The Outdoor Power Equipment Institute 341 South Patrick Street Alexandria, VA FAX ARB proposed regulation’s impact on a smaller OEM The Ariens Company.

The Outdoor Power Equipment Institute 341 South Patrick Street Alexandria, VA FAX The Ariens Company Manufacturer of high end consumer lawn and garden products under the Ariens name. Ariens snow blowers. Commercial products under the Gravely name. Majority of the products use non integrated, class II engines. Ariens is purchasing the fuel tank and muffler and mounts them to the product. Aftermarket component supplier, under the Stens name

The Outdoor Power Equipment Institute 341 South Patrick Street Alexandria, VA FAX A smaller OEM faces additional issues in complying with the proposed regulation. Fewer available resources. Small California market share (less than 1% of US market). Same or more cost to meet regulations as a larger company. Smaller OEM’s Challenges

The Outdoor Power Equipment Institute 341 South Patrick Street Alexandria, VA FAX Longer lead-time with vendors who cater first to the large OEM’s. Higher cost because of the smaller volume. Because of the cost of compliance coupled with small volume, it may becomes economically unfeasible to supply product to California. This puts the smaller OEM in competitive disadvantage because it can not supply a full line of products to their California customers and lose their total business. Challenges (cont.)

The Outdoor Power Equipment Institute 341 South Patrick Street Alexandria, VA FAX Example – Tank modification for New Fuel Cap Ariens has 15 different fuel tanks they provide on their class II products. The number of tanks is driven by customer demand All have the same fuel caps We would have to redesign, modify, test verify and certify all the changes. This makes the change economically prohibitive