How John Deere’s MOU Impacts the Trucking Industry?
Learn how John Deere’s MOU can impact the trucking industry and right to repair.
Episode 257: Back in Episode 117, we talked about how repair restrictions threaten the trucking industry. In this episode, we are going to talk about how the new Memorandum of Understanding (MOU) that John Deere has signed, and the implications this can have on the trucking industry, and the effect this can have on right to repair.
John Adami is the Principal at NW Heavy Duty
Ann Wilson is the Senior Vice President of Government Affairs at MEMA
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Transcript of Episode:
Jamie Irvine:
You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine, and this is the show where you get expert advice about heavy duty parts that keeps trucks and trailers on the road longer while lowering costs per mile.
Welcome to The Heavy-Duty Parts Report. Back in Episode 117, we talked about how repair restrictions threaten the trucking industry. If you haven’t had a chance to listen to that episode, we’ll include links in today’s show notes so that you can easily find it, and I recommend that you go back and listen to it. In this episode, we are going to talk about how the new Memorandum of Understanding the MOU that John Deere signed, has implications for the trucking industry. And in this episode, we’re going to explore exactly how this MOU could affect the trucking industry.
We’re going to talk about what still needs to happen in Washington in order to move right to repair legislation forward. And we’re going to conclude our conversation with a discussion around what you as an individual can do to support right to repair and the independent service channel. Now, in order to help me with this, I’ve brought on two subject matter experts that can really give us some insight into what’s going on at the manufacturing level and what’s going on at the legislative level in Washington. I’d like to now introduce my two guests.
John Adami:
Hi, I’m John Adami with Northwest Heavy-Duty, Co-founder of a manufacturing rep agency that’s based out in the Seattle area.
Ann Wilson:
Hi, my name is Anne Wilson. I serve as the Senior Vice President of Government Affairs for MEMA, the Vehicle Suppliers Association.
Jamie Irvine:
I started my conversation off with John because I wanted to understand from a manufacturer’s perspective, since he works as a consultant with manufacturers, how he views this MOU that was signed by John Deere. Listen in to what John had to say.
John Adami:
So this MOU was signed between them and a trade industry organization, and John Deere has done a pretty good job from my understanding of covering themselves and saying, you know what, this is our intent. This is the direction we want to move. But if states or even at the federal level, if they start getting involved in right to repair, then this agreement is moot. I think it’s a fascinating conversation. I think it’s important conversation.
I think it’s way too early to tell if this MOU is going to be some kind of landmark shift for their industry or for on highway industry. There’s too little known about what this right to repair really means, how broad it is, how effectual it is in real life. John Deere, like every other OEM out there, they want to do the best possible job by their customers, make them happy, and they also need to make a return for their shareholders.
So they’re going to walk that line between giving the customers what they think they want and what they need to have to be successful and the need to have to be successful is always going to trump what they think they want. Jamie, I just believe it’s a little too early to tell whether that is going to be an influential document and whether or not it translates into other industries.
I will tell you the agricultural industry should be watched. It should be respected. They have had a lot more electronic content on those vehicles for a lot longer period of time. So they are a leader in that space and our on highway industry should be familiar with it, keep an eye on it and anticipate that what happens there in their space will eventually migrate to ours.
Jamie Irvine:
So, Ann, we just listened to John from Northwest Heavy Duty talk about how they view from a manufacturer’s perspective since he works with manufacturers. This MOU, I’d like to understand from your perspective how you think this MOU with John Deere, that’s an agricultural company, how this could impact the trucking industry.
Ann Wilson:
So let’s sort of level set where we are right now. As individual consumer devices and vehicles have gotten more complicated and more technical, the owners of those equipment, whether it’s your cell phone, your refrigerator, your car, your truck or tractor on a farm have gotten more complicated to actually repair and maintain.
The independent aftermarket and MEMA aftermarket have strongly supported a for a long time repair access so that it will allow an individual consumer to be able to maintain and repair that vehicle, whether it’s a tractor, a car, a heavy-duty truck, tractor trailer at the place that the time that they feel is best and most appropriate for them. We also think that legislation is necessary. So when we look at what John Deere did, the owners of Deere tractors have had a long hard time for a long time in getting their tractors repaired.
They have had to bring the tractors back to the stores, back to the dealerships. And as we can all imagine, that is very difficult. This is part and parcel of this whole repair access issue overall. I’ve been around for a long time, believe it or not, in Washington DC and I always think the discussion up between parties is always a good thing.
I think it’s great that the Farm Bureau and Deere sat down and really talked about what they needed and what would be successful. We are concerned though, at MEMA because what has actually come up with between Deere and the Farm Bureau has a lot of the same elements that we have struggled with as the automotive industry and as the heavy vehicle industry for the last few years.
There’s no way to actually enforce the agreement. It doesn’t necessarily allow the farmers individual kind of access that they can promote and move forward as technology moves forward. We’re going to be real interested to watch this and watch how the dialogue continues, but we continue to believe that the best way that the heavy-duty industry and the light vehicle industry would be served is with federal legislation.
