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Transportation Politics Your Rights Online

Tesla vs. Car Dealers: the Lobbyist Went Down To Georgia 190

McGruber writes The Atlanta Journal Constitution (AJC) newspaper's Jim Galloway has an update on the behind-the-scenes battles over who can sell you a new car: "Traditional car dealers are in the midst of a legal fight to push Tesla, the fledgling California electric car company, out of Georgia. Never mind that metro Atlanta is one of the hottest markets for electric vehicles in the nation. Signs point to a parallel battle in the General Assembly. Last week, the National Automobile Dealers Association began trolling for sympathetic lawmakers. While Georgia dealers say they have "no plans" to revisit an anti-Tesla bill that failed last year, Tesla is preparing a defense. It has already hired one of the top lobbying firms in Atlanta."

The Georgia Automobile Dealers Association wields considerable influence in the state Capitol; the AJC determined that the Georgia Auto Dealers Association (GADA) had made over $600,000 in recent campaign contributions to state lawmakers. Despite those contributions, a bill to boot Tesla from Georgia mysteriously died during last year's legislative session. While no legislator would claim credit for killing the bill, Galloway noted that Lt. Gov. Casey Cagle, who presides over the Senate, drives a Nissan Leaf.
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Tesla vs. Car Dealers: the Lobbyist Went Down To Georgia

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  • by JBMcB ( 73720 ) on Sunday January 11, 2015 @06:12PM (#48789309)

    An industry is using government regulation to stifle competition? Holy cow NO!!!
    https://en.wikipedia.org/wiki/... [wikipedia.org]

    • by Kagato ( 116051 ) on Monday January 12, 2015 @01:24AM (#48790889)

      The reason the laws existed in the first place was because at the dawn of the industry the franchise fees were used for capital by the manufactures. Without the legal protections car makers could simply run the franchisees out of business once they became big enough. To a similar extent when foreign makers moved into the USA the franchise fees helped build the infrastructure.

      Now we have a conundrum where Tesla doesn't see itself needing the dealers and is going on it's own. A large chunk of that is based on most buyers are going to be in big cities. They only need need 1 or 2 showrooms per state for the foreseeable future. They don't see the need to build out the showroom network which would require having franchisees. For Tesla the Franchisee system would certainly add another 3-4K to the cost of each car. They'll never get the model 3 to fit into the expected price range going that route.

      At the same time you can't just get rid of all the dealer protections because Ford, GM, Toyota, Honda, etc would be more than happy to cherry pick the most profitable areas for corporate dealerships. Those dealerships are owed that exclusivity because they invested in the company at the beginning. I personally don't think the dealers give a crap about selling Tesla, but they foresee the big auto makers suing to get rid of franchise laws if Tesla is allowed an exemption.

  • Lobby = Corruption (Score:4, Interesting)

    by Felgior ( 856383 ) on Sunday January 11, 2015 @06:17PM (#48789323)
    Lobbying, is corruption clear and simple. They should jail everybody connected to it.
    • by Anonymous Coward on Sunday January 11, 2015 @06:31PM (#48789401)

      All of us should have the right to lobby our legislators and legislatures.

      Where it's a problem is when we have these professionals and big money behind them to effectively give them a larger voice than the rest of us.

      How can one compete when you have to take time off of work to drive over, somehow get through security, and then get to talk to an intern; whereas the big money guys, get to take the actually politician out to an expensive meal, rides on their private jets and other attention getting things that are waaayyy beyond you or me?

      And then there's the human nature thing. People take rich people more seriously than regular people. Got a billion bucks? Well, just having it makes your opinion more important even no money or favors are exchanged - because we are all primates and act like it when it comes down to it; bald ape.

      And as a Georgia resident, I can assure you that our current politicians are all Hollywood Stereotypes. No one is called Boss Hogg - yet, though. You want material for a corrupt Southern Politician, come'on down here, boy!

      • by jklovanc ( 1603149 ) on Sunday January 11, 2015 @07:37PM (#48789705)

        How can one compete ...

        A single person can not compete but groups can and do. Groups like ACLU [influenceexplorer.com] and AFL-CIO [influenceexplorer.com] lobby and contribute to campaign on behalf of there members all the time. Tesla [opensecrets.org] does it too.

