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Tesla Faces Tough Regulatory Hurdle From State Dealership Laws

timothy posted about a year ago | from the those-darn-monopolists-at-the-statehouse dept.

Government 309

First time accepted submitter vinnyjames writes "States like Arizona, Texas, Massachusetts and North Carolina either have or have recently added legislation to prevent Tesla from selling its cars directly to consumers. Now there's a petition on whitehouse.gov to allow them to sell cars directly to consumers." Laws that protect auto dealerships aren't newly created for Tesla, though, as explained in this interview with Duke University's Mike Munger.

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Fags (-1)

Anonymous Coward | about a year ago | (#44127481)

Fags

Middlemen: the official plague of the modern age (5, Insightful)

Anonymous Coward | about a year ago | (#44127487)

I think we've just figured out what the next big thing is. Mercantilism should have disappeared centuries ago.

Re:Middlemen: the official plague of the modern ag (5, Insightful)

peragrin (659227) | about a year ago | (#44127797)

Three things,

Middlemen don't like being cut out. those that try find themselves cut.

Manufacturers, factories, etc don't want the headaches of dealing with uniformed idiots. Ever work a computer Hell desk? yea that has been going on for as long as we have had machines. The average person is barely above being an idiot and half the population is dumber than they are. I have explained the same thing to the same person 30 times in the last 3 months she still doesn't get it. She can't open her mind up to possibilities other than what she already knows.

Lastly, Middlemen provide slack, and options for the supply chain. In today's tight supply chains they are even more important than ever. As if the factory doesn't have your part your stuck unless your lucky enough to have a middleman with extra.

Re:Middlemen: the official plague of the modern ag (5, Insightful)

ShanghaiBill (739463) | about a year ago | (#44127909)

Manufacturers, factories, etc don't want the headaches of dealing with uniformed idiots.

If manufacturers don't want to deal directly, they why do we need laws prohibiting them from doing so?

Middlemen provide slack, and options for the supply chain.

If middlemen really added value, then customers would be willing to pay for that value, without government coercion.

Re:Middlemen: the official plague of the modern ag (1, Redundant)

quintus_horatius (1119995) | about a year ago | (#44128001)

See #1: middlemen don't like being cut out.

Re:Middlemen: the official plague of the modern ag (5, Interesting)

Shavano (2541114) | about a year ago | (#44128067)

The manufacturers of other cars have to sell through dealers because of these laws, and they don't want Tesla to have an advantage, and the existing dealers want a chance to become dealers for Tesla so they can get a share of that action.

Re:Middlemen: the official plague of the modern ag (4, Insightful)

drinkypoo (153816) | about a year ago | (#44128179)

If middlemen really added value, then customers would be willing to pay for that value, without government coercion.

Well, there are middlemen that add value, but they're not typical auto dealerships. They're facilitators that help you locate the car you're looking for. Many of them have agreements with dealerships that will get you the best price or near it without having to dicker, and you only pay a [relatively] small commission to the "dealer" that you're actually dealing with. This only really makes sense when buying a fairly new vehicle, otherwise the commission can be disproportionate. Of course, their value would fall without this sort of protectionist nonsense.

Re:Middlemen: the official plague of the modern ag (5, Insightful)

jxander (2605655) | about a year ago | (#44127995)

So, why not allow the option of middlemen, and the option of direct sales. If what you say is true then middle men will foster a better experience, capitalism will prevail, and companies dependent on direct sales will falter.

Right?

Re:Middlemen: the official plague of the modern ag (-1)

Anonymous Coward | about a year ago | (#44128083)

I have realized that anyone espousing a ideal are only in it as long as it benefits them. They really don't care about the point they are making, but the ends they are defending.

Re:Middlemen: the official plague of the modern ag (5, Funny)

Sponge Bath (413667) | about a year ago | (#44128099)

The average person is barely above being an idiot...

I admire your optimism.

Now there's a petition on whitehouse.gov... (3, Interesting)

Raistlin77 (754120) | about a year ago | (#44127491)

Now? The petition has been up since June 5th. I guess this is a last ditch effort to get signatures as it's over 44K short.

Re:Now there's a petition on whitehouse.gov... (1)

Raistlin77 (754120) | about a year ago | (#44127511)

Typo... 74K short. Although now it's only 72K short, seems it's working...

Re:Now there's a petition on whitehouse.gov... (4, Insightful)

ackthpt (218170) | about a year ago | (#44127855)

Typo... 74K short. Although now it's only 72K short, seems it's working...

