Cover Story: Locked out

Technology has made heavy-duty trucks safer, more efficient and reliable and reduced their environmental footprint. It also has made trucks much more sophisticated and complex. As new components and systems continue to merge old-school mechanical with high-tech electronics, the knowledge and tools needed to support these vehicles in the aftermarket also grows increasingly advanced.

It is creating, according to some, an informational chasm between the haves and the have nots. This access to information – commonly referred to as the right to repair – has put some independent service providers on the offensive, claiming an unfair playing field when it comes to caring for customer vehicles.

Many independent shops and distributors claim some manufacturers withhold essential data – and in some cases, parts – necessary to repair vehicles, including the meaning of diagnostic codes, VIN-specific parts lists and technical instruction. Many manufacturers claim either the needed information is available and those seeking it are just looking in the wrong place, or that they have no obligation to give proprietary data and other fruits of their investments to competitors.

One of the more outspoken advocates of the independent parts and repair network’s fight for access to information is Dave Scheer, president of Inland Truck Parts. Scheer says not being able to access information necessary to service and repair vehicles is “a daily problem” for Inland’s 16 repair facilities. The problem, he says, adds time and cost to repairs and often they are forced to take vehicles to the appropriate OEM dealership for assistance.

“We run into it every day and they [manufacturers] just flat out won’t give us the information. So we end up going back to the dealership or we scrounge around and spend two hours working on something that we should do in 15 minutes,” says Scheer. “It costs us business because we can’t work on the vehicle adequately and so it has to go back to a dealer. When you have less access, it restricts the number of choices the customers have. It restricts the serviceability in the marketplace and it drives up the price.”

He adds, “We’re not trying to get proprietary information. We’re not trying to get any design information. None of that stuff. The only thing we want is to do a good job for our customers and repair their vehicles correctly.”

Steve Crowley, president of VIPAR Heavy Duty, agrees that the issue impedes consumer freedom.

“Let the customer make sure he’s going to the most efficient place where he can get the best repair for his repair dollar,” says Crowley. “Whether he chooses a dealer, an independent repair shop or a franchised repair shop – it doesn’t matter. Whatever his choice, he should have the confidence that he’ll get the right parts and the right result out of that repair. I think that’s not only necessary, it should be demanded by everybody who operates a commercial vehicle.”

If truck owners need to use OEM dealerships for service and repairs because they alone have the technical know-how to care for the vehicle, they may be at the mercy of long waits and extended downtime. While the Heavy Duty Manufacturers Association (HDMA), has no official stance on the issue, President and Chief Operating Officer Tim Kraus says there are capacity concerns.

“I’ve heard from a lot of people that there is not adequate capacity at the dealer level to handle all of the work on the new engines and trucks that came out five to six years ago,” Kraus says. “Most of the trucks in that category are already out of warranty. The independent channel, in many cases, is a place that needs to be considered for this shortfall. But on the other hand, a person who is the second owner of a truck wouldn’t necessarily always want to go directly to the dealer. He may choose to go to an independent service facility to get his truck worked on. If they don’t have access to the information – for example reprogramming the engine or even just interpreting diagnostic codes – when something fails on a truck that is out of warranty, they are almost forced to go to the dealer to get that taken care of. So they’re going to have to wait in line, from what I hear.”

Bruce Plaxton, president of BGP Marketing Solutions says he too, hears about extensive wait times at dealerships. “Without mentioning names, there are numerous truck dealerships today that if I drive up and I’m not a major fleet or a major customer, it could be 48 to 96 hours before they get my truck in the door,” says Plaxton, who addressed this subject at the 2007 Heavy Duty Aftermarket Week in a presentation titled “There’s No Room at the Inn.”

FAILURE TO COMMUNICATE
Just what information is available and to whom is debatable.

Distributors and service providers say some suppliers are better than others at making information available.

“I think they [training and tools] are available, but there’s a gap in communications,” Kraus says. “What I’ve been saying all along is let’s get the two ‘sides’ together and talk because I’m not so sure that there isn’t a solution in there somewhere.”

John Flad, Bendix Commercial Vehicle Systems’ vice president of aftermarket sales, North America, says his company makes all necessary information available to whoever needs it through its website and customer support network. However, he does recognize that that may not be the case throughout the industry.

