Regulatory Roundup Talking Points

NATIONAL ASSOCIATION OF TRAILER MANUFACTURERS NATM's mission is to promote trailer safety and the success of the trailer manufacturing industry through education and advocacy.

WHO WE ARE The National Association of Trailer

NATM VISION:

Manufacturers (NATM) is the trade association for manufacturers of light- and medium-duty trailers (under 26,000 lbs.

Gross Vehicle Weight Rating) and suppliers and service providers to the industry. For over 30 years, NATM has worked to improve the safety of America’s roadways.

Continuously advance trailer safety and industry growth.

NATM MEMBERSHIP AT A GLANCE The National Association of Trailer Manufacturers (NATM) represents manufacturers who produce light- and medium-duty trailers that are towed behind cars, trucks, and SUVs; and suppliers to the trailer manufacturing industry.

There were more than

1,093,000 new trailers

registered in the U.S. in 2019*, representing approximately

$4.98 billion in sales each year.

In addition, NATM members employ more than

485,000 American workers.

NATM seeks to promote awareness among its members of best industry practices and provide a voice for trailer manufacturers when issues of trailer safety and regulation are considered by Congress and relevant government agencies.

NATM’s goal is to promote the safety standards by which the industry is measured.

Number of Employees by State Employed by NATM Members

* Statistical Surveys. (2020). National Light-and Medium-Duty Trailer Registrations Report, 2020.

COMPLIANCE VERIFICATION PROGRAM The cornerstone of NATM is its mandatory Compliance Verification Program (NATM CVP) which verifies that NATM member trailer manufacturing companies have the manufacturing processes in place to build trailers that meet applicable Federal Motor Vehicle Safety Standards, federal regulations, and industry best practices, as well as providing members with technical and educational resources. Â Although the law requires that all trailer manufacturers comply with federal regulations, not all US trailer manufacturing companies use a third-party inspection body to verify compliance. The NATM CVP is mandatory for all trailer manufacturing members in the Association and involves multiple components, all of which are geared toward creating safer trailers and, in

Currently, NATM members manufacture an estimated 80% of new trailers on the nation’s roadways each year. turn, safer roadways.

Biennially, an NATM Compliance Consultant visits every trailer manufacturing member company to conduct an independent third-party inspection. The onsite consultation includes a review of elements such as recordkeeping, NHTSA reporting, safety chains, emergency breakaway systems, lighting requirements, component capacities, and other applicable details. Once the member successfully completes a compliance consultation, they are able to purchase and place NATM Compliance Decals on their trailers.

WHEN WHEN SHOPPING SHOPPING FOR FOR A A TRAILER, TRAILER, LOOK LOOK FOR FOR THE THE NATM NATM DECAL. DECAL.

PROMOTING TRAILER SAFETY Educating Dealers and Consumers: Trailer Safety Week While trailer manufacturers play a significant role in trailer safety, consumers and dealers also contribute. NATM has increased its efforts to educate trailer dealers and end-users through its annual, nationwide Trailer Safety Week which takes place the first week of June. The mission of Trailer Safety Week is to improve the safety of the nation’s roadways by raising trailer safety awareness through the education of end-users, dealers, and manufacturers on safe trailering practices. The weeklong event features webinars, distribution of printed materials, and social media campaigns all aimed at providing towing safety resources and education. Bringing together more than 235 Allies, Champions, and Partners in 2020 alone, it is estimated that Trailer Safety Week has reached an

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estimated 90,000+ individuals across the country including dealers, consumers, law enforcement and legislators. Trailer Safety Week continues to expand its reach and resources are available all year long at

TrailerSafetyWeek.com.

In 2019, NATM launched its Dealer Affiliate program, an effort focused on closing the gap of communication between trailer manufacturers and end-users by providing dealers with trailer safety education and resources. Trailer dealers are an integral component of the trailer industry and often are the only point of contact for trailer purchasers. Dealers’ success and ability to support trailer safety is dependent upon their access to information and resources and NATM is proud to be establishing those vital pipelines.