If there's one thing business can't stand it's competition - given that the Big 3 conspired to kill the Tucker, you have some idea where the original legislation found its roots and monetary $upport (when it came to buying votes to pass the original bill). Every business would love to be a monopoly, barring that, they settle for an oligarchy.

Re:Now there's a petition on whitehouse.gov... (3, Insightful)

multimediavt (965608) | about a year ago | (#44128327)

Please Mod the parent up. He's the only one that got the Tucker reference to where the laws originally came from.

Laws that protect auto dealerships aren't newly created for Tesla, though ...

Nope, a lot of them were created to kill Tucker in the late-1940s. Luckily, Elon has a few other hits to back him up so even if the automotive industry quashes Tesla's dreams he's still got rockets and Paypal.

Re:Now there's a petition on whitehouse.gov... (-1, Offtopic)

KiloByte (825081) | about a year ago | (#44127959)

Here [whitehouse.gov] you have another worthy petition with too few signatures. Because Nixon.

Re:Now there's a petition on whitehouse.gov... (2)

Nethemas the Great (909900) | about a year ago | (#44127557)

It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.

Re:Now there's a petition on whitehouse.gov... (4, Insightful)

fuzzyfuzzyfungus (1223518) | about a year ago | (#44127603)

It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.

I'd be the first to agree that the feds(the executive branch, no less, get your fucking civics in order, people...) are the wrong place to go; but I'd bet a nontrivial amount of money that the Interestate Commerce Clause is 'elastic' enough to handle this one, if Congress felt like it.

It would be bad form, and strikes me as unlikely to happen; but I suspect that if the feds felt like trying, they'd probably get jurisdiction.

Re:Now there's a petition on whitehouse.gov... (5, Insightful)

michaelmalak (91262) | about a year ago | (#44127697)

I'd bet a nontrivial amount of money that the Interestate Commerce Clause is 'elastic' enough to handle this one, if Congress felt like it

If a federal judge can strike down [nytimes.com] Virginia's ban on out-of-state trash processors shipping their trash to Virginia landfills, striking down barriers to Tesla selling direct to consumers across state lines seems like a no brainer to me. And I'm a states rights advocate.

Re:Now there's a petition on whitehouse.gov... (2)

ackthpt (218170) | about a year ago | (#44127907)

I'd bet a nontrivial amount of money that the Interestate Commerce Clause is 'elastic' enough to handle this one, if Congress felt like it

If a federal judge can strike down [nytimes.com] Virginia's ban on out-of-state trash processors shipping their trash to Virginia landfills, striking down barriers to Tesla selling direct to consumers across state lines seems like a no brainer to me. And I'm a states rights advocate.

And this post winds a kewpie doll. If I had mod points you'd get a bright and shiny one for understanding this and stating it clearly. A federal court should be able to throw out a law which was cynical enough to be designed to protect dealerships. Smacks of the 'Old Boy Network', doesn't it?

Re:Now there's a petition on whitehouse.gov... (1)

msauve (701917) | about a year ago | (#44127991)

"And this post winds a kewpie doll."

WTF is that suppose to mean? Kewpie dolls weren't mechanical. If anything, it might mean something akin to "pissing against the wind."

Re:Now there's a petition on whitehouse.gov... (4, Insightful)

Kell Bengal (711123) | about a year ago | (#44128485)

I think it's a typo for 'wins a kewpie doll'. Kewpie dolls are often given away as prizes at games of skill and chance at fairs and carnivals.

Re:Now there's a petition on whitehouse.gov... (4, Insightful)

Arker (91948) | about a year ago | (#44128063)

For all the times that we see the interstate commerce clause treated as a blank check for federal power, this is one time when it would actually be appropriate. Preventing one state from erecting barriers to trade with another is exactly what that clause had in mind.

Guess Washington is too busy regulating everything else they can see to even notice when an opportunity to wield power constitutionally comes along.

Re:Now there's a petition on whitehouse.gov... (5, Insightful)

drinkypoo (153816) | about a year ago | (#44128155)

I really don't see how anyone can perceive this as stretching the ICC. This is precisely the kind of thing it is actually for! States are erecting unconstitutional barriers to trade of goods from other states, that's exactly when congress should invoke the ICC.

Re:Now there's a petition on whitehouse.gov... (1)

OverlordQ (264228) | about a year ago | (#44127621)

> It doesn't really matter since the federal government doesn't have jurisdiction anyway.

