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Tesla Faces Off Against Car Dealers In Another State: Ohio 214

Posted by timothy
from the most-politicians-deserve-to-be-electrified dept.
cartechboy writes "We've seen Tesla run into regulatory issues in Texas. And North Carolina. This time, it's Ohio, where car dealers are playing an entertainingly brazen brand of hardball. The Ohio Dealers Association is backing an anti-Tesla amendment to Ohio Senate Bill 137--which turns out to be an unrelated, uncontroversial proposal about drivers moving left when they see emergency vehicles (The bill is headed for adoption.) The sudden and subtle amendment would ban Tesla from selling its electric cars directly to customers, who place their orders online with the company after learning about the Model S in company-owned stores. A hearing on the amendment was suddenly scheduled for today; Tesla is fighting back by outlining the economic benefits to Ohio--after taking some legislators for a ride in the Model S (a Tesla tactic that has worked before)."
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Tesla Faces Off Against Car Dealers In Another State: Ohio

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  • by ion9 (2568341) on Tuesday December 03, 2013 @01:23PM (#45585491)
    http://www.ohiosenate.gov/senate/index [ohiosenate.gov] Find your Senator and tell them what you think, not that it will do any good.
    • At the state level, sometimes it does still do good. It's calling your US Senator that is mostly useless.

    • by Anonymous Coward on Tuesday December 03, 2013 @03:19PM (#45587033)

      I wonder how often when a bill comes to the attention of a legislator does he actually think, "what do I honestly think is the right thing to do here?" Do you think ever? Or is it 100% "hmmm, which side of this bill's backers is paying me more?"

    • by Mr D from 63 (3395377) on Tuesday December 03, 2013 @03:54PM (#45587401)
      While Tesla direct sales are an example of the the type of practice this law intends to ban, it is not because of Tesla that they want this law enacted. It is the dealers protecting themselves from being cut out by their own car companies. For the near future, they could care less about Tesla specifically. Calling it Anti-Tesla is a bit "Tesla-centric", IMO. But it makes headlines, I guess.
  • At least... (Score:5, Insightful)

    by mythosaz (572040) on Tuesday December 03, 2013 @01:23PM (#45585495)

    ...at least Texas' laws were a consequence of leftover monopoly laws preventing squeezing out car dealers.

    This is just plain old greed by bought-and-paid-for politicians working for their car-dealer sponsors.

    • Re:At least... (Score:5, Interesting)

      by i kan reed (749298) on Tuesday December 03, 2013 @01:26PM (#45585531) Homepage Journal

      Car dealerships practically own(and frequently are) local politicians, in a way mega-corporations wish they could do to the U.S. federal government. Being a local petty millionaire who can throw a "fund-raiser" is all it takes for the smaller offices.

      • Re: (Score:3, Insightful)

        by Ralph Wiggam (22354)

        Which is why the libertarian "move everything to the state level" concept is a bad idea.

        • by mythosaz (572040)

          It's not inherently wrong for Ohio to decide how it wants to deal and trade with California at the state level -- only different.

          • Re:At least... (Score:5, Insightful)

            by i kan reed (749298) on Tuesday December 03, 2013 @01:39PM (#45585689) Homepage Journal

            Not inherently wrong, I agree, but it is unconstitutional. Interstate trade is the exclusive regulatory domain of the feds.

            • Re:At least... (Score:5, Interesting)

              by LordLimecat (1103839) on Tuesday December 03, 2013 @02:51PM (#45586721)

              Incorrect, it is NOT exclusive. The fed has supremacy when it passes a law, but states CAN reach inter-state agreements about many things: liquor laws, metro finance agreements, etc.

              Virginia has reached agreements with Maryland and DC regarding who pays for Metro costs, how the metro runs, who regulates it, etc-- thats not an exclusively federal issue.

              • Re:At least... (Score:4, Informative)

                by Anonymous Coward on Tuesday December 03, 2013 @03:47PM (#45587325)

                Incorrect, it is NOT exclusive. The fed has supremacy when it passes a law, but states CAN reach inter-state agreements about many things: liquor laws, metro finance agreements, etc.

                Virginia has reached agreements with Maryland and DC regarding who pays for Metro costs, how the metro runs, who regulates it, etc-- thats not an exclusively federal issue.

