The election of Donald Trump to a second presidency and the coming shift in party control for at least one chamber of Congress will impact the collision repair industry.
Though it’s tough to say exactly how the election will bring specific changes in areas like tariffs, federal right to repair efforts, and auto insurance premiums, it’s safe to assume the new political landscape will alter electric vehicle (EV) mandates and relax the overall regulatory environment.
Further, trade officials in Trump’s first administration prioritized the automotive industry, negotiating new bilateral, protective automotive regulations with countries including South Korea, Mexico and Canada in various free trade agreements, namely the Korea-U.S. Free Trade Agreement and the U.S.-Mexico-Canada Agreement.
Bob Redding.
To make sense of the shifting regulatory climate, Autobody News spoke to Bob Redding, president of The Redding Firm, a Washington, D.C.-based lobbying group. In his capacity, Redding is the head lobbyist for the Automotive Service Association (ASA).
Redding shared his insights on what a Trump presidency, GOP Senate and potentially a Republican House could mean for the collision repair industry.
We’ve seen two recent rate cuts by the Federal Reserve, one in September and another Nov. 7. Combined with the election results, what could this mean for the collision repair industry?
Lower interest rates are going to help everybody from a single shop owner to investment groups, I think, that are working not only in the collision space, but also the mechanical space. We represent both. Even though the mechanical partners have lagged behind collision on consolidation and MSO movement, it is there.
We’re seeing more and more of it -- more interest from single shops, and hearing more interest in activity in M&A. So with the trends we're on now, certainly the ingredients would be encouraging. I think this is going to impact a lot of different segments, not just the M&A piece.
The Federal Trade Commission, structure of the board and appointments and direction, that's going to be a big change.
But I think it's encouraging for small business. We did not take an official position [on the election]. We have people on both sides.
But I would say a majority of our folks would certainly recognize the [potential of a coming] shift in tax policy, banking policy and competition policy. And if the House keeps trending and does fold into Republican leaders controlling the House, I think you're going to see an impact on auto policy that's significant. And it won't just be in the M&A space.
Trump has criticized EV incentive programs in the recent past. What do you think a Trump presidency means for EV mandates, as well as the internal combustion engine (ICE) market?
I think we have to look back even at this Congress and the dissatisfaction amongst many Republicans in the House -- and I'm not speaking for them, but I'm saying we've heard them say it to us, in meetings and publicly -- dissatisfaction with the amount of federal funding that's gone into incentives and charging stations, for example.
They have a lot of questions about that. We've even run up against it in EV training efforts in trying to get more funding in that space. Not opposition to auto technician training, but opposition to narrow EV training. We've got a lot of shops, particularly in rural areas, that may not have had the volume of EV training, EV cars in their shops.
And even up to today, shops in a university town might have experience with EVs, yet a rural community shop not so much.
We've had a couple of pilot projects in Colorado and California on EV training. But it's a funding issue. Paying for these things is hard, and the only way to do it is a public-private partnership. So that impact and the lack of focus on the EV piece amongst particularly many House Republicans, I think now will be incentivized. So, we'll see.
Federal appointments are going to be critical. If you look at not just the FTC, but you look from our perspective at U.S. DOT. I don't know who [Trump’s] going to pick. I don't have an inside track on that. But I know that some of the names that have been thrown around are conservatives who are not advocates of huge federal subsidies in the EV space.
And I think you could see a real directional change in that area, not just in the House of Representatives and the Senate, but also with whoever's appointed to run the DOT, I think it's going to be big.
What could the next Senate bring for the industry?
[Texas Republican Sen.] Ted Cruz will chair the [Senate Commerce] Committee. And we know Sen. Cruz. He's been very helpful to us. He's pro-small business. I can't imagine a scenario where Sen. Cruz, who now will be Chairman Cruz, is seeking more federal regulation of shops or more federal incentives in the space. I just don't see it.
Now, some lobbyists may be able to sell that, but I don't think I can. So, I don't see that. I think that what we're watching for is what they'll do in the auto safety space from our perspective.
We like inspection. We like state programs in the vehicle inspections space. We like states having a lot of rights relative to vehicle safety inspection.
But the federal government certainly has a role in that and what that should look like and any incentives in that area for states that want to do it. That includes post-repair inspections, programs like in New Mexico, where it's on resale, the vehicle has to have a post-repair inspection after a collision.
I think it's going to be very different [in the Senate]. I was surprised at the Pennsylvania Senate seat flipping.
But I'd be surprised if one of the first things out of the box is broad auto policy. When it comes up, I do think it would be in the EV space, but I don't see a broad automotive emphasis, which we could’ve had under Democratic control.
And in the House, I don't think so either. We don't know who's going to be chairman, but if you look at the mix of potential chairs of the House Energy and Commerce Committee, I don't see that as a priority.
What about federal right to repair legislation? Some view it as favorable to small business and mom-and-pops in collision repair. Do you think there could be pushes to get those efforts off the ground?
We talked some about this within ASA this week, after the election with our executive committee informally. But we have an agreement with the Alliance for Automotive Innovation and with Society of Collision Repair Specialists to address the vehicle data access issue.
And we are still working on implementation for the agreement we signed in July 2023. That will be very important for ASA implementation of the agreement, making sure that our shops have access to the data they need.
We like exhausting an industry agreement or an industry process if it's possible, and it's not always possible. But that's always our first choice. If it doesn't work, you go to Congress, or on this issue, right to repair, in Massachusetts and Maine, you have laws.
What we're trying to avoid is any activity on this at the state level that will wind right back up where we've been with the insurer-repairer-consumer relationship, with it regulated at the state level, a 50-state checkerboard footprint of regulation. And that's a hit and miss.
How might other regulations be affected by the election?
