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Tesla Motors Sued By Car Dealers

Soulskill posted about 2 years ago | from the not-playing-by-industry-rules dept.

The Courts 510

An anonymous reader writes "Car dealers in New York and Massachusetts have filed a lawsuit that seeks to block Tesla from selling its pricey electric vehicles in those states. The dealers say they are defending state franchise laws, which require manufacturers to sell cars through dealers they do not own. Robert O'Koniewski of the Massachusetts State Automobile Dealers Association says, 'Those dealers are investing millions of dollars in their franchises to make sure they comply with their franchise agreements with the manufacturers. Tesla is choosing to ignore the law and then is choosing to play outside that system.'"

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Fuck those greedy bastards. (5, Interesting)

LeAzzholeChef (2576267) | about 2 years ago | (#41942925)

They cant sue under the franchise laws. Because the law is under combustible motors. It never included electric driven vehicles. Therefore this case should be thrown out of court on grounds of greed and control.

Re:Fuck those greedy bastards. (5, Funny)

fustakrakich (1673220) | about 2 years ago | (#41942969)

I don't think I would buy a car from Combustible Motors [gtspirit.com] , but to each his own

Re:Fuck those greedy bastards. (0)

Anonymous Coward | about 2 years ago | (#41943767)

Others might have flames deco on the outside of their car body, but we at Combustible Motors truly believes that the flames should be in the motor where it counts!

Re:Fuck those greedy bastards. (4, Insightful)

Nerdfest (867930) | about 2 years ago | (#41943001)

Out of curiosity, what was the original intention of the law? It seems a bit pointless.

Re:Fuck those greedy bastards. (3, Insightful)

MickyTheIdiot (1032226) | about 2 years ago | (#41943021)

"To Help My Corporate Buddies."

When there is only one explaination is possible it has to be true.

Re:Fuck those greedy bastards. (-1, Offtopic)

Anonymous Coward | about 2 years ago | (#41943115)

"To Help My Corporate Buddies."

When there is only one explaination is possible it has to be true.

Yeah. Like when Obama knows his fiscal policies will harm the nation because he is a very smart man. He also admitted knowing that raising taxes will not increase gov't revenue. He also knows that reducing gov't spending is the only permanent fix for the debt. He knows you cannot spend your way out of a debt problem. Study after study confirms these things. He knows that. He is extremely intelligent. But he does these things anyway.

The only single explanation is, he hates America and wants to see it fail. It is consistent with his "anti-colonial" brand of leftism. Obama is anything but incompetent. He is not a dummy. Not at all. We have people in the highest offices that want to see us fail. We're boned.

Funny thing is the rich are the ones who can afford to move someplace else. It is the poorest people who will be the most stuck here while our little nation collapses.

Cue all the idiots with their "yeah but republicans do bad stuff too, so there!" Pull your head out of your ass and realize finally that the two-party deal is there to make you cheerlead like you're at a pep rally and pretend "your team" can do no wrong because that means you don't call things what they are. Fucking sheeple. Fucking tool. This isn't a left vs. right deal. It isn't a black vs. white deal. They present it that way because you morons believe every word of it. It's a self-destruction vs. prosperity deal.

Re:Fuck those greedy bastards. (-1, Offtopic)

kanweg (771128) | about 2 years ago | (#41943209)

You must have voted for Clinton back then. He was the one who got the government's finances healthy, after Reagan and Bush sr.

Do you dare to take a look at the facts, in particular the graph?
http://en.wikipedia.org/wiki/Presidency_of_Bill_Clinton [wikipedia.org]

Bert

Re:Fuck those greedy bastards. (1, Insightful)

Captain Splendid (673276) | about 2 years ago | (#41943249)

This is why us dirty liberals refer to Clinton as the best Republican president of the modern age.

Re:Fuck those greedy bastards. (0)

Anonymous Coward | about 2 years ago | (#41943325)

Makes one wonder if there are two or one party running the place...

Re:Fuck those greedy bastards. (1)

Anonymous Coward | about 2 years ago | (#41943569)

There really is only one party for the president to belong to: The President. No matter who gets voted in as President, the country won't change dramatically. If Romney had won, he would have continued most of Obama's policies, just as most Obama's policies have followed Bush Jr.'s, after his followed Clinton's, etc. Obama's successor will likewise continue Obama's policies and so on and so forth. There is very little leeway for Presidents to act on partisan grounds on any matters of national merit, mostly occurring in what Congressional bills they veto and the international agreements, both political and economical, that they make or promise.

Re:Fuck those greedy bastards. (1)

Anonymous Coward | about 2 years ago | (#41943529)

Yeah, by borrowing from the Social Security fund and having the luck of being president when the dotcom boom was in full swing.

