other repair.
Mr. ECKHARDT. But, you would have general requirements that the type of work be listed.
Ms. Gist. Yes.
Mr. ECKHARDT. I think that would be comparable to what we might do in the statute. But still, in ultimately making that statute meaningful, it might be necessary for you to make administratively some determination with respect to a uniform description of the work. Otherwise, what appears on the charge bill may be really of no use to the customer, if to one garage one thing means one thing, and to another, another.
I note that on some bills you receive you find a description that is so broad that it really does not tell you what was done.
Ms. Gist. We would envision, I think, the descriptions being specific enough so that the customer could tell from the description and parts supplied what was done. We do not envision a situation where we will condone invoices that just have a certain amount of gibberish on them and you cannot tell what was done.
Mr. ECKHARDT. Now, I assume that your licensing will envisage a fee connected with it.
Ms. Gist. Yes; it does.
Mr. ECKHARDT. And, what do you intend to do with the money generated from such a fee?
Ms. Gist. The money generated from such a fee goes into the general corporate fund, and generally the fees in fact will support—though they do not go directly to our department—they will support the amounts of the inspections and complaint handling that we have to do as a result of that law.
Mr. ECKHARDT. Do you envisage any type of general investigation as, for instance, with test cars which are brought to various garages, without notification that they are in fact test cars and may have previously designed defects, for checking?
Ms. Gist. I should imagine that that would certainly be one mode of operation that we will have in the future. Our first order of business is to find and get licensed, or put our of business, every one of the shops in Chicago. Right now there is, as far as we know, no definitive list; so, that is our first order of business.
But our agency, as consumer protection agency, does enforce all other consumer protection, and we do that by shopping the businesses in Chicago. So, the way to enforce this ordinance, of course, would be to shop the auto repair places, and the only way to do that is to bring in cars.
Mr. ECKHARDT. Well, I think you certainly ought to be commended for this endeavor in Chicago, and I am sure it will generate information that may be extremely useful to Congress. We look forward to cooperating with you in any way, if we may.
Ms. Gist. Thank you very much, Representative Eckhardt.
Mr. ECKHARDT. Thank you very much.
Mr. Albert Benjamin Kelley, senior vice president, Insurance Institute for Highway Safety.
Mr. Kelley, we are glad to have you before us, again. I am sure you are familiar with the proceedings of this subcommittee. You may proceed.
STATEMENT OF ALBERT BENJAMIN KELLEY, SENIOR VICE PRESIDENT, INSURANCE INSTITUTE FOR HIGHWAY SAFETY Mr. KELLEY. Thank you, Mr. Chairman.
At the subcommittee's invitation, I am appearing today to comment on the results of institute research and testing carried out since 1969 into the problem of automobile damageability and, specifically, of how much vulnerability to damage has been needlessly designed into new cars.
I will somewhat summarize my statement.
Even before the institute began its low-speed crash test program in 1969, we were concerned by what appeared to be a standard condition of virtually every new car then being offered on the American market-a condition of routine, technologically unwarranted susceptibility to damage due to new-car design characteristics. We testified to that effect before the Senate Antitrust and Monopoly Subcommittee in April of 1969.
A few months later, in beginning our crash test program, we found out just how delicate, damage prone, and costly to repair the new cars of that time actually were. In a small but revealing test program, we carried out low-speed barrier impacts of full-size, fourdoor 1969 model automobiles. Before continued hearings of that same Senate subcommittee into problems of automobile repairability in 1969, we showed films of those crash tests, including 5-mileper-hour front and rear impacts into test barriers, showing among other things that, for instance, the 1969 Chevrolet Impala four-door sedan was registering $187 worth of damage in this jogging speed, actually a fast-walking-speed crash, including damage to its bumper of $65.50 for the replacement part, not including labor and attachments.
For the 1969 Ford Galaxy a similar amount of damage, $174 in this very, very modest crash.
For the 1969 Plymouth Fury 1, $134, again, in that very modest crash; and the bumper alone was responsible for more than $53 of that.
We have since then updated those prices and looked at today's replacement prices for those parts, in other words, the prices that would directly impact the owner of one of those 1969 cars. The Chevrolet Impala front bumper face bar today is $121; that is the same part, possibly made at that time, and simply sitting in the storeroom since then. The 1969 Ford Galaxy part would be $106; and the Plymouth Fury I part $101.94. In every case, as I am sure you have noted, today's price is about double the replacement cost at the time the crash tests were performed for the identical part.
The following year we broadened our test program to include not only full-size 1970 model cars, but also smaller cars. I have attached the results of those tests as attachment A to my testimony. The results were equally dismaying.
As early as 1969 and 1970, our test results, together with other testimony and evidence being presented at the Senate hearings, were making clear a number of basic points about relationships between new-car design and new-car vulnerability to damage, such as these.