Ahahahahahah, they've invoke the Commerce Clause for less.

Re:Now there's a petition on whitehouse.gov... (4, Insightful)

aztracker1 (702135) | about a year ago | (#44127793)

Actually, this is probably a much better interpretation that would actually *FIT* under the interstate commerce clause than most other permissions extended since the 1830's

Re:Now there's a petition on whitehouse.gov... (2)

msauve (701917) | about a year ago | (#44127687)

"It doesn't really matter since the federal government doesn't have jurisdiction anyway."

Because selling cars manufactured in another state isn't interstate commerce? Hell, growing your own vegetables for your own consumption has been ruled to be interstate commerce.

Re:Now there's a petition on whitehouse.gov... (1)

Shadow99_1 (86250) | about a year ago | (#44127689)

Well using the all mighty interstate commerce clause, this could be considered a federal matter as it bans a company from one state selling in another. I mean one group in one state selling to people in another is sort of the root of 'interstate commerce'.

I believe this is why saturn has no dealerships in my state, but they do in Ohio (next door). Though I've never actually heard that we have such a law in place.

Re:Now there's a petition on whitehouse.gov... (2)

Lunix Nutcase (1092239) | about a year ago | (#44127707)

Except that the Supreme Court has ruled otherwise such as Exxon Corp v. Maryland [wikipedia.org] .

Re:Now there's a petition on whitehouse.gov... (1)

msauve (701917) | about a year ago | (#44127749)

You're under the mistaken assumption that SC rulings follow any sort of logic. They can say "red is green," and it's the law. And they have.

Re:Now there's a petition on whitehouse.gov... (2)

ravenshrike (808508) | about a year ago | (#44127931)

Except that the ban on shipping cars direct to customers would apply to both Tesla, as well as out of state car dealerships if for some bizarre reason you bought a car from said dealership and wanted it shipped to you. Operating a dealership also adds a large surcharge on the item in question. As such, it violates 3 and 4 of the majority holding.

Re:Now there's a petition on whitehouse.gov... (4, Informative)

lgw (121541) | about a year ago | (#44128123)

As someone who has actually bought a car from an out-of-state dealership and had it sent to me, I can say that not only is it legal, but that states have special forms of registration just for this purpose (I still paid registration fees in the state the car was shipped from, but they were very small and accompanied by a warning that'd I'd owe a fine if I tried to register the car in that state within a year).

Re:Now there's a petition on whitehouse.gov... (2, Interesting)

Anonymous Coward | about a year ago | (#44127717)

It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.

Well...a petition to the White House is ridiculous. However, I can see you'd be able to challenge the law in a Federal Court. Tesla manufactures its cars in California, and when I buy one online, I'm buying it from California, where it's a perfectly legal sale. Then they're delivering the car, which is already mine and fully paid for, to me in NC. Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in. That's definitely in the federal government's court.

Now the Texas law that is just trying to prohibit non-dealerships from giving test drives in the state is another story. They're not stopping the sale there, just making it more difficult for you to decide if you want the car.

Re:Now there's a petition on whitehouse.gov... (2)

khallow (566160) | about a year ago | (#44127989)

Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in.

I think this alone would be enough to overturn such state laws in federal court. One doesn't need the other branches of the federal government to interfere.

Re:Now there's a petition on whitehouse.gov... (0)

Anonymous Coward | about a year ago | (#44127753)

It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.

Funny you bring up blue laws. Texas law says dealerships can only be open one day on the weekend. Most choose to be open on Saturday, so you basically can't shop for a car on Sunday.

Re:Now there's a petition on whitehouse.gov... (1, Insightful)

StopKoolaidPoliticsT (1010439) | about a year ago | (#44127829)

Regulation is good when it forces other people to do what I want/support... Regulation is bad when it lets other people force me to do things I don't want/support.

I do love the hypocrisy of Slashdot.

Re:Now there's a petition on whitehouse.gov... (0)

Raistlin77 (754120) | about a year ago | (#44127945)

Regulation is good when it forces other people to do what I want/support... Regulation is bad when it lets other people force me to do things I don't want/support.

I do love the hypocrisy of Slashdot.

Indeed. It scores right up there with off-topic replies.

Re:Now there's a petition on whitehouse.gov... (1)

drinkypoo (153816) | about a year ago | (#44128389)

Regulation is good when it forces other people to do what I want/support... Regulation is bad when it lets other people force me to do things I don't want/support.

