Michigan weighs whether to bar Tesla
 

DETROIT -- Michigan Gov. Rick Snyder, who has boasted of makingthe state more hospitable for entrepreneurs, has until Tuesday to sign or veto a bill that would prevent upstart electric vehicle maker Tesla Motors from selling cars in the state through its own stores and not through a traditional

Continued http://www.usatoday.com/story/money/...esla/17544663/

Another bad example of trying to legislate disruptive innovation away.

Snyder has been an anti consumer Governor. The state legislature is really bad -- bunch of simpletons ...

So, now they want to protect the status quo of the on again, off again auto industry cash cow. Nothing was learned by the past 6 years of recession -- same old attitudes that has prevented any industrial and commercial diversification continue.

What is next a law prohibiting farmer's markets to protect supermarkets so the consumer has more "choice"?

This may suggest that we now have a government of the fossil fuel, military industrial complex, by the fossil fuel, military industrial complex, for the fossil fuel, military industrial complex.

Reading is fundamental...

You think I didn't know that? I live in Michigan now, having been back for 25 years, and was born in Detroit -- now take your foot out of you mouth and go play in your own sandbox like a good boy.

forcing companies to sell through franchise dealers sounds insane

any other industry where this happens?

And once again, as usual, and on a daily basis, Government does it's thing.......


But hey! Let's give the government MORE power!! That will fix things!!!




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Not really, they are just trying to protect the automotive franchisees and legislate any other distribution other than that 80 year old arrangement out of existence. It won't work in the end ...

The irony of all of this is we have a Republican Governor and a Republican majority in the legislature. As you can see they are very free enterprise and in favor of limited government intervention but is all fairness: if the Democrats were in power currently it would be the same shit -- this is about protecting the status quo.

You could extrapolate the insurance and banking laws into a similar context. VISA comes to mind ...

Your parents must be very proud. :)

michigan is pretty much a slightly shittier version of canada ...sooooo

You have to understand the history of this legislation.

I was promulgated originally to prevent the auto manufacturers from selling direct and selling in an anticompetitive manner. However, it also made it unlawful for the automakers to demand exclusivity of their franchisees offering competing brands at their dealerships.

As example: a dealer could sell both Toyota and Ford cars.

Musk has taken the same sales strategy as Apple that of selling direct. Where Musk has gone a different direction is in his willingness to share some of the technology of the electric automobile that Tesla has developed. The is an ulterior motive here -- he wants to wholesale the battery packs perhaps.

I lived in Los Angeles and in the Hollywood Hills for some time -- I got tired of sewer diving ;) Most places are shit-holes. But Detroit and Buffalo are the armpits of America ...

Of course, this is tempered by the money you make and your living standard in the locality. As I remember, the state of California had/has some the the most costly laws on the books for a business to tolerate ...

Just because new technology comes out does that mean it's purveyors should be able to skirt existing laws that it's competitors have had to follow? If I own a Chevy dealership and have to follow certain franchise laws, which were put into effect to protect consumers btw, why should a new car brand be allowed to take a cheaper route?

That is the other side of the argument. Musk and Telsa could just franchise dealers for their vehicles and the advantages of a dealer service network and resale network would be at their disposal -- these are the real profit centers for automobile dealers -- they make only a small portion of their overall revenue from new car sales but this feeds the machine.

How would limiting new auto companies coming in hurt the older ones? If I remember correctly it was that competition between auto companies that was the driving force to making them into giants in the first place.


11 posts in and making friends like a champ huh? marketing genius right there..

Just because it hasn't repeated, more than half of states have similar laws. Clearly outdated and unnecessary, I think.

Brad

It's not as foolish as it may initially sound... a car is a pretty expensive purchase, so customers need a place to go if there are any problems... so with this business model, you buy from a dealer, if there is a problem you go back to the same dealer to fix any issues...

not 100% sure how tesla handles it, but I think with tesla on the other hand, you buy online or in some show room, car gets delivered to your driveway... something goes wrong and then what? you are kinda fucked...

not saying that I agree with the law, but there is some [though pretty limited] merit to it...

