‘This Is a Job-Killing Regulation That Will Put Our Company Out of Business’: Some Push EPA to Reverse Obama-Era Regulation
Kevin Mooney /
Trucking industry interests successfully lobbied the Environmental Protection Agency to impose “job-killing” regulations on remanufactured vehicles known as gliders that are cheaper to purchase than new trucks, an energy policy analyst and a maker of the vehicles say.
Gliders range in size from medium to heavy trucks. They are constructed from “glider kits” that include new truck parts, such as the tractor chassis, with a frame, front axle, cab, and brakes. The glider is manufactured by combining the glider kit with a powertrain from a used vehicle.
While gliders include new truck parts, they should not be considered new trucks, since the engine and other parts are used, industry representatives have argued. Yet, the EPA under President Barack Obama issued a new rule reclassifying gliders as new trucks in October 2016.
This distinction matters because the Clean Air Act authorizes the EPA to regulate greenhouse gas emissions only from new trucks, not old ones. Most glider trucks cannot meet the emissions standards the Obama EPA imposed for new vehicles.
“This is a job-killing regulation that will put our company out of business,” Jon Toomey, director of government affairs for the Tennessee-based Fitzgerald Glider Kits, said in a phone interview with The Daily Signal.
“Based on the business we do with parts suppliers and family-run businesses, we estimate this Obama-era rule could cost 900 jobs in Tennessee and possibly 22,000 jobs across the country. We hope the rule can be reversed,” he said.
Toomey and Steve Milloy, a member of President Donald Trump’s EPA transition team, have identified the Volvo Group as the company that most aggressively lobbied the EPA to impose the new emissions standards against glider trucks.
In May 2016, Volvo Group submitted comments to the EPA expressing support for the imposition of new greenhouse gas regulations on glider trucks.
In testimony delivered before an EPA hearing last December, a Volvo public affairs official told agency officials that glider trucks had been permitted to “skirt” both emissions and safety regulations. The official also made the point that some glider kits are manufactured in Mexico, while every truck manufactured by Mack Trucks and Volvo is built in the U.S.
The glider market represents a very small percentage of the trucking industry, with between 5,000 and 7,000 sold annually, compared with 300,000 new trucks sold annually, Toomey estimates.
He also notes that gliders sell for about 25 percent less than what it costs to buy a new truck.
“We serve a vital interest for small, independent trucking operations,” Toomey said. “The EPA regulation would be devastating.”
Fitzgerald has joined with other glider truck manufacturers to call on the Trump administration to reverse the Obama rule.
While he’s concerned about the actions of “careerists” inside the EPA, Toomey says he is encouraged by steps taken by Scott Pruitt, Trump’s EPA administrator.
Pruitt issued a statement in November that said he would be working to “undo the regulatory overreach of the prior administration.” Because of the “unique way gliders are manufactured,” the EPA is now proposing that gliders not be regulated as new vehicles, Pruitt explained in his statement.
“The previous administration attempted to bend the rule of law and expand the reach of the federal government in a way that threatened to put an entire industry of specialized truck manufacturers out of business,” Pruitt said in his statement. “ … Gliders not only provide a more affordable option for smaller owners and operators, but also serve as a key economic driver to numerous rural communities.”
Tommy Fitzgerald, the owner and founder of Fitzgerald Glider Kits, expressed his gratitude toward the Trump administration for moving forward with regulatory reforms that he said would enable small businesses to continue to innovate and create new jobs.
“The Trump administration and Administrator Pruitt are walking back the blatant regulatory overreach of their predecessors,” Fitzgerald said in an email.
“In this case, the Obama EPA, at the urging of a few corporate elites, sought to regulate gliders out of existence. We cannot thank President Trump enough for his relentless work to save small businesses and promote American industry first,” he said.
“Fitzgerald USA is a family-run business, and I am pleased that we have been able to create good-paying jobs and other opportunities in rural communities. Our mission is to bring jobs back to the proud, hardworking people left behind by manufacturers who offshored jobs just to save a few bucks.”
The comment period for the rule Pruitt proposed to reverse the Obama EPA regulations on glider trucks ended on Jan. 5 and is expected to move up to the Office of Management and Budget for interagency review within the next few weeks.
“Administrator Pruitt is doing a great job protecting the environment while adhering to the rule of law,” Toomey told The Daily Signal in an email.
“His opponents believe that they can make enough noise to have him removed. President Trump is far too smart to fall for such a scam by the liberal elitists and Volvo, a foreign truck manufacturer.”
Critics of glider trucks are “being disingenuous” when they claim those trucks exceed emissions standards, Toomey explained, because they fail to point out that glider trucks actually emit less carbon dioxide than newer ones.
The challenge with emissions for glider trucks relates to particulate matter, not carbon dioxide, he said.
The EPA defines particulate matter as “a complex mixture of extremely small particles and liquid droplets that get into the air” and “cause serious health effects” if inhaled. The Clean Air Act requires the agency to set national air quality standards for particulate matter.
An EPA laboratory in Ann Arbor, Michigan, performed tests in October on two glider trucks and found they exceeded emissions standards for particulate matter. But Milloy, who is also the editor of JunkScience.com, told The Daily Signal in a phone interview that the tests were performed under questionable circumstances—without Pruitt’s knowledge and with no peer review process.