I do love the hypocrisy of Slashdot.

So just to be clear, you believe it would be hypocritical to oppose regulation permitting slavery, but support regulation requiring safety inspections before using a public road?

Re:Now there's a petition on whitehouse.gov... (0)

khallow (566160) | about a year ago | (#44128047)

I do love the hypocrisy of Slashdot.

You do seem quite at home with hypocrisy. But I would point out that there's nothing hypocritical in supporting regulation that does things you want and not supporting regulation that does things you don't want.

For example, supporting regulation of the practice of jaywalking doesn't mean that you are being a hypocrite by not supporting regulations that mandate the murder of six million Jews.

Re: Now there's a petition on whitehouse.gov... (0)

Anonymous Coward | about a year ago | (#44128245)

Really? You had to Godwin a Tesla article? I wish there was a car analogy for this but I'm in North Carolina and my car analogy dealership closed 20 minutes ago.

Re: Now there's a petition on whitehouse.gov... (1)

khallow (566160) | about a year ago | (#44128409)

Really? You had to Godwin a Tesla article?

No. I did not have to.

Re:Now there's a petition on whitehouse.gov... (2)

hawguy (1600213) | about a year ago | (#44128077)

Regulation is good when it forces other people to do what I want/support... Regulation is bad when it lets other people force me to do things I don't want/support.

I do love the hypocrisy of Slashdot.

I've found that in general, slashdot users tend to support regulation that leads to more freedom, and are against regulation that suppresses freedom especially when it comes to the rights of companies to impose their will on individuals. For example: supporting reform of the patent system to stop patent trolls, being against regulation that supports DRM or limits the ability of consumers to use content they own, being for regulation to enforce net neutrality, being for regulation that prevents a state from restricting where people can buy a car, etc.

Is that really being hypocritical [techdirt.com] ?

Re:Now there's a petition on whitehouse.gov... (0)

Anonymous Coward | about a year ago | (#44128189)

Where is the /. user that supports the Citizens United Supreme Court ruling?
Before the ruling, I as an individual was not allowed by buy a TV ad for my favorite politician within 90 days of an election.
After the ruling I can.

I have seen nothing but hatred for that ruling, which increased freedom, here on /.

Truth - If the regulation oppresses those against government it is good here, period.

Re:Now there's a petition on whitehouse.gov... (1)

hawguy (1600213) | about a year ago | (#44128249)

Where is the /. user that supports the Citizens United Supreme Court ruling?
Before the ruling, I as an individual was not allowed by buy a TV ad for my favorite politician within 90 days of an election.
After the ruling I can.

I have seen nothing but hatred for that ruling, which increased freedom, here on /.

Truth - If the regulation oppresses those against government it is good here, period.

Can you post a link to the Slashdot story that discussed the ruling?

Re:Now there's a petition on whitehouse.gov... (1)

khallow (566160) | about a year ago | (#44128491)

Here [slashdot.org] . Note the number of people bewailing the end of democracy. Since I've seen a number of anti-business types who whine about corporate personhood as a result of this ruling. They just can't seem to grok (or perhaps just don't care about) the unconstitutional nature of the law which was overturned.

Re:Now there's a petition on whitehouse.gov... (1)

jedidiah (1196) | about a year ago | (#44128479)

"Citizens United" doesn't sound like a person. It sounds like a corporation. The idea that a limited liability entity should also have limited rights is by no means hypocritical.

Your personal fantasy is a red herring.

Re:Now there's a petition on whitehouse.gov... (1)

timeOday (582209) | about a year ago | (#44128433)

Wow, if you're going to be that simplistic, then you are a hypocrite for believing simultaneously that "people are hypocrites" and "people are not hypocrites." I mean, it would be outright hypocritical to divide people into groups and judge them based on their individual merits, wouldn't it?

Re:Now there's a petition on whitehouse.gov... (1)

Shavano (2541114) | about a year ago | (#44128075)

I think he's going to say it's not Congress's business what restrictions a state puts on their sales outlets.

Duke University? (-1)

Anonymous Coward | about a year ago | (#44127495)

Duke sucks!

-- a farker

Protectionism... (3, Insightful)

ackthpt (218170) | about a year ago | (#44127513)

I've seen your face before .. back when Michigan fought Japan through legislation in Washington DC. How have you been? I see you are on the rise again as people pretend you're their last, best hope.