Jamie Irvine:
So as you were talking about the changes in technology of vehicles, it made me think about my, as a teenager, I bought an old truck. It was a 1977 F 250 Ford, and I could fix anything on that truck with about five or six tools. I needed like a 7/8 socket, a couple screwdrivers and a 1/2 wrench, a 9/16 wrench. And basically I remember one time driving and I overheated and I literally went out into a farmer’s field.
I knocked on his door and said, that truck out in the field, do you care if I take parts off it? He said, no, go ahead. And I took the rad off of that truck in the field, put it on my truck, filled it with water from a stream and got back to my shop where I was able to put coolant in the truck and I ran that truck with that rad for a couple years until I sold the truck.
That kind of scenario just doesn’t exist anymore with vehicles. They’re so complex. You need diagnostic tools and there’s been a big push from vehicle manufacturers from my understanding to also vertically integrate.
They’re very interested in doing business, not just with first owners, but second, third, and fourth. So when it comes to the legislation and the federal legislation, is there a time limit to it? Have we run out of time here? Why is right now so pressing beyond just the evolution of technology?
Ann Wilson:
Well, I think the evolution of technology is really important and I am totally amazed at that story. You’ll have to tell me some time the specifics of that. As a lobbyist, I can put gas in my car and change a tire and that’s about it. But having said that, I think there’s a couple of things that we’ve got to keep in mind.
One is, as you said, vehicles are getting much more complicated and as they get more complicated, as we move towards more automated technology, as we move towards greater fuel efficiency, lower emissions, it is going to be easier for the original vehicle manufacturers to actually make it even more difficult to access repair and maintenance data. And that data has value. We’ve seen this over and over again in reports of different kinds of the importance of that data is the value that it has.
But the thing to keep in mind is when you purchase that truck, that data’s yours too. And one of the things that I think is really important to remember is the last couple of years we have seen more supply chain problems in this country than I can ever remember in my professional lifetime. We’ve seen international problems, but we’ve also seen domestic problems with the railroads, with trucks, with logistics, all of these types of things.
It’s really important for our national economy to keep every single one of those trucks on the road. And as you and I know, the value in a tractor trailer is not just the first owner, it’s the second owner, it’s the third owner.
It’s what an independent trucker is actually doing with that vehicle. It’s with that small fleet is doing with that vehicle. And if those particular owners in that second and third chance do not have the opportunity to find a way to repair their vehicle either themselves or at whatever location they decide to do it in, the value of that becomes less and it’s going to get harder and harder to keep those trucks on the road.
So it’s about the economy. And then finally, I think one thing that we’ve got to keep in mind too is this has become an overall consumer issue. I have a colleague who bought a fancy new stove for a brand new house and it was out of commission for more than two months because they couldn’t get the motherboard in there.
Now how many of us have had to have the dealership or whoever we bought it from, fix our washer machines, our dishwashers, our stoves, much less what you have to do when you buy a phone. So more and more consumers are saying, wait a minute, I bought this. This is mine.
Why can’t either I fix it if I’m capable or why can’t I take it to a place where I know that I am comfortable with them repairing, maintaining it so that I don’t just have to stand in line. And it’s going to be important when we address vehicle issues. At the same time, we address these other consumer issues, they need to go hand in glove because frankly, your personal vehicle for most of us is the most expensive thing other than a house we ever buy.
But a tractor trailer for an independent trucker is more expensive than many of the houses that I’ve ever purchased. So I mean, these are all very important issues that we address at the same time.
Jamie Irvine:
That makes a lot of sense to me. And as you were describing that, it made me think of a listener of The Heavy-Duty Parts Report. They own a repair shop and they set up their repair shop across the street from a truck dealership, and everybody said that was crazy. Why are you doing that?
He’s never been so busy in all of the years of owning a repair shop because everybody that the truck dealership can’t take that day or right then and there, they go across the street to him. And so to me, that highlights the realities that the dealerships can’t keep up with the demand today. Nevermind if all of the independent service channel was to disappear.
Ann Wilson:
Well, and keep in mind, isn’t this great? We should be celebrating the fact that the value of these new vehicles extends so long. This is a good thing. But that value only continues if they’re repaired and maintained appropriately. So exactly that. If you can’t get to the dealership, then come here. And again, we need those trucks on the road. The nation’s economy depends on those trucks being on the road.
Jamie Irvine:
Yeah, I often say the trucking is the backbone of society and it’s so, so true of our dependency on it. We’re going to take a quick break to hear from our sponsors. We’ll be right back.
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Jamie Irvine:
So let me ask you something. If you talk to people in the independent service channel, there is this feeling that the OEMs of commercial equipment that most of them oppose right to repair legislation. And I guess the concept is something along the lines of, well, they’re just trying to vertically integrate and put us out of business and they want to capture a hundred percent of the market.
Is that accurate? Is that real? Is there more to it? Is it not quite that black and white? I’d like to hear your opinion because you’ve had a chance to see it from both sides.
