Comment Log Display

An Open Letter to the California Air Resources Board
Regarding Implementation of the “Truck and Bus Regulation”
December 9, 2009

Ladies and Gentlemen of the Board, Greetings!

My name is Richard Lee.  As a 4th generation Californian I’ve seen
what a great job your agency has done to clear the air in
California over the years and how profoundly our lives have been
touched by your decisions.  I do hope that what I have to say today
will be helpful to you in making a decision on whether or not to
proceed with the implementation of the Truck and Bus Rule at this
time.

I am a business consultant working with a family owned business
with 50 employees operating 33 on-road dump trucks and various
off-road equipment.  They’ve weathered many past recessions and
managed to grow their business while being challenged by all kinds
of economic adversity.  Despite the fact that they’ve never seen
worse economic conditions in the past 42 years, the owner believes
he can survive this economic downturn.  Personally, I don’t think
he’s got a “snow-ball’s” chance of staying in business if he has to
comply with the Truck and Bus Rule.

What sense does it make to put a $15,000 Diesel Particulate Filter
on a truck that should be worth $25,000, but in today’s market can
only bring $5,000?  The $120,000 that retrofits could cost him next
year will only allow him to run his trucks a couple of more years,
at which time they’ll have to be replaced with newer 2010
technology trucks.  So what if he just bites the bullet and
replaces those eight trucks in his fleet with newer 2010 technology
trucks now, at the cost of well over a million dollars?  Those are
the choices dictated to him by the Truck and Bus Rule just for this
next year, with more exciting opportunities to go broke yet to
come.

Over the next 4 years compliance with the Truck and Bus Rule will
cost this small business over $4 million.  These are dollars they
do not have and never planned on spending.  These are dollars far
and above any profits they can make.  These are dollars well over
what they need just to stay in business in the foreseeable future. 
These are dollars that would much better be employed growing the
business.  The only way they can comply with the Truck and Bus Rule
is to either liquidate their savings, which are nearly depleted, or
take on more debt.

Today they can only charge rates comparable to what they got in
the early 80s when diesel fuel cost 82 cents a gallon.  I’d say
this is probably why most trucking companies are barely getting by.
 Do you know that it will cost California truck owners many
millions of dollars to retrofit or replace their equipment just to
comply with the Truck & Bus Rule?  Do you understand that Truck
fleet owners of all sizes all across the state will be required to
come up with capital that they do not have and cannot obtain?  Do
you have any idea what these people are going through right now? 
Do you care?

For those who can borrow, what do you think will happen if they
take on more debt merely to comply with the Truck and Bus Rule and
the economy does not pick up?  Your own staff has acknowledged that
no one knows when or if the economy will recover.  If you think the
housing market is bad, you should take a look at the used equipment
market.  There’s a glut of used trucks on the market right now. 
This means that truck owners find themselves in a ditch, stuck
between that proverbial rock and hard-place with two bad choices
facing them.  They can either go out of business, sell their trucks
and get paid next to nothing for them.  Or, they take on more debt
that they cannot realistically afford and stay in business just
long enough to end up being crushed by an avalanche of debt they
won’t be able to support.  Either way, they’re screwed!

And either way, the state is screwed.  Do you want to see all
these tax paying, revenue generating, job creating citizens become
wards of the state or would you prefer they move their tax base out
of the state?  Either way it’s a loss to the state treasury.  Who
knows, you too may soon enjoy a 5-day a week work furlough!

In my opinion, the minor effects of diesel emissions pale in
comparison to the serious economic difficulties so many families
are now facing and the disastrous financial conditions sure to come
unless the implementation of the Truck and Bus Rule is stopped in
its tracks immediately.  Sure, everybody wants to breathe cleaner
air, but truck owners alone should not have to pay for it.  It
makes no sense to saddle the trucking industry with a regulation
that absolutely assures the collapse of thousands of tax paying
businesses and the loss of so many jobs.

