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Auto dealers say Senate bill would give them more local control

State House Bureau

April 09. 2013 8:55PM

CONCORD - Auto dealers say they can make better decisions about their franchises than out-of-state manufacturers who often hold them hostage.

Members of the NH Auto Dealers Association told of their dealings with manufacturers at a press conference Tuesday as the House Commerce and Consumer Affairs Committee prepares to hold a public hearing April 16 on Senate Bill 126, which changes business practices between manufacturers and their dealers. The bill would give local auto and other vehicle dealers greater flexibility to run their franchises. All other states have similar laws.

The bill would require more transparency and uniformity from manufacturers, said association president Peter McNamara, and would give dealers more control over construction projects by "buying local."

Andy Crews, president and CEO of AutoFair Automotive Group, said he has one of the largest dealerships in the state and is better equipped to handle manufacturer demands than smaller dealers.

"Explain to me why I have to buy $40,000 worth of furniture for one of my showrooms from an outside vendor, when I can order the same furniture from a New Hampshire business at half the price," he said. "Even though it is my money being invested, I have little say in how it is spent. If I don't follow the rules of exclusivity and vendor agreements, then the manufacturers threaten to pull inventory."

SB 126 will "bring fairness back into the relationship and stop the cost shifting to local dealers," Crews said.

He referred to several advertisements in the Union Leader and several other newspapers by the auto manufacturers and the farm and off-road equipment manufacturers.

Crews said they make false claims and give auto dealers a bad image among the public.

The Association of Equipment Manufacturers ran a full page ad in the New Hampshire Sunday News questioning why lawn tractors and construction and farm equipment should be under the same laws as automobiles.

The ad states SB 126, which passed the Senate on a 21-2 vote, is bad for business and wrong for New Hampshire. The group also has set up a website with information on the bill.

Nick Yaksich, vice president of government and industry relations for the Association of Equipment Manufacturers, said putting his organization's manufacturers under the laws governing automobiles would be unprecedented.

Ron Poulin's Rochester General Motors dealership was shut down in 2009 after the company had gone into bankruptcy and closed a number of its franchises.

When he fought the decision, Poulin said he was not allowed access to files the company had on his business. "GM told us the reason for shutting us down was that there was no need for a dealership in this area," he said. "They withheld information that could have been used to keep my doors open and my employees' jobs."

Under the bill, dealers would be given access to the files.

Daniel Gage, Alliance of Auto Manufacturers director of communications and public affairs, said the provision is unprecedented. Auto manufacturers, as all businesses do, collect a lot of information on franchises and dealers who make their targets and those who do not.

The National Auto Dealers Association reported dealers had their highest profits ever in 2012, said Gage, with the average New Hampshire dealer having sales of $29.3 million. The state's largest dealer, AutoFair, had annual sales of $207.8 million, he noted.

"While the dealers are saying 'Woe is me,' we need lots of special protections," Gage said, these figures "show just how well they are doing."

But McNamara said the business relationship between manufacturers and dealers is one-sided. The Senate saw that "these local businesses invested their blood, sweat and tears," McNamara said, "but they don't have control over their own fate."

The bill includes: a "buy local" provision, which dealers say will end mandates by auto makers to use out-of-state contractors and suppliers for work; transparency in inventory and sales decisions made by auto makers; market-based reimbursement for warranty work done by local dealers; gives local dealers more control over decisions regarding major capital expenses, such as showroom renovations and new construction; and incorporates equipment manufacturers and farm equipment dealers into the bill of rights.

The hearing is scheduled for 1:15 p.m. in Room 302 of the Legislative Office Building.

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