Re:Protectionism... (0)

Anonymous Coward | about a year ago | (#44127549)

You mean back when independent dealers didn't want manufacturers undercutting their prices in the 1930's, right? Because that's how far back this goes.

Re: Protectionism... (0)

Anonymous Coward | about a year ago | (#44127819)

Translation: back when middlemen wanted to keep ripping off customers.

Re: Protectionism... (1)

Rockoon (1252108) | about a year ago | (#44128511)

It wasnt to protect the middle men...

..but it protected the middle men.

This was about preventing new players from cheaply entering the market.

Except, Tesla won in NC (4, Informative)

MoFoQ (584566) | about a year ago | (#44127539)

Tesla victory in NC [engadget.com]

go figure...once they go on test drive....they love it.

Federal Case (1)

meldex (1255142) | about a year ago | (#44127561)

Seems like these States are trying to invoke the Federal power to regulate interstate trade. That's a no no.

Re:Federal Case (1)

Rob the Bold (788862) | about a year ago | (#44127635)

Seems like these States are trying to invoke the Federal power to regulate interstate trade. That's a no no.

Some states still do it for liquor and other alcoholic beverages. The Feds have pretty much left them alone to do as they please since at least Prohibition. I don't know if it's Federal indifference towards alcohol or Constitutional issues at work.

Re:Federal Case (1)

Todd Knarr (15451) | about a year ago | (#44127655)

I think the logic there is that sales over the counter aren't interstate commerce, so they're open to state regulation. Mail-order direct to consumers would be interstate and a Federal matter.

Of course that's the opposite of what the Feds claim when it comes to a lot of other regulation, where anything that crossed a state line at any point or involved any party in another state, no matter how peripherally, is "interstate commerce", but nobody said the government had to be consistent...

Re:Federal Case (1)

reub2000 (705806) | about a year ago | (#44127771)

21st amendment basically gives the states unlimited power when regulating alcohol.

Re:Federal Case (0)

Anonymous Coward | about a year ago | (#44127657)

Nope, case law has upheld laws such as these. One such case is Exxon Corp. v. Maryland where the Court stated both:

The fact that the burden of a state regulation falls on some interstate companies does not, by itself establish a claim of discrimination against interstate commerce,

and

Clause protects interstate market, not particular interstate firms, from prohibitive or burdensome regulations.

Wait (0)

The Cat (19816) | about a year ago | (#44127591)

Isn't this protectionism? Oh wait that only applies if an American isn't being fired. When Americans get fired, then it's capitalism.

Re:Wait (0)

Anonymous Coward | about a year ago | (#44127737)

Reminds me of a posting on the snowden conversation the other day.

The question was "Name a country with more freedom then the USA".

I guess the freedom start a company and sell your product without a middleman isn't covered?

Re:Wait (0)

The Cat (19816) | about a year ago | (#44127799)

You can start a company. You can sell a product. And the Chinese company (subsidized by a government -controlled manipulated currency) will sell your product for 30% less.

How long do you think you'll be in business, considering the United States government will side with the Chinese if you complain?

Re:Wait (0)

Anonymous Coward | about a year ago | (#44128311)

Can you enlighten me to the difference between the Chinese manipulating their currency, and the three rounds of "Quantitative Easing" the US has been doing for the past few years?

http://en.wikipedia.org/wiki/Quantitative_easing

One of the "economic impacts" they list is :
Increasing the money supply tends to depreciate a country's exchange rates versus other currencies. This feature of QE directly benefits exporters residing in the country performing QE and also debtors whose debts are denominated in that currency, for as the currency devalues so does the debt. However, it directly harms creditors and holders of the currency as the real value of their holdings decrease. Devaluation of a currency also directly harms importers as the cost of imported goods is inflated by the devaluation of the currency.

This seems to be an act of "currency manipulation" or have i missed something?

rich car buyers vs rich dealership owners (1)

doug141 (863552) | about a year ago | (#44127609)

Interesting that his spawned a grassroots We The People petition. I don't see how most people have a horse in this race right now.

Re:rich car buyers vs rich dealership owners (5, Insightful)

NoNonAlphaCharsHere (2201864) | about a year ago | (#44127627)

There are two kinds of people in my town: those who work at car dealerships, and those who would rather go to the dentist than shop for a new car.

Re:rich car buyers vs rich dealership owners (1)

Anonymous Coward | about a year ago | (#44128211)

There are two kinds of people in my town: those who work at car dealerships, and those who would rather go to the dentist than shop for a new car.