Ann Wilson:
I don’t think it’s quite that black and white. And kind of going back to your original question on John Deere, I think this is an opportunity to have these conversations and to see if there’s a way to bridge this and to say, look, it is in all of our best interests, there’s only so many service space you have. So don’t you want a satisfied second or third owner of those vehicles so that you make sure they’re on the road.
Now, at the same time, as we all know, the larger fleets when they buy vehicles, they have a lot more leverage of what they can actually agree to with truck manufacturers. But the thing is that’s got to translate to that second and third owner too, or it’s even got to translate to the smaller fleets that might not have that leverage. So I again, am a big believer in sitting down and chatting with people and talking with people.
I would encourage all the folks who feel like that is true to reach out to vehicle manufacturers or to work with us to reach out to them. But again, we’re more than willing to say to everybody, this is so important for the economy, for the heavy-duty industry, for individual consumers, that it needs to be addressed even if we can’t get the vehicle manufacturers on same page as we are.
Jamie Irvine:
And I think if you are in the trucking industry, and if you are concerned about this, one of the best things that you can do is advocate for the industry. And that means talking to your local representatives, get them down to your shops, show them the challenges you’re having, get them involved, reach out to them. I think of enough people in the trucking industry do that along with the help that we get from other advocacy groups that we’re talking to.
We can move the needle on this, but if the politicians don’t understand what it’s like for us on the street as it were, then they’re not going to make the right decisions. So we have to represent ourselves and I think we need a larger and larger voice from the trucking industry to do that.
John Adami:
Historically, we’ve done a really good job of doing that as in tandem, right? If it’s very difficult to take your position as a fleet operator and separate that from the vehicle manufacturer. So the more collaborative work that’s done trying to create a win-win and presenting that unified front to the legislative bodies, I think the more success we’ll have.
Jamie Irvine:
Yeah, that’s a great point. So Ann, let me put a scenario out there and I’d just like to get your thoughts on it. So if we have truck manufacturer 1, who decides to oppose right to repair, make it difficult for people to get access to that IP in that second and third owner scenario, and then we have vehicle manufacturer 2 who goes in the opposite direction and says, well no, we’re going to in fact go the other way.
We’re going to work with the independence, we’re going to make it super easy. That would actually create a competitive advantage for manufacturer 2, where that badge of truck could become very, very popular with the trucking industry. So I just don’t see a scenario where we have a complete monopoly in the truck industry and all of that information is tightly guarded forever.
But at the same time, I think that to your point, if we work with the manufacturers, if they can hear us, if we work with our legislators, if we work with the people at our disposal as an industry, then we’re going to create the best possible scenario that kind of covers everybody’s needs. Is that the vision? Is that the dream and is it attainable?
Ann Wilson:
Yeah, absolutely true. And I think the time is now to do this because we have these other factors that are playing into the scenario that we have. But let’s keep in mind too, so that suppliers who actually manufacture parts for most of those trucks, they are committed to cybersecurity, they’re committed to safety, they’re committed to the privacy of information, and they can continue to do that in the aftermarket. And the service space, they’re committed to training.
They’re committed to having the best possible tooling available so they can have that diagnostic tool that you mentioned in your first scenario that you absolutely need these days. All of this is going to take a community of effort to be able to move forward, and we know that investment in that need is there, but we also know the capability is there.
The capability is there in the independent service repair base, in the capability is there and the manufacturers. So those two together I think puts a very, very massive force going forward.
Jamie Irvine:
And I think we should conclude by emphasizing one point. To your point about our own appliances in our home or our electronic devices. Like I got a microwave that’s down right now because of one stupid fuse and I can’t find it. It goes way beyond just vehicles, doesn’t it?
Ann Wilson:
It does, it does. But the thing that worries me is that it is going to be relatively straightforward to deal with those other issues. And if motor vehicles aren’t included in that, then we will have missed a very significant opportunity. One thing I would tell your listeners to do, so your independent repair shop that’s crossed the street from the dealership, find out who your member of Congress is, find out who your representative in the house is and invite them to come by your facility. Do it first thing in the morning, probably Monday or Friday when they’re home.
Have some coffee for ’em. Walk through what your commitment is to that community, what you’re seeing come through your door 30, 45 minutes. Ask them to support repair access when it comes up in Congress. We could help them with this. They can reach out to me. We’ll help them with talking points and the meetings and everything because we need to make sure that everybody understands it’s not a minority of the industry that needs this.
It’s the entire industry that needs it. And I think having a member of Congress walking through your workspace and meeting your associates, your other colleagues, there is going to be an invaluable experience for them.
Jamie Irvine:
I think today’s episode was a very important subject that we need to keep talking about as an industry, and I’m really appreciative of both John and Ann for coming on the show and sharing their expertise around this subject. If you want to continue to learn about subjects like this, make sure that you subscribe to The Heavy-Duty Parts report. You can do that in three ways. One, you can go to heavydutypartsreport.com, sign up for our weekly email so you never miss out.
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