                On many things, yes, but not all things. States can collaborate on certain things (or not) but the courts have always held that states cannot pass any laws that would in any way restrict commerce across state lines.

                So if the states of New York and New Jersey agree, for example, to impose a $100-per-unit sales tax on widgets, they can do this. Or if New Jersey decides to undercut New York's $100 tax by charging only $50, it can do this. But New York can't impose a $250 tax on widgets brought in from New Jersey while keeping its own tax rate at $100, because that would be, essentially, a tariff that restricted interstate commerce.

          • Re:At least... (Score:4, Interesting)

            by faffod (905810) on Tuesday December 03, 2013 @02:13PM (#45586239)
            Is Ohio deciding how to deal with California trade, or are a few making choices that will harm the many. The parent comment about moving everything to the state level was in response to the comment that local politicians are easy to lobby (let's not call it bribe). I find it inherently wrong that a few with money can carry so much leverage in our political system.
          • You missed the point of i kan reed's post and my response to it. By "Ohio", I assume you mean "the people of Ohio". State legislators are usually *less* accountable to their constituents than federal legislators. A handful of wealthy business owners can have massive influence on a state legislator. And unless they murder someone, their shady dealings are not going to make the news.

        • by Spy Handler (822350) on Tuesday December 03, 2013 @01:42PM (#45585763) Homepage Journal

          You can easily move to another state. Just pack up your stuff and go. You cannot easily move to another country; in some cases it may be impossible (what country will have you?)

          • Re:At least... (Score:5, Insightful)

            by faffod (905810) on Tuesday December 03, 2013 @02:15PM (#45586277)
            I can't leave the city I live in - not if I want to continue being a father for my children. Saying that it is easy to pick up and move is a fallacy for many if not most people.
        • Ignorance (Score:5, Informative)

          by s.petry (762400) on Tuesday December 03, 2013 @02:00PM (#45586011)
          I think you should read up on the Libertarian movement, because they don't want to "move everything to the state level" as you falsely claim. Don't come back with some wacko and claim that's the movement ideology.
          • So Ron Paul is a "wacko" now? He has sure seemed like the standard bearer of the libertarian movement for the past decade.

            • How to tell if someone is a wacko: is he a medical doctor who doesn't accept the underlying principles of modern biology [cbsnews.com]? If so, then yes, he's a wacko.

              That doesn't mean he's wrong with regard to economic matters, but it does mean you don't want to blindly hitch your intellectual wagon to his.

            • by s.petry (762400)

              Are you now trying to falsely claim that Ron Paul said to move everything to the State level? One lie tends lead to another lie, and you prove to be no exception. Your irrational generalization was wrong, and no amount of fallacy or lies makes it true.

        • by danbert8 (1024253)

          The libertarian ideal is "move everything to the individual level" but failing at that we attempt to get it to the local level, and failing at that, the state level. Basically the smaller number of constituents to politician ratio, the more power the individual has.

          • by Valdrax (32670)

            Basically the smaller number of constituents to politician ratio, the more power the individual has.

            And the more important it becomes to be one of the strong, because there's not enough weak people to defend themselves without resort to violence.

        • Hey now, I'm a neo-separatist. I want to dissolve the North American Empire of Crassus.
      • I remember when a local Volvo dealer got himself elected mayor of the city his dealership was in. The city police got kitted out with new Volvos.

    • Why aren't there penalties for attempts to introduce legislation that is blatantly illegal? Tesla should request that criminal conspiracy and racketeering charges be brought against the Ohio Dealers Association. Or at the very lease, the companies behind this should get a nice ass probing with the Sherman anti-trust act...
      • by torkus (1133985) on Tuesday December 03, 2013 @02:14PM (#45586263)

        That's just it...if you make it a law then it's legal. Then you challenge the law and get it overturned...then they write a new one permitting whatever was used to overturn the old one ad infinitum until you get a constitutional challenge which this won't rise to.

        I agree though it's a brazen, monopolistic power grab by the dealers. Remind you of the MPAA and RIAA? Their business model gets challenged by...reality and life...so they fight for laws and sue sue sue. All to the detriment of their customers.

