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Transportation Politics

Ohio Attempting To Stop Tesla From Selling Cars, Again 387

Posted by Unknown Lamer
from the screams-of-dying-middlemen dept.
cartechboy writes "Man the automotive dealer associations don't like Tesla. Remember that time the Ohio dealers attempted to block Tesla from selling its electric cars in in the Buckeye State. Now, it's happening again. The car dealers are once again pushing legislation that would keep Tesla from selling cars in Ohio. Senate Bill 260 would prohibit the Ohio Bureau of Motor Vehicles from issuing car-dealer licenses to auto manufacturers. Since Tesla owns and operates its own network of 'dealerships' (aka galleries), this would make it so the automaker couldn't acquire a car-dealer license. Section 11 of the bill lists 'a manufacturer... applying for license to sell or lease new motor vehicles at retail' as one of the types of organization ineligible for a dealership license. On top of all this, the language isn't on the Senate floor as a standalone bill. No, it's inserted as an amendment to Senate Bill 137 which is an unrelated bill requiring Ohio drivers to move to the left while passing roadside maintenance vehicles. Is this yet another slimy tactic to try and undercut the new kid on the block?"
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Ohio Attempting To Stop Tesla From Selling Cars, Again

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  • Pretty Much. (Score:5, Insightful)

    by SlashdotWanker (1476819) on Wednesday February 12, 2014 @01:27PM (#46230537)
    Yes.
  • Ask... (Score:2, Interesting)

    by mcspoo (933106)
    Ask a stupid question, get a stupid answer: "Fuck Beta!"

    Seriously, tho... of course it's an underhanded tactic. It's not even new. The big "3" did the same thing when Tucker tried to revolutionize the industry. Automakers don't like change at anyone's pace but their own glacial plodding.

  • Meh... (Score:4, Informative)

    by mythosaz (572040) on Wednesday February 12, 2014 @01:29PM (#46230555)

    Ostensibly these laws exist to stop manufacturers and distributes from cutting out the middle-man. If Ford or Honda can sell directly, they can get rid of the dealerships, and then charge whatever they want for a Ford, since there won't be any competition. They are, on the face, anti-monopoly laws. [The oft-mentioned Texas law does the same thing for theaters - preventing Paramount from eventually owning all the theaters and then stopping showing MGM movies to anyone in the Lone Star State.]

    ...but we all know it's because car dealers buy politicians, and want to make sure they get their cut of luxury Tesla sales.

    • Re:Meh... (Score:5, Insightful)

      by Gadget27 (1931378) on Wednesday February 12, 2014 @01:36PM (#46230639)
      Cutting out the middle man is not a crime, its an achievement.

      What would be the problem if Ford or Honda sold directly to the consumer? Are you suggesting that it's anti-competitive to set the price of your own product? In a scenario without dealerships, there would still be competition... not between dealerships, but between manufactures instead. If you could only buy a Ford from Ford, and the only cars on the market were Ford, then there could be a problem, but there is no shortage of auto manufactures to keep the market competitive.
      • Re:Meh... (Score:4, Interesting)

        by minstrelmike (1602771) on Wednesday February 12, 2014 @01:49PM (#46230779)

        Cutting out the middle man is not a crime, its an achievement.

        It kind of depends on how you make your own living.
        If you make your living as a middle man, it doesn't seem like an achievement; it looks more like a disaster.
        And while I dislike getting pedantic, the _definition_ of crime is based on law, not morals or economics.
        If the law says cutting out the middle man is a crime, then it is.

        Note that I am not arguing pro or con, merely perception vs social reality.

        • Re: (Score:3, Insightful)

          by Hadlock (143607)

          It's still an achievement. If you look at it objectively the middle man only exists to expedite sales of cars from the manufacturer to the end user. If it's now more efficent to get the product to the end user directly than working through a proxy, you've cut out a step. In the era before instantanious cheap/free communication the middle man was an important center of local product knowledge, now we have wikis and fedex. I can troubleshoot and order an alternator for a rare car on the internet and install i

      • If all the dealerships are eventually owned by a few car manufacturers, then competition still exists but becomes much more limited. Manipulation of prices by various means can occur, particularly with high demand products where artificial shortages can occur, or dealers in higher priced markets get favorable treatment. We see this a little today with gas prices. Prices in some areas are inexplicably higher than others nearby, mainly because the stations can't individually set prices outside a certain rang
    • I don't see how that can be remotely so?
      Does ford not already run its own dealerships in ohio?
      If not why not?

