A Perspective on Energy Regulations

Dealing with the complications and frustrations created by energy and emissions regulations is not a new challenge for dealers or other members of the outdoor power equipment industry. As these parameters continue to build, the individuals within this industry must continue to work together in order to remain compliant.

About Golden Eagle Distributing

Established in 1946
Distributes out of Rocklin, CA & St. Charles, IL
Proucts represented are Echo, Echo Bear Cat, Billy Goat, BlueBird, Classen, Eastman, Little Wonder, Mantis, Oregon, Sarlo, Scag, Sutech and World Mower
Territory footprint covers CA, OR, WA, ID, MT, AK, HI, IL, WI, MN, IA, SD, ND, KS, NE, MI, IN, MO, NV (Not all brands are represented in all regions)

I was sitting at my desk in Sacramento, CA. The year was 1978 and today would not be an ordinary day in the HVAC industry. All of the major players would be meeting with the California Energy Commission to discuss proposed energy regulations for the HVAC industry beyond current federal standards.

It was a short walk from my office to the State Energy Commission hearing room. Little did I know that what I heard and witnessed that day would follow me through the rest of my career. I immediately understood that we as a country were deeply divided in our approach to achieve energy efficiency. The issues discussed at that time raised many questions in my mind. Unfortunately today in the outdoor power equipment industry, many of those same questions still linger.

COHESIVE COMPONENTS

I guess I'm still from the old school that believes a unified approach will always achieve the best results in the long run. When you look at the macroeconomics model of our industry, and others competing in highly regulated environments, you need to examine each component: consumer, corporation, distributor, dealer, government and foreign competition.

The consumer must still balance their sensitivity to the environment and their pocketbook. The consumer must work to provide for their family. Are there more jobs available today in energy-regulated industries or less? Are we losing jobs abroad? If so, why is that necessary? Are government jobs increasing or decreasing with more compliance? Is the consumer being asked to spend more or less of their tax dollars on energy compliance?

The corporations comprising the industry are locked into the vice of ever increasing regulations, competition and market price points that force consolidation, downsizing and combinations. The business models must be continuously restructured to hold profits and survive. The compression of profits affects everyone in the supply channel. The manufacturer must develop, test, produce, train and meet consumer price expectations with energy-efficient products.

The distributor must be able to forecast, deliver, anticipate market acceptance, and train their staff and dealers on sales and service.

The dealer must present to the consumer new products and features, proper maintenance, train their inside staff, stay on top of compliance regulations, and align themselves with the manufactures or distributors that will survive the current economic and regulatory drivers.

What is the common denominator for everyone in the supply chain? Decreasing profits; the hidden cost to bring new energy-efficient products to the market is substantial.

OBSTRUCTING STANDARDS

The government is compelled to lead the industries and raise consumer expectations to deliver products that will produce results based on milestones. The struggle for power has lead to a division between federal and state regulatory bodies as to which standard is correct. Should compliance lead innovation? Or should innovation lead compliance? I wonder if many of our major technology breakthroughs in the past would have occurred under the current regulatory compliance umbrella.

Without question, there are certain parts of this country that need special consideration in a unified effort. The effect of multiple directions and standards will continue to create an unstable environment for the workforce and companies attempting to comply. If it is decided that we are not doing enough, then how much is enough? How much further can we go without destroying the other components in the macro matrix?

Maybe we should take a moment to ensure that the damage in our quest is not greater than our continued achievement. Based on current technology, how much further can we squeeze miles per gallon or other energy efficiency? Are we sacrificing our future resources of time, money, companies and jobs for short-term gains? Should we be leaving money in the pipeline to develop long-term solutions and transition our workforce for future generations?

The global component is a significant factor. International regulations appear to be all over the board. Emerging highly productive countries will be challenged to meet expected effiencies. Will we be able to legislate their progress? Will we be asked to provide technology, money, and other resources to raise their standards? Will we be asked to sacrifice more tax dollars, more jobs? Has foreign competition gained a competitive advantage?

It has been 30 years since that day in 1978. While I still have many questions, one thing remains consistent. The people in this industry continue to be more creative than ever. You have to tip your hat to them for providing results in a less than perfect macro system.

- Gary Bussell

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