        I can see why they're bent out of shape...they're used to a locked in business model that basically guarantees profits. Unfortunately buying votes indirectly is still ridiculously easy as is adding things to unrelated bills about to be passed into law. I can only see that trend getting worse...here's a bill to explicitly outlaw shooting infants in a stand your ground state. Rider to it also prohibits you from selling books not approved by the writers guild. Just you wait...

  • Oh no! (Score:5, Funny)

    by i kan reed (749298) on Tuesday December 03, 2013 @01:24PM (#45585503) Homepage Journal

    It's a new business model, and it's coming right at us! Shoot it! Shoot it now! Don't check if it's friendly! SHOOOT IT!!!!

    • It sounds like part of the plot of Atlas Shrugged and the response to Rearden Metal.
    • It's a new business model, and it's coming right at us! Shoot it! Shoot it now! Don't check if it's friendly! SHOOOT IT!!!!

      Adam Smith wrote how competition between vendors means lower prices for consumers.
      Of course, competition means lower profits for vendors too so they pervert the 'free' market they first got rich in.
      Same old same old.

      • by s.petry (762400)
        In fairness, Adam Smith also discussed how Government regulation must prevent monopolization to ensure that this didn't happen. We used to have laws that were enforced to handle some of this, but those have been repealed or simply ignored.
        • Re:Oh no! (Score:5, Insightful)

          by jratcliffe (208809) on Tuesday December 03, 2013 @02:27PM (#45586431)
          "Rarely do people of the same occupation gather together, even if only for merriment, that it does not end in some plot to defraud the public." I'm pretty sure that the large majority of people who cite Smith haven't actually _read_ Smith.
          • "Rarely do people of the same occupation gather together, even if only for merriment, that it does not end in some plot to defraud the public." I'm pretty sure that the large majority of people who cite Smith haven't actually _read_ Smith.

            I find two things interesting about Wealth of Nations. One is that it is easily readable. The other is that it seems everybody interprets it from an ideological perspective, kind of like the Bible. He wrote it for kings to understand basic economics, both good and bad.

            • by s.petry (762400)
              It's not because of Wealth of Nations that people differ on views, it's because there was much more work than just one book. People that read part of the works don't see the same thing as the people that read the complete works.
          • by s.petry (762400)
            I have read the books several times, and your quote does not change my statement or what he said in "Of Systems of political Economy" and hinted at in other works. I do hope you realize that Adam Smith wrote much more than "The Wealth of Nations".
      • I totally read that as "Agent Smith wrote..."

        Yeah, I need some sleep...

    • by ranton (36917)

      Politicians only like free markets if it helps their corporate sponsors. When the free market benefits the consumers it is evil and needs to be stopped with government intervention.

  • by Beryllium Sphere(tm) (193358) on Tuesday December 03, 2013 @01:25PM (#45585511) Homepage Journal

    Tesla purchases are interstate commerce. Constitutionally and practically that's a matter of Federal jurisdiction.

    • by MightyYar (622222)

      I'm betting it gets complicated since Ohio can control vehicle registrations. Try buying an out-of-state vehicle without CA emissions and registering it in CA, for example. I understand that is not a perfect analogy, but I can see how it isn't just a simple interstate commerce thing.

      • You can buy it, then get it registered and tested yourself. Full-faith-and-credit means the registration from another state would stand until you did so.

        • No you cannot. CA bans cars that do not meet CA requirements unless the car was registered out of state for some miles. From the smogtips.com website "Any type of smog station can inspect and certify your out of state vehicle (regular smog check & repair center, smog test only center, or Gold Shield smog station) so long as it's a used vehicle with at least 7,500 miles. New vehicles can not be registered in California unless they are 50-State Emissions certified. "
          • Yes, so you have to get tested and meet compliance. At a certain point it becomes about the owner complying by means of registration, and not the sale. You can meet the requirements without being sold in-state. I think the distinction is an important one.

    • The amendment corresponds to the registrar of motor vehicles:
      "The registrar of motor vehicles shall deny the application of any person for a license as a motor vehicle dealer, motor vehicle leasing dealer, or motor vehicle auction owner and refuse to issue the license if the registrar finds that the applicant:

      (11) Is a manufacturer or a subsidiary, parent, or affiliated entity of a manufacturer. applying for a license to sell or lease new or used vehicles at retail. Nothing in this division shall prohibit a

      • by Sarten-X (1102295)

        As I read it, that clause impacts the Tesla stores, not the online sales.