“Bendix always has made information very open and available to the independent channels,” Flad says. “We believe in being open with that information. Now, as a supplier, we’re caught a little bit in the middle because we’re servicing OE customers that are certainly a huge part of our business, and we also service an independent aftermarket that is a very important part of our business. So, we’re caught a little bit in the middle. We intend to continue to make information available, but when you ask is it an issue? I think it is a looming issue that is going to do nothing but get larger.”

Some would argue that the problem grows with each new generation of technology. The more complex the component, the more difficult it typically is to diagnose and repair. Integration among truck systems compounds the issue.

“The issue is one of vehicles becoming so complex with new safety and emissions systems designed into the newer vehicles – not just on the engine side of things, which is the main concern of the automotive business – but also on braking systems, active ride control, stability control and a number of other new technologies,” says Kraus. “Trucks right now are as complex as passenger cars, and they used to be relatively simple compared to cars. An earlier truck was a bunch of independent systems that all worked together with each other and didn’t have a lot of electronic controls before should be anti-lock braking systems (ABS). Now everything is electronically controlled and managed.”

The proliferation of technology throughout the truck and greater integration of systems will, according to Scheer, begin to impact independent shops which do not currently see right to repair as a big issue.

“It’s getting worse all the time,” says Scheer. “It’s escalating as things become more electronic. One of the issues in the aftermarket is that if you’re not into as many things as we are, it’s not as apparent to you. It did start with the engines and it’s moving into other componentry. So if you’re a brake and wheel-end guy, you’re just starting to see it in ABS. But as time goes on it’s going to get more difficult. So five years from now, everything is going to be electronic and there are going to be less and less things that an independent can work on if you don’t have access to the information.”

MUTUAL INVESTMENT
Taking advantage of supplier training is essential for keeping up with new technologies. John Reed, Bendix’s manager of service for warranty and training, says in 2007 they provided training for more than 11,000 people resulting in over 55,000 training hours. “There are no qualifications,” he says. “Anybody can attend. We have first-year mechanics that attend. We have engineers from the OEMs that attend. Anybody in the industry can come.”

Pete Pasdach, co-owner and president of Midway Truck Parts, says his company gets a lot of cooperation from suppliers when it comes to training, “but if it’s proprietary systems and proprietary components, that training is not available to us. The technology, the training and the software are not available to us because the product is not available to us.”

When it comes to components, such as engines, where his business is seen as a competitor to the manufacturer and there is no co-operation, Pasdach says they rely on the makers of the engine components, such as Federal Mogul and PAI Industries, to fill the gap.

Kraus says some manufacturers recognize liability risk if their products aren’t repaired or installed correctly in the aftermarket, particularly when it comes to safety systems. “When you talk about those systems, you are talking safety issues,” he says. “When you are looking at the new technologies that are involved in braking, unless these guys are trained and up to speed on everything that’s going on, if they work on these electronically controlled systems and they don’t have adequate training, those vehicles can be dangerous.”

Scheer says Inland utilizes supplier training and even has personnel dedicated to it. He says his company is more than willing to invest in the resources made available.

“We have no problem with that whatsoever. As a matter of fact, we employ a full-time technical trainer for the company,” Scheer says. “We’re highly committed to that and we have no problem with any manufacturer saying ‘listen, we want to make sure that when you work on our component you have the proper tools and you have the proper education to do it.’ I support that. I have no problem doing that. They just have to give us the information.”

Scheer estimates Inland spends several hundreds of thousands of dollars on just salaries and travel expenses related to training.

It’s expensive for the OEM dealers as well. They are not given a free ride when it comes to paying for training and adopting required business systems that gain them access to proprietary information, such as VIN-specific build papers.

“The bottom line is, if you talk to a lot of good, solid truck dealers, they will complain vociferously about the assessments, charges, etc. that the truck and engine manufacturers charge them for data, training, etc.,” Plaxton says. “It costs a good deal of money for the manufacturers to develop this. The challenge for the independent distributor is that, for the most part, they have never paid for that and there’s an extreme reluctance to pay for it. It’s very expensive.”

It’s that high price tag that some cite as the reason for the dramatic change from service stations to convenience stores in the automotive market.

“The reason that we see BP stations and others selling soda, cigarettes and candy where they used to have three and four repair stalls is because the owners felt the investment and commitment required to work on the more advanced engines and systems in the 1970s and ’80s were too great a training and financial challenge,” says Kraus. “Many felt they could make more money doing car washes and running convenience stores. We don’t have that same thing going on with the independent side for trucks. The independent service channel is a strong segment.”

