American Truck Dealers (ATD) Chairwoman Jodie Teuton of Kenworth of Louisiana introduced trucking’s newest coalition to fight federal excise tax (FET), Modernize the Truck Fleet, Friday during the general session at ATD Show 2019 in San Francisco.
Teuton has followed in the footsteps of her ATD chair predecessors in leading the dealer association toward the elimination of the 102-year-old tax. On Friday she said the steps taken by the ATD with Congress in 2018 were positive, and believes the Congress sworn in earlier this month could potentially push the trucking industry further toward FET’s repeal.
“This is our best shot in decades to eliminate this tax,” she said. “This year, we have a unique opportunity to make FET repeal a reality.”
Joining ATD’s fight against FET in the Modernize the Truck Fleet (MTF) coalition are NTEA – The Association for the Work Truck Industry; the Truck Renting and Leasing Association (TRALA); and the Truck and Engine Manufacturers Association (EMA). Teuton said the four groups will work together to not only to repeal FET, but also determine an acceptable replacement for the tax to sustain the highway trust fund.
“It’s been 37 years since Congress changed the FET on trucks,” Teuton said. “It’s time for Congress to take the FET off cruise control.”
The leaders of the other MTF groups are optimistic about the coalition’s chances to create real change.
“TRALA is excited to be part of the Modernize the Truck Fleet coalition,” said Jake Jacoby, president, TRALA. “With an infrastructure bill as likely to pass as any piece of legislation in 2019, this is the time to put all of our combined energy into finding a way to replace the onerous FET. We are excited to be a part of such a collaborative effort working with truck companies, manufacturers, dealers and end users who all want to put the cleanest, most technologically advanced trucks onto our highways immediately.”
EMA President Jed Mandel added, “The FET increases the cost of purchasing a new, modern heavy-duty trucks, and as such we endorse repealing the FET to lower barriers to deploying the cleanest and safest trucks available. We are enthused to help lead this important effort to modernize the truck fleet.”
Finally, Steve Carey, NTEA president and CEO, said, “Working to repeal the FET and stabilize highway trust fund revenues will serve the needs of the nation’s economy and speed the integration of the latest safety and emissions technologies into the truck fleet.”
Federal excise tax was enacted in 1917 and was meant to be a temporary measure to help pay for World War I. Today, it is the highest percentage tax that Congress levies on a product. ATD says FET can add from $12,000 to $22,000 to the cost of a new truck.
Teuton said Congress and the Trump administration discussed a comprehensive infrastructure bill in 2018 and those conversations are expected to continue in 2019. During Friday’s address, she urged ATD member dealers to ramp up their grassroots efforts and get involved by contacting their members in Congress.
“We need each one of you in this fight. Your senator or representative may be the one to make the difference,” she said.
Teuton’s chairwoman address Friday also touched on the dealer industry’s employee shortage, particularly in the service bays of ATD’s 1,800 member companies. She said truck dealers are seeing a shortage of more than 9,000 technicians per year, and when combined with auto dealerships, that number spikes to more than 50,000 annually.
As she did with the FET discussion, Teuton urged her fellow dealers to become more proactive in promoting trucking’s career opportunities to young people in their communities.
“I’d like every truck dealer to help ATD get the word out now: Dealership jobs are rewarding, challenging and pay well,” she said. “Technician jobs at dealerships average $61,000 per year with benefits. Some of the best paid people in my dealerships are technicians.”
Industry outlook strong for 2019, Paccar’s Armstrong says
Friday’s general session also included a presentation by Paccar CEO Ron Armstrong, who discussed the Paccar’s outlook for the commercial trucking industry in 2019 and beyond. Armstrong said trucking averaged 24,000 retail sales, 25,000 new truck builds and 38,000 orders per month last year. He says Paccar is anticipating another strong year in 2019, with the company estimating between 305,000 and 335,000 orders.
Armstrong also briefly touched on the U.S. economy. Despite admitting “if you ask 100 economists about the U.S. economy you’ll get 100 different answers,” Armstrong was able to provide some consensus projections of 2.6 percent GDP growth and 2.7 percent industrial production growth in 2019.
Armstrong concluded his presentation with a look into the future, noting several trends — fleet consolidation, connected services, advanced driver-assistance systems, automated transmissions and alternative powertrains — likely to grow in market interest and evaluation in the coming year.
He said 2018 was a great year for truck dealers and 2019 is expected to be “another outstanding year,” but for OEMs and dealers to keep thriving into the next decade, OEMs and dealers will need to capitalize on the technology becoming available to stay on the cutting edge of the marketplace.
“The future of this industry is very dynamic,” Armstrong said. “We must continue to innovate.”