EPA receives documents from automakers to certify compliance with Corporate Average Fuel Economy information. In these compliance reports Automakers are required to submit an enormous amount of detailed information. On top of the emission testing data and equipment automakers are also required to include things like vehicle subfamily, sub-configuration (automatic, manual, CVT), engine models (I4, V6, V12, etc.), annual production reports, product information reports, final CAFE reports on footprint /fuel economy , etc.
What can the EPA release to the public?
The information in the reports can be; released right away, held as confidential business information (CBI) until the end of the vehicle model year or held as CBI indefinitely. This ensures that automaker’s trade secrets are protected. Some of the information contained in the reports to the EPA can be compiled by automakers through the use an automotive consulting firm or data provider such as Wards Auto.
In the course of this process EPA makes a class determination on the information submitted by automakers. By designating release classes the information is better protected and information that can be released to the public is done so in a timely manner.
Why are we talking about this?
On July 22, 2014 EPA’s Office of General Counsel posted draft guidelines for the class determination, of confidentiality of business information submitted by automakers for compliance for 2014 and subsequent model year vehicles.
EPA laid out what information could be released and when in the tables below. Table 1 contains information that is never treated as CBI. Table 2 is information that is treated as CBI until the end of model year. Table 3 is information that can never be released.Where do the automakers stand on this?
In a September 5, 2014 joint letter from the Alliance of Automobile Manufacturers and Global Automakers, the lobbying groups expressed concern regarding the level of information required by automakers in Table 2, specifically the Final Sales/Production Information (emphasis added in Table 2 image with red box).
The group goes on to say:
“we are concerned that, as drafted, the “Final Sales/Production Information” category is overly expansive, and extends to information that, if released, could harm a manufacturer’s competitive position in the marketplace by indicating details of the manufacturer’s fuel economy and greenhouse gas (GHG) compliance strategies.
Specifically, the compliance documentation that manufacturers are required to submit to EPA on a regular basis contains sub configuration-level technical data commonly considered to be confidential within the industry. The public release of this information could enable a manufacturer’s competitors to gain an unfair competitive advantage over the manufacturer by allowing a competitor to identify areas that are important to the manufacturer’s compliance strategy without investing the same level of resources in compliance strategy and development.
A manufacturer’s competitor could unfairly trade on this information by copying the manufacturer’s compliance strategies or by undercutting the manufacturer through attempts to take market share in areas crucial to the manufacturer’s compliance strategy. Concerns about competitive harm extend to a manufacturer’s suppliers as well – a component supplier discovering it supplies components that play a significant compliance role for a manufacturer could demand higher prices from the manufacturer.”
Automakers have two basic concerns – product information (what fuel friendly models are selling in what volume) and cost information (labor rates, supplier prices, etc.). While I understand the concern with cost information as that gets into supplier agreements and other information that could easily be argued as confidential, or “trade secrets.” I’m not sure I understand the apprehension to release product information.
If I’m reading the automaker’s response correctly their fear is that competitors could use product mix information, not to gain pure market share, but to target another automaker’s CAFE compliance strategy. If we are to believe this there is a person sitting in Dearborn cooking up ways to further degrade (if possible) sales of the GM’s Chevrolet Volt in the hopes the automaker will incur a CAFE noncompliance fine. Huh?
The draft guideline can be found HERE.
A list of comments, 10 in total, can be found HERE.
The letter from the joint group that represents automakers can be found HERE.