        Basically, the person getting a dealer license (used for test drives) can't be affiliated with the manufacturer. They have to be independent, like most other dealers.

    • by Trepidity (597) <.delirium-slashdot. .at. .hackish.org.> on Tuesday December 03, 2013 @01:39PM (#45585693)

      The commerce clause doesn't say that a state cannot regulate anything that has ever traveled in interstate commerce. Rather, it does two things (as relevant here).

      1. It prevents states from discriminating against out-of-state producers in favor of in-state producers. This is known as the "dormant commerce clause" [wikipedia.org]. So a state could not ban, say, the import of electric cars from out-of-state, while allowing in-state manufactures to produce and sell them them. But the state could completely ban the sale of electric cars within the state. The fact that someone wants to trade the cars in interstate commerce doesn't trump the state's right to regulate sales within its borders.

      2. In certain areas where the federal government has enacted a comprehensive regulatory scheme under the interstate commerce clause such that it intends to fully "occupy the field" to the exclusion of any state regulation of the subject, the federal preemption doctrine [wikipedia.org] does preempt any state laws. This might be closer to what you're thinking of. But it applies only in specific cases, where the federal government has actually explicitly preempted states' authority with a comprehensive regulatory scheme.

  • by digitalPhant0m (1424687) on Tuesday December 03, 2013 @01:26PM (#45585525)

    What a shame it is that our country operates in this manner.
    Regardless of which or both parties are to blame it's the publics complacency in allowing our elected leaders to behave this way.

    This is supposed to be a capitalist democracy. There is supposedly a free market.

    Wave goodbye to innovation when you can no longer bring it to market because it is more lucrative to stifle it.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      This is supposed to be a capitalist democracy.

      Democracy is sold to the highest bidder. Works as designed.

    • This is supposed to be a capitalist democracy. There is supposedly a free market.

      Is that actually in our Constitution?

    • For years people have been wanting a very powerful government that can regulate business in the way THEY want and think is right.

      Now they have their powerful government, but other people want other things, and that government listens to them too.

      • You really think cronyism is a new thing? You know that the exact same things happened when the robber barons ruled, right? Local government is just as susceptible to corruption as Federal. Besides, this is at the state level.

        • by Quila (201335)

          Same thing still applies: If you give government power, it will be used, often not in the way you wanted.

    • by Smidge204 (605297) on Tuesday December 03, 2013 @03:04PM (#45586859) Journal

      There's no such thing as a free market.

      Someone will always jockey for a position of dominance, because that's how capitalism works. The result is monopolies, robber barons and corporate oligarchy. Or it can go to the other extreme, where all trade is strictly regulated and controlled by third parties (eg governments). The result is the ideal case of socialism where everything is effectively owned and operated by everyone.

      The reality in practice is always a mix of these two; some combination of dominant corporate influences and government regulations that attempt to keep them from running completely roughshod over the economy. This in no way resembles the "free market" that everyone learns about in high school economics class because that's just a simplified, idealized example and not a tenable economic model.
      =Smidge=

      • by lgw (121541)

        There's no such thing as a free market.

        The CME/CBOT commodities markets meet any reasonable persons definition of a free market. There a many pages of exchange rules, and a few pages of law and regulation involved to trade, say, corn, but effectively anyone can buy or sell and there are no imposed price limits. Yes, there are structural protections to ensure the price doesn't move too fast, and that those buying/selling can actually deliver, but in practice it's a "free market".

        You don't need "complete absence of regulation" or any such nonsen

    • > This is supposed to be a capitalist democracy.

      Citation please.

  • by MetalliQaZ (539913) on Tuesday December 03, 2013 @01:27PM (#45585545)

    Why is it that the people who schedule these underhanded surprise hearings go unnamed? People need to know that these guys are working for special interests in back-room deals.

  • by gstoddart (321705) on Tuesday December 03, 2013 @01:40PM (#45585721) Homepage

    Why do states wish to entrench a specific business model or exclude someone from it? What does it have to do with them?

