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Mr. Knapp of those that are not test ready, or whether or not someone would misconstrue anything you might say in the publicity you might give thinking you are building up membership in AAA, that is what I was concerned about. Do you conceive that as being a problem, if you could expand

? Mr. McDOWELL. I don't see that as a problem. In our program obviously we have developed and generated the program because our members want it, but we have numerous programs, including our traffic safety programs that we conduct for the general benefit of the public and we think that this program also has wide public benefit as well as benefits to the industry itself, because we have set high and stringent standards which we feel the industry is ready and willing to upgrade themselves to meet.

Mr. METCALFE. Mr. Laue, you testified that the California Statute and AAA's agreement with repair shops specifies that replaced parts must be returned to the customer. Does the repair shop generally sell some of these replaced parts to rebuilders who, in effect, recycle them?

Do the statutes and provisions prevent the customer from getting a credit for such broken, replaced parts which might be sold to a rebuilder?

Mr. LAUE. I was simplifying what the statute says. In the regulations we have provided for that. If there is a charge for a part or if the part is too large to return or too oily to return, or something, to customer, then the customer is really not entitled to tha part back.

In our State the customer must ask for the part at the time they place the work order so it is not mandatory return of parts.

Mr. METCALFE. I think the record is not completely void of information on that.

Mr. HUNSUCKER. In Michigan the law requires that all parts replaced must be returned to the customer except parts too large, too heavy, or parts that must be returned to the manufacturer under a warranty agreement or to the distributor under an exchange agreement.

In our administrative rules we have said if a customer wants an exchange part, he may pay the facility the exchange charge and then take custody of it.

If he wants the part because he thinks he has cause to complain, he thinks the part was replaced unnecessarily, we even allow him to pay the exchange charge, take custody of the part long enough to pursue his complaint-for example, contacting our complaint service, one of our investigators and then when the complaint is resolved one way or the other, if he returns the part to the garage, they refund the charge.

Except in a warranty transaction, where there is no charge for the replacement of the part, the customer isn't denied the benefits of physical evidence in pursuing his complaint.

Mr. METCALFE. Mr. Hunsucker, I have a question for both you and Mr. Knapp.

Does a written test really demonstrate a mechanic's ability to fix a car? A Detroit Free Press reporter has written that he took and passed the Michigan engine repair test with negligible repair experience.

Mr. HUNSUCKER. No test is an absolute indication of competency. You cannot write a written test that some incompetent person can't pass or some highly competent person can't fail on any given day. I don't know about the Detroit reporter. You could be talking about someone with a lot of test-taking savvy who passed the test. Thank the Lord I may have passed some college course when I shouldn't have.

Mr. METCALFE. Mr. Knapp, the Michigan auto repair law makes allowance for mechanics with reading or language difficulties by offering oral and hands-on tests. Does NIASE make similar provisions?

Mr. KNAPP. We make provisions too for mechanics who have reading difficulties, either because they can't read, or because they may have only a foreign language skill. In either case, the mechanic is allowed to bring a reader or a translator to the test center with him who will read the test or translate the test for the testtaker.

Mr. METCALFE. Mr. Hunsucker, and Mr. Laue, you both testified that your State auto repairs statutes are working. Do you have any “before and after” data to demonstrate reduction in auto repair complaints?

Mr. HUNSUCKER. It is too early to have statistically reliable data. All I can say is, we handle 20,000 complaints a year. We have recovered several hundred thousand dollars in actual refunds to customers and it is impossible to calculate the value of reperformed work.

If we are talking about as much as 20, 30, 40 cents on every repair dollar going for either unnecessary or incompetent repair work, I think our program has to have made an appreciable impact. A law like this is at least a deterrent.

Mr. Laus. We have no statistically valid data.

However, as I did testify, our complaints are now shifting to be less of the jurisdictional kind of complaints, which indicates to us there is far more compliance with the disclosure provisions of the act and I might indicate to you also we do have in progress right now an evaluation being done by the University of California of our deterrent effect. It is just in the design stages at this point and it is awaiting an LEAA grant or something like that. We have no results from that at this point.

Mr. METCALFE. I want to express our really profound thanks and appreciation for your very fine statements. I was very much impressed by the dialog.

Do any of you wish to make any final statement before we recess?

If not, we again want to thank you.

The Subcommittee on Consumer Protection and Finance will now stand adjourned subject to the call of the Chair.

Thank you, gentlemen.

[Whereupon, at 3:05 p.m., the subcommittee was adjourned subject to the call of the Chair.)




Washington, D.C. The subcommittee met, pursuant to notice, at 10:30 a.m., in room 2123, Rayburn House Office Building, Hon. Ralph H. Metcalfe, acting chairman, presiding.

Mr. METCALFE. The Subcommittee on Consumer Protection and Finance will come to order. Today, the Subcommittee on Consumer Protection and Finance continues its examination of auto repairs in the second of 5 days of hearings.

Last week, the subcommittee heard from the National Highway Traffic Safety Administration, NHTSA, that approximately 40 percent of all auto repairs were unnecessary or unsatisfactorily performed. This translates into a consumer loss of $20 billion out of the $50 billion spent annually for auto repairs. The consumer loss of $20 billion, however, should not be confused with fraud.

NHTSA estimates that only about 4 percent of all auto repairs are sold with possible fraudulent intent. Thus, while the overwhelming majority of auto mechanics are honest, some apparently have difficulty diagnosing and repairing cars correctly.

