Comment Log Display

My name is Rod Winkle and I am the President of Franklin
Construction, Inc. in Chico California.  We are a general
engineering contractor and own a large number of off road diesel
machines.  I have been going to the workshops for this regulation
for the last year and have become familiar with the regulation
itself including the most current modifications. As a company, we
have been responsible over the last ten years as far as equipment
goes and have made every effort to replace our existing equipment
with new, cleaner machines to the degree that we have been able to
afford it. We are a state certified small business doing between
$10 and $11 million of business per year and have
a maximum of 30 employees at the peak of the season.  As far as
this regulation is concerned, we are now considered a "Large
fleet" at roughly 9500 total horsepower.  Ironic-a small business
with a large fleet.
  I dont even need to run my fleet through the calculator to know
that we are not compliant and will need to follow the 10%/20%
replace/retrofit/retire process to comply with this regulation.
That means we will have to replace around 950 horsepower of
engines or equipment per year for NOX and 1900 horsepower of
modifications for PM.  In just the NOX portion, 950 horsepower is
a very large number.  In a normal year we can not afford to
replace or add 950 horsepower to our fleet unless we are buying
old used equipment.  In rough numbers, If I were to buy near new
used equipment to upgrade 950 horsepower from existing equipment
to used tier 2(or tier 3 if available)equipment I would have to
buy a Cat 631g Scraper, a Cat 14H motor grader, and a Cat
615C(which is a flex tier 2)scraper to get to around 950
horsepower.  The cost, based on todays current used equipment
market would be around $1.2 million dollars.  I could sell the 3
older machines for around $350,000 if I am lucky with a net
expenditure of $850,000.  If we were to do around $11 million
dollars worth of work in the same year that we replace this
equipment, our normal profit would be in the range of $660,000 to
a high of $850,000 in a good
year.  Can you see the dilema?  We would have to do something like
this every year until we comply or for ever since the regulation is
a sliding scale type of arangement that moves from tier 2 to tier 3
to tier 4.  It will take more money than we can ever make to comply
with this regulation.  We will be faced with downsizing our fleet
by 50% or more to get down to the newest, cleanest machines that
we have and then building back up to the fleet that we currently
have now if we ever can. This regulation
will drop our net worth, cost employees that are well paid and
well taken care(we provide family plan inurance paid by the
company, profit sharing, 401K matching at $0.50 per the dollar, 
bonuses, and interest free loans to employees when in need).  We
will be forced to drop many of these benefits just to keep working
and buying equipement or paying for costly, time consuming engine
retrofits.  I cant see where any of this is going to work out very
well for our company, employees, our local economy, our county, or
our state.  It is just to rapid of a pace.  I strongly believe in
upgrading our fleet to be cleaner.  I have childern that I want to
survive and breath clean air.  I also want to have income from the
business that I have been in for generations while saving money
for my children
to go to college.  This regulation is just going to destroy all
but the largest general engineering contractors that own
construction equipment and depend on it for thier living.
I think that the regulation needs to exist, but the pace of
compliance with the regulation needs to be slowed down in order
for owners and manufacturers of equipment to keep pace and
actually accomplish the end result.  This regulation will do no
one any good in the present form.  What good will it do if the
regulation puts most companies out of business or downsizes them? 
Add to this regulation the already existing PERP program as well as
the soon to come On road in use diesel regulation.  We own all
categories of equipment.  When all 3 of these regulations are
passed and running concurrently, we will be in
real trouble.