PROMOTING TRAILER SAFETY Educating Manufacturers Regulatory compliance is an important and often confusing topic for the light- and medium- duty trailer industry for both trailer manufacturers and suppliers. All trailer manufacturers and suppliers, regardless of size, have reporting obligations per federal regulations. NATM is committed to providing education and facilitating conversations about practices that will help members navigate those compliance obligations more confidently.

With a shared goal of highway safety, NATM regularly works with the National Highway Traffic Safety Administration (NHTSA)

to bridge the gap

between regulators and industry. In 2018 when NHTSA expressed concern about industry compliance with tire recordkeeping requirements (a system set in place to improve recall effectiveness in cases of tire-related safety defects), NATM responded quickly and aggressively spending two years providing industrywide education through webinars and workshops, articles, and updating its onsite consultation process. In 2020, education efforts have focused on compliance with expanded sick and family leave policies per the FFCRA and additional support on workplace safety in response to COVID-19, amid other changes.

Trailers are defined as “Motor Vehicles” NATM seeks to educate members of Congress, congressional staff members, and regulatory agencies as to the unique challenges facing the light- and mediumduty trailer industry to ensure trailer manufacturers are able to comply with regulations and standards, thus improving trailer safety. One unique challenge is the

trailers are defined as “motor vehicles" and thus grouped into legislation fact that

and regulations that impact automobile manufacturers, often without thought of the implications for trailers.

PROMOTING TRAILER SAFETY Funding Trailer Safety Initiatives Traffic safety is considered a major public health issue, but light- and medium-duty trailer towing is one facet of motor vehicle crash safety that is often overlooked.

Prior to NATM’s efforts there had never been a nationwide safety initiative to address the proper usage of these trailers, which millions of Americans use each year for a wide variety of commercial and recreational purposes. The Commercial Vehicle Safety Alliance has noted an increase in towing-related crashes in recent years.

While data collected in the reporting process for trailer related crash reporting is incomplete, it is clear based on NATM’s 2015 conversation with then NHTSA Administrator Rosekind, that many incidents are the result of inadequate towing knowledge and training. In fact, NHTSA Administrator Rosekind directly challenged NATM to educate consumers. Trailer owners are often unaware of safe trailering practices, which can put them at risk of collisions, flipping, swaying, detachment, tire blowout, and other poor outcomes including life-threatening impacts with others on the roadways. All towers, both novice and seasoned, private and commercial, can struggle with towing basics. From selecting the right tow vehicle and trailer combination, to proper hitching, loading, and maintenance, mistakes are made daily.

With over one million new trailers being towed on highways across the United States every year and a demographic of users that mirror those of higher risk, higher fatality rate drivers, it is crucial that trailer usage is considered within the realm of traffic safety and is funded accordingly. In 2018, NATM launched the inaugural “Trailer Safety Week” to develop educational materials to raise awareness of safe towing practices. 2020 marked the successful third year of the effort, but more can be done. NATM believes Congress should consider directing appropriate funding, via the National Highway Transportation Safety Administration, to continue the progress NATM and industry partners made over the past three years.

Such funding could be distributed to traffic safety organizations and key stakeholders, associations, and/or law enforcement to fund public health interventions to improve trailer safety. Federal funding to support nationwide towing safety initiatives intended to prevent trailer related incidents is a crucial next step in roadway safety. Proposed trailer safety initiatives include the development of a mobile app that includes information, safety resources and support at the touch of a button. Other proposed initiatives include PSAs during peak towing seasons; resource distribution at events with significant towing populations such as rodeos and car races; development of trailer safety content in print and video format; and funding to educate the law enforcement community on safe towing practices and regulatory compliance. These public safety interventions are intended to educate end-users about proper towing safety and maintenance in an effort to decrease trailer-involved traffic incidents.

INDUSTRY ISSUES COVID-19

COVID-19 has had a profound impact on the light- and medium-duty trailer manufacturing industry. Monthly, NATM surveys its trailer manufacturer, supplier, service provider members and dealer affiliates to capture the impact and monitor industry projections for workforce, supply chain, and economics.

