GM continues to try to stifle competition

[Lanny]

I think the story of the EV1 and the Volt should be left out of this discussion. I'm a Volt owner but I still strongly disagree with GM's stance on legislation to stifle competition.

The issue here is not the entire history of automotive electrification, just GM's support of regulation to prevent Tesla (or any other automaker) from selling direct.

I understand what you are saying, however, it was the Baltimore "Superlawyer" that GM hired to lobby the Maryland Legislature that brought up GM's history with electric vehicles in his testimony before the House Environment and Transportation Committee last February.

While it may not be apparent in the video below, not all of the committee members were falling for the spin from GM's lawyers. If you go to the very end of the video at around 58:20, a Delegate asks about the change of ownership structure after the GM bailout. The GM lawyer claims not to have the answer and the Delegate abruptly says, " I have no more questions for this witness." What you don't see because the camera switches off him is the Delegate is shaking his head and mouthing, "wow, wow, wow." The Delegate clearly was upset and in my opinion, he felt that the GM lawyer was not being forthcoming, and hence he considered it futile to try and get an honest answer from him on any other questions.

I never had much of an opinion about GM one way or the other before this. But after seeing what happened in the hearing room and out in the hall that day in Annapolis, it is clear to me that this is about winning at any cost for GM. And they are willing to play hardball to get what they want.

Lanny

 

[Jopo43]

GM Makes the volt kinda hard to leave it out of the discussion.... it and the bolt are the two cars they are trying to protect.....

 

[Xenoilphobe]

They should change their name to GMF: Government Motor F*E*##ers. I'll never buy anything with their badge on it. First the bailout and now this. Total D-bags.

 

[ggies07]

Re-Volt as it relates to the Maryland testimony, one of the reps had a back and forth with GM over that because GM was calling it their Electric Car, and the rep asked does it have an ICE and the guy was like well, no it has a backup generator it is an EV, and the rep was like so it doesn't run on gasoline or cumbust fuel? And the guy was like, well yeah, but it is an EV. So it has an ICE in it? And he was like more like a backup generator...

So they were very much trying to say, look at us we have a true EV, when the Volt is not that. I'm also not trying to hate on the Volt or its owner's, many people are quite happy with them, but in this scope and how they are trying to frame it is misleading and innacurate. In the Volt 1.0 you could go what? 30 miles on electric? I'm sorry but that is not enough range for a lot of people and other than the die hard Volt owners that go out of their way to not spend fuel, most people don't want to inconvenience themselves on not spending gas and 30 miles (even plugging in every day) is not going to hack it (unless you can maybe plug in at work, and at least here in NOVA/DC that isn't most places)

That is about the dumbest sh** I've heard. That is WEAK sauce GM.

 

[Breezy]

In order to generate the broadest possible opposition to this, it's best to stick to points that the largest number of people can agree to: GM shouldn't be trying to legislate how consumers buy cars, or trying to block new market entrants by creating a barrier to entry.

I understand GM brought up the EV1 and Volt, but that doesn't make them relevant. Stick to the things we can all rally around.

 

[bonnie]

In order to generate the broadest possible opposition to this, it's best to stick to points that the largest number of people can agree to: GM shouldn't be trying to legislate how consumers buy cars, or trying to block new market entrants by creating a barrier to entry.

I understand GM brought up the EV1 and Volt, but that doesn't make them relevant. Stick to the things we can all rally around.

I think we're talking past each other here.

My tweet with reply is meant ultimately for Indiana committee members to see. THIS is what GM says. I want them to know what isn't being said. Otherwise GM's lies sit there and are accepted as truth.

 

[Yuri_G]

Keep fighting the good fight, Bonnie!

 

[santana338]

Well, this is interesting. GM's cryptic stance when asked about a charging network for the Bolt made me wonder what they were doing. Could it be that they are only using the Bolt as a way to try to kill Tesla (by putting these roadblocks in place and saying the Bolt was the answer)? They would be able to claim they were all for EVs while trying to drive Tesla out of business, then quietly pull the plug on the Bolt when customers complain that they can't travel more than one charge on a road trip.

That's too bad. I was looking at the Bolt as a possible car for the kids when they get old enough to drive. It was the only reason I would have considered a GM car. Not anymore. They've lost a customer forever.

 

[Lanny]

Five minute statement from Tesla Motors to the Indiana Senate Commerce & Technology Committee on February 18, 2016.

"Make no mistake, HB1254 as amended with Amendment #3, will shut down Tesla in the state." James Chen, VP of Regulatory Affairs, Tesla Motors.

Lanny

 

[glenhurst]

Bonnie, you mentioned you were contacted by a publication (newspaper?) in Indiana. I suggest those of you in Indiana contact the larger newspapers in the state, perhaps the business columnists if there are any, about this issue. A local write-up about these shenanigans can go a long way to moving legislators.

And regarding Mary Barra's comment about having dealerships in every state means customers don't have to go out of state for service, that is perhaps true and may even be an advantage for customers. But that's a marketing advantage, not something to be codified into law. And if that is such a great system, why is GM trying to remove its advantage by forcing Tesla to adopt the same model? The illogic is astounding.

 

[Xenoilphobe]

They blocked Tesla for many reasons. Interesting that Indiana is the 4th largest ethanol producer as well. http://www.neo.ne.gov/statshtml/121.htm

 

[Nomad]

Update!

Here is the crucial text of Amendment 3. It prevents manufacturers from selling direct that aren't already, and makes it illegal for existing sellers (i.e. Tesla) after December 31st, 2017.

