Massachusetts says Tesla can sell cars there

[Robert.Boston]

I bet they wish they had never filed the first lawsuit, it just woke everybody up to the fact that the dealer laws are for the dealers only.

Maybe; remember that in Colorado, the dealer lobby got the franchise laws tightened after Tesla opened up a store successfully. The ball is in play now--it remains to be seen whether Tesla and consumers win, or dealers.

 

[woof]

I urge any MA residents to write to their state rep and state senator voicing, asking for their support on this bill.

Done. Thanks for the notice.

 

[aronth5]

Done. Thanks for the notice.

Also done, but I have the unique situation where my town of 35K residents is carved up into 4 districts so I've written to all 4 of my state reps and 1 state senator.

 

[PeterK]

Also done, but I have the unique situation where my town of 35K residents is carved up into 4 districts so I've written to all 4 of my state reps and 1 state senator.

Done with the help of Find a Legislator
- I looked at the little maps on the site and identified the rep and senator covering me.

 

[Jaff]

Dealers always give consumers a fair shake...unfortunately, the consumer is usually held upside down by the ankles whilst the "shaking" occurs...


"Robert O’Koniewski, the association’s executive vice president, said it opposes the legislation."The whole system of franchise law is to ensure a legitimate dealer-manufacturer relationship," he said.

O’Koniewski said the franchise system has created competition among dealers of Ford or Chevrolet or other brands "ensuring consumers really get a fair shake in the process."

 

[Robert.Boston]

I think we need to be careful about how to make this case. There's no reason to slam the dealers; instead, my argument has been:

1. No existing car dealer is being harmed by Tesla (or any other OEM) choosing not to use the franchise model, provided that they don't already have any franchised dealers;
2. State laws regarding the level of service and support ensure apply equal to affiliated and franchised dealers;
3. Jobs are not adversely affected: affiliated and franchised dealers still employ sales and repair staff;
4. The direct-to-consumer model has worked well for other consumer products, e.g. Apple
5. So why not allow a new car company to innovate and use a different business model than other car companies?

This line of argument forces the dealers into a corner: the only possible reasons to oppose this line of thinking are self-serving or anti-competitive:

1. We don't want Tesla selling cars in the state because their cars make ours look bad;
2. We don't want Tesla servicing cars in the state because their quality of service makes ours look bad;
3. If we're going to tolerate Tesla in the market, we need our slice of the profits.

Here's how I put it to the legislators (with some slight variation in the first and last paragraph, depending on the addressee):

Chairman Scibak:

I’m writing to ask for your support for Rep. Linsky’s recently filed Bill H. 241, An Act relative to clarification of the Massachusetts franchise law, which has been referred to your Joint Committee on Consumer Protection and Professional Licensure. The bill clarifies that auto manufacturers with existing franchise arrangements in the state are prohibited from setting up affiliated dealerships – which is very important to protect the capital and community good-will that the incumbent auto dealers have created.

At the same time, though, Rep. Linsky’s bill would clarify that auto manufacturers that do not have any existing franchisees can choose whether to sell through a franchised dealer or through a company-affiliated store. Massachusetts consumers should have the right to buy directly from car companies, if that’s their choice and it doesn’t harm existing dealer’s franchises. No one would support a bill prohibiting Apple from owning its iconic Apple stores; and other retailers do still sell Apple products. So, why not let new automobile companies experiment with the same direct-to-consumer approach? The manufacturers would still be subject to the same high standards currently required by law for providing support and service.

When I bought my Model S from Tesla Motors last year, Massachusetts law and regulation made doing so a real challenge, costing me time and money. Why should it be harder for me to by an American-built car from an American company, than a German- or Japanese-built car? Tesla quite reasonably doesn’t want to sell through franchised dealers because these dealers neither understand nor want to promote, alternative-fuel vehicles.

The Massachusetts Auto Dealer Association is now suing the Natick selectmen who granted Tesla its Class 1 Dealer license. At the hearing, the lawyer for the association made clear his concern: if Tesla can sell cars directly to Massachusetts residents, then VW, GM, and the like will be next, and auto dealers will be squeezed out. Rep. Linsky’s bill strikes the right balance to address everyone’s concerns. Existing dealers have their franchise rights preserved, while innovative, new car companies can try new business models.

For these reasons, I urge you to take up Bill H. 241 in committee for open hearings and a vote. I would be happy to meet with you and your staff to discuss this bill further – and maybe take to take a spin in my Model S. It’s a great piece of American engineering and a lot of fun to drive.

I got a nice, personalized note back from the co-chairman of the committee that has Bill H.241 on its platter:

Dear Robert,

Thank you for your email regarding H 241. Although my Co-Chair, Sen. Kennedy, and I have yet to finalize our hearing dates, we will certainly include your email as part of the testimony regarding this bill and we will contact you in advance of the hearing in the event that you wish to provide additional written testimony or testify in person. Once again, thank you for taking the time to contact me regarding this matter

Sincerely,

Rep. John Scibak
Second Hampshire District
Phone: (617) 722-2030
(413) 539-6566
EMail: [email protected]

 

[Jaff]

Thanks for your efforts Robert!

 

[RDoc]

Done, house and senate.

 

[ModelS1079]

Just saw this thread and was reminded of just how far we have come in so little time.
Wendy was wondering whether she should sign a one year apartment lease.
Tesla Watertown is just beginning to do the registration on owners' behalf. Sweet.
Onwards.

 

[stephenpace]

Tesla's internal legal counsel at the hearing last night was Dan Connelly (I think I got that right)--flew up from Texas, I was told, because he has the greatest experience on franchise issues.

I believe Tesla hired a Texas-based lawyer who specializes in these things to help out: Billy M. Donley who is a Partner with BakerHostetler:

http://www.bakerlaw.com/billymdonley/

Sort of a bummer he couldn't more definitively answer whether the Texas amendment was legal under NAFTA during the hearing, but perhaps it was some type of legal trap to answer. He said something like "I will need to look into it more."

 

[Robert.Boston]

I believe Tesla hired a Texas-based lawyer who specializes in these things to help out: Billy M. Donley who is a Partner with BakerHostetler:

http://www.bakerlaw.com/billymdonley/

Sort of a bummer he couldn't more definitively answer whether the Texas amendment was legal under NAFTA during the hearing, but perhaps it was some type of legal trap to answer. He said something like "I will need to look into it more."

Yep, I met Billy when he was up for the Natick selectmen's meeting. I thought at the time it was interesting that they had hired a Texan for the work; I should have put 2+2 together to realize that Tesla was planning on a direct assault on the Texas legislation. It wouldn't surprise me to learn that Billy also helped craft H.Bill 241 here in Massachusetts, too, but that's pure speculation.