Workforce Impact In late March and April, the industry saw significant lay-offs and furloughs, as well as a reduction in employee hours. While the industry attempted to implement telework policies where possible, unfortunately the bulk of trailer manufacturing cannot be done remotely. However, as the country began to re-open and federal funding like the Paycheck Protection Program came through, the practices that involved loss of income for employees decreased significantly and the industry saw increases in altering production schedules to support workplace safety efforts.

Despite efforts to rehire or hire new employees, 51% of industry respondents have faced challenges including rejections of employment offers.

Supply Chain Impact While trailer manufacturers re-open, or in some cases, remain open, production was further challenged by issues in sourcing supplies. With 84% of trailer manufacturer

WORKFORCE IMPACT: MONTH TO MONTH COMPARISON – TRAILER MANUFACTURERS

respondents indicating they are experiencing delays, 100% of dealers surveyed are experiencing delays in getting product with some citing lost sales as a result.

On top of these challenges, 27% of trailer manufacturers are reporting increases in costs, a concerning issue when combined with continued tariffs and falling consumer demand.

SUPPLY CHAIN IMPACT: JUNE 2020 - TRAILER MANUFACTURERS

INDUSTRY ISSUES COVID-19

Economic Impact While March saw the most significant deviation from projected revenue, with 35% of all survey participants reporting a decrease in revenue of more than 25%, that number lowered to just 20% of the industry reporting losses of more than 25% in June. While more than 25% of respondents in April believed their annual revenue projections would fall by more than 25% in 2020, in June outlooks became slightly more positive with only 12% of industry reporting such loss projections.

Still, nearly 31% of industry businesses expect a revenue decline between 10% and 25% in 2020.

Federal relief packages have been accessed by

ECONOMIC IMPACT – MONTH TO MONTH COMPARISON OF ANNUAL GROSS REVENUE EXPECTATIONS - INDUSTRY DATA

the industry widely. For example, in May 51% of the industry applied for the Paycheck Protection Plan and 91% of those applicants received funds. The impact of those funds can be seen in workforce trends and improved economic outlook.

ECONOMIC IMPACT – MAY 2020 ACCESSING SUPPORT RESOURCES - INDUSTRY DATA

INDUSTRY ISSUES

Developing a Skilled Workforce Despite unemployment rates reaching unprecedented levels, the trailer manufacturing industry is still facing a workforce shortage as businesses reopen. The underlying causes of this shortage are two-fold. In the short term, COVID-19 has created mounting issues with 51% of the industry reporting challenges in the hiring and rehiring process citing smaller candidate pools, potential hire concerns with contracting COVID and a surprising 31% of respondents having offers to hire rejected citing unemployment benefits. Long term success means both reinvigorating an interest in skilled trades among Americans and providing more access to training and education for students in public education settings and adults in the job market.

This workforce shortage threatens not only the future economic health of the industry, but also its ability to resume working at a pre-COVID-19 capacity. NATM member companies are developing innovative ideas like hosting on-site programs for local high school students to train them in necessary skills while earning school credit or partnering with local prisons to hire and train non-violent offenders. NATM has made workforce development a primary initiative of its strategic plan, investing in school outreach, upskilling resources, expanding efforts to attract women, minorities and veterans, and marketing the stability and importance of trailer manufacturing careers.

INDUSTRY ISSUES

Impact of Tariffs

Members of NATM continue to be detrimentally impacted by tariffs on products used heavily in the manufacture of trailers levied by the Section 232 Aluminum and Steel tariffs, Section 301 tariffs, and the anti-dumping and countervailing duty assessments with regard to certain Chinese steel wheels. In each instance, NATM provided comments or otherwise encouraged

As a result of these tariffs, the price per unit rose while, in 2019, the units sold declined*. NATM members have also been communicating industry comments where required.

regularly with their legislators on the impact of these issues.

With discussion of expansions in tariffs to additional countries, the industry is leery about the continued rise in costs and the ability of the American consumer to shoulder costs when domestically sourced products are difficult, if not impossible, to obtain.

NATM member companies pride themselves on supporting the American worker and contributing to the nation’s economy, but sourcing parts and providing the American consumer a reasonably priced product is vital for the success of the industry.

*RSM US LLP, 2019 State of the Industry Survey