Re:Fuck those greedy bastards. (2, Insightful)

Anonymous Coward | about 2 years ago | (#41943227)

I'd say cue the right-wing retards that present a bunch of lies in order to support their failing party, but you already did that.

How about some facts (look 'em up!):
Bush started with a surplus and left with a trillion dollar deficit.
The deficit has been decreasing since Obama took office.
Unemployment has been decreasing since Obama took office.

Instead of just parroting Fox News lies, why don't you present some facts to back up your fucking insane opinions.

Re:Fuck those greedy bastards. (-1)

Anonymous Coward | about 2 years ago | (#41943471)

Shut your pie hole, parasite.

Re:Fuck those greedy bastards. (4, Insightful)

Anonymous Coward | about 2 years ago | (#41943243)

Cue all the idiots with their "yeah but republicans do bad stuff too, so there!"

No, cue all the people who want a sane discussion with their "Shut the everloving fuck up about the goddamned election you LOST already, this discussion is about a statewide car dealership law in New York, now stop trying to change the subject, you prosecution-complex-suffering asshole".

So, shut the everloving fuck up.

Re:Fuck those greedy bastards. (-1)

Anonymous Coward | about 2 years ago | (#41943315)

While I agree with everything else you said, I think that Obama is one or multiple of the following: 1. Stupid and therefore doesn't realize the need for economic action to prevent devastating inflation 2. Has self-deceived himself into thinking that the economy is unimportant except when giving speeches (the human capacity for self-deception is immeasurable) 3. Too busy to think for himself and thus just follows the advice of others who are stupid and/or self-deceived

Re:Fuck those greedy bastards. (3, Insightful)

MightyMartian (840721) | about 2 years ago | (#41943463)

Raising taxes can most certainly raise revenues. Don't confuse your political ideology with actual economics.

Re:Fuck those greedy bastards. (-1)

Anonymous Coward | about 2 years ago | (#41943575)

Since you seem to know everything already, I'll just put this here http://en.wikipedia.org/wiki/Laffer_curve

Re:Fuck those greedy bastards. (3, Informative)

Lunix Nutcase (1092239) | about 2 years ago | (#41943087)

Probably to prevent the auto manufacturers from driving the independent dealers out of business and being the only source of buying vehicles.

Re:Fuck those greedy bastards. (0)

Anonymous Coward | about 2 years ago | (#41943113)

it is so the state makes more money. local state franchise = more taxes and more local employment and more taxes on that etc.

this means someone will just buy the car in another state and pay the registration in NY or whatever.

they are seriously shooting themselves in the foot and giving good publicity to tesla.

pwnt

Re:Fuck those greedy bastards. (1)

AvitarX (172628) | about 2 years ago | (#41943233)

What state lets you do that?

in DE and PA both you pay no taxes or registration on your purchase, then pay when you register (in the state you prove residence in).

These are the only two states where I've purchased a car, but the thought that I'd be able to register my car without a proof of address surprises me.

Re:Fuck those greedy bastards. (0)

Anonymous Coward | about 2 years ago | (#41943033)

http://law.onecle.com/new-york/vehicle-traffic/title4.a17-a.html

This law covers all Motor Vehicles. An electric car has an electric motor.

Re:Fuck those greedy bastards. (2)

MickyTheIdiot (1032226) | about 2 years ago | (#41943071)

So does it apply to ATVs? Does it apply to Golf Carts? Does it apply to motorized scooters you can get a K-Mart?

Seriously... I don't know the answer. There is a definition somewhere but I doubt that is it.

Re:Fuck those greedy bastards. (1)

Seraphim1982 (813899) | about 2 years ago | (#41943149)

So does it apply to ATVs?

It can cover ATVs, along with snowmobiles and boats. The law calls them out as examples of motor vehicles, however the law also allows the commissioner to exempt things other then cars, trucks, and motorcycles.

Re:Fuck those greedy bastards. (2)

Charliemopps (1157495) | about 2 years ago | (#41943163)

Well, franchise laws should be thrown out all together... along with Liqueur distribution laws, and all the other nonsense left over from the 50s that was designed to keep out competition.

Re:Fuck those greedy bastards. (0)

Anonymous Coward | about 2 years ago | (#41943361)

You mean the 1850's? How about the 1750's? New York is home of Gibbons v Ogden, where New York granted a monopoly license covering ALL combustion powered vessels. States like NY and MA have been imposing licensing schemes since before the US was founded.

Re:Fuck those greedy bastards. (4, Insightful)

jythie (914043) | about 2 years ago | (#41943321)

I really, really hope they loose due to that element. I utterly loath these car dealers, and their 'but we invested money! we should have the law protect us!' argument just doesn't do it for me....