This is more of a statement against the progress of electric cars. Anything that equals progress is scary for Republicans.

Rick Snyder has been known as a Republican asshat for a long time. Just Google it for the evidence. There's a long list of political stunts and partisan backward-ass thinking by this guy.

over here we have franchise dealer and some companies like BMW, Mercedes, VW additionally have their own distribution points - mostly in big cities - but of course including shop for repairs etc.

You should not take the "misery loves company" approach. Laws like these are designed to raise the bar for competition into a market. They aren't designed to "protect consumers". They are designed by a combination of bureaucrats who have never run a business, or created any kind of service or product, and representatives of the largest players in a market who are motivated to stop new start ups and other competition. If these laws are about "protecting consumers", nallow the consumers to "protect" themselves if they want to, by shopping at franchises. I believe in free association. If you think that these laws are increasing your cost of doing business, then fight to have them removed! Don't just fight make everyone else have to pay that extra cost for no reason also!



Just my :2 cents:




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I think you will find that most of the Democrats in the state legislature voted for this bill also.

While I've known about this for some time, I fail to understand this at all - Why should ANYONE be forced to sell their product through a franchise? That's just stupid.

I understand that's the way they've always done it, but why? That's a dumb system.

For this reason https://gfy.com/showthread.php?t=1152441

Maybe, this law is redundant to the Sherman Antitrust Act but it is more specific to the issues. Like Brad said: many other states have similar laws or regulations.

How great would it be if you could just visit a manufacturer's web site, configure your vehicle exactly as you want, and purchase it with complete price transparency without having to go through a dealership?
Most car buyers would prefer it this way, but it's actually illegal to do so.

With so much shopping being done online, many people wonder why you can't just buy a car directly from the factory - it would make the car shopping process so much easier.

It all goes back to the days of Henry Ford when mass vehicle production first began. Back then, it made sense to sell cars through a network of independent dealers.

By doing so, Ford created a buffer to cushion fluctuations in sales. Ford's customers were actually the dealers, who would need to purchase and store up to 60 days worth of vehicle inventory. Since there were no options on vehicles back then, there was no need for special orders and the franchise system made sense.

Over the years, the dealers became more powerful and formed strong lobbying groups to ensure States made it illegal for consumers to purchase vehicles without dealer involvement. So although you may see services such as CarsDirect that claim you can buy vehicles online, dealers always remain involved.

And it doesn't look like this will change anytime soon. If anything, the franchise laws have gotten even stricter, thanks to the political clout that dealers have in most States.

lotta defects at chevy dealerships, yes?

Yes. And aren't Chevy customers glad that state law makes anyone selling new Chevys maintain a physical apperance to warranty/service those vehicles.

yes. would suck being legally required to buy questionable products and services

Should we have legislated the protection of buggy drivers and forgone the armored car too?

WTF? How are you putting a republican vs democrat spin on this just because the governor is a republican, is that all you ever see?

Both houses of the Legislature have passed a bill, backed by the Michigan Auto Dealers Association, that would require all automakers to sell through franchised dealers.

It's just up to him to pass or veto it.

So, where will his loyalties lie?

Free market economics or supporting the staus quo that has gutted the state of Michigan over the years? Motown was a cool place when I was a kid in the 60's but it has stagnated to shit today.

Tesla will have to have showrooms to sell their autos. Do you know anyone who has bought an automobile without first test driving it? Maybe as an alternative, you could rent a Tesla from a car rental to drive it before you bought it ... Spending $70 in due diligence before making a $60K to $100K purchase makes sense -- is this where they are heading? Who would buy a vehicle without there being local service to maintain it?

So in the end game, there will be company owned outlets if Musk gets his way and this is what this is all about: The fear of disruptive innovation in an industry.

I see where it is better for the end customer

But I also see a lot of business's that want to protect their business.

Some of these business's have a huge investment in their business and to make it so Tesla can over ride that, could hurt their business in the end.

