The power of local auto dealers


Politicians respond to threat to their dealer friends

Politicians respond to threat to their dealer friends

New Jersey refuses to let Tesla sell its cars directly to consumers. This fight’s been going on for decades, around the country, and auto manufacturers have lost every battle, so far as I’m aware. Most recently Porsche tried to set up its own dealerships because customers were so dissatisfied with the service provided by existing dealers – stopped dead in its tracks.

I’ve never seen an explanation for the clout dealers hold over their local politicians but I assume that (a) they have a lot of money to toss around and (b) they’re all active in the fat boy clubs, such as Rotary and Lions and Royal Order of the Water Buffalos (Lodge 26).

Whatever the cause, the interest of consumers has no place in the discussion.


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19 responses to “The power of local auto dealers

  1. Cos Cobber

    Pathetic. There isn’t one GOOD reason for such a law. Actions by the Christie administration on this issue are deeply disappointing.

    • JRH

      Couldn’t agree more, and it’s a bipartisan shame – New York Democrats are about to pull the same. If you think lobbyists and special interests have too much influence in Washington, you should see the state legislatures.

  2. Pinzgauer

    Isn’t there such a thing as Commerce Clause protecting inter state Commerce? Actually for exactly this scenario?

    • I forget how they get around that, but auto dealers have all fifty states locked up – it’s almost impossible to get rid of a single non-performig one, and going around the network entirely? Forget it – too much money in the pockets for too many years.

      • JRH

        FWIW, this Forbes article disagrees, but seems wrong to me. Key point: “As Tesla pursues the direct-to-customer sales model, it has stated that it intends to become fully licensed as a seller of automobiles under the laws of each state.” If Tesla N.Y. is being discriminated against in favor of N.Y. dealers, it’s hard to claim the law is protectionist (constitutionally problematic) instead of just stupid (constitutionally protected, with the remedy at the ballot).

        • AJ

          Remedy at the Ballot? That’s a good one, JRH, as if there were some real difference between parties, as if there were some real choice. The only real choice I’ve seen in the last 50 years was Ron Paul, and they disappeared his results in Iowa, closed the polls in the districts in Maine where he was slated to win, and wouldn’t allow him or his supporters to speak at the Convention. Then, of course, there were those statistical impossibilities in the General Election in districts where Obama got 100% of the vote. There’s your “remedy at the ballot”, where wrong choices by the electorate are corrected.

        • JRH

          Who’s they? The Bilderbergers, or the Trilateral Commission?

        • AJ

          They being the establishment Republican Party.

          “It’s official, or is it? Once again the establishment is showing it’s cards in an obvious attempt to defraud Ron Paul of the nomination, as Iowa GOP ‘officials’ purposely disrupt and permanently invalidate the 2012 Iowa Caucus.

          The official Caucus website, in conjunction with the Des Moines Register, had to come forward Thursday to claim the official results can “never be certified” after, at least, 8 different precincts turn up invalid results due to “missing votes” and changing stories.

          For the first time in history, the Iowa GOP decided to change the final vote count to a “Secret location” for what was claimed to be “security concerns.” The unprecedented…”

          “Maine: Ben Swann reported on shenanigans in Maine . Even though only 84% of votes had been counted; State GOP Chairman, Charlie Webster, declared Romney the winner over Paul by less than 200 votes. Hancock and Washington Counties hadn’t voted yet because Webster cancelled the caucuses due to an impending snowstorm, promising they could vote later and their votes would be counted. The snowstorm never occurred and he later reneged on his promise, telling voters in those counties their votes would not be counted after all. Washington County was Paul’s strongest in the state in 2008. Though other states with close outcomes held recounts, this was never a consideration for Maine.

          At least one of the counties that did vote claims the state party recorded its tallies incorrectly. Matt McDonald, pastor of a small community church in Belfast, was nominated as the chairman of his caucus. He says the state instructed the caucus chairmen not to read any of the vote totals aloud, but rather to send the results straight to Augusta without a public reading. McDonald made a motion to change this rule, and it was approved unanimously. McDonald says 22 voters showed up, resulting in 8 votes for Paul, 7 for Santorum, 5 for Romney, and 2 undecided. When he called the votes into Augusta, he was told they already had the results and the totals read 9 for Romney, 5 or Santorum, and 2 for Paul…”

          ‘GOP convention changes rules to silence Ron Paul’s supporters

          And the Paulites are not at all happy about it.’

          There was a lot of drama yesterday in Tampa when the RNC changed rules so that some delegates who were there to support the conservative Texas congressman would be bound to support Mitt Romney. Other Paul delegates were simply ignored by the RNC during the roll call of the states…”

  3. Pete

    Didn’t a lot of dealerships close when Obama gave GM and Chrysler to the unions?

    • Yes – I believe they used federal bankruptcy law to get around state protective laws, but I’m no expert on this, just an observer of the phenomenon.

    • Mazama

      Obama didn’t care about the car dealers because they were predominantly white, thus giving his administration an early twofer: help is friends (unions) while punishing (one of Obama’s favorite words) his enemies.

  4. JRH

    We agree on this one! Same thing happening now in New York re: Tesla. Pinzgauer, re: Commerce Clause issue, the states likely have a successful argument that these regulations don’t protect in-state commerce at out-of-state commerce’s expense, but rather that they protect one sort of in-state interest against another.

    As for the political economy of it all, and why auto dealers are political kingmakers – disposable income to spend on politics, ubiquity (every state legislator has at least one auto dealership in her district, to say nothing of members of Congress), and lots of good marketing as pillars of their community (notice how many local charitable expenses auto dealers tend to make). Something similar happened on the federal level in Dodd-Frank, which, in its consumer protection provisions, contains explicit carve-outs for auto dealers (and attorneys, surprise). The provision was introduced by Vern Buchanan, a Florida congressman who is not only a legislator but the owner of – wait for it – a chain of auto dealerships. Lobbying stories focus on big names like AIPAC, the NRA, and the NEA – but it’s auto dealers who virtually bat 1.000 in state capitals and D.C.

    • Thanks for the info, JRH. Interesting to think what might have happened to the interstate commerce clause if Ollie’s Barbecue had sold cars, instead of pulled pork and chicken.

  5. william clay ford dies

    last of the four Henry Ford grand kids.will the Detroit lions be for sale?
    fred bourke knew him – only he won’t be attending the funeral due to a “commitment” – only 11 more days til the gates swing open for this poor guy wrongly convicted and the bar of soap is no longer a threat.

  6. John M

    It’s not just politicians who are bought – it’s also the media. Dealers spend a lot of money advertising locally – most of the “stop by your local dealer’ ads on TV are purchased by associations of local dealers. The newspapers, too, are full of car ads, and not Tesla’s.

    • Mazama

      That’s correct. Which why what used to be called “investigative reporters” seldom, if ever, reported on car deal scams, ripoffs, etc.

      There was a scam in Seattle that was so egregious – salesmen at a Chrysler dealership who took turns fleecing all of the money a dementia suffering elderly man had in a series of ripoff transactions – which even then, as I recall, was publicized only when the long-time dealership (i.e., TV and newspaper advertiser) was in the process of closing for reasons unrelated to its salesmen’s (known) crimes.

  7. ML

    Very disappointing from Christie. But then again RIck Perry did the same. The Republican party is in shambles. So sad.