There are times and places where regulation is useful, but this type of protectionism that forces companies and consumers to go through some cartel of private businesses simply because they got a special law just.. it doesn't do the population any good.

Translation: (5, Insightful)

Local ID10T (790134) | about 2 years ago | (#41942933)

"Stop them! They are competing unfairly, by selling a product that will one day make ours obsolete!

We have engineered a law to protect ourselves from competition, and since we choose not to sell their product, we can use this law to keep them from selling their product either!"

Re:Translation: (4, Insightful)

Ostracus (1354233) | about 2 years ago | (#41942963)

Is it? I thought it was," we have to obey these government imposed laws, you should too".

Re:Translation: (3, Insightful)

MickyTheIdiot (1032226) | about 2 years ago | (#41942991)

wow. Now THAT'S naive.

Re:Translation: (2)

Ostracus (1354233) | about 2 years ago | (#41943143)

For that my new business model is patenting making snarky comments, and making a fortune off of people like you.

Re:Translation: (5, Insightful)

ShanghaiBill (739463) | about 2 years ago | (#41943061)

Is it? I thought it was," we have to obey these government imposed laws, you should too".

Except these laws were not "imposed" on the car dealers. The car dealers lobbied and bribed to get these laws passed. They are anti-consumer and anti-free-market. They are a result of sleazy special-interest politics.

Re:Translation: (5, Insightful)

Anonymous Coward | about 2 years ago | (#41943311)

Except these laws were not "imposed" on the car dealers. The car dealers lobbied and bribed to get these laws passed. They are anti-consumer and anti-free-market. They are a result of sleazy special-interest politics.

Think it through. You get discounts off MSRP because the franchisee dealers compete with each other. If the manufacturer is also the only dealer, you will see the same price at every dealer; full MSRP. This law is pro-consumer, not anti.

Re:Translation: (5, Insightful)

Anonymous Coward | about 2 years ago | (#41943417)

Except that consumers actually prefer no-haggle pricing. Many people, including me, find the dealership experience unpleasant. With manufacturers competing with each other vs dealers, it's more likely that each manufacturer will try to give you the best price, or at least appear to do so. With dealers, you just expect to have your wallet pillaged.

Re:Translation: (4, Insightful)

bmo (77928) | about 2 years ago | (#41943451)

Bullshit.

The manufacturer could sell the car direct to the customer. They could sell it for the same price as the dealer pays them.

The dealer is just a middle-man skimming off the top. The dealer offers service too, but independent certified garages could too. This is anti-consumer and anti-independent repair.

--
BMO

Re:Translation: (1)

khallow (566160) | about 2 years ago | (#41943489)

If the manufacturer is also the only dealer, you will see the same price at every dealer; full MSRP.

Not at all! Just pass a law requiring the MSRP to be higher than what the manufacturer sells the car for. Another non-problem solved with the power of stupidity!

This law is pro-consumer, not anti.

If only that were true. But as we see, its consequences are to force a costly middleman into every transaction.

Re:Translation: (0)

Anonymous Coward | about 2 years ago | (#41943511)

MSRP has to actually be competitive if you aren't counting on middle men heavily discounting it.

Imagine a Toyota Camry and a Honda Accord are 100% the same (they pretty much already are).

If Honda sells the Accord to dealers for 28,000 and sets a MSRP for 30,000, the car will usually sell for 28,500.
If Toyota then wants to sell the Camry direct to consumers (competitively), they will need to set the price at 28,500, not 30,000.

The competition comes from other comparable options, not from two dealers selling the same product for different prices.

Re:Translation: (1)

Impy the Impiuos Imp (442658) | about 2 years ago | (#41943431)

Apparently people twisting government to protect their own interests is a new concept. Golly! I thought it was all nice, honest people petitioning government to outlaw murder and stuff!

Re:Translation: (4, Insightful)

Shavano (2541114) | about 2 years ago | (#41943541)

Nope. Those laws were made for the protection of the franchise contracts, so the manufacturers couldn't make a franchise agreement with a dealer and then establish another franchise within the franchisee's territory or go into direct competition with their franchisees. In the case of a company store opening in an area where there are no dealers for the brand. It's essentially protecting the value of the franchise contract from being undercut by the manufacturer. But if there is no franchise contract covering the territory... who is hurt? Dealers for OTHER BRANDS? Who the hell cares? Those dealers have no contract with Tesla and no interest to protect.

It sounds like New York and Massachusetts are trying to apply the law outside its scope.

When the government does something stupid (1)

kawabago (551139) | about 2 years ago | (#41943675)

people jaywalk to get around it.

Re:Translation: (1)

houstonbofh (602064) | about 2 years ago | (#41942967)

Yep... The entire article I was thinking "Now where have I heard that before?" I am looking forward to watching this unfold.