        The thing is that lobbying is necessary as it is the only way to put alternate positions in front of the politicians.

        • The thing is that lobbying is necessary as it is the only way to put alternate positions in front of the politicians.

          Really? The only way?

          It's not the "lobbying" that is the problem. It's the money. Certain lobbyists are the ones that get the appointments to have lunch with the senator because they can drive campaign donations and promises of lucrative jobs after politics.

          You know who doesn't promise politicians lucrative jobs after they leave government? The ACLU.

          • You don't think the $4,734,809 [influenceexplorer.com] spent on lobbying and the $32,811,424 in campaign contributions by the ACLU has influence?

            You know who doesn't promise politicians lucrative jobs after they leave government? The ACLU.

            Citation needed or it is just conjecture. By the way, the ACLU can and does "drive campaign donations".

            • You don't think the $4,734,809 [influenceexplorer.com] spent on lobbying and the $32,811,424 in campaign contributions by the ACLU has influence?

              Of course it does. That $4,734,809 was over 25 years. Comes to less than $200,000/yr, which considering it probably pays for two full-time lobbyists sitting in the waiting room of a legislator doesn't leave much left over for trips to Hawaii with hookers, does it? But that wasn't my point.

              Citation needed or it is just conjecture. By the way, the ACLU can and does

      • by PopeRatzo ( 965947 ) on Sunday January 11, 2015 @09:17PM (#48790151) Journal

        All of us should have the right to lobby our legislators and legislatures.

        But money should not be the controlling factor for access to those legislators and legislatures.

        If you can afford to go to those $50,000 plate campaign events, you get more access to the politicians and they listen to you more.

        Our Constitution is designed to make sure only the wealthy elite can influence government. It was designed that way in 1789 and nobody should be surprised that it's only gotten worse.

      • All of us should have the right to lobby our legislators and legislatures. Where it's a problem is when we have these professionals and big money behind them to effectively give them a larger voice than the rest of us. How can one compete

        Each congresscritter has about 725,000 (3.16M / 435) people living in their district. If everyone decides to directly lobby their congresscritter -- and the only thing the congresscritter does 24 hours a day is listen to constituents -- then each person gets less than 44 seconds a year to talk to their congresscritter.

        The system needs to group voices together otherwise it would never work.

        • by cdrudge ( 68377 )

          You're presuming that all 725k people in the district want to lobby their critter. We can barely muster 1/2 of eligible voters to vote in a presidential election. The last midterm election had just over 1/3 the people voting. If you consider that it's likely that households would have a similar or common voice, then the numbers get even smaller. Factor in apathy and you can calculate the number of constituents that actually have a need, want to talk to, and eventually follow through with talking to their c

      • by T.E.D. ( 34228 )

        All of us should have the right to lobby our legislators and legislatures.

        ...and we do. Its right there in the First Ammendment [wikipedia.org]:

        Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

    • by Dcnjoe60 ( 682885 ) on Sunday January 11, 2015 @06:35PM (#48789419)

      Lobbying, is corruption clear and simple. They should jail everybody connected to it.

      When you do it in the US, we call it lobbying. When you do it in a foreign country, we call it bribery.

      • by The New Guy 2.0 ( 3497907 ) on Sunday January 11, 2015 @07:55PM (#48789789)

        Lobbying is the act of telling an official how to vote by making a convincing argument.. Bribery is paying money for a vote or action.

        • by Dcnjoe60 ( 682885 ) on Sunday January 11, 2015 @08:54PM (#48790067)

          Lobbying is the act of telling an official how to vote by making a convincing argument.. Bribery is paying money for a vote or action.

          Are you under the dillusion that nothing of value exchanges between a lobbyist and a politician? No favors or future benefits? Bribery is giving something of value for a vote or action.

          • Are you under the dillusion that nothing of value exchanges between a lobbyist and a politician? No favors or future benefits? Bribery is giving something of value for a vote or action.