Read the full text here: Indiana General Assembly, 2016 Session

EDIT: I just received confirmation from a contact in the General Assembly that the language above is the current bill being considered by the Senate Committee on Commerce and Technology—NOT the harmless study recommendation. It's go time folks, contact your state senator now!

 

[JadeJaguar]

Lanny - thanks for the link to the video of the hearing, which I watched yesterday.
As you said, the last comment by the chairman was that the hearing Thursday next week will only allow comments by supporters of the bill. Not sure I can spend the day driving to Indy and back to be a spectator.
Wikipedia's page on car dealerships Car dealerships in North America - Wikipedia, the free encyclopedia
references a paper "ECONOMIC ANALYSIS GROUP COMPETITION ADVOCACY PAPER" from the US Dept of Justice, which discusses the advantages to car manufacturers of having independently owned dealer franchises (mainly not having to create a whole network of their own) and the costs to consumers (averaging 8.6% of sale price per Goldman Sachs in 2000). The link to the paper is

Economic Effects Of State Bans On Direct Manufacturer Sales To Car Buyers | ATR | Department of Justice

It also discusses an experiment by GM with direct marketing in Brazil.

The Indiana Commerce & Technology committee members asked the Tesla representative Mr. Chen repeatedly about whether Tesla couldn't just establish one franchise dealership after the end of 2017 in order to be able to continue sales in Indiana. They seemed incapable (or unwilling) to grasp the fact that an independent dealer would have to mark up the cost of a car by around 10% to make a profit after covering their brick&mortar costs EVEN IF they sold the numbers of cars that LARGE ESTABLISHED companies to. As Tesla pointed out several times, they produced only 50,000 cars worldwide last year, while the big companies sell several thousand per month in the US alone. Until the company grows with the advent of the Model 3, sales per showroom are far too low to support an independent dealership, ESPECIALLY since most dealerships make most of their money on their service departments. Since the Tesla has no valves, camshafts, oilpumps, pistons etc. of ICEs, it doesn't need frequent expensive service.

 

[JadeJaguar]

Lanny - Thanks for posting the link to the video of the C&T meeting of 2/18. I watched it all.
As you said, at the very end the chairman said the meeting next week would only allow comments from supporters of the bill.
I wrote a LONG reply to your post, but when I wend to post it TMC had logged me out.
The US Dept of Justice produced the following paper on the economic impact of franchise auto dealerships:

Economic Effects Of State Bans On Direct Manufacturer Sales To Car Buyers | ATR | Department of Justice

The committee seemed unable (or unwilling) to grasp that if Tesla did create an independently owned dealer franchise, it would have to mark up the price around 8-10% to survive on the small sales volume Tesla currently has, especially since Tesla cars need so little service compared to ICEs that dealerships couldn't support themselves on their service departments like the major manufacturers do.

 

[JadeJaguar]

"The original bill had an exemption for Tesla. It looks like Thursday's amendment will eliminate all direct sales, with no exemptions."

I didn't realize this! Can you provide a reference to the original bill? In the Feb 18 committee meeting introduction, the chairman said several times "This is not about Tesla."

 

[Electroman]

If the fight comes from dealers I can understand the logic. But coming from GM makes no sense.

If GM perceives dealers are a plus then what is the level playing field they are aspiring to?

If GM perceives dealers are a negative then they should come out and say so, and then ask for level playing field.

 

[Nomad]

"The original bill had an exemption for Tesla. It looks like Thursday's amendment will eliminate all direct sales, with no exemptions."

I didn't realize this! Can you provide a reference to the original bill? In the Feb 18 committee meeting introduction, the chairman said several times "This is not about Tesla."

The original house bill would alter to the Indiana Code so that dealer licenses issued to manufacturers expire after 30 months. The original bill also makes those licenses non-renewable. Because Tesla is slated to renew their license in October 2016, the original bill would put a hard stop on Tesla's sales on March 2019 (30 months after October 2016). On the other hand, Amendment 3 specifically makes December 31st, 2017 the effective date.

So both the original bill and Amendment 3 have the same end result, but the effective date varies slightly as shown above.

Original introduced bill here: Indiana General Assembly, 2016 Session

 

[qwk]

If the fight comes from dealers I can understand the logic. But coming from GM makes no sense.

If GM perceives dealers are a plus then what is the level playing field they are aspiring to?

If GM perceives dealers are a negative then they should come out and say so, and then ask for level playing field.

Well since GM has contracts with dealers, they cannot just ask for a level playing field. That is their problem though, as they are the ones that entered into the contracts in the first place.

 

[JadeJaguar]

Thank you! Based on the link to the original bill you included, I see that the original bill included an "exemption" for Tesla:

"The manufacturer has offered all-electric vehicles for sale in Indiana on a continuing basis since July 1, 2015, or earlier." Then Tesla would have had until March 2019 under its current license.

This thickens the plot! The committee chairman claimed that "this is not Tesla!"

- - - Updated - - -

The committee chairman claimed that "this is not Tesla!"[/QUOTE]

He said this is not ABOUT Tesla..

 

[Curt Renz]

I’ve always suspected that Tesla was waiting for the departure of Justice Scalia before going to federal court regarding the states that legislate contrary to the US Constitution’s interstate commerce clause. Scalia preferred a soft interpretation of the clause as a bow to a state’s right to legislate commerce as it sees fit. The Federal Trade Commission sees the clause in a more absolute sense.

General Motors would probably be pleased if Tesla wins in federal court. It would be to the benefit of all manufacturers. Barra may be trying to force Tesla to do just that.