Re:Translation: (4, Insightful)

fafaforza (248976) | about 2 years ago | (#41943051)

You really think this is a petrol engine versus electric thing?

You don't think this is a "I want to make money as a middleman, and don't want this 'direct to customer' sales model to take off" thing, instead?

Re:Translation: (1)

Ostracus (1354233) | about 2 years ago | (#41943101)

Even if it did, I don't see the death of the dealership, especially when you're talking about something the size and price of an automobile. As far as cars being shipped from maker to future owner? Already happens. I've had cars from overseas shipped to the US.

Re:Translation: (2)

timeOday (582209) | about 2 years ago | (#41943223)

I don't think there's any question there must still be dealerships; only whether they are independently owned, or owned by the manufacturer.

The two models seem to compete OK with restaurants, so I'm curious what the history of the law is. (Maybe because there are so few auto manufacturers?)

Re:Translation: (0)

Anonymous Coward | about 2 years ago | (#41943663)

I don't see how it can be a ICE vs EV thing. Dealerships have dealt in EVs in the past. It's not like the Tesla is the first EV. Did this problem happen then? There's your answer.

Re:Translation: (0)

Anonymous Coward | about 2 years ago | (#41943297)

How does selling cars make selling cars obsolete?

Re:Translation: (0)

Anonymous Coward | about 2 years ago | (#41943421)

The article is singularly uninformative regarding the origins or the intent of the law.

Why should a manufacturer be required to sell franchises for dealerships if they are willing and able to support their own sales force. It really sounds like an archaic restraint of trade law designed to require businessmen to control the sales and distribution of a automobiles...

I smell the mob at work.

UNLEASH CAPITALISM (0)

Anonymous Coward | about 2 years ago | (#41942935)

Go free market power, Go!

Re:UNLEASH CAPITALISM (3, Insightful)

loganljb (1424009) | about 2 years ago | (#41942997)

I'm not a big supporter of complete Laissez-faire capitalism, so don't take this the wrong way... But this story is about exactly the opposite of what you seem to think it is. The problem in this case is the franchise law -- which is government interference in the free market, which is anathema to true capitalism -- not with capitalism. Of course dealerships are going to sue -- they've got a nice racket going on, with government backing.

Re:UNLEASH CAPITALISM (2, Interesting)

shellster_dude (1261444) | about 2 years ago | (#41943293)

I think you missed the point of the OP. That was precisely what he was saying.

This is a government backed monopoly (in my opinion, the only true use of the word "monopoly"). It needs to be shut down. The same way utility providers currently get to exercise monopolies, enforced by government. Tesla ought to succeed or fail on their own merit (and I think they will fail, but they deserve the chance).

Re:UNLEASH CAPITALISM (0)

Anonymous Coward | about 2 years ago | (#41943427)

> in my opinion, the only true use of the word "monopoly"

Your distance from reality is showing.

Re:UNLEASH CAPITALISM (1)

realityimpaired (1668397) | about 2 years ago | (#41943467)

This is a government backed monopoly (in my opinion, the only true use of the word "monopoly"). It needs to be shut down. The same way utility providers currently get to exercise monopolies, enforced by government. Tesla ought to succeed or fail on their own merit (and I think they will fail, but they deserve the chance).

Actually, the is the exact opposite of a government-backed monopoly. The point of the franchise law is to prevent there being a monopoly, by preventing the auto manufacturer from owning all of the dealerships.

So they also want to be able to sell Tesla cars? (1)

Anonymous Coward | about 2 years ago | (#41942943)

Surely this ends up being a good thing, right?

The important question is did Tesla do this because no dealers wanted to middleman the cars or because they want to head down the Apple Store route?

Similar complaints-Level ground. (0)

Anonymous Coward | about 2 years ago | (#41942945)

Isn't this like the original Amazon before they decided to stop avoiding sales tax?

capitalism rules!! (1)

Anonymous Coward | about 2 years ago | (#41942955)

As long as I'm the winner! When I lose I sue your ass off.

Re:capitalism rules!! (1)

Anonymous Coward | about 2 years ago | (#41943107)

As long as I'm the winner! When I lose I sue your ass off.

I am nearly eighty pounds overweight. Do you sue guts off as well?

Good! Maybe they strike the stupid laws over this. (5, Informative)

ezakimak (160186) | about 2 years ago | (#41942965)

The car dealer franchise laws began in California w/Reagan helping a buddy's business. Soon Bush did similar in TX, then lobbyists picked up the ball and rolled it to the other states.
I can think of no other industry where it's in fact *illegal* for a manufacturer to sell their own product directly to consumers.
It makes it so that it is no longer a free market. Who knows what options and colors people actually want--dealers order speculatively what they think they can sell, then sell them--people wind up choosing between the existing inventory, usually none having exactly what they want. You'd think on big ticket purchases people would be more picky about getting exactly what they want--but we wind up with millions of same-colored cars on the road anyways.

