Opinion: Truck Dealers Move Industry Forward

This Opinion piece appears in the June 15 print edition of Transport Topics. Click here to subscribe today.

By Eric K. Jorgensen

President and CEO

JX Enterprises Inc.

Every day, thousands of the nation’s commercial truck dealerships — from the ordering process to delivery — meet customers’ needs and provide service after the sale.

Moving heavy- and medium-duty trucks out of dealerships to America’s highways is not a singular effort. We couldn’t do what we do without our manufacturers, suppliers and vendors, who provide the products and tools required to move forward.

America’s truck dealerships are part of an industry that moves more than 70% of all the freight tonnage annually and employs about 8.7 million people.

Trucks, which are cleaner, safer and more fuel-efficient than ever, reached a near sales high in 2014. Sales of medium- and heavy-duty trucks, Classes 4-8, increased to 406,707 units last year, a 15.6% gain from 351,737 units the previous year.

The success of our dealerships — and our customers — often depends on what happens in Washington. With federal regulations at an all-time high, we must reach out to members of Congress and government regulators and inform them about our challenges and work together on solutions. They have the power to regulate our dealerships, but they don’t really understand how our businesses operate. We must continue to change that.

We recently met with officials from the Office of Information and Regulatory Affairs to discuss the Phase 2 commercial truck fuel-economy proposal from the Environmental Protection Agency and the National Highway Traffic Safety Administration. OIRA, part of the White House Office of Management and Budget, reviews the economic effects of regulatory proposals.

During the meeting, we expressed our support for continuous improvements in vehicle fuel economy but stressed our concern that trucks must be affordable and reliable and that past regulations have dramatically disrupted the market.

More than 60 members of Congress have visited truck dealerships since the American Truck Dealers began its grassroots advocacy initiative to inform lawmakers and policymakers about the commercial truck industry and how laws and regulations can have adverse consequences.

Last year, as part of an ATD ongoing initiative, we met with officials from EPA and the Department of Transportation. We informed them about the truck dealership business and the negative effects that poorly planned and poorly executed regulations have on the industry.

We are making progress with meetings and phone calls. If we don’t talk to the people who make decisions for us, someone else will. We must step up and make the effort. And we have included our partners in those efforts. ATD hosts policy roundtables with our manufacturers and other industry representatives to share our concerns.

With all the rulemaking coming out of the nation’s capital, our message is simple: The rules affecting truck dealerships should be technologically feasible and economically practical.

Eventually, every policy decision, regulation or vote — whether related to taxes, highway funding, the environment or road safety — leads back to our dealerships on Main Street. And concerning highway funding, because Washington seems unable to find a bipartisan way to fund the nation’s roads and highways, ATD has stepped up.

We’ve generated additional support for legislation opposed to an increase in the 12% heavy-duty truck federal excise tax. Any increase in FET would depress new heavy-duty truck sales and delay the deployment of cleaner, safer and more fuel-efficient trucks.

Reps. Reid Ribble (R-Wis.) and Tim Walz (D-Minn.) reintroduced legislation March 26 that reaffirms congressional opposition to any increase of the excise tax on the sale of new heavy-duty trucks. House Concurrent Resolution 33 was introduced with 18 original bipartisan co-sponsors.

The existing 12% levy on heavy-duty trucks already is the highest excise tax imposed by Congress on a percentage basis. With a highway bill and comprehensive tax reform on the agenda in Washington, H.Con.Res. 33 sends a clear message to Congress that hiking FET on commercial trucks should not be on the table. Because all the heavy-duty trucks sold in the United States in 2014 were manufactured in North America, increasing FET would hurt American jobs

This is ATD’s No. 1 legislative priority. ATD strongly supports this legislation and is urging its members to contact their congressional representatives and request their co-sponsorship of H.Con.Res. 33.

Congress is looking at the viability of the Highway Trust Fund and trying to figure out the path forward on funding. When Congress looks at overhauling the Highway Trust Fund, ATD is hopeful that eliminating FET will be part of the conversation. It’s a volatile tax based on truck sales and inhibits the turnover of trucks on the roadway by slowing the deployment of cleaner and safer trucks. This concurrent resolution helps to shine a spotlight on the need to reconsider this tax, going forward.

ATD also has advocated for legislation that would make permanent or retroactively increase the eligibility of expensing business equipment to $500,000 and extending the 50% bonus depreciation deduction for new business equipment in 2015.

ATD members are a critical part of an industry that puts people behind the wheels of the trucks and tractors that move our nation’s freight. For more information, visit www.atd.org.

Jorgensen is chairman of the American Truck Dealers, a division of the National Automobile Dealers Association, in McLean, Virginia. He is president and CEO of Hartland, Wisconsin-based JX Enterprises Inc., which sells and services Peterbilt, Volvo and Hino brand trucks.