But even not knowing who will chair the House Energy and Commerce Committee or the subcommittees -- because that does matter, the committee leadership -- I still don't see the administration encouraging any legislative effort within their own party that dramatically expands the role of the federal government, particularly at the Federal Trade Commission.
Certainly, [car] dealers have taken their share of hits from the current Federal Trade Commission in the regulatory space. I just don't see, from a direction perspective, that continuing. I may be wrong, but I don't see that.
One of the things that has concerned us, because we were victims of it, independent repair shops, collision and mechanical, after the 1990 Clean Air Act Amendments, in the service information regulation, the U.S. EPA in a Clean Air Act Amendment said emissions data must be given to independent repair shops, collision and mechanical, across the board, and that repair shops should get the same service information that franchise car dealers got. The Department of Commerce released further rulemaking on data access. Well, the OEs dumped all the info at Commerce.
They were understaffed, didn't have the funding, and had no clue what they were doing. It was a complete failure. We met with the U.S. EPA. They reversed that policy. It took years to get this new law into a regulatory space that worked, which are the websites that you go to now, the OE websites, are a product of that 1990 Clean Air Act amendment. So, the federal government regulating this and disseminating our data or what we need to repair cars is risky.
And I'm going to be very surprised if we see the House or the Senate, particularly the Senate, going full bore to expand the number of personnel, funding and authority of the Federal Trade Commission to run these kind of programs.
For legislation and laws that are too aggressive and can try and cap out what you as a collision shop owner charge for storage fees, if your storage fee is too high -- this is our view -- then the consumer or the insurer should tell you, “That's too high,” and not the government. Then, it's up to the shop what they want to do.
But controlling prices at shops is not something we want the federal government involved in. And that was clear in our pre-meeting with the panelists, clear from our members over the years and our leadership that these capped storage fees -- in Oklahoma that was proposed, and that legislation could come up again, even though it died this next year -- that is something that we just don't support.
We think that's too much of government.
If we go too far on the Federal Trade Commission as a police officer under, whether “Joe Shop Owner” gets data or information from a third-party provider or the OEs or whatever, then that's a little too much interference.
Trade officials during Trump’s first term prioritized the auto industry, negotiating new bilateral trade rules and imposing more restrictive tariffs. What do you expect to see in the trade landscape under a second Trump term?
I think it's anybody's guess right now. There’s no U.S. trade representative yet. Bob Lighthizer [under Trump’s first administration] did a fantastic job.
I thought, for Trump's first appointee, he was experienced. He was involved in steel [litigation before serving as USTR], and I think he had some other clients where he had a lot of interaction with the [U.S. International Trade Commission] and other entities.
I'm just a big fan of theirs. Also, President Trump's first chair of economic advisors, Gary Cohn, was one of the most inclusive senior staff people at the White House I've ever seen.
Where they brought small teams in -- not always the same industries in the room -- they might have five people from different sectors running things by them that might not be not be a priority for the industry, but had some impact. So, I was impressed with those administration appointments last time.
The establishment of the House Select Committee on the Chinese Communist Party is a big deal. They have a serious chairperson there with [Republican] Congressman [John] Molinar of Michigan.
He's a serious person, very smart, very educated and works well with the ranking member. There are a lot of members from both parties that are very focused on the China piece.
I can't imagine a scenario where the Congress doesn't, as a majority, support what the president tries to do on China. That would be a surprise. Could we see, I mean, China is focused on specifically in the automotive context.
Pundits have raised the possibility that Chinese cars, including EVs and autonomous vehicles, could be exported more to the U.S. in the future. Do you expect automotive trade with China to be a focus area in the trade conservation?
If you go back to the U.S.-Canada-Mexico agreement, some of the positions that USTR put on the table that were not accepted, really, I think, are precursors towards a willingness for an aggressive protectionist approach.
I think it's going to be a very different approach. As you know, [current USTR] Ambassador [Katherine] Tai has been less assertive on trade agreements and certainly that’s just a really different approach than what Ambassador Lighthizer did or others, even going back to [former USTR] Mickey Cantor with Bill Clinton, who was very aggressive in the space, a Democratic USTR. But it's going to be different.
I don't know who [Trump’s] going to pick. He certainly has some good choices out there, including former deputies that may have an interest.
In September, Trump tweeted that auto insurance rates were up 73% and he would cut them in half once he gets into office. Obviously, that can’t be a clean guarantee for every auto insurance holder. But is there any change that such a rate cut at least progresses toward being a reality, in the case of, say, deflation, or a deregulated supply chain?
I hope he does. I mean, my insurance rates are up. They’re certainly going to have a very, very different antitrust division at the Justice Department, a very, very different attorney general.
So, in the FTC piece, you're going to have a lot of different federal policies. But as you know, the bulk of the regulation of these companies is at the state level. And despite having those major insurers that we focus on at various conferences and symposiums, there are a lot of small companies out there.
They're small, local and state entities. And that is going to be a really hard job. And, you know, we have a mix of insurance commissioners, a lot that were in the industry or going to the industry when they leave, as well as consumer activists.
That's a tough job [to rein in insurance rates].
It's hard. But it is, as you know, in many states, Pennsylvania, New Jersey, Florida and California, insurance rates are high.
Do you have anything else to add?
I think that generally, we are going to see some very pro-business initiatives.
I do think auto will be in the line of things that Capitol Hill addresses relative to the EV piece. I think you'll see legislation introduced out of the box.
I think this applies to any industry sector: Whatever administrative agency that they follow, whatever cabinet official, but not just that -- all the way down to Schedule C’s -- I think the Trump administration has been working early, diligently, on the personnel piece, gathering names and gathering policy ideas, and I think it will be a much more hit-the-ground-running, versus last time when it was slow getting people in place, slow getting appointments to the Senate. I think it will be very different this time.
Brian Bradley