Strike down these laws and it should be possible to actually order a vehicle that you customized on a manufacturer's "build-your-own" website--rather than it directing you to a bunch of local dealers that have their heads up their asses and don't actually have one in stock like you just spent 20 minutes configuring.

Furthermore, right now, if you want to place a custom order, you *have* to do it through a dealer--who is now an unwelcome middleman that *hasn't* made a sale yet thinks they still deserve MSRP markup for merely printing out the paperwork even though you beat a path to their door with no other option.

I truly hope Tesla wins.

Re:Good! Maybe they strike the stupid laws over th (4, Insightful)

MickyTheIdiot (1032226) | about 2 years ago | (#41943007)

Again.. these people are *not* free marketers. They are opportunists. They are fine with the free market as long as it benifts them. When they are on the losing end they're absolutely fine with the government intervening in every possible way.

Re:Good! Maybe they strike the stupid laws over th (0)

Anonymous Coward | about 2 years ago | (#41943139)

Again.. these people are *not* free marketers. They are opportunists. They are fine with the free market as long as it benifts them. When they are on the losing end they're absolutely fine with the government intervening in every possible way.

You sound jealous that somebody knows how to play the game better than you do.

Re:Good! Maybe they strike the stupid laws over th (0)

Anonymous Coward | about 2 years ago | (#41943229)

You sound like an idiot who is missing the point.

Re:Good! Maybe they strike the stupid laws over th (0)

iceperson (582205) | about 2 years ago | (#41943055)

I love it. Lawsuit regarding a stupid law in very liberal states and it's the republicans fault...

Re:Good! Maybe they strike the stupid laws over th (5, Insightful)

purpledinoz (573045) | about 2 years ago | (#41943195)

America is so focused on blaming republicans/democrats, that they don't realize that they both follow the same principal: Laws are for sale. Stop this blame game and wake up. Your government has been taken over by big business, and it is the American people who are getting screwed to ensure that the wealth trickles to the top 0.1%. It's so ironic that America's ideal is to spread democracy, while its own democracy is a corrupted mess.

Re:Good! Maybe they strike the stupid laws over th (0)

Anonymous Coward | about 2 years ago | (#41943203)

Because the people of those states voted on this law, specifically?

Or did it get lobbied for by certain interests, and pushed by others?

Even the most partisan state can and does have others acting in some ways.

Re:Good! Maybe they strike the stupid laws over th (3, Insightful)

fafaforza (248976) | about 2 years ago | (#41943079)

Do you know if they have a similar system in Europe? I believe you can order direct from Audi and actually go over to their factory to pick the car up.

And yea, the dealer only option sucks, as when, for example, you're looking to buy a V8 VW Tuareg, mainly for its compact size and towing capacity, you have to buy one with *all* the options, because that's the only thing that was imported. Very anti-consumer.

Re:Good! Maybe they strike the stupid laws over th (1)

c_sd_m (995261) | about 2 years ago | (#41943317)

Insist that they order a car to your specs. You'll have to wait but I know people who regularly do it with Audis and VWs. I almost did for my last car but they found one 10 hours away that was almost exactly what I wanted so I opted not to wait the 6-8 weeks. At least in Canada, I haven't found a VW or Audi dealer who won't place a factory order with fewer options than anything on their lot.

Re:Good! Maybe they strike the stupid laws over th (0)

Anonymous Coward | about 2 years ago | (#41943131)

In my experience the only way to buy the exact model of vehicle with the precise features from the menu of all available options for the particular model is to place an order through the dealership in the later winter or early spring. Otherwise, as you say the consumer gets to choose from a limited palate according to speculative dealership managers and their sales staff. I love how the car dealers refer to themselves as "stores" as in Ford Store, Dodge Store, etc. In a real store the consumer sees an item they want, they buy it for cash or on credit, and take the item home. But at the Ford Store or Dodge Store or Toyota Store, for example, you are iucky if you can take the vehicle after almost a week after singing the purchase agreement. Then you have all the paperwork to complete and sign on actual delivery. Buying a house is less complicated although not by much.

Re:Good! Maybe they strike the stupid laws over th (1)

Charliemopps (1157495) | about 2 years ago | (#41943205)

lol... these laws cover almost every product out there. Try and sell alcohol "Direct" to the consumer and you'll find out about them really quick. There is only one, count them ONE liqueur distributor for the entire Chigago metropolitan area... and the laws are such that it costs a fortune to apply for a distribution license and you are guaranteed not to get it.

