CARB Dumps On Dump Truck Industry

FEB. 23, 2011

For Lee Brown, who’s run a dump truck company in Upland for the last 20 years, business is as bad as it has ever been. The construction industry in California is half of what it was three years ago, and credit is tight for those small companies still hanging on.

“It’s terrible,” said Brown. “There are so many contractors out there fighting for so little work, it’s jammed prices so low that nobody’s making any money. I call it a death spiral.”

And this is before the new rule goes into effect. It’s known in the industry as the “Truck and Bus Regulation,” and even just mentioning those words to any trucker in the state is enough to cause fits of anger. The regulation comes straight from the California Air Resources Board (CARB), and goes into effect on the first day of 2012.

It’s hard to read or write anything about CARB without becoming angry. The $650 million agency is a behemoth, responsible for all the state’s pollution and global warming regulations, which it enforces with all the subtlety and kindness of a barroom brawler. Even the revelation that one of its own pollution researchers had falsified his credentials didn’t phase the agency, which received no official sanction.

In any case, the new CARB regulation in question imposes tough new pollution standards on all diesel vehicles in the state. It also levies the same steep fines on anyone found out of compliance that CARB observers have come to know and love.

On Feb. 11, Brown, who is also executive director the 70-year-old California Dump Truck Owners Association (CDTOA), filed suit against CARB in an attempt to stop the new rule. The organization attempted to work with CARB, he said in a Feb. 11 press release, but a “lack of cooperation and empathy” led to litigation. The suit says nothing less than the survival of the entire dump truck industry in California is at stake.

“Available retrofit technology costs tens of thousands of dollars to purchase and install for each truck,” states the lawsuit complaint. “Most CDTOA members do not have the financial resources to purchase and install retrofit technology for their trucks, and will likely lose their businesses… [or] relocate their trucks outside of California.”

According to Brown, CDTOA membership three years ago stood at 1,700 companies. Today it’s about 900, 60 percent of which are small, independent owner-operators. If the rule goes into effect, Brown said it could destroy virtually all of the small business operators.

“CDTOA members primary source of likelihood is their truck,” states the lawsuit complaint. “Most members purchase trucks to be used for decades, and most have lengthy mortgages on their trucks. The trucks typically cost at least $150,000 to purchase, but have a useful life of several decades if maintained properly.”

Brown said it’s common for an owner to keep a truck for many years – indeed, warranties typically run for 750,000 or even a million miles. But because of CARB’s new rule, that may no longer be possible.

“Because the rule requires replacement of otherwise perfectly useful trucks much earlier than would otherwise be required, most CDTOA members will be unable to continue their business,” states the lawsuit. “Not only will CDTOA members be prohibited from purchasing replacement trucks do to a lack of financial resources, they will be prohibited from earning any income at all because the rule prohibits them from operating their current trucks.”

If that sounds bad, the retrofitted technology “makes the truck less efficient, less able to run for long periods of time, and more prone to mechanical breakdowns,” states the suit. That plays havoc with the trucks’ resale values. “As a result, CDTOA members will be able to sell their current trucks for only a fraction of the balance they owe, and will default on their truck mortgages.”

Brown says a truck manufacturer recently told him that the price of a new truck has already gone up $18,000 to take into account the mandatory new pollution equipment. And that’s a year before the rule actually goes into effect. All of this adds up to considerably higher prices charged by dump truck operators. It’s a grim picture of an already grim industry.

“I would say 95 percent of the small business operators would go out of business,” Brown said. “Of course, then the big companies would come in and buy the trucks, and then unions would come in and organize the drivers. Environmentalists and unions have the same agenda here. That’s probably how it’s going to shake out, in my opinion.”

There is, as yet, not response to the CDTOA lawsuit in court documents, and CARB spokeswoman Karen Caesar said the agency’s policy was not to comment on any pending litigation.

– Anthony Pignataro