Then current automobile designs, as we testified then, "While aimed at the eye of the consumer in the showroom,” were, “pointed directly at his wallet on the road in low-speed bumps and scrapes so common-and so predictable-in driving and parking today.
Huge variations were apparent in the amounts of damage being sustained even by cars of similar size in the crash tests. Clearly, some manufacturers were providing somewhat less damage-prone front- and rear-end designs than others-although at that time none was providing the no-damage designs that were, and for some time had been, technologically possible.
Yet, competent components manufacturers were ready and willing—and have so testified before Senate and House hearings—to provide automobile companies with energy-managing bumper systems that would go far toward eliminating damage in these lowspeed, fender-bender crashes. In my prepared statement I have given details of that readiness, and of the lack of interest of automobile manufacturers in taking up those technological opportunities.
Beginning in 1971, government began to act to require that future new cars be so designed and built that they would emerge from very low speed impacts with somewhat less costly results to the public. The National Highway Traffic Safety Administration issued an exterior protection safety standard, requiring that in very minor crashes, bumpers protect certain specified safety-related automobile components that were safety related, beginning in 1972. That standard, however, did not require that bumpers reduce economic losses in low-speed crashes-nor could it, under NHTSA's then existing authority.
Despite the weakness of that initial NHTSA standard, it did, as our test results show-again, before both Senate and House hearings-it did somewhat reduce the amount of damage in very lowspeed impacts. But meanwhile-and we looked very hard at this for the first time that year-replacement part increases had pushed the cost of damage not eliminated by the standard to new highs.
I will show you now a brief portion of the film in which we compared the damage of typical 1971 model new cars, those manufactured before the NHTSA safety standard took effect, with the damage to comparable 1976 models, which were covered by the standard. The repair cost estimates you will see in this film all are based on replacement parts and labor prices and rates in effect in the fall of 1975, that is, when these cars were new, the 1976 cars.
May we have the lights?
We are looking at 5-mile-an-hour front and rear barrier tests, and showing in contrast 1971 full-size cars and the 1976 models. We are looking here at the 1971 Ford Galaxy 500 for which, in 1975, parts and labor prices were $443 to repair after that very, very minor crash.
In contrast, the 1976 Ford LTD was $10—virtually the same car, but with a much improved bumper system. Here the 1971 Ford Galaxy, and had you owned this and had that crash in 1976, it would have cost you that high amount. Here the 1976 Ford LTD, with zero dollars worth of damage instead of many hundreds.
The 1971 Chevrolet Impala from our earlier tests, nearly $500 worth of damage in this 5-mile-an-hour front-end barrier test; its counterpart, the 1976 Chevrolet Impala with only $132. Again, an inexcusably high amount, but much less than its earlier counterpart had registered.
The 1971 Chevrolet Impala rear-end barrier, its bumper so insufficiently protected that it was almost $600 worth of damage. Its 1976 counterpart, zero dollars, simply by putting a slightly better bumper on and pulling it away from the sheet metal. We see here how, in the 1971 models, designs had so strongly induced this kind of high-cost damage by nestling the bumper right into the costly "French pastry” sheet metal; and in contrast the 1976 bumpers have been pulled out slightly, so that they did not impact the sheet metal in those crashes.
The 1971 Plymouth Fury with more than $350 worth of damage, and in contrast the 1976 Plymouth Fury with no dollars worth of damage in a test which never, justifiably, should have one penny of damage in any model car.
We have not continued testing analogously models in all cases because, as you know, many of the large-size cars have been taken off the road and downsized in the new move toward smaller, lighter cars, for energy savings and other purposes. So, there is not now in the marketplace an analagous car to some of the full sizes that we are seeing here.
Now we are looking at some of the smaller cars of that time. Here is the 1971 AMC Gremlin, which had a considerable amount of damage, in contrast with the 1976 model, zero dollars. I emphasize again that all of these are in 1975 parts and labor costs.
More than $250 for the little Chevrolet Vega in its front-end test for the 1971 model; only $15 for the 1976 model. So, progress had been made. For the rear-end test of the same car, $300 for the owner of the 1971 model, having to have his car fixed in 1976; and here $114 for the 1976 car, still too much, but less.
The 1971 Ford Pinto, $220 by 1975 prices; and its 1976 counterpart, only $10 worth of damage. The same car in the rear-end test-and there is no reason or excuse for these bumpers to perform differently front and rear-$276, and again, the 1976 counterpart, covered by the Federal standard, zero dollars.
So, weak as that standard was, it did have a modest effect of reducing damage.
More recently we looked at current replacement prices on representative parts damaged in some of those earlier tests and we found even further large increases since 1975. Attachment C will give you an indication of some of these, if I may describe it briefly.
The 1971 Chevrolet Impala that you saw here had prices in 1971 for some of its major parts, such as about $70 for the front bumper face bar, about $75 for the front fender, and about $78 for the hood. By 1975, those prices had gone to $80, $85 and $103. Now, they have further increased, so that the 1971 Chevrolet Impala front