    What next, banning all forms of on-line shopping to prop up the brick and mortar stores?

    This just sounds like more irrational pandering to protect existing business interests -- which isn't really what legislatures should be doing (but do anyway).

    • by TimHunter (174406)

      This is more irrational pandering to protect existing business interests -- which isn't really what legislatures should be doing (but do anyway).

      FTFY

      • This is more irrational pandering to protect existing business interests -- which isn't really what legislatures should be doing (but do anyway).

        On the contrary, this is highly RATIONAL pandering, from the POV of the Ohio legislators. Irrational pandering would be sucking up to people who have no social influence, don't vote, and don't make political contributions.

    • Re:Why? (Score:5, Informative)

      by Copid (137416) on Tuesday December 03, 2013 @02:01PM (#45586043)

      Why do states wish to entrench a specific business model or exclude someone from it?

      Because while it's expensive to buy US Senators and other high profile offices, it's pretty cheap to buy state legislators--well within the grasp of one of the district's wealthier entrepenurs. Like a guy who owns a major car dealership.

    • Why? Because previously, the issue was that the car manufacturer was monopolizing all the car sales.

      In other words, these rules started out as anti-monopoly consumer protections. It's only 50+ years later, now that the independent dealer industry has evolved into a cartel, that they're seen as bad for the consumer.

      Of course, I'm not sure why that was perceived as a problem for cars but not for other consumer goods (i.e., why aren't all "factory outlet" stores, including those for things like clothing, illeg

      • by Firethorn (177587)

        Why? Because previously, the issue was that the car manufacturer was monopolizing all the car sales.

        I don't think this was ever seriously the case. Originally speaking the car companies loved dealerships because it allowed them to concentrate on making and selling cars to dealers - they didn't particularly care if an individual dealership failed or not. Sort of like clothes companies selling to dealers and the bigger stores; less paperwork and hassle for them.

        But with the rise of technology closer control made sense, and thus the dealers had a bunch of laws passed to protect themselves from companies li

        • by jandrese (485)
          On the other hand, I look at these laws as simply protectionism for the middlemen. They're disgusting. We've all been paying too much for our cars because they didn't want to have to compete with a more efficient business model and convinced the local governments to enshrine their profits in the law.
  • by 241comp (535228) on Tuesday December 03, 2013 @01:41PM (#45585739) Homepage
    This was already passed by the senate, without the "Denial of license as motor vehicle dealer" clauses: http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_137 [state.oh.us] I guess I don't understand how the bill amendment process works, but are they really considering amending it now that it has already passed?
  • As I write this from Ohio and look over the Ohio River and think to myself...Kentucky doesn't look half bad.
  • Great! (Score:5, Funny)

    by Black Parrot (19622) on Tuesday December 03, 2013 @01:49PM (#45585855)

    Now only 48 more articles on this topic.

  • "Donate" 5 dollars and they'll send you a bumper sticker. "Donate" 15 dollars and they'll send you a tshirt.
    "Donate" 30,000 dollars and they'll send you a car.

    • by Smidge204 (605297)

      $30K for a current-gen Tesla? Where do I sign up? Cheapest they offer now is double that.

      =Smidge=

  • Sounds familiar (Score:5, Interesting)

    by spaceyhackerlady (462530) on Tuesday December 03, 2013 @01:51PM (#45585879)

    Here in B.C. we had a stink a few years ago over privately imported vehicles from Japan. Under Canadian law you can privately import anything you like if it's over 15 years old, and in the mid-noughties a lot of interesting vehicles started to turn 15. Since they are essentially worthless in Japan, but well looked-after, they're a bargain for anybody who wants a used car. Japan has made a major industry of exporting their used cars. Unlike many other jurisdictions, cars with the steering wheel on the "wrong" side are road-legal here.

    The car dealers threw a fit. They claimed that right-hand drive vehicles were the enemy of all that is free and right and holy, but were never to adequately explain why. I wondered why they were concerned about their ability to compete with 15 year old used cars. Again, they were never able to adequately explain why.

    It's died down. For now. But you never know what they're going to try next.