Moreover, what he called the “renegade report” was not printed on an official EPA letterhead and did not receive an internal EPA document number, he said.
“This was an easy layup for Volvo and the new truck industry at the Obama EPA,” Milloy said. “This was classic rent-seeking. With more stringent air standards, Volvo gets to sell more expensive items.
“The fact that this would happen with the Obama administration is not surprising. But what is surprising and disturbing is to have these bogus tests take place in the new administration without Pruitt’s knowledge,” he said.
With regard to some of the environmental concerns that have been raised about glider trucks, Fitzgerald pushed back on what he described as “false narratives” Volvo has circulated to environmental groups. He also explained why glider trucks might have some environmental benefits.
Environmental groups have been misled by the Volvo Trucks of the world that have actively sought to kill off the glider industry for years.
They were given misleading and unfounded data points about glider emissions, and they were encouraged to repeat false narratives about the carbon footprint and efficiency of gliders. In reality, gliders are the best example of ‘upcycling’ that the truck industry has.
Upcycling is the process of transforming products into new materials or products of better quality for better environmental value. It is a concept that is very familiar to environmental groups.
Every glider assembled accounts for approximately 4,000 pounds of upcycled cast steel that would otherwise be junked and tossed in a landfill. Glider assemblers are developing ways to make trucks that are more fuel-efficient and emit less carbon dioxide than new trucks, all without adding to our nation’s landfills.
The Daily Signal contacted Volvo and asked why the company saw fit to lobby for regulatory changes on emissions that would impact the glider truck industry. John Mies, a communications official with Volvo Group of North America, responded in an email and said, “We are seeking a level playing field. All manufacturers, whether of original equipment or gliders, should have to abide by the same emissions regulations.”
He also sent testimony from Susan Alt, Volvo’s senior vice president of public affairs, that was delivered as part of an EPA hearing on Dec. 5.
Her remarks read in part:
We are here today to voice opposition to EPA’s proposal to repeal the emissions standards for heavy-duty glider vehicles. A glider vehicle is essentially a new truck that’s been equipped with a used engine.
Their original purpose was to allow truck owners to salvage working powertrains after severe accidents by installing the wrecked truck’s engine and transmission into new cab-and-chassis assemblies.
The glider vehicle market was just a few hundred per year for decades, and Volvo has never objected to gliders used for the aforementioned purpose.
In fact, the Phase 2 rule as finalized provides for production of a volume of glider vehicles to meet this market need. In 2010, a significant emission reduction was required for newly manufactured diesel engines.
Not coincidentally, we’ve watched the glider-vehicle market grow more than tenfold since 2010, now reaching ‘significantly over 10,000 gliders in 2015,’ according to EPA records.
Why did the volume grow so dramatically? Because some companies exploited the opportunity to offer glider vehicles with older ‘pre-emissions’ engines to customers seeking to avoid modern emissions-control systems.
Today, almost no glider vehicles use 2 of 3 donor components from the same truck to be installed into his new truck. Most glider vehicles today are mass produced, custom-built new trucks with donor components that come from any possible source.
Most glider vehicle buyers today are not small operators trying to salvage their truck after an accident or unable to afford new trucks. The glider buyers today are small, medium, and even large fleets buying new replacement trucks, equipped with noncompliant engines, to haul for-hire loads on America’s highways.
These glider vehicles not only skirt current emission regulations, but they also skirt safety regulations, such as electronic stability control—technologies that help keep both the driver of the truck and the cars safer.
But Nick Loris, an energy policy analyst with The Heritage Foundation, sees an effort at work to put small business at a disadvantage.
“These onerous regulations are the epitome of the federal government crushing small business,” he said in an email. “In many cases, it is a single individual who owns a truck or a small fleet of trucks. The businesses that have and use gliders passionately defended them, because the gliders often have better gas mileage and break down less.
“Regulating them out of existence would also likely backfire environmentally, by forcing companies to hold onto their older trucks longer, rather than buy new ones,” he said.
In her testimony, Alt insisted that the proposed rule change “will hurt a much larger number of small businesses who are not selling glider vehicles.”
She also warns that glider vehicles will undercut new-vehicle sales and that that would directly affect the “livelihoods of the more than 14,000 Americans” these dealers employ.
Where the interests of small business are concerned, Fitzgerald anticipates that the Trump EPA’s planned regulatory relief will help to level competition between larger and small companies while providing smaller trucking fleets with affordable options.
“The vast majority of our customers are small fleet owners and owner-operators who cannot afford to buy or maintain new trucks, but nonetheless want the latest safety features, amenities, and styling,” he said in an email.
“Small fleet owners and owner-operators buy gliders because the alternatives—sticking with their old, unsafe truck or buying another used truck that likely lacks the latest safety features—are not viable, long-term business strategies.”
Fitzgerald added: “Consolidation in the trucking industry is making life increasingly difficult for independent owner-operators and small fleets. Gliders—which are more reliable, cost less to buy and maintain, and are more fuel-efficient than new trucks—help them keep the lights on and the doors open.
“Gliders allow the small fleets and owner-operators to stay competitive with the big corporate fleets that want to eat their lunch. Destroying the glider industry would put tens of thousands of people out of business, and the impact on small businesses and rural communities throughout the country would be profound,” he said.