    • by AaronW (33736)

      In the early days dealerships made sense. It made it so that manufacturers didn't have to hold onto inventory and deal with all the individual financing or service.

      In the case of Tesla dealerships would be a big problem.

      To give you an example, back in 2006 I decided to get a Prius. I researched and decided what options I wanted, what color, etc. The problem was that for many months the only cars I could get were white or sometimes black. I didn't want white or black and I wanted a certain set of options. I

  • by Opportunist (166417) on Wednesday February 12, 2014 @01:29PM (#46230557)

    It's not the first time politics try to protect businesses, but it's hardly been THIS blatant before.

    Free market is a thing of the past. Today you don't buy and sell goods and compete with your competitor with quality and price, you buy and sell laws and compete in who can bribe more politicians.

    It's a bit like papal elections in medieval times.

    • by Akratist (1080775)
      And, optionally, you try not to be the guy whom the legislative hammer is brought down on by politicians looking to make a buck, which is the other side of the coin. But, yes, when I hear people complain about the "free market," they obviously have no idea how our current economy functions.
    • It's not the first time politics try to protect businesses, but it's hardly been THIS blatant before.

      Just after the civil war the big traincompanies lobbies the US federal goverment and recieved shit tons of money to build a transcontinental rail road. The companies convinced the enough people that it was in the best interest of the country to connect it together.

      What you'll see, if you look closer is a set of laws passed to ensure the train companies made money, mostly at the expense of tax payers. They manipulated stock prices. They used the power of where the railroad would go exactly to extract favo

    • by Touvan (868256)

      When a group of business men/women lobby the government for special rules on behalf of their own private interests, and those of their companies (or bribe/buy special rules) - I suppose that's a kind of "politics protecting business." I never understand who exactly is supposed to protect "the free market" from this kind of behavior in this quirky American libertarian dream world that IT specialists seem so fond of.

      After a "free market' has run it's course to it's predictable - and predicted - consolidated e

      • An ideal free market is much like the ideal anarchy. In theory, a great concept. In practice, both fail because man is greedy.

        Communism failed because man is also lazy, btw.

        • The difference is that markets degrade fairly gracefully.

          There is no such thing as an ideal free market with perfect information for everyone. But real world markets still work well. Real world anarchy, not at all. Real world Communism, not at all.

    • by tlhIngan (30335)

      Free market is a thing of the past. Today you don't buy and sell goods and compete with your competitor with quality and price, you buy and sell laws and compete in who can bribe more politicians.

      No, a free market tends towards monopolies - it's the ultimate end game.

      What you're describing as competition and such is just an idealized situation. It's how free markets SHOULD work. You know, like how communism SHOULD work. But like communism, there are unintended consequences, and the free market producing mon

  • Once again ... (Score:5, Insightful)

    by gstoddart (321705) on Wednesday February 12, 2014 @01:29PM (#46230561) Homepage

    Once again, companies try to prevent competition through legislation ... and apparently some lawmakers aren't above giving it to them.

    This is just buggy whip makers trying to ensure they still get their cut.

    Free market my ass.

    • by Touvan (868256)

      I guess the rest of us, those with non-market driven interests (life, liberty, happiness, etc.), may have to actually get involved in government! If all politicians are getting is lobbied from private interest A and private interest B, well, they have a decision to make - A or B!

      They'll need an option C.

  • by Attila Dimedici (1036002) on Wednesday February 12, 2014 @01:37PM (#46230655)
    While Tesla is the only manufacturer who is attempting to sell cars without a dealer network, the dealers recognize that if Tesla is successful with this tactic other manufacturers will follow their lead. The car dealers are attempting to protect their business model. I hope the dealers fail because it is not at all clear to me that dealers add any value to the process. It appears that the dealers' association agrees with me. However, I am not positive that car dealers do not add value. If they do, and manufacturers are allowed to sell without them, we will quickly discover what value they add to the equation. In either case, this attempt to enshrine their existence into law is a bad idea.
    • Exactly: for anyone turning around and telling us that we need dealers: let them show what value they can add to the marketplace. If they're giving people something, then they'll continue to survive and turn a profit. If they are indeed just middlemen that we no longer need, then we should not be subsidizing them, and we should force them into more productive lines of work.

