Thursday, September 24, 2020

Post Script – Government Overreach

Davood Kaheh, Part 4

Nikki and David Kaheh, with Emma (6) and Jordan (8), the author’s grandchildren, during a recent Las Vegas vacation. Submitted Photos

Nikki and David Kaheh, with Emma (6) and Jordan (8), the author’s grandchildren, during a recent Las Vegas vacation. Submitted Photos

In 2008, in the face of the Great Recession, David Kaheh had incorporated Arizona Corporate Coach (ACC) with only a few limousines and a small repair shop as assets. By mid-2016, through what can only be described as super human effort and superb timing, he had expanded the company into a top tier tour bus company, with 48 employees, 35 tour buses, and an expansive shop to service them. The city of Phoenix had also expanded and was now part of the twelfth largest metropolitan area in the nation.

President G.W. Bush signing legislation: In 2000, the Bush administration adopted strict emissions standards for heavy duty trucks and buses. David blamed the Obama administration for over zealousness in enforcing them

President G.W. Bush signing legislation: In 2000, the Bush administration adopted strict emissions standards for heavy duty trucks and buses. David blamed the Obama administration for over zealousness in enforcing them

Business was booming. ACC had contracts with 60 area schools, transporting their students to sports and cultural activities. His buses were operating out of three cities and constantly on the road, reaching into virtually every western state and loaded with satisfied tourists, who bombarded ACC’s website with testimonials. There is a lot for people to see in the great American west and ACC made sure that they would see it. Even his on-site bus maintenance shop was making a profit, with 25% of their business coming from competitors. His staff was functioning smoothly and his bus drivers were experienced and loyal. David was respected for his integrity, dependability, and grit throughout the industry. As Whitney Wilson had said, “The sky is the limit.” Or was it? In the fall of 2016, David, the tour bus impresario, tried to sell his company. He was worn out by trying to comply with federal regulations, he said.

President Obama signing the Affordable Car Act, March 23, 2010. In 2016: According to David, it effectively halted ACC’s expansion and caused him to put the company up for sale.

President Obama signing the Affordable Car Act, March 23, 2010. In 2016: According to David, it effectively halted ACC’s expansion and caused him to put the company up for sale.

As a small business owner, David has blamed the Democrats for his struggles to expand his business and hire more people. “They are the enemies of small businesses,” he says, “It is easier for large profitable companies to comply with their regulations, but for me it has caused problems.” The Environmental Protection Agency (EPA) was David’s particular bête noire. He said they were making it difficult and costly for him to keep his buses on the road. It was nightmarish for David, and he lay awake nights thinking about it. Ironically, it was regulations adopted in 2000 by the George W. Bush administration that were causing the problem; they took effect in 2007. In 2014, the Obama administration started enforcing them with a crusader’s zeal. Long story short, the regulations have forced David to retrofit his pre-2007 model buses with EPA approved Diesel Particulate Filters (DPFs). After 2007, all new buses had to include the DPFs, but in 2014, almost half of David’s buses were older models. Installing the heavy and unwieldy DPFs was an expensive proposition. After installation the real trouble began. “The DPFs were prone to clog up and caused the engines to shut down,” David said. “If this happened, say in Yellowstone, a different bus had to be dispatched and, if possible, the disabled bus towed back to Phoenix.” Each time this happened could cost up to $20K. David estimates that ACC expended in excess of $300K, installing DPFs and then dealing with the problems and disruptions they caused. “It killed our profits,” he says, “We still have 10 older model buses [with DPF retrofits] in service, but we are forced to keep them close to home.” David believes that bus companies should do their share in cutting down pollution from their emissions, but that the EPA should have cut some slack for smaller companies, with fewer buses and resources, grandfathering their older buses until they were retired. “Every time I complained to an EPA about our DPF problems, I got the same answer. ‘It’s your problem’ they said.”

President Trump signing one of many executive orders in 2016: David believes that these orders helped boost the economy and reinforced his belief that small business owners had a voice in the White House.

President Trump signing one of many executive orders in 2016: David believes that these orders helped boost the economy and reinforced his belief that small business owners had a voice in the White House.

Above:Diagram of Diesel Particulate Filter: DPF’s did remove a lot of soot from bus and truck emissions, but were expensive and costly to install and maintain. The costs nearly brought ACC to its knees in 2016. Right: Diesel Particulate Filter being installed on a school bus. brought ACC to its knees in 2016.

Above:Diagram of Diesel Particulate Filter: DPF’s did remove a lot of soot from bus and truck emissions, but were expensive and costly to install and maintain. The costs nearly brought ACC to its knees in 2016. Right: Diesel Particulate Filter being installed on a school bus. brought ACC to its knees in 2016.

 

 

The Affordable Care Act (ACA), aka Obamacare, was passed by a Democratic congress in 2010 and took effect in 2016. It mandated that companies with 50 or more fulltime employees provide affordable health insurance for all of them. David, who was already paying his employees from $100 to $150 per paycheck to help subsidize their private health insurance, said that the mandate would cost him another $250K. “I couldn’t make a commitment like this until I was sure I could afford it,” he said. Consequently he stopped hiring and froze the number of full time employees at 48.

In the fall of 2016, David began negotiations with a prospective buyer. “I felt that I had gone as far as I could go with ACC,” he said, “I was ready to start from scratch with another business.” At the same time, he was hedging his bets. By December 2016, David had incorporated separate companies – one to handle ACC’s towing needs and the other to sell the cars which were being refurbished in ACC’s body shop. Negotiations ultimately broke down, but David could now see his way clear to expanding the business while still holding ACC’s employees below the 50-employee cutoff. A couple of weeks ago, he learned that this wouldn’t be possible. The eight employees he had hired to staff the separate companies would count as ACC employees, bringing the total to 55. Having already committed to hiring additional employees, he is now in the process of providing the required health insurance.

For David, the equation has changed. It began with the election of Donald Trump. “I voted for him because he was not a Democrat,” said David, “I felt that [a Trump administration] would level the playing field for small business owners.” Trump seemed to be on the side of the little guy and against regulations that might stifle business expansion, he said. From easing environmental regulations, to attempting to repeal the employer health insurance mandate, David is happy with Trump’s performance so far. He feels that the administration’s pro-business policy has had a positive effect on the whole economy – an economy in which he can now expand with more confidence.

This is the final installment, chronicling the efforts of a young Iranian man, my son in law, to escape the shackles of a repressive Middle Eastern regime and make a new life for himself. When he was issued a green card in 2003, he had no special skills to offer, other than that of a cook. I am hoping that what he has accomplished will serve as a reminder as to the immense contribution our immigrants, regardless of ethnic background or skill level, make to our economy and to our society.

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