Re:Good! Maybe they strike the stupid laws over th (3, Insightful)

nedlohs (1335013) | about 2 years ago | (#41943391)

Picking a heavily restricted special case product that was so special the constitution got changed twice due to entirely to it and applying it to "almost every product" does not a reasonable argument make.

I can buy pumpkins from a local farmer who grew them. I can buy a computer made by Dell from Dell. I can buy ink for my printer directly from the manufacturer. I can pay a local carpenter to build me a table directly. I can buy a house from the builder.

Re:...stupid laws... Plus Ãa change... (0)

Anonymous Coward | about 2 years ago | (#41943239)

The history of the motion picture industy's old "studio system" may be relevant to this discussion
http://en.wikipedia.org/wiki/Studio_system [wikipedia.org]

Re:Good! Maybe they strike the stupid laws over th (0)

Anonymous Coward | about 2 years ago | (#41943303)

"I can think of no other industry where it's in fact *illegal* for a manufacturer to sell their own product directly to consumers."

Distilled alcohol is pretty close but there are exceptions to that as well.

Re:Good! Maybe they strike the stupid laws over th (1)

westlake (615356) | about 2 years ago | (#41943651)

I can think of no other industry where it's in fact *illegal* for a manufacturer to sell their own product directly to consumers.

The motion picture industry was vertically integrated until 1948. MGM and Lowe's at the top. Paramount and Warner Brothers lower down. If you wanted decent exposure for your independent production you had to cut a deal with the majors.

Re:Good! Maybe they strike the stupid laws over th (0)

Anonymous Coward | about 2 years ago | (#41943677)

alcohol manufactures are also prevented from selling directly to consumers. that 3 tiered system is protected byone of the largest lobbying groups out there.

Re:Good! Maybe they strike the stupid laws over th (0)

Anonymous Coward | about 2 years ago | (#41943685)

Glad California is so much better off today than it was under Reagan. Dealer franchises are a distribution network that employs lots...and lots... of people. Gasp! jobs. who needs them anyway. After all, they are private sector employees. It would be way better if they were unemployed or worked for the government

The actual law (1, Interesting)

Anonymous Coward | about 2 years ago | (#41942985)

Thanks for linking to the actual law in question

On reading it, it appears that the law says that the manufacturer will not make business decisions based on ownership of dealers. ie it seems to indicate that dealers and factory stores be treated equally. I don't know if it says that factory stores are illegal.

It reminds me a lot of Richard Branson (1)

Anonymous Coward | about 2 years ago | (#41942993)

I'm reading a (quite good, if a bit self-flattering) book on Branson called "Losing my Virginity" and the guy has had to face off with this kind of old farts constantly.

I don't know what it is about these people. Don't they feel a bit of disgust trying to get in the way of someone who is, unlike them, trying to do something cool with their lives?

Re:It reminds me a lot of Richard Branson (1)

causality (777677) | about 2 years ago | (#41943281)

I don't know what it is about these people. Don't they feel a bit of disgust trying to get in the way of someone who is, unlike them, trying to do something cool with their lives?

They do, but they blame that on whoever is trying to do something cool. That's what denial looks like. It's a reiteration of the emotional immaturity that has become so widespread.

Now they have to try even harder to shut them down, or else they'll be disgusted with the ineffectiveness of their disgust. There's potentially no end to how many layers of denial can be heaped on it. When people falsely think they are justified, they really badly need to win no matter how much they don't deserve to. Not getting what they want would mean losing face by making it more obvious they were not justified. You can see this pattern everywhere.

It's the same reason the Inquisition decided to spread the love and forgiveness of Jesus Christ ... by torturing people to death. Yeah I know that might seem a bit inconsistent with an actual reading of the words of Christ ... but this way they "win" and the victim "loses" so they must have been "right"! And of course dead people stop saying things you find inconvenient. It's "might makes right" mixed with "shoot the messenger".

This is the courtroom version of the same little ego games. If these dealers were a bit more humble they'd recognize that they might be looking at their own future, and the time to invest in it is now. Unlike trying to halt inevitable progress, this is something that might work. But they are "right" in their own eyes and the other guy must necessarily be "wrong". So the court battle begins.

Re:It reminds me a lot of Richard Branson (1)

c_sd_m (995261) | about 2 years ago | (#41943323)

They really think that because they "paid their dues" to the system that the system needs to stay in place forever. Their disgust is reserved for new entrants who don't understand how the system "needs" to work.

But Tesla isn't breaking any laws (2, Funny)

Culture20 (968837) | about 2 years ago | (#41943023)

Tesla motors sells suped-up golf carts, not cars. No need for franchises.