    • by Talderas (1212466)

      Some dealers have value added service but that's mostly restricted to trucks and vans.

      They also, to an extent, greatly simplify the logistics of warranty issues for the manufacturers.

    • by NoKaOi (1415755)

      Q: Do car dealerships add value?
      A: I have to go ask my manager.

  • Missed Opprutunity (Score:5, Insightful)

    by EMG at MU (1194965) on Wednesday February 12, 2014 @01:44PM (#46230723)
    Generally, politicians with (R) next to their name claim to be against regulations and state/federal interference with free enterprise. Therefore I would expect the (R) members of the Ohio Senate to be up in arms about this law, capitalizing on this opportunity to show that the (D) guys are always putting unreasonable burdens on private enterprise and stifling innovation and growth.

    But the fact that the sponsor and co sponsors of the bill are all (R)s contradicts that long held (R) stance. What gives? And why aren't there any reporters pointing out this contradiction?
    • by idontgno (624372)

      Because no one with a brain believes the propaganda ^w premise that underlies the apparent contradiction. Anyone the press might report to who would believe such a report already knows. Anyone the press might report to which doesn't already know wouldn't believe.

      In other words, it's not news.

      More importantly, it wouldn't push up circulation/sales/page views/ad impressions/other all-important sales metrics.

  • by Zaatxe (939368) on Wednesday February 12, 2014 @01:55PM (#46230839)
    The owners of Tesla Motors would also be the owners of ANOTHER company that controls the network of dealerships.
    Wouldn't that work in the USA?
    • by kervin (64171)

      The Ohio law bans subsidiaries and affiliate companies. It's in the linked document.

    • The owners of Tesla Motors would also be the owners of ANOTHER company that controls the network of dealerships.

      Wouldn't that work in the USA?

      You would think it would. It does in other industries. [wikipedia.org]

      But not when lobbyists induce politicians to protect their clients' business models with legislation.

  • different then their implementation?

  • The simple solution for Tesla is to outsource their galleries to some degree. I believe Tesla did that in some states and the Ohio law bans "affiliated entities" as well, but this really will become a "cat and mouse" game.

    Regular dealerships are "affiliated" with the manufacturer at some level, so it sounds like Tesla will have to find that balance as well.

  • riders need to be done away with.

    There abuse far out weighs any advantages.

  • by Coward Anonymous (110649) on Wednesday February 12, 2014 @02:35PM (#46231339)

    It is not a coincidence that Tesla has no dealerships. It likely never will.

    This strong-arming is a perfect example for the reason. Dealerships wield in an inordinate amount of political power in their regions. The result hash been that once a manufacturer grants a dealership license to a dealership in a certain area, it is perpetual, geographically exclusive and irrevocable by the manufacturer. Unheard of conditions in practically any other business.

    Tesla will sooner open its own dealerships across Ohio's state lines. The lost sales taxes will eventually prove irresistible to the coin operated legislature.

  • ...my apologies for the stupidity and protectionism being displayed by the auto dealers in my state. Ohio has enough problem without something this stupid.

  • So, from what I can tell, the main problem with this Ohio law (aside the fact it's an obvious, blatantly stupid attempt to stop one particular company from selling in the state) is that they want to prevent auto manufacturers from owning dealerships, right?

    So, then, why doesn't Tesla just franchise out the dealerships in Ohio?

  • "Man the automotive dealer associations don't like Tesla.

    They have a name: NADA [nada.com]. Hate them, they are evil.

  • In public choice theory [wikipedia.org], rent-seeking is spending wealth on political lobbying to increase one's share of existing wealth without creating wealth. The effects of rent-seeking are reduced economic efficiency through poor allocation of resources [wikipedia.org], reduced wealth creation, lost government revenue, national decline, and income inequality.

    Rent-seeking [wikipedia.org]

  • by MadMartigan2001 (766552) on Wednesday February 12, 2014 @03:16PM (#46231735)
    When will you people wake up.

I am not now, nor have I ever been, a member of the demigodic party. -- Dennis Ritchie

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