FTC to Host Public Workshop Examining the U.S. Auto Distribution System Workshop Will Explore Competition, State Regulations, and Emerging Trends in the Industry, Project No. P131202 #27353

Submission Number:
27353
Commenter:
Marilyn B. Miller
Organization:
Vermont Vehicle & Automotive Distributors Association
State:
Vermont
Initiative Name:
FTC to Host Public Workshop Examining the U.S. Auto Distribution System Workshop Will Explore Competition, State Regulations, and Emerging Trends in the Industry, Project No. P131202
March 4, 2016 My name Is Marilyn Miller and I am the Executive Director of the Vermont Vehicle and Automotive Distributors Association. Representing Vermont's franchised new car dealers before our state elected officials, government agencies and Vermonters in general for over 32 years has provided considerable experience and insight about our motor vehicle industry. I offer these comments in response to the January 19th FTC workshop on automobile distribution and franchise laws to express my concern about much of what I heard. Though dealer viewpoints were included on several panels, the remaining speakers seemed united in their opposition to the current system and the franchise laws in place to regulate it. I was astonished to hear declarations that a much more balanced economic dealer-manufacturer relationship now exists with expressions of confidence that the disparity in bargaining power which led to the enactment of dealer franchise laws in 50 states no longer exists. Such comments reflect a lack of understanding about these business relationships and how they operate and did a real disservice to the franchised dealers in my state, their employees and, most important, to the public at large. Consumer protection, the disparity in bargaining power between manufacturers and dealers, and the value of community-based businesses are as valid today as when these laws were first enacted. The speakers at the January 19 workshop who said that there is now a fairly equal balance of power between dealers and manufacturers were wrong. In Vermont, manufacturers continue to have the clear upper hand in this relationship. Once a dealer has invested millions of dollars to support a particular franchise, the dealer becomes, in a very real sense, the economic captive of the manufacturer. With the overarching control that they wield, manufacturers routinely take advantage of their dealers, seeking to transfer costs to them and punishing those who won't comply. Manufacturer overreaches continue to occur right up to today. Even when manufacturers skirt requirements of our franchise law, many dealers do not challenge them for fear of retaliation or the cost of litigation. Legislators in all 50 states have voted to ensure that the system of retailing automobiles remains consumer friendly and fair. The FTC needs to look beyond the theoretical and understand the actual before reaching any conclusions about this important market. Finally, and of the utmost importance, the FTC also needs to appreciate and respect the fundamental role the states play in determining what level and type of regulation these markets need. Thank you for your consideration of my views on this important matter. Very truly yours, Marilyn B. Miller Executive Director