A fully implemented Truck & Bus Rule will have far worse
consequences than the effects the current economy has had on the
trucking industry.  It will be the last straw…more like stabbing a
knife into the heart of the California economy itself.  Truck
owners and all the rest of us who depend on them here in California
cannot afford the Truck and Bus Rule at this time.  It’s simply not
workable.

In seeking to learn what could possibly be the reason why the Air
Resources Board has been ramrodding the Truck and Bus Rule into
law, I found the following statement on your website: “…without the
diesel regulation, California will not be able to meet U.S.
EPA-mandated air quality standards and deadlines, and could
subsequently lose billions of dollars in federal highway funding.” 
 So, I get it, you’re selling us out for Federal Funds, is that
it?

Or could it be that someone wants California’s trucking industry
to pay for California’s privilege of being the proving ground for
new emissions-control technologies that benefits the companies
looking forward to marketing that technology to the rest of the
nation?  

If these aren’t the real reasons, or for what other reasons there
might be, implementing the Truck and Bus Rule at the current stage
in the development of the technology -- plus the present depressed
state of the economy -- is simply nuts!

I actually decided to come to this Board meeting today intending
to make a constructive suggestion for a positive resolution of this
issue, so here it is: The Air Resources Board must back off on the
implementation of the Truck and Bus Rule, right now!  You’ll hear a
huge sign of relief if you will simply vote to put a 5-year hold on
the implementation of the Truck & Bus Rule, or as an alternative,
hold back on its implementation until triggered by the recovery of
the economy, whenever that occurs. 

I am no scientist but I can tell you from a practical standpoint,
the diesel particulate filter technology is not ready, the newer
engine technology is not ready, the trucking industry is not ready
and the economy is not ready.  Bad timing!

Putting a hold on the implementation of the Truck and Bus Rule
would allow the 2010 technology to actually be approved by CARB, to
be tested by the market and to be proven finally.  I don’t know if
you are aware of this but you can’t even order a 2010 technology
truck engine today, if you wanted to or could afford it.  And what
do you think will happen when the trucking industry is forced to
wait in line next year to buy these newer trucks?  Do you think
they’ll come down in price?   Don’t count on it!  

Putting a hold on the Truck & Bus Rule would allow the state to
put the financing in place to compensate these truckers for being
someone else’s guinea pigs.  It would allow the owners to drive
their existing trucks a little longer to get some more usable life
out of them, which, by the way, happens to be a more natural,
organic and earth friendly way to go.  Next, it would allow us all
to see where the economy is heading, to see whether or not the
economy resumes its growth mode and to see whether or not it makes
good business sense to take on more debt.

Given a few more years to comply, truckers should be able to save
and plan for the replacement of their older trucks.  In the future,
as the newer 2010 technology trucks become available in the used
market all across the country – not just here in California –
switching over to the newer technology should be more affordable.

As an alternative to an arbitrary 5-year hold on the
implementation of the Truck and Bus Rule, an economic event --
based in reality -- might be employed to trigger the
implementation.  If there are indications that the economy is
really recovering, implementation might be triggered in less than 5
years time.  Implementation of the Truck and Bus Rule, now more
than ever, gives new meaning to that expression: “It’s the economy,
stupid!”

Here is a short list of economic recovery indicators that might be
useful either individually or in combination to create such a
trigger:
•  Unemployment gets back to normal, ~5%,
•  Individuals and households resume spending, 
•  We see the end of home foreclosures,
•  The enormous housing inventory held by the banks is
eliminated,
•  Housing prices start to rise,
•  Commercial mortgages are written off,
•  The GDP starts to grow again, and
•  The P/E ratio of the S&P drops back to normal.

Thanks to draconian regulations like the Truck and Bus Rule, the
American Dream is fast becoming an American nightmare.  The Air
Resources Board must resolve to back off on the implementation of
the Truck and Bus Rule immediately.  If not, you may see a lot more
bad press and you’ll likely receive many class-action lawsuits
filed on behalf of all truck owners for the “Regulatory Taking” of
their property, their businesses and their livelihoods!

Stop it, Right Now!  We’re mad as hell and we’re not going to take
this any more!