Re:But Tesla isn't breaking any laws (3, Funny)

Ol Biscuitbarrel (1859702) | about 2 years ago | (#41943127)

I'm confused. Tesla don't provide any options at all for their EV? How about clarifying this with a car analogy?

toddlers (0)

Anonymous Coward | about 2 years ago | (#41943025)

And they all went noisily towards the future, sporting a futile display of kicking and screaming at progress.

Re:toddlers (1)

MickyTheIdiot (1032226) | about 2 years ago | (#41943089)

With the asshole rating of most of our CEOs right now (look at the post-election idiocy), future progress will be made one funeral at a time.

Easy fix. (0)

Anonymous Coward | about 2 years ago | (#41943027)

How much for a franchise, Tesla? O, and I won't be joining Robert's SAD Association.

Elon Musk made a blog post about all this (5, Informative)

Anonymous Coward | about 2 years ago | (#41943037)

http://www.teslamotors.com/blog/tesla-approach-distributing-and-servicing-cars

Elon Musk made a blog post about all this legal turmoil last month. Worth a read.

Re:Elon Musk made a blog post about all this (1)

dutchd00d (823703) | about 2 years ago | (#41943591)

Elon Musk made a blog post about all this legal turmoil last month. Worth a read.

From that post:

Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars. It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business. This would leave the electric car without a fair opportunity to make its case to an unfamiliar public.

Which, IMHO, is bunk. Every car they are selling is different from every other, that's just product differentiation. Saying they can't sell electric cars without undermining their gasoline cars is like saying they can't sell white cars without undermining their red cars. I suspect this is Tesla Motors trying to keep the entire supply chain under control (and thereby not allowing third parties to add a little margin on top of the sales price).

Simple Work Around (5, Informative)

Anonymous Coward | about 2 years ago | (#41943057)

The Tesla "Dealers" are show rooms and advertisements only, you cant test drive, you cant get the keys, They may not even be owned by Tesla at all in some states to get around Franchise laws. BMW does the same thing, as do a lot of non-US car builders. They advertise a trip to some place where the car is built and you then buy the car in Europe.

In this case they advertise the car in a mall or other location, and then provide you internet access to the Tesla plant to place an order. The show room makes no money and sells no car.

Ford cant do this because its contracts with dealers would require Ford to pay the dealer if it somehow sold a car in that state. Tesla has no such contract with its advertisers.

In the end, all sales are done out of California, cars are built there, and shipped to the person, the show room has no additional involvement in the process.

Regulatory capture, crony capitalism (5, Insightful)

timothy (36799) | about 2 years ago | (#41943097)

Whatever you do, please don't attribute this to actual "capitalism" or "the free market." When people talk about deregulation as a horror, realize this is the kind of horror that the deregulators seek to undo -- complacent vendors with a cozy layer of protection against new entrants.

Also, consider how much like these state franchise laws resemble gerrymandering district agreements -- both rely on passing in secret -- or at least in relative obscurity, in a process that regular folks rationally stay away from -- agreements to use the force of law to keep things tidy, stable, and predictable (and profitable, for those who've done the manipulating), rather than dynamic, risky, interesting, innovative, and other nice adjectives.

The laws that give special privileges to state-sanctioned franchise owners are bad, even if they have some small silver linings, whether the franchise is for transportation, banking, legal services, auto sales, gambling, or Dixie cups. Not that their history in the auto industry isn't interesting -- this podcast is enlightening on that topic: http://www.econtalk.org/archives/2009/06/munger_on_franc.html [econtalk.org]

Re:Regulatory capture, crony capitalism (3, Interesting)

phantomfive (622387) | about 2 years ago | (#41943261)

Regulatory capture, crony capitalism, etc is one of the biggest problems in America today.

It is easily something that both the left and right in America can agree on. It is unfortunate that politicians tend to agree with each other, in opposition to the public.

Re:Regulatory capture, crony capitalism (-1)

DNS-and-BIND (461968) | about 2 years ago | (#41943605)

Gerrymandering keeps minority districts safe for minorities. What the fuck sort of person are you who doesn't understand this? If districts were not drawn to ensure representation of historically underrespresnted minorities, then what would happen? Riots. Courthouses on fire. Be quite careful about these Republican talking points you're parroting. These ideas are dangerous and lead to violence.

i knew there would be pushback on the electric car (0)

Anonymous Coward | about 2 years ago | (#41943123)

revolutionizing the car industry isn't going to be easy, the old oil gobblers aren't going to go down with out a fight...

Re:i knew there would be pushback on the electric (1)

green1 (322787) | about 2 years ago | (#41943665)

As much as I'd love to believe that, I don't think this has anything at all to do with internal combustion vs electric. This strikes me more as a "there's new competition in town and I hate competition" issue. I'd be willing to bet that if Tesla was selling internal combustion vehicles this case would still be exactly the same.