            I hope you're not suggesting that just because a politician goes on to a wealthy consultancy with a large corporation after he leaves office that it has anything to do with the fact that he pushed legislation that was favorable to that corporation after playing golf with that corporation's lobbyist. In Hawaii. With topless

          • Are you under the dillusion that nothing of value exchanges between a lobbyist and a politician? No favors or future benefits? Bribery is giving something of value for a vote or action.

            You've oversimplified the situation. Yes bribery results in future benefits for the lobbyist and the politician. But good policies also result in future benefits for both lobbyist and the politician. Your litmus test is incapable of distinguishing between bribery and good policy.

            You need to evaluate three parties to det

        • Re: (Score:3, Insightful)

          by Anonymous Coward

          And it's a complete coincidence that the most convincing arguments are frequently followed up with large campaign donations... There's no link at all.

        • Lobbying is the act of telling an official how to vote by making a convincing argument.. Bribery is paying money for a vote or action.

          A convincing argument as in "I'm gonna make him an offer he can't refuse"?

        • by houghi ( 78078 )

          And that in itself is wrong in my opinion. He should investigate on how to vote. You should not tell on how to vote. Politics should not depend on a sales pitch where the best salesperson wins.

          Because otherwise you will go either/or instead of finding perhaps a middle ground.

    • Lobbying and campaign contributions are done by every large group. Take at look at the ACLU [influenceexplorer.com] or AFL-CIO [influenceexplorer.com].

    • by Chandon Seldon ( 43083 ) on Sunday January 11, 2015 @08:50PM (#48790053) Homepage

      How else would regulators and lawmakers get input on policy?

      If you're going to pass a law that effects, say, orange juice production then it's important to consult with Dole Food Company to find out what the impact of the proposed law will actually be. Nobody else knows, and you can't just guess.

      Now, you know they're going to give you biased testimony. If you're trying to decide what drinks to subsidize for low-income school lunches, the (completely legitimate) scientist from Dole is going to tell you that sugar isn't the greatest for kids, but that the sugar in orange juice isn't as bad as that in Coca Cola because it's from oranges not corn. And the other nutrients in orange juice totally make up for the disadvantages of fruit sugar - you wouldn't want those disadvantaged kids getting scurvy.

      The guy from Coke is going to tell you that all sugar is the same. It's just a carbohydrate, and in fact it raises blood sugar less by weight than the hot dog rolls the kids are drinking it with.

      And there's no real way to get an unbiased voice. You could use government funds to fly a scientist out to the hearing, but then you have to pick who to fly out. You're a lawmaker, and you're not going to be able to pick a sugar metabolism scientist. That's not your field. All you can do is try to find a stakeholder to suggest someone. Who are you going to call? The American Medical Association now finally might send someone who says "kids shouldn't be drinking sugar", but how do you balance that against the orange juice guys and chocolate milk guys saying that the sugar isn't a big deal compared to the other nutrients in the drinks?

      If you create a government science board, it'll have to hire established scientists. They got funding somewhere for their previous research. Unless you want to fund someone to find out why sugar is bad, you won't find someone who will say it. And then all you've got is the thing you asked for - it's obviously not worth anything.

    • Yeah Like you'd ever get a bill THAT passed...
  • by Opportunist ( 166417 ) on Sunday January 11, 2015 @06:19PM (#48789335)

    So much for "free market" and "competition". Screw that old fashioned shit, let's get back to territory protection and arbitrary monopolies to screw over the custom... I mean, to protect the customer and ensure the highest possible quality.

    No, you're not encouraged to try to find out how it should increase quality and create the best product for you when a monopolist can pretty much sell you any crap and you have to buy it, lacking any options.

    Politicians? You expect politicians to do anything against that? For real? They're doing exactly the same and benefit from the same monopolizing, anti-competitive mechanisms in their area, you honestly expect them to do something against what they learned is good for them?

    Face it, we're fucked.

  • by 140Mandak262Jamuna ( 970587 ) on Sunday January 11, 2015 @06:20PM (#48789349) Journal
    NADA vs Tesla battle is not really about Tesla. It is NADA vs gas car makers.

    I have friends who have worked as IT consultants in Detroit. Their inside story is that NADA is more powerful than the automakers. It is not that the auto makers are saints, but the laws governing data sharing between the dealers and the auto makers is very heavily biased in favor of dealers. Even very minor data gathering projects have to go through several layers of approval from NADA. NADA is very suspicious of the automatkers.