What about dentists?

Re:rich car buyers vs rich dealership owners (0)

Anonymous Coward | about a year ago | (#44128339)

They don't do their own teeth.

Re:rich car buyers vs rich dealership owners (1)

anagama (611277) | about a year ago | (#44128499)

Count me in the latter group (except I kinda like going to the dentist) -- you're typically way better off getting a newish used car off Craigslist where someone else has paid the "I drove it off the lot instantaneous depreciation" cost. All you pay for is the car that way.

Re:rich car buyers vs rich dealership owners (4, Insightful)

amicusNYCL (1538833) | about a year ago | (#44127663)

There are plenty of people who would like to purchase a Tesla if they had the means, and Tesla has lower-priced cars on their roadmap. Just because this wouldn't affect someone right now doesn't mean they shouldn't support it for when they need it. It's the "first they came for X, but I said nothing" scenario. Just because you're driving a gas car now doesn't mean you shouldn't support Tesla or any other EV maker. I'm sure the various auto dealer associations would love to get a bunch of laws passed in their favor before Tesla releases their lower-priced models in a few years. If you don't want to see that happen, then now is the time to speak up.

Everybody has a horse in this race. (3, Insightful)

techno-vampire (666512) | about a year ago | (#44127773)

Just because I'm not interested in buying an electric car (and don't live in one of the states affected by this) doesn't mean that I don't have a horse in this race. What's at stake here is the ability of ordinary people to buy whatever brand they want even if the only way they can do so is by going directly to the manufacturer. Being required to go through a dealership is a form of restraint of trade, and when the merchandise comes from another state, that makes it interstate commerce. Everybody who's concerned with the rate at which the current administration is eroding our rights has a horse in this race, not just those who want to buy a Tesla car.

Re:Everybody has a horse in this race. (1)

Anonymous Coward | about a year ago | (#44128191)

You also can't list your house on MLS unless you go through a Realtor. If you live in Illinois, you can't have wine shipped from a winery outside the state of Illinois unless that winery has a business presence in Illinois. There are thousands of stupid restrictions like this on the books, all because money makes the rules, not people.

I'd say your racehorse was shipped to the glue factory a long time ago. The US is pretty much an oligarchy at this point, and it started long before Obama.

Re:rich car buyers vs rich dealership owners (1)

drinkypoo (153816) | about a year ago | (#44128167)

I don't see how most people have a horse in this race right now.

Everyone who is paying attention has a horse in this race. Unless you support the notion that states should promote unconstitutional restraint of interstate trade as well as economic protectionism which harms consumers, you should oppose laws which require cars to be sold through dealerships.

Impossible! (5, Funny)

sphealey (2855) | about a year ago | (#44127693)

Impossible! North Carolina and Arizona, at least, are libertarian paradises - very "business friendly" - that would _never_ pass legislation interfering with markets or freedom to contract. Never! There must be some misunderstanding.

sPh

Re:Impossible! (0)

Anonymous Coward | about a year ago | (#44127857)

Impossible! North Carolina and Arizona, at least, are libertarian paradises - very "business friendly" - that would _never_ pass legislation interfering with markets or freedom to contract. Never! There must be some misunderstanding.

Ha! Yeah, I remember watching Cindy McCain talk about building her alcohol distributing empire in Arizona as an example of what can happen if you keep government out of the way. Arizona is a three-tiered [wikipedia.org] state. There wouldn't be a Hensley & Co without government regulation forcing people to use a middleman.

Repeat ad nostrum. (1)

Impy the Impiuos Imp (442658) | about a year ago | (#44127703)

How many outraged would have cheered this legislation as originally applied to the Big 3?

(Some hot air about competition to the cheers of useful idiots) and therefore they can't (and politicians' pockets get lined by a different faction.)

How many yelping now about "this is not what America is about!!!" will forget that the next issue that comes around when some politician (blows hot seductive air to useful idiots who cheer wildly) and does the un-American, un-Freedom economic thing (and gets his pockets lined?)

Re:Repeat ad nostrum. (5, Insightful)

White Flame (1074973) | about a year ago | (#44128041)

And where was the political outrage towards Apple when they opened their own stores, for causing "unfair" competition with the other retailers?

(Obligatory computer analogy in this car thread.)

Re:Repeat ad nostrum. (3, Informative)

tlambert (566799) | about a year ago | (#44128437)

And where was the political outrage towards Apple when they opened their own stores, for causing "unfair" competition with the other retailers?

