REACH Department of Defense Briefing

1. REACH Department of Defense Briefing July 16, 2008

2. Agenda • How the automotive industry is addressing REACH • REACH impacts for military equipment • What can be done to protect DoD capabilities

3. Pb Hg Cd Cr+6 30,000+ Substances REACH (2007) ELV (2003) EU Chemicals-in-Products Regulations All Substances PBB PBDE RoHS (2006) Increasing Complexity, Cost and Level of Information Divulged

4. International Material Data System (IMDS) • Developed in 2000 in response to EU’s End of Life Vehicles Directive • 130,000+ users, secure transfer of confidential chemical substance information for vehicular components • Automotive industry may use IMDS to track and manage SVHCs, but will not solve all problems

5. Other tools and processes are being developed • AIAG has established a collaborative relationship with global REACH Task Force and trained 750 suppliers in Detroit -- http://reach.aiag.org • Supplier risk management methodology (Plan, Assess, Handle, Monitor, Document..) being established. Risk factors include • Small market • Small supplier capacity • Complex supply chain • Foreign headquarters deciding REACH strategy • Product contains SVHC

6. REACH Impacts for DoD • Same risks from automotive as for other industries • Increased costs • Decreased availability of parts and materials • Product delivery delays • Alternatives meet military specs?

7. REACH Impacts for DoD (cont’d) • OEMs are currently specifying materials and parts for 2012 products, may not be able to remove banned substances (SVHCs) in time • Generally a 3-5 year lead time needed for design • Testing and qualifying for military specs may take longer in some cases • Preliminary list of SVHCs (16 proposed per ECHA released June 30, 2008) may affect following automotive applications • Plasticizers • Semiconductor materials • Fire retardants • Chromium pigments and dyes • Metal surface treatments • Adhesive additives

8. REACH Impacts for DoD (cont’d) • Installations are not part of the EU, thus REACH-exempt if vehicles are shipped directly to bases • However, purchases from off-site, within customs area of the EU (plus Norway, Iceland and Liechtenstein) are subject to REACH. • This could affect service part availability for vehicle maintenance • Joint venture and foreign military sales may have increased requirements due to importing/manufacturing in the EU • ITAR – what information should not be disclosed to foreign entities?

9. What Can be Done to Protect DoD Capabilities ? • Work within framework of REACH’s provisions • Propose defense exemptions for all allied states, especially those with installations • Coordinate comment on proposed SVHCs (Aug 15 deadline for current list) • Coordinate authorization activities for military applications • Collaborate with industry • Identify suppliers of critical substances which are at risk, using a standardized tool or process. Identify alternative substances and suppliers and communicate with industry on how to replace • Ensure confidentiality for suppliers to protect military secrets • Provide funding for processes, tools, trainings • Provide training/education for DoD agencies

10. Questions ? AJ Guikema reach@aiag.org http://reach.aiag.org

11. Supplemental Slide (1)

12. Proposed SVHCs per ECHA • 4,4'-methylenedianiline 4,4'diaminodiphenylmethane • Bis(2-ethylhexyl) phthalate; di-(2-ethylhexyl) phthalate; DEHP • Anthracene, pure • Arsenic pentoxide; arsenic oxide • Diarsenic trioxide; arsenic trioxide • Triethyl arsenate • Hexabromocyclodecane (HBCD) • Bis(tributyltin)oxide (TBTO) • Cobalt dichloride • Lead hydrogen arsenate • Sodium dichromate, dihydrate • 1-(1,1-Dimetyletyl)-3,5-dimetyl-2,4,6-trinitrobenzen • Dibutyl phthalate; DBP • Alkanes, C10-C13, chloro (short-chain chlorinated paraffins) (SCCPs) • Benzyl butyl phthalate BBP • Cyclododecane