    I bought a 1992 Mitsubishi L300 Delica in 2007. I love it. A touch expensive to run, but ridiculously practical and it will go anywhere with shift-on-the-fly 4WD. It also has a delightfully quirky style.

    ...laura

    • by nblender (741424)

      In Alberta they tried the same thing but they actually got traction in Quebec. They attempted to rally the insurance companies and concoct all sorts of statistics about safety, etc. I went the other way. I bought the diesel drivetrain out of a JDM Land Cruiser and installed it in my US Spec land cruiser. But yes, the dealers (under the guise of AMVIC) are behind this.

    • Re:Sounds familiar (Score:4, Interesting)

      by DarthVain (724186) on Tuesday December 03, 2013 @02:13PM (#45586237)

      Looked into these myself at one point. Two amendments. Not only do they seem not to want to compete with 15 year old cars, but 15 year old cars with both the cost of freight across the PACIFIC OCEAN and import taxes that are associated with them. Not to mention (as you probably noticed) trying to get part or service for something exotic (at least here).

      Considering most people that are interested in these things, are specifically interested in obtaining a car you can't usually get outside of Japan anyway. Doesn't sound like a big crossover of lost business.

      Typical knee jerk reaction to anything that *might* threaten their old antiquated business model (even if it doesn't and never could).

    • by Arker (91948)
      Interesting that the left-hand drive vehicles are legal in Canada, did not know that. There is one I would be dying to import if I lived there. (Mazda B-series turbodiesel, small pickup, heavy suspension, dual rear wheels and a flatbed. Wonderfully practical vehicle and we really should be able to get them here with the steering wheel on the right side but nooooo.)
  • Ford and some others sell thousands of cars directly to nationwide car rental companies in the US by the way, just in case you didn't know that.
    • by Xicor (2738029)
      those are still middlemen... they dont go directly to the consumer.
    • by Xicor (2738029)
      also, they dont car about anyone who isnt directly impeding sales of cars from dealerships. tesla competes directly with the dealerships, by offering cars to consumers without the 30% markup. ford sells cars to dealerships and rental companies, but they never sell directly to the consumers.
      • In my state and most others, you cannot rent a vehicle that is more than 3 model years old. Because of this and the price they get, any rental agency always has any car for sale at any time. They could sell it on day one and make a profit without ever renting it.
  • by TimHunter (174406) on Tuesday December 03, 2013 @01:59PM (#45585999)
    Tesla arranged for NC governor McCrory to test-drive a Tesla. http://www.newsobserver.com/2013/06/10/2953779/dome-tesla-lobbyists-give-mccrory.html [newsobserver.com]

    McCrory hopped in for a ride, with a state trooper behind the wheel. Before long, McCrory and the trooper switched, giving the Governor a chance to guide the sleek vehicle around Raleigh.

    It worked. http://www.digitaltrends.com/cars/tesla-model-s-scores-big-win-in-north-carolina-in-battle-over-business-practices/ [digitaltrends.com]

  • by Anonymous Coward

    Clearly there are some who would like to protect the good ol' boy dealer network: a couple of years ago, I was planning a purchase of a Toyota Sienna, and when I was unhappy with the treatment I was getting from our local dealer when it came time to negotiate a price, I decided to call around to dealers within a couple hours' drive to see what other options there were. One dealer two hours away returned my message, and my wife was unlucky enough to answer. He chewed her out for not "respecting" the dealer

  • The happiest day of my life was when I moved out of that hell hole. "Inbred swine" a euphemism for Ohio politicians.
  • Congress has been using its Constitution granted power to "regulate interstate commerce" in absurd fashion to gain more and more power over all aspects of our lives for at least 100 years. In this case there is a genuine and direct instance of states interfering with interstate commerce to attempt to ban or penalize products from being sold in the state that local business and political interests may not like. This is a legitimate instance in the since that is what the Founders actually intended. So why

  • by Tom (822) on Tuesday December 03, 2013 @10:01PM (#45591075) Homepage Journal

    The whole "rider" thing in the USA puzzles me to no end.

    How isn't this considered fraud? To attach something entirely unrelated to a law as a trick to get it passed? To me that's the definition of fraud and deceit.

If a thing's worth having, it's worth cheating for. -- W.C. Fields

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