(Obligatory computer analogy in this car thread.)

There were tons of complaints by tons of people; they were unable to buy the laws because the resellers were not franchisees. Here's a short list of pissed off people:

All U.S.: http://www.sfgate.com/business/article/Apple-dealers-biting-back-Mac-sellers-say-2636871.php [sfgate.com]
Australia: http://www.macworld.com/article/1027780/australia.html [macworld.com]
France: http://www.padgadget.com/2011/12/30/apple-reseller-sues-apple-in-france/ [padgadget.com]
Portugal: http://appadvice.com/appnn/2012/07/portuguese-reseller-interlog-fails-sues-apple-for-hefty-sum [appadvice.com]
LA and Boston: http://appleinsider.com/articles/11/02/22/apple_repair_consultants_upset_over_changes_to_apple_retail_referral_policy [appleinsider.com]

The current Apple pissing contest is over the changes to the repair referral channel. They're going to lose to Apple's wishes there, too, since what Apple sells is a holistic customer experience rather than selling only consumer devices.

Re:Repeat ad nostrum. (0)

Anonymous Coward | about a year ago | (#44128451)

Thing is, Apple *is* the middleman in that market. They don`t make computers. Foxconn makes them and the Apple dealerships sell and maintain those computers.

So why can`t Tesla restructure into separate companies, one to manufacture and one to sell/distribute. They would have to do that anyway to break into the European market where everything is sold by companies incorporated in Ireland or Luxembourg for tax reasons.

Re:Repeat ad nostrum. (1)

jedidiah (1196) | about a year ago | (#44128497)

The very name "Big 3" implies that they deserve special scrutiny under the Sherman Anti-Trust act.

So they are a p*sspoor example. Conflating Ford with Tucker is pretty dishonest.

There Some Reason (2)

Greyfox (87712) | about a year ago | (#44127731)

Tesla can't sell them directly to consumers on their web page? Since that'd be interstate commerce and all, and states can't regulate that...

If they want to be really cool about it, they could have someplace you could deposit $50000 worth of bitcoins and have the car delivered directly to your doorstep.

Re:There Some Reason (0)

Anonymous Coward | about a year ago | (#44128449)

Tesla can't sell them directly to consumers on their web page? Since that'd be interstate commerce and all, and states can't regulate that...

If they want to be really cool about it, they could have someplace you could deposit $50000 worth of bitcoins and have the car delivered directly to your doorstep.

They do - you can buy it from their webpage. You just can't take delivery of it in certain states.

U$A (-1)

Anonymous Coward | about a year ago | (#44127735)

the most pathetic country in the world... lobby should be written over they flag... next to oil, eagle and burger...

Re:U$A (-1)

Anonymous Coward | about a year ago | (#44127975)

You are an American teenager. Everyone can tell.

Why does this law exist? (1)

ImdatS (958642) | about a year ago | (#44127925)

I'm sorry, this may sound stupid, but can anyone point me to directions where I can find something about WHY this is the case? I.e. why is it forbidden for car manufacturers in the US to sell cars directly to consumers?

I'm not native, so I don't know and it sounds outlandish for. The TFA has a link but the text there is awful to read, so any help really appreciated.

Thanks
a former European

Re:Why does this law exist? (3, Informative)

Spy Handler (822350) | about a year ago | (#44128037)

It's not forbidden in the U.S. by the national (federal) government. Some local (state) governments do forbid it to protect a class of people called "car dealers".

Why you ask? Same reason the British forbid Indians from making their own salt: to protect the profits of a certain group. It's not unique to the U.S., I'm sure it happens all over the world. Is it fair? No it isn't.

Re:Why does this law exist? (3, Interesting)

ImdatS (958642) | about a year ago | (#44128153)

Thanks for the answer.

I probably was not accurate enough in my question. Question was rather "how this happened and still happens..."

Now, a little search provides a really good link I found: http://www.justice.gov/atr/public/eag/246374.htm [justice.gov]

I thought there was a real reason historically but it just seems that car dealers effectively lobbied their state governments to introduce these "Franchise Laws" after they were established. And it was in order to "... protect their investment in real estate and showrooms, etc..." - So, as you said, the traditional protectionist malaise as everywhere (reminds me of the stupid solar industry in Europe which actually managed to convince the EU Commission to introduce tariffs on Chinese solar panels... up to 67% ... now the Chinese are striking back with tariffs on European products *sigh* - will this never end?)

