Madam Chairwoman and my colleagues on the subcommittee, I am pleased to appear before you today and be permitted the opportunity to address the issue of the disposition of the Fastener Quality Act (FQA). No issue has as great an impact on the future of fastener businesses in my district and across the United States as this one. As one who has fought hard to protect the interests of small fastener manufacturers, I appreciate the chance to offer my remarks with the expectation that they will contribute to reaching a mutually agreeable solution to the problems we all acknowledge are inherent in the FQA.

Before I begin, I want to express my gratitude to you, Madam Chairwoman, and the members of this subcommittee for your efforts to craft and help pass legislation that extends the implementation date of the FQA. Public Law 105-234 gives us until next June to examine the FQAs effects on the fastener industry and agree on modifications to the Act. This law mandates the Department of Commerce to provide Congress with a report to determine what changes are needed to the FQA. I believe it is imperative that we take advantage of this window of opportunity to arrive at a solution that works for the fastener industry and the industries it supplies. To that end, this hearing, Madam Chairwoman, is an important first step in this process. I thank you and the subcommittee for your attention to an issue which will have a decisive impact on the economic well being of our country.

Fasteners are the sinews of a modern manufacturing nation. Disruption in the supply of fasteners would be the equivalent of a nationwide trucking or rail strike. Amidst an increasingly volatile national economy this would have devastating consequences for the country, with reverberations throughout industries dependent on supplies of fasteners.

When the National Institute of Standards and Technology released the latest set of regulations last April, I surveyed the fastener manufacturers in northern Illinois for their input. A third of these answered my survey--a very high response rate. Let me review for my colleagues on the panel the results of the survey:

I have met with or been contacted by numerous fastener companies in my district, all of which express concerns reflective of the findings in the survey. For example, there's Pearson Fastener, a 35-employee family enterprise in Rockford. For years Pearson has been manufacturing fasteners. For the last eight years they have been wrestling with the FQA, wondering why existing independent accredited laboratories cannot continue to test their fasteners instead of the company having to switch to as yet unidentified and unaccredited labs. Aside from the added costs involved, newly accredited labs may not offer every testing service needed by the diversity of fastener manufacturers in Rockford. For instance, Pearson could not get one accredited lab to give them a price quote for a salt spraying test on fasteners they make for outboard engines on motor boats.

Camcar, a division of Textron Fastening Systems of Rockford that has manufactured fasteners since 1943, complained that they could not get an approved signatory to sign test reports, as the regulations require. Since no one can observe all the test results, nobody is willing to sign off on the reports.

Elco, also of Textron Fastening Systems and a major fastener manufacturer in Rockford declares the FQA a showstopper to our industry... [It] penalizes every U.S. fastener company with hundreds of millions of dollars of extra costs in testing and paperwork when the original intent of the Act was to keep out foreign, fraudulent bolts. This particularly affects smaller companies within our industry.

The problems with the FQA from the perspective of small fastener firms are manifold: ambiguity about which fasteners the Act covers; availability and proximity of accredited labs; confusion about the definition of certification; prohibitive compliance costs; over-regulation of the industry; loss of market share to foreign competitors because the FQA exempts fasteners imported as components of larger parts; and lack of information about required tests of a specialized product are all major concerns of fastener manufacturers in my district. Resolution of these matters needs to be a part of any final modification of the FQA.

It has been eight years since the FQA was enacted. During that time, technological advances within the fastener industry have greatly improved testing techniques so that the failure rate for fasteners has been practically eliminated. Obviously, this necessitates a re-examination of the Act to see that it is applicable to the industry in light of these advances. If some basic, common sense changes are not made to the FQA, I believe most small fastener manufacturers would like to see a total repeal because it is currently unworkable. This is the problem with the FQA as it is currently written. I hope Congress, the National Institute of Standards and Technology, the fastener industry, and others can work together to fix it, or else resolve to abolish it.

I am pleased that we all want to make a genuine effort to work out the problems with the FQA. I submit that the approach we ought to take should address the concerns of all fastener manufacturers. At the same time, we should avoid a course that seeks a solution through exemptions for specific industries. A solution that fails to resolve the issues raised by both large and small fastener firms is no solution at all. Otherwise, down the road we again will find ourselves wrestling with the same problems that threaten the viability of the fastener industry and, consequently, the very health of our economy.

The answer to the question that is the title of this hearing, The Fastener Quality Act: Needed or Outdated?, is one that this subcommittee is now trying to settle. Your work will be aided greatly by the anticipated report to be submitted by the Secretary of Commerce to Congress sometime next year. However, even at this early juncture, we already know that any future workable regulatory document must include the following:

If a revamped FQA can accomplish these things, then I think we have the basis for a document that can work for the fastener industry and ensure safety for the consumer. On the other hand, if the FQA remains difficult to interpret, costly with which to comply, and threatens the existence of small fastener companies, then it must be repealed.

Madam Chairwoman, I know we can work together with all interested parties to arrive at an agreeable solution. I thank you and the subcommittee for giving me the opportunity to address you today. I trust my remarks will contribute to the overall effort to resolve this matter. I remain available to assist you in any way I can to achieve this goal. Thank you.