The other side of the investment coin is that made by OEMs on product research and development, which is sizeable. Tens of millions of dollars alone were spent to develop technologies to achieve compliance with the stricter emissions rules that went into effect last year. To continue to introduce new products that meet both regulatory and customer requirements, there has to be a return on their investment, it is argued. By keeping information necessary to support the new products captive among their dealers or distributors, it helps keep their network profitable through more aftermarket revenue. Of course, a financially healthy dealer network keeps the manufacturer profitable through new truck and part sales.

Plaxton says he doesn’t think the manufacturers should be denied a return on their investment, but ultimately customer needs have to be met.

“I think there’s an obligation there on the part of the manufacturers to provide that information to the marketplace, but I also think they have a right to charge a reasonable amount of money for it,” says Plaxton. “That’s what it comes down to at the end of the day.”

End users are not exempt from absorbing the costs, either. Says Plaxton: “Even the engine manufacturers are beginning to charge the smaller and mid-sized fleets substantial amounts of money [for repair data]. I’m familiar with one fleet that has 400 or 450 power units and it’s getting charged several thousands of dollars a year, but it doesn’t have a choice.”

NOT FOR SALE
In some cases, money isn’t the issue – the information isn’t available for any price.

“The other issue is the engine manufacturers simply saying they’re not going to share the information under any conditions,” says Plaxton. “I guess my position on that is that I have some real questions whether it’s proper behavior. They have an obligation to keep their customers’ trucks on the road and operating.”

Scheer says even those manufacturers that do provide information on their websites and through other means are not always comprehensive. “The truth is, there is a lot of information available on websites and so on, but they know just where to stop, where you can go just so far,” Scheer says. “But when it really comes down to getting the information that you need, you just flat out can’t get it to complete the job.”

“I think there are certain things that still need to be kept in the hands of the engine distributor with some of these complex, newer engines,” Kraus says. “With electronic programming of the vehicle you can affect the horsepower and the utility of the engine. Some of that needs to stay in the hands of authorized service centers. But, now, there’s nothing to say that an authorized service center can’t be an independent shop that has received training from an engine manufacturer and is named as authorized.”

Scheer says he does operate repair facilities that are authorized by engine manufacturers. “Out of 16 shops, we do have a Cat dealership and we do have a Cummins dealership,” he says. “The places where we have Cat or Cummins dealerships are remote locations were there is not a strong [competitive] dealer presence. If you’re going to be in Kansas City, Omaha, Des Moines or Dallas or any of our other major markets, they’re not interested because they have full-service dealers there and they’re not going to give us the info.”

Scheer says the relationship with the engine OEM is strictly with a designated location and not with Inland as a distributor and service network. The software and information provided by the OEMs is for use at the authorized location only.

According to Caterpillar the company largely relies on its dealer network to make decisions on partnering and co-operating with other dealers and distributors in their local area.

“Each Caterpillar dealership is responsible for product support in their service territory,” says Mike Powers, product development manager for Caterpillar Global On-ighway. “Caterpillar relies on Cat dealers to determine how to best meet the support needs of customers in their territory. Cat dealers have the latitude to establish second-level dealers that sell and promote Caterpillar engines in the vehicles they sell. There are also some limited opportunities based on territory coverage needs for an independent service provider. If there is a coverage need, the independent service provider also must be willing to meet Caterpillar’s requirements in tooling, training and facilities to be considered as a Cat second-level dealer.”

COOPERATION OR LEGISLATION?
Most in the aftermarket, manufacturers and independent shops alike, hope the right to repair can be remedied without government intervention. A panel titled “Access to Product and Service Information, an Industry Perspective” was held at this year’s Heavy Duty Aftermarket Week in Las Vegas with representatives from distributors, manufacturers and end users [see sidebar: HDAW Provides Perspectives on Access to Information].

At the end of the panel, Scheer announced the formation of a Commercial Vehicle Task Force that is made up of eight distributor, marketing group and industry organization representatives.

The group meets for the first time this month in Chicago. “We want to bring the OEs to the table to discuss the issue,” Scheer says. “Hopefully a plan to do that will come out of the meeting.”

Kraus says dialogue may well present an amicable solution for all. He points to an example in the automotive industry as proof that things can be worked out without the need for legislation.

“Everyone on NASTF [National Automotive Service Task Force] on the automotive side of things has agreed that this is an issue in light vehicles,” Kraus says. “[On the heavy-duty truck side] some feel it’s an issue best addressed with legislation or the threat of it, some feel it’s an industry issue best handled by industry people. NASTF is handling it as an industry issue by industry people on both the OEM side and the independent aftermarket, and it works, from what I’ve seen, extremely well.”

