In a letter to SEMA members on 3/20/20, SEMA President and CEO Chris Kersting provides updates on which businesses in the automotive sector are deemed essential. The letter is reprinted below:
Dear SEMA Members,
In these uncertain and fluid times, SEMA continues to take a proactive approach to ensure lawmakers are properly educated on the importance of the auto and auto parts industry and inform SEMA members of any policy decisions that will impact your ability to conduct business.
With regard to the impact of COVID-19 on the industry, and more directly member business operations, the Federal government and individual states and localities, on a daily—even hourly— basis, continue to change the legal landscape for doing business in the foreseeable future. Recently the Federal government and some state governments have begun to issue “Shelter in Place” and “Safer at Home” ordinances to curtail a range of commercial activity. These directives have thus far exempted various commercial operations deemed “essential.” This document provides SEMA members with a review of the Federal directive and three State directives (California, New York, Pennsylvania) to help SEMA members understand these types of directives and prepare for further directives that may be issued in other states and localities.
Shelter in Place/Safer at Home Directives & Your Business
1. On March 19th, The United States Department of Homeland Security (DHS) Released A Memorandum Entitled “MEMORANDUM ON IDENTIFICATION OF ESSENTIAL CRITICAL INFRASTRUCTURE WORKERS DURING COVID-19 RESPONSE”.
The DHS memo establishes the (current) most detailed explanation of those individuals who are deemed “Essential” “to help State and local officials as they work to protect their communities, while ensuring continuity of functions critical to public health and safety, as well as economic and national security.”
Of greatest interest to the aftermarket industry are the following 2 categories identified as Essential in the DHS memo:
TRANSPORTATION AND LOGISTICS
- Employees supporting or enabling transportation functions, including dispatchers, maintenance and repair technicians, warehouse workers, truck stop and rest area workers, and workers that maintain and inspect infrastructure (including those that require cross-border travel)
- Automotive repair and maintenance facilities
- Workers necessary for the manufacturing of materials and products needed for medical supply chains, transportation, energy, communications, food and agriculture, chemical manufacturing, nuclear facilities, the operation of dams, water and wastewater treatment, emergency services, and the defense industrial base.” (emphasis supplied)
The DHS memo provides guidance on who could be considered “Essential” but gives discretion to state and local officials to identify critical infrastructure sectors and issue their own directives and guidance. It also explicitly directs states to work with “industry partners” to ensure “continued operations of critical infrastructure.”
2. Governor Of California Ordered All State Residents Stay At Home
Effective 11:59 pm on March 19, Governor Gavin Newsom issued a “Stay At Home Order,” which states:
- “…all individuals living in the State of California to stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors…The federal government has identified 16 critical infrastructure sectors [the DHS memo]…. I order that Californians working in these 16 critical infrastructure sectors may continue their work because of the importance of these sectors to Californians’ health and well-being.”
Coupling the California directive with the DHS memo, it is clear that aspects of the aftermarket industry may continue to operate in California. It is imperative that SEMA member companies conduct critical analysis to determine to what extent their operations fall within the foregoing “Essential” exceptions as well as consider their workforce and applicable HR/employment laws (there is no federal or California law granting employees the right to work remotely or to ask to work remotely). To determine if a company or manufacturer provides a service defined as “Essential”, a threshold question may be: whether a company’s product or service is necessary, or indispensable, for a vehicle to continue to lawfully operate?
3. Today, March 20, the Governor of New York Issued a Directive That Does Not incorporate the DHS Memo and Its Definition of “Essential”.
According to the New York order, no later than March 22, 2020 at 8 p.m., all employers shall close all non-essential businesses. Businesses providing essential services, supplies or support are exempt from the restrictions. For the aftermarket industry, the relevant portions of the NY memo defining “essential” specifically includes auto repair as an essential service which is “necessary to maintain the safety, sanitation and essential operations of residences or other essential businesses. Businesses may also apply to be considered essential.
4. Today, March 20, the Governor Of Pennsylvania Issued An Order That Explicitly Includes Automotive Maintenance and Supplies but Excludes Motor Vehicle Manufacturing
Pennsylvania Governor Tom Wolf ordered all “non-life-sustaining” businesses in the state to close their physical location; with “enforcement” of the order to begin at 12:01 a.m. on Saturday, March 21. The order makes no reference to the DHS Memorandum.
Pennsylvania’s order is the broadest and clearest in its recognition of elements of the aftermarket industry as being “life sustaining”. The following are considered life-sustaining businesses that are permitted to continue physical operations under the governor’s order:
- “TRADE, TRANSPORTATION & UTILITIES
Motor vehicle and motor vehicle parts and supplies merchant wholesalers
Automotive parts, accessories and tire stores
Support activities for road transportation
OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION)
Automotive repair and maintenance
Electronic and precision equipment repair and maintenance”
Despite automotive parts businesses being recognized as “life sustaining”, the Governor’s matrix also provides the clearest statement negatively impacting the aftermarket industry, declining the ability to continue physical operations to the following manufacturers:
- Paint, coating and adhesive manufacturing
Glass and glass product manufacturing
Motor vehicle manufacturing
Motor vehicle body and trailer manufacturing
Motor vehicle parts manufacturing
Other transportation equipment manufacturing
While SEMA has urged that the DHS guidance become a national standard, several cities, counties and states have also issued their own guidelines—including most recently Illinois Florida, and Nevada—and more will surely be announced in the coming hours and days at both the local and state level.
SEMA is compiling a database that will highlight state-level orders that will specifically impact the aftermarket industry. This database will be available on the SEMA website in the coming days.
SEMA member companies need to understand the applicable laws and restrictions imposed by various governmental agencies will continue to evolve. SEMA will continue to proactively work to make sure lawmakers are properly educated on the importance of the aftermarket industry as the nation addresses the COVID-19 virus. These efforts remain focused on the safety and health of our SEMA member company employees, owners, and their families.
Please know that SEMA is here for you during these challenging times. Wishing you all health and safety in the coming weeks.
Chris Kersting, CAE
SEMA President & CEO