In fact, when questioned about a possible shortage of auto mechanics, the Department of Labor has responded that there is only a "shortage of qualified auto mechanics."

Aggravating the effect of this shortage is the increasing complexity of today's cars. With the introduction and expanding utilization of electronics, even qualified mechanics may have a difficult time diagnosing and correcting problems.

One means proposed to address this problem is specialized diagnostic equipment. Under NHTSA auspices, several pilot diagnostic inspection centers were initiated. Cars participating in the program showed significant reductions in hydrocarbon and carbon monoxide emission levels, improved gas mileage, and a 50-percent reduction in unnecessary repairs.

In addition, several of the auto manufacturers are projecting that mid-1980 cars will be equipped with on-board diagnostic sensors. Such onboard diagnostics, unlike an inspection center, might require only a computer terminal to plug into the car's sensors and read their data output.

While this approach may present the ultimate answer in auto repair, major policy questions such as what to do about the existing fleet of 124 million passenger cars and how onboard diagnostics would interface with the repair industry need to be considered.

The subcommittee will be discussing these questions today and tomorrow with representatives of the independent repair shops, the tire, battery, and accessory stores, and the new car dealers.

Will Messrs. Cossette, Randall, Marchitelli, Richey, Higgins, and Ditlow on our first panel please step forward?

I would like to call you gentlemen in a particular order and encourage you to have some dialog among yourselves. In one of the hearings that I attended, I found that to be very, very effective, because we had a greater input as a result of others discussing their points of view and disagreeing with maybe some points of view previously discussed.

I would like to ask Mr. Richard Cossette, president of Automotive Service Councils, Inc., in Washington, D.C., together with Mr. Donald Randall, to lead off the discussion.



Mr. COSSETTE. The news media seems bent upon carrying out a massive character assassination of the auto repairmen throughout this country. As responsible businessmen and proud members of our home communities, we recognize that there is a small minority within our industry who engage in questionable and possibly fraudulent practices.

I submit that the auto repair industry is not unlike any other industry or profession, including lawyers, doctors, and even the politicians. We each have a few bad apples who tend to spoil the image for all the rest of us. We, too, would like to rid our industry of those few who give all of the rest of us a bad reputation.

As you have already been advised by a previous witness, the district attorney from Philadelphia, ASC has for some time been cooperating with consumer protection agencies and the district attorney's office in attempting to rid our industry of those who are fraudulent and irresponsibly incompetent.

We recognize that consumer satisfaction is a principal source of repeat business which is the mainstay of the independent automotive repairmen. We know that complaints about auto repairs are a leading consumer issue. We believe that preventing these complaints should be a major objective of both industry and government. ASC has recently concluded an agreement with the domestic car manufacturers to obtain copies of our technical bulletins for distribution to our members. This, along with our other suggestions, can be a major factor in this effort.


ASC is the oldest and largest national automotive repair shop association in the United States, with over 5,000 members located

in 44 States. We appreciate the opportunities of appearing here to respond to the committee's invitation to testify.

We intend to offer some helpful suggestions, and we hope that the news media will be responsible in their reporting of our suggestions, because in the Senate hearings they failed to do so. They failed to talk about the complexity of the cars and some of the many things that cause the American public problems with this massive private transportation system that we use. The Senate hearings and a host of consumer conferences indicate that automotive repair problems are perceived by the public and government officials as a leading consumer issue. It is a serious area of concern for the American motorist. The ability to perform correct repairs at competitive prices satisfactory to the motorist is increasingly affected by both Federal and State regulations.

In general, the Federal regulations that affect the auto industry are the Federal Motor Vehicle Safety Standards, 1966; the Federal Motor Vehicle In-Use Safety Standards, 1967; the Federal Motor Vehicle Emission Control Standards, 1970; the Federal Motor Vehicle Crash Worthiness Standards, 1972; the Federal Motor Vehicle Fuel Conservation Standards, 1975; the Federal Motor Vehicle Noise Abatement Standards of 1976. These laws are the results of efforts to make automobiles, our private transportation system, less injurious to our population and more environmentally compatible. Unfortunately, most of these laws to date have been essentially single purpose, narrowly defined and have not applied a broad systems concept toward achieving more ethically or socially acceptable vehicles. Except for the Federal highway programs which have been substantial, the Federal efforts to address problems associated with the use of the privately owned vehicle fleet have been comparatively small.

In the past, America's transportation policies and programs have been directed toward the air, rail, and maritime industries. Our tax policies and other direct or indirect subsidization programs have favored those modes of transportation. For example, earlier this month the Congress approved a $3 billion tax on air travelers. This is to be used to reduce the noise level of jet engines. It is but one dramatic example of the willingness of Congress to apply substantial economic resources toward solving a relatively small problem of a small transportation mode compared to the automotive industry.

Measured in national expenditures, the private auto is $172 billion. Contrast this with the public's expenditure for aircraft operating costs of $5 billion for passenger movements. In fact, if one compares the entire passenger transportation expenditures for rail and air, the private vehicle costs are over 10 times as great.

In 1976, the 137 million cars, trucks and special purpose vehicles traveled 1,700,000,000,000 miles, providing over 90 percent of our passenger movements.

The national news media failed to report the solutions offered during the Senate hearings to correct some of the economic losses associated with America's private transportation system. The news did not print that millions of new cars now contain sophisticated electronic systems and components made to respond to the Federal and State emission safety, noise, and fuel economy standards.

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