NASTF, which was formed in 2000, is a not-for-profit organization made up of members from service centers, manufacturers and makers of repair/diagnostic equipment and tools. NASTF promotes itself as “a collaborative industry effort to identify and resolve gaps in service information, diagnostic tools and equipment, and other resources today’s automotive service professional needs.”

If a solution can not be worked out within the industry, some feel the alternative – legislation – could set both sides back, wasting time and money.

“If it ends up having to jump through the hoops in Washington, there’s going to be huge resources wasted,” says Plaxton. “There are better things that people need to spend their money on. The challenge is that sadly once you get to people with their feet stuck in concrete, you’ve got the lawyers just rubbing their hands together and collecting the fees. I would hope that reasonable people can sit around and talk about the subjects.”

HDAW Provides Perspectives on Access to Information
Panelists presented distributor, manufacturer and end user points of view on the controversial access to information issue during the 2008 Heavy Duty Aftermarket Week session, “Access to Product and Service Information, an Industry Perspective.”

“Is this a real issue? Some would argue that it’s not a major issue and that the information is available if you just know where to look,” said Dave Scheer, president of Inland Truck Parts and session moderator. “We at Inland face this issue every day. We know where to look. We’re very resourceful.”

Scheer went on to cite several examples his company has encountered where repairs could not be completed without contacting an OEM truck dealer because the necessary wiring schematics or other technical data was not available to them.

“One of the myths that exists out there is that this only affects those who work on trucks,” Scheer said. “But that’s not true. If you’re supplying a part to a customer who works on a truck, he needs this sort of information also.”

He added that while the issue is most frequently attributed to accessing electronic engine information, it is extending to other truck components.

Avery Vise, editorial director of CCJ magazine, a sister publication to Truck Parts & Service, added a historical perspective. While electronically controlled engines have been around for nearly two decades, the proliferation of advanced technology and the growing abundance of information it generates has created an “if you build it, they will come phenomenon.”

While service and repair information once was relegated to the shop floor, its impact on other areas of a fleet’s business, as well as the bottom line, means more and more of it is constantly being sought.

The supplier perspective was provided by ArvinMeritor’s commercial vehicle aftermarket Director of Sales and Marketing Todd Kindem, who said suppliers have to maintain a balancing act between providing “what actual repair information is required, versus what could possibly be sharing of intellectual property.” Revealing too much could hurt manufacturers through reverse engineering of their products, he said.

Kindem acknowledged manufacturers have a responsibility to support their products in the aftermarket with a non-channel bias. He said ArvinMeritor makes technical data and assistance available to the entire industry through printed publications and its website. Companies with which ArvinMeritor has a business relationship have access to additional resources.

“In many cases manufacturers withhold information and try and keep it only with people they have business relationships with,” Kindem said. “This is not necessarily unusual in our marketplace and it’s really only negative when it’s used against a channel should be for a competitive outcome.”

Kindem cited the increase of labor hours through the years as evidence of opportunities for all aftermarket channels to grow their respective businesses. He added, “a fleet has the right to choose where it get its vehicles serviced.”

Prefacing her presentation with a disclaimer – “This point of view is not necessarily that of Swift or myself, but the purpose of this panel is to get you to think about the issue and be a bit passionate about it and get you to voice your own opinion and walk away from here with different points of view” – Michelle Calbi, vice president of procurement and shop operations for Swift Transportation and a former Freightliner executive, provided a manufacturer’s perspective.

Outlining the extensive resources manufacturers invest in product research and development, Calbi said: “From a product and service development standpoint, the original equipment manufacturers and suppliers pay the price. And what do they pay the price for? It’s creation of original ideas. So why should they be forced to give those away for free?”

She added, “And they have to get a return on investment. Will fit manufacturers and independents don’t feel as though they have to contribute to that huge investment.”

The ROI is necessary, Calbi said, in order to continue to bring new products to market and to keep pace with emission compliance.

“So what about future market value? If customers demand greater technology, reliability and dependability, the OE manufacturers must be able to afford these demands without the proliferation of competitive independents,” Calbi said. “Think about the money that the OE has spent the past couple of years to meet the EPA ’07 standards and the 2010 coming on. It is a huge investment and every dollar that the independents steal from them the fleets have to pay in upcharges to put that technology in their trucks.”

Pete Pasdach, co-owner and president of Midway Truck Parts, said access to information is “first and foremost