    There is very good reason for the strained relationship. The automakers would dearly love to ditch the dealership model of sales and go for direct sales. The auto makers believe the dealers are acting in bad faith and against the interests of the makers. Many dealerships are actually selling cars from different vendors. Even when the dealerships are nominally different they are owned by same clan or extended family in a market. They demand the automakers to cut deals with them and they are not above promoting one maker to punish another maker. The present set up is so biased in favor of the dealers, if it at all it is possible to ditch them, the auto makers will boot them in no time.

    What NADA is really afraid of is setting a precedent allowing Tesla to sell cars directly breaking their monopoly of access to auto buyers. Americans love cars. Automobile is the second most expensive thing a person buys, after home. (Slowly slipping into third place, behind college tuition). Still car buying is the most unsatisfactory part of car buying. We can thank NADA and its selfish policies for this anomaly. Once Tesla breaks the dike, so NADA believes, all automakers will sue for equal access to the market and the dealerships will be at a huge disadvantage.

    • Still car buying is the most unsatisfactory part of car buying.

      Sorry for the dumb editing. I mean car ownership.

      • Thanks for the clarification. Before that, reading that sentence was the most unsatisfactory part of reading that sentence.
    • The automakers would dearly love to ditch the dealership model of sales and go for direct sales.

      Why did GM not do this in its recent bankruptcy in every state that allows direct sales?

      • by Gavagai80 ( 1275204 ) on Sunday January 11, 2015 @06:43PM (#48789461) Homepage

        Because they'd be punished by dealers for it, and they can't go to pure direct sales all at once, especially not when some states disallow it.

      • Re: (Score:2, Informative)

        by Anonymous Coward

        Because even if it's legal, doesn't mean its feasible given the current state of affairs. Here's what would happen:

        1. GM says they are going to sell direct in the few states that allow it
        2. Immediately following that action, dealers in ALL states take action such as pushing other brands they sell more or even stopping sales of GM vehicles to punish GM for this action.
        3. Gm loses a large chunk of its , and goes out of business.

        There's a reason most dealerships "partner" with multiple makers, it's to be able

    • Nice summary! Off topic, but this really reminds me of the way that alcohol industry is set up. Originally people felt like it was a good idea because the manufacturers had way too much power. But in the end the manufacturers are sorta getting screwed, and the public is really getting screwed.

      I try to buy my beer from independent brewers (mmm... growlers...) because the distributors can make or break them, and I'd I'd leave dealerships in the dust if I could, too.

      • by swb ( 14022 )

        I would bet that the laws that split manufacturers, distributors and resellers had more than a little of its origins in Prohibition morality politics versus some market control designed to prevent monopoly abuse. Although I'm sure now it's kept in place more for its ability to protect market niches than for any specific lingering notions of alcohol control.

        • My knowledge of this comes mostly from Wikipedia and a movie I saw called Beer Wars. I took an interest some years ago when Surly Brewing [startribune.com] had a long battle with the three tier system in MN. Mostly I just wanted to be able to buy a pint locally.

          I've been trying to pay attention to the Tesla vs Dealership battle for a while. Mostly with the hopes that some day I could afford to comfortably pay $90k for a vehicle some day. Though I'd be more than happy to get the Model 3 when it becomes available. :)

  • $$$ == Influence (Score:4, Insightful)

    by Anonymous Coward on Sunday January 11, 2015 @06:21PM (#48789355)

    It's like we're not even trying to hide anymore how bribes work in this country. Saying that the association holds influence, and then backing up that claim with exactly how much they've "donated"... Payola is still illegal, prostitution is still illegal, yet, bribing politicians is considered par for the course. Business as usual. I think it's time we called politicians in America what they are. Whores. And they will turn tricks for the measliest of sums.

  • Scum (Score:3, Insightful)

    by Anonymous Coward on Sunday January 11, 2015 @07:03PM (#48789553)

    All those dealers are pissing in their pants that they won't be able to as easily provide "value" such as $1000 detail/wax jobs, $10/gallon gas, and ridiculously structured "protection plans"

    • by gnupun ( 752725 )

      Will Tesla be able to provide at least one or two service centers in every city/town big or small, in the entire US? That sounds hard to accomplish and people often service their cars at their dealership.