I don't like the Tesla, I think the pollution from the battery tech and the limited travel is terrible and we should be focusing on better modes of travel, like the hydrogen fuel cell cars that pollute less than battery powered car.

I thought the "Must sell through Franchised dealer networks" law was to screw Tucker.

No, Tucker had dealerships lined up

I'm thinking that anything these politicians do that endangers what is left of the jobs in Michigan (auto) would hurt them in the election next month.

The governor himself is running for reelection as well.

So I would expect that he would sign this bill into law in Michigan.

It won't last into the future...things are changing. But for the moment, it will make the workers who still have jobs feel good in Michigan, and it will save the politicians asses in this election.

Michigan is in a bad position all the way around with the auto industry flailing about.

It's just amazing that a small company like Tesla can make bad ass electric cars, Japan can make the "Leaf" all-electric car, but Detroit's best offering is the half-ass Chevy Volt that has no real useable range as an electric and has to use mostly gasoline if you drive very far.

8 for 1 says you're right on that ...

However, Musk took Massachusetts to court and won on a similar law.
This will go one of 2 ways:

1. Tesla uses the dealer distribution schema, or;
2. This is decided in the US 6th Court of Appeals.

The economics for Tesla will determine the path ...

Of all the electric cars out there, I like the Fiat 500e the best, you can own one for about 20k, which if you really are concerned about the environment, more cars can be sold and the environment will be better off than getting the 75k Tesla

You are totally missing the point.

Want to see why these laws are in place? Allow me to import ship loads of Chinese cars and sell them nationwide via the internet without any service or warranty centers.

Auto related complaints are the number one consumer complaints to state attorney generals right now. Without a physical presence in a state there is zero consumer protection agencies can do in that state on behalf of their consumers.

am I? i thought this was a free market. if you think there should be some communist oversight on what products i want to buy, that's your problem

my point, which you seemed to have missed, is that the car companies too big to fail can't seem to keep their skirts down when it comes fucking away with all these defects.

legislating requirements of warrant and service centers does nothing if the cars are still shit.

legislating 'oversight' bodies that just seem to be run by these automotive dealerships and eventually result in less or no fines or jail time.. also not helpful.

but call me names and go drink whiskey.

I haven't called you any names.

Communist oversite?

All Musk has to do is comply with the same laws and overhead everyone else is stuck with.

The only reason any quality exists at all is state/federal regulations designed to protect local consumers.

Even industry quality leader Toyota is forced to modify, repair, compensate owners.

Musk might be some "quality God" to you but he's just another car vender to state regulators.

Richard, I was in the auto repair business for decades. Trust me, consumers need recourse and without a physical presence in each state they are fucked.

Fycking gas comapines trying to stop the revolution

sounds good. looks like this company will be banned from doing business in the state for political and not safety reasons.

congrats on the huge success of the auto-repair business

So the regulations General Motors, Ford, Kia, Mercedes, Toyota, Nissan, BMW, Hyundai, Honda, Dodge, Jeep, Jaguar, Ferrari, Porsche, VW, etc, have to follow shouldn't apply to Tesla?

Congrats on your thought process.

I hate they car-buying process. So much bullshit, smoke and mirrors, and so difficult to buy the exact car you want at the right price without hours of nonsense jumping through hoops and paperwork and going back and forth between sales and management.

congrats on your assumption.

run along and spend your windfall

Richard, I've never lived in Canada so I won't make guesses on how regulations are there. In the US EVERYTHING is regulated in some way, shape or form ... liquor, food, cigarettes, clothing material, mattresses, lawn-garden products and yes car sales.

To expect special treatment just because your product is new or innovative or cool is foolish.

edit; The list of Federal regulations Tesla has already complied with is staggering, just opening a few dealerships in Texas, Michigan, etc in order to sell their product is nothing.


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yea id rather not talk to someone who had/has financial interest in the system remaining the same.

we done here?

Wow ............

And as far as the misleading thread title, nothing is being banned. Just open a fucking dealership in the state and start selling cars for fucks sake.

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it is being banned. telsa has a manu to consumer direct, and that is what is about to be banned, backed by the good old boys.