Another View: We need to level the playing field for NH auto dealersBy Sen. Andy Sanborn
April 17. 2013 11:56AM
WE ALL KNOW THAT any good relationship, contract or negotiation is based upon a level of equal participation, equal risk and equal reward. The most successful relationships are when everyone can participate and everyone can succeed and both parties have an equal measure of risk and ownership of the contracts.
Seeing just how one-sided the relationship between manufacturers and automotive dealers has become has encouraged me to write Senate Bill 126, more commonly known as the Dealer Bill of Rghts.
At some level it would seem curious that such a traditional New Hampshire Yankee who so strongly supports free markets, limited government and individual liberty would be involved in government intervening in this relationship. Typically, I would agree.
However, sometimes things are not what they seem. Today this relationship between manufacturers and local dealers is not free, surely not equal and no longer fair. This goes way beyond bullying. It is with malice.
Take for example how today we see manufacturers actually advertising against their "partners," trying to drive a wedge between us as consumers and the local, hard-working dealers who for generations have been selling and serving us products, and doing a great job of it, despite some sort of Big Brother relationship in which manufacturers make life more difficult for our local businesses that hire our neighbors and friends.
For those dealers who have been in business for decades and invested every dollar they have into their facilities and business, having some monopolistic company make regular unrealistic financial demands while holding the power of withholding product to force compliance is neither fair, nor balanced, nor right.
The fact that today we are seeing manufacturers advertising specifically against local companies and threatening to withhold inventory or take away financing is adequate proof of the level of corporate bullying that this bill looks to stop.
Nowhere else in a relationship does there exist the ability of one company's supplier to come in and mandate a small business owner rebuild his or her facility to continue receiving a supply of inventory to sell, or to specifically prohibit what a dealer can sell. It's not like a Ford dealer can go across the street and start selling Chevys.
This is a captive relationship that has gone from manufacturers working with dealers to a system in which manufacturers use the threat of extinction to force compliance.
For example, today manufacturers can walk in the front door and dictate that a car dealership be rebuilt. Manufacturers are proud that they force companies to remortgage their facilities every 5-7 years, regardless of need.
Manufacturers require that dealers repair products produced by the manufacturer if they break. The dealers should not be forced to repair that product for less than it costs. The manufacturer built the product and should stand behind it.
In their anti-local business ads, manufacturers neglect to say that if they had just come to the table and negotiated fairly, then they could have and would have come to a mutually acceptable agreement.
My Senate and House colleagues listened to the horror stories of local dealers who suffered reduced inventories if they didn't play by the one-sided rules. We heard from dealers who were forced to close their doors and lay off workers, only to find out later that manufacturers had changed their sales territory, ensuring poor numbers and the eventual failure of that specific operation.
This is New Hampshire, where, while we all respect the private right of contract, we believe equally in fiercely protecting our friends, neighbors and local businesses from foreign entities determined to force their one-sided, self-serving desires on our own.
This bill, which I encourage the House and the governor to support, strikes a balance between the need to provide some basic ground rules and leaving the details of the relationship up to the manufacturers and dealers, and it recreates a true free market where both sides can feel proud.
Sen. Andy Sanborn, R-Bedford, is chairman of the Senate Commerce Committee.