      • I could see them having roaming technicians for minor issues. With a car that's basically a computer the diagnostic codes should be able to tell them what the problem is before they even arrive to service it. So unless it's something severe it seems like on-site maintenance at your work or home would be possible. (For severe issues they could pick up your car on a flatbed and drop off a working model, either temporarily or permanently like they planned to do with battery swaps)

      • That sounds hard to accomplish and people often service their cars at their dealership.

        What service? Have you ever looked at the recommended service schedule for an electric vehicle? It's basically tires and brakes, which clueful people don't have serviced at a dealership.

        • by gnupun ( 752725 )

          Yeah, I did not read the schedule before I wrote that post. But $600 for changing brake pads and windshield wipers seems a lot.

  • Isn't this sales over state lines, which should be federal.
    • It's hard to get a desk where the seller is in State A and the buyer is in State B. Therefore, the state the dealer is in gets to regulate sales.

      • It's hard to get a desk where the seller is in State A and the buyer is in State B. Therefore, the state the dealer is in gets to regulate sales.

        Regulation is always bad.

        Except when it isn't.

        I know this is snarky, but for people who preach to us about the value of the free market, such as it is,and rail about the liberals and their socialiism, but to ban sales of something in your state isn't just socialism, it's showing a creamy core of hypocrisy.

        • by dryeo ( 100693 )

          It's only socialist when it helps the common man. If it helps the rich or other aristocratic type, then it is not socialist and therefore good.

  • by jklovanc ( 1603149 ) on Sunday January 11, 2015 @08:33PM (#48789983)

    It might not be just lobbying and and campaign contributions that turn legislators' heads. It could be tax revenue as well. According to this [yale.edu] document a lot ff tax revenue is created by car dealerships.

    States earn about 20 percent of all state sales taxes from auto dealers, and auto dealerships easily can account for 7–8 percent of all retail employment. The bulk of these taxes (89 percent) are generated by new car dealerships, those with whom manufacturers deal directly.

    If States allow direct sales there goes the tax revenue. I am not saying it is a good thing just another incentive for States to keep the franchise laws.

  • Georgia has the BEST durn govment that MONEY can buy ---- and believe me it HAS been bought
  • by Ol Olsoc ( 1175323 ) on Sunday January 11, 2015 @09:02PM (#48790099)
    Except when God fearing, free marketing, red states can use them to stifle competition.
  • I have the spurs and the whip going hard on my startup and one of the first things I would contemplate buying with genuinely spare cash would be a Tesla. Mostly for my inner geek but the concept of walking into a Mall (I don't really like malls) store and saying, "I'll take one in black." and not having a sales dick try and bamboozle me for the next 8 hours really really appeals to me.

    I was in a restaurant a few months ago with a friend and at a nearby table there were a group of guys who all fit some st
  • (Fledgling)
    You Keep Using That Word, I Do Not Think It Means What You Think It Means.

  • Not a great deal of sympathy but some. Dealerships do offer competition and choice to the customer - the kind of competition lacking if the manufacture sets the price and there are no negotiations over that price.

    The problem for car dealers are they are one of the the slimiest and contemptible professions around. Buying a car is an ordeal thanks to the upselling, misleading prices, nickel and diming, fine print and sales pressure that goes with it. Car salesmen are on a commission and quotas and they will

    • the kind of competition lacking if the manufacture sets the price and there are no negotiations over that price.

      Really? I would love to be able to shop for a car and know that no matter where I shopped I was getting the exact same price. I absolutely HATE having to negotiate on the price, and the popularity of services like truecar suggest that a huge number of people agree with me.

      I think Tesla will have to sell cars via dealers

      Why? Tesla sees dealers for the unnecessary middle men that they are. They've already shown that they would rather not enter a market than open a franchised dealership. I don't see any reason that this would change.

  • by FatLittleMonkey ( 1341387 ) on Monday January 12, 2015 @10:38AM (#48792667)

    The analogy doesn't work. In the song, the Devil accepted when he'd lost.

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