Lizzi Lovdal, Contributing Writer and Lynn Marcinkowski Woolf, Contributing Writer
A third of surveyed dealers say they have had customer-modified equipment come into their shop, according to a recent survey conducted by the Equipment Dealers Assn. What’s more, some of those dealers reported that up to half of the equipment in their shop had been modified or altered from manufacturer settings. Often, these modifications have environmental, safety and liability implications for customers and dealers.
Here’s one real-life scenario that Natalie Higgins, vice president of government relations and general counsel for EDA, shared during a recent presentation for the United Equipment Dealers Assn. “An Ohio equipment owner purchased a tractor and then installed a turbocharger on the engine. The tractor owner sustained injuries and then sued both the manufacturer and the equipment dealer, alleging that his injuries were the result of negligence on the part of the manufacturer and dealer. Remember, neither the dealer nor the manufacturer were involved in the turbochargers installation.”
That is not an isolated incident, according to Higgins, “The bottom line is that smart lawyers always look for deep pockets,” she says.
Defining the Issue
“Chipping,” or engine tuning, is one modification in particular that dealers need to be aware of. Eric Wareham, vice president of government affairs for the Western Equipment Dealers Assn., says the Code of Federal Regulations prohibits any defeat device, system or element of design which allows operation outside normal emission test conditions, and reduces the emission control effectiveness.
Chipping involves modifying a piece of equipment to increase engine horsepower and often results in it no longer being in compliance with emissions standards, according to Wareham.
Chipping is part of a wider consumer movement called “Right to Repair.” Supporters want access to proprietary diagnostic systems and embedded software for independent repair services to fix consumer goods. In 2019, Right to Repair legislation was introduced in 24 states and, to date, none of those bills has passed.
Knowing Your Obligations
Regardless of what is happening on the legislative front, you can take the lead and educate your customers, many of whom may not know or are confused about the issue. According to a recent Assn. of Equipment Manufacturers survey of 500 farmers, only 28% were aware of Right to Repair legislation.
“There are three main questions a farmer should ask themselves before they agree to have equipment chipped.
1. ‘Does it affect my equipment’s warranty?’ If it’s under the warranty, the answer is always going to be ‘yes.’
2. ‘Does it affect the service I can get from my dealership?’ Yes, because it compromises the service a dealership can provide.
3. ‘Will it affect my engine or other parts?’ We have a lot of anecdotal evidence from dealers across North America about the consequences of chipping equipment, whether that is a complete breakdown, issues with telematics and precision agriculture as well increased engine wear and violation of emissions standards,” says Wareham.
At the same time, educate your team, especially those in the service department, about the implications. “One of the first duties of dealers is to report failures or malfunctions. When we talk about dealers reporting to manufacturers problems that arise from their customers chipping equipment, it can put dealers in a sticky situation,” Wareham says.
Dealers are also bound by contracts not to modify equipment that falls outside what is considered standard or to install non-standard equipment. And, of course, dealers are bound to abide by the law.
“If you install a defeat device, you’re violating the Clean Air Act and in many contracts, that becomes grounds for termination,” Wareham says.
And, if you service equipment that has been chipped, the warranty will most likely be denied and you will not be paid for your work. “That can also put your dealership in a sticky situation if technicians in the shop are not conveying to the rest of the dealership what is going in,” says Wareham.
Financial consequences can be harsh for not following the law. Under federal law 40 CFR § 89.1006, the penalty for a dealer who removes or renders inoperative emissions controls is subject to a penalty of $32,500 for each violation. Wareham says that one manufacturer of chipping software was initially fined $300,000 by the EPA and then $6 million to ensure future compliance with the Clean Air Act. “The EPA has stated that their intent is to crack down on defeat devices in 2020,” says Wareham.
Guarding Against Liability
A dealer may face liability issues when customers tamper with the equipment they purchased, even if a dealer had nothing to do with the modification. For example, in instances in Ohio and Oregon, customers were injured as a result of modifications and dealers were sued.
“It’s important for dealers to have a strict policy of no tolerance for chipping equipment and installing defeat devices. It’s important for the industry as a whole because when one person does it to try to gain an unfair competitive advantage, it discredits the entire industry,” Wareham says.
Sharing Repair Tools
Higgins says, “While proponents of this legislation argue that they want the right to repair what they are really after is twofold. First, they want to remove repair dollars from an authorized dealer network regardless of industry to the independent repair industry. Second, they want to tamper with their equipment to disable emissions and safety features in violation of EPA, DOT regulations as well as the Digital Millennium Copyright Act (DMCA).”
Stephanie See, director of state government relations for the Assn. of Equipment Manufacturers, says, “If you ask a farmer, ‘Do you want to repair your equipment?’ they say ‘Yes.’
“We agree. We want farmers to repair their equipment. But, it’s not a grassroots farmer initiative like it's reported to be. Activist support from the personal technology side stands to profit from access to embedded technology. They're holding the farmer up as the sympathetic victim because that plays better in appearing right.”
EDA and AEM are providing support and resources for farmers and dealers. “We at AEM support the industry’s right to repair. We’re providing them with tools and information to help diagnose and maintain their equipment,” says See. AEM and EDA have joined 30 other organizations in the Coalition Opposed to Illegal Tampering.
In 2018 AEM and EDA formally announced an industry commitment to provide a comprehensive set of service information tools for tractors and combines put into service by model year 2021:
- Manuals (operator, parts & service)
- Product guides
- Product service demonstrations, training, seminars or clinics
- Fleet management information
- On-board diagnostics via diagnostics port or wireless interface
- Electronic field diagnostic service tools and training on how to use them
- Other publications with information on service, parts, operation and safety
AEM and EDA also jointly launched the website (www.R2Rsolutions.org) to help publicize this commitment. The website features additional detail about the Statement of Principles and Right to Repair legislation, as well as a video that explains the manufacturer and dealer commitment in greater detail.
This campaign is intended to underscore for state lawmakers why so-called right to repair legislation is unnecessary. Those proposals would risk undermining manufacturers’ investment in software development, and jeopardize machinery’s compliance with environmental and safety regulation, say the associations.
The Statement of Principles developed by AEM members and EDA strikes the right balance between giving farmers and ranchers the tools that they need while protecting and encouraging innovation. Higgins concluded, “We believe that our industry continues to rise to the occasion and meet the needs of our partners in business: end users. When they have what they need to succeed, AEM AND EDA members also succeed.”
Access these Right to Repair Resources
From Farm Equipment:
- Dealers Discuss Risks of Equipment Chipping (Tuning)
- Legislative Landscape Webinar with the Western Equipment Dealers Assn.
- Chipping: The Unspoken Problem in the Farm Equipment Industry, Webinar with the Western Equipment Dealers Assn.
From the Equipment Dealers Assn.:
- https://illegaltampering.com/ contains multiple resources for end users, equipment dealers and legislators.
- Fact vs. Fiction on “Right to Repair” Flyer helps set the record straight on the misconceptions and risks with the Right to Repair legislation.
- Right to Repair Flyer that helps outline repair information that is available to consumers. A great resource for consumer education and customer mailings.
- News & Updates on Right to Repair from EDA
From the Environmental Protection Agency:
- Punch It Performance and Tuning Agrees to Stop Selling Illegal Devices That Defeat Emissions Control Systems of Vehicles in the Wake of Clean Air Act Enforcement Action | US EPA
- National Compliance Initiative: Stopping Aftermarket Defeat Devices for Vehicles and Engines | US EPA
- DPF or DEF Delete or EGR delete kits