I really wish companies in general (in every market segment) would stop using the courts to enforce a profit. Compete on merit and we all win, compete on legalities and everyone looses.

Winners. (0)

Anonymous Coward | about 2 years ago | (#41943147)

Sometimes I find it disgusting when teams do out-of-field maneuvers to lose critical games and thus fall on easier matches so they can reach the finals easier and have one hard match against a (probably) tired adversary to grab the victory at the last moment.

That's what it takes to win: sometimes it means forgetting why you started playing at the beginning.

Middlemen were supposed to do a useful service. Not this. And it's not only them. Few have the grace and fairplay to know and adapt to changing times, even if only to help progress -- many will fsck the entire Earth to get some additional coins...

color me SHOCKED! (0)

Anonymous Coward | about 2 years ago | (#41943161)

Car dealers acting like a complete spoiled greedy douchebags! It's unprecedented!

Oh wait. It's completely normal. Car dealers are SCUM.

The real question is... When can we lynch them for being douchebags? How much harm do they have to cause first...

The state (2)

kelemvor4 (1980226) | about 2 years ago | (#41943173)

The state of NY isn't going to be happy if they have to lose out on all that tax revenue because consumers have to go to jersey or some other state to buy cars. Maybe that isn't the case right now, but as time progresses I think combustion engine cars will become less and less desirable.

Silly boy (or girl) (1)

Anonymous Coward | about 2 years ago | (#41943399)

if you buy a new car in NJ and then go to register it in NY, NY will collect the tax on the sale. Which is why, when you're in the dealer in NJ, he'll ask you in what state you'll be registering the car. You say NY, and he handles the NY paperwork instead of the NJ paperwork.

Yeah, there are edge cases. He doesn't have the Alaska or Hawai'i, or even the Missouri paperwork. But, depending on where the dealership is in NJ, he's got some subset of CT, NY, PA, DE, and MD because most (all?) states have figured this out.

Dealers are a textbook case of rent-seeking (4, Interesting)

realinvalidname (529939) | about 2 years ago | (#41943201)

Re:Dealers are a textbook case of rent-seeking (0)

Anonymous Coward | about 2 years ago | (#41943713)

Exactly. New York, the place anti-capitalist monopolies go to thrive.

Change the law then (3, Insightful)

Bodero (136806) | about 2 years ago | (#41943291)

Under the law, these dealers are absolutely right. Chrysler was forced to sell a company owned Chrysler Dodge Jeep Ram store in LA for this exact reason.

If Tesla doesn't like it, then lobby to change the laws. You can't just ignore them.

I don't get it? (2)

Shavano (2541114) | about 2 years ago | (#41943477)

Where is the section of the law that says that a new manufacturer with no existing franchisees in the service area can't open factory stores that would compete with other makes?

New car dealerships (3, Interesting)

EmperorOfCanada (1332175) | about 2 years ago | (#41943525)

What tesla should do is to give out non exclusive franchises for $0.01 online. Anyone can get one: corner stores, private people, my cat, just saturate the market. Then when you want to buy a car you would buy it online through some "local" dealership. Technically bob down the street would sell it to you but Tesla would handle the transaction for Bob and then pass bob his $0.02 commission.

There are few organizations that I detest more than car dealerships.

A better end run of the law would be to go federal and try to slip in an online sales rule that overrides any local laws. That would be a 21st century way to go. I don't care where Amazon's HQ is and I certainly don't want a stupid local law getting between me and Amazon.

Historical problem (5, Informative)

Animats (122034) | about 2 years ago | (#41943539)

Auto dealer franchise laws reflect a long history of auto manufacturers screwing dealers. Auto dealers were traditionally small businesses with one supplier, which put them firmly under the thumb of the manufacturer. Many dealers still are, although some are big mufti-manufacturer chains.

After looking at the New York [onecle.com] and Massachusetts laws, it's not clear that they prohibit a manufacturer from selling entirely through their own stores. What the laws clearly prohibit is a manufacturer competing with its own dealers. If a manufacturer doesn't have any independent dealers, the law probably doesn't apply. The dealers are trying to stretch the law by arguing that the manufacturer is unfairly competing with their dealership, but that may not work.

California prohibits a manufacturer from opening a company store within 10 miles of a dealer, so Tesla has no problem there.

Interesting. (1)

dtmancom (925636) | about 2 years ago | (#41943729)

I never thought of the dealer as an unnecessary middleman before... and at the same time I learn they are protected by law.

Is it possible to order a car directly from a manufacturer, and skip the dealer markup completely?
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