Re:Why does this law exist? (2)

YrWrstNtmr (564987) | about a year ago | (#44128319)

I thought there was a real reason historically but it just seems that car dealers effectively lobbied their state governments to introduce these "Franchise Laws" after they were established

Because then, as now, car dealers are businessmen. And hang out with the lawmakers.
Or are actual lawmakers themselves. Like Scott Rigell in Virginia. Who owns Freedom Ford. Do you really think he would craft laws that challenge the car dealer status quo? Not likely.

Re:Why does this law exist? (2)

Smauler (915644) | about a year ago | (#44128295)

I'm really confused by this... Europe is constantly being lambasted by some in America about the consumer protection laws restricting free capitalism. These kind of laws seem the antithesis of free capitalism - they're designed to keep the local rich rich. I don't see their purpose, at all.

This kind of law wouldn't last 5 minutes in the UK, let alone the rest of Europe. The salt tax on India is getting on for a century since it was repealed, prior to independence.

Rentseeking (4, Informative)

cervesaebraciator (2352888) | about a year ago | (#44128141)

There once was a reason for laws such as this to exist on the local level. Whether one thinks it a good reason, I leave to the individual judgement. Here's an excerpt from an article [theamerica...vative.com] that explains succinctly:

While auto-dealership laws go back to the ’20s and ’30s, the dealers’ nationwide legal grip on selling cars was established by state legislatures in the postwar era out of concern that the Big Three would establish networks of their own dealers. It was a time haunted by bigness, as Americans stared at the giant corporations that had swelled to dominate the economic landscape and feared that consumers would soon become subject to whatever whims the companies cared to impose on them. Smaller businesses feared General Motors, General Electric, and the rest of corporate America for the same reason those companies could promise a lifetime of employment followed by a generous pension: they seemed immortal. As Kenneth Elzinga of UVA explained recently at an ISI Faculty Seminar, there was a palpable fear that big companies would slash their prices below cost until all their smaller competitors were driven out, and then, having the market to themselves, they would dramatically raise prices.

For the auto industry this was particularly feared, as 1950s cars were, compared to today, terribly unreliable. The state antitrust laws that prohibited manufacturers from selling direct also set limits on entry and exit in order to ensure that a car company could not decide a region to be undesirable and just pull up stakes, leaving the customers they had sold long-term products to without a source of spare parts or service. Legislators feared that allowing manufacturers to set up their own dealerships would make the communities subject to the whims of the latest Detroit strategy document, so they sought to break up the process. With independent dealers, states hoped to insulate themselves from concentrated corporate power and force it to serve their communities if it wanted to sell to them.

Thus the laws were originally intended to protect consumers on the local level. Now, especially in the face of subversive business models like Tesla's, matters have changed. Local dealers are in closer league with manufacturers, the latter often even providing financing for purchases [wikipedia.org] . The arrangement is mutually beneficial: manufacturers can prevent upstarts like Tesla from getting a foothold in the market; dealers, acting as middle-men, can reap the rich benefits of rentseeking [wikipedia.org] through powerful lobbies targeted toward state governments. N.b., however, this arrangement does not prevail in all states.

Re:Rentseeking (2)

ImdatS (958642) | about a year ago | (#44128205)

Thank you very much for this great explanation. Now I understand.

So, in fact, what is happening now is exactly what these laws were meant to prevent - e.g. with regards to Tesla Motors. I have experienced these unwanted side effects every time any government tried to regulate an industry with very specific laws with the intent of protecting one group of people from another... be it consumers against Big Business or one side of business against another.

Thanks again, this helped me understand the history of these laws - though they make even less sense now (though I understand the circumstances back in the 1940's & 1950's)

Re:Rentseeking (1)

cervesaebraciator (2352888) | about a year ago | (#44128289)

I also occurs to me to note that a similarly vestigial system also remains in place in the form of the three-tier system of alcohol distribution [wikipedia.org] . Major producers of alcoholic beverages cannot sell directly to retailers or to the public in the U.S. (brew pubs and the like excluded, and there are many other state-level exceptions). Rather producers sell to wholesale distributors who, in turn, are allowed to sell to retailers. I needn't add, I am sure, that this makes for many taxation opportunities and this may well be the chief reason the absurd old system continues.

In any case, if you've ever been to a grocery store in much of the U.S. you may notice an odd pattern to the beer aisle. The major brewery conglomerates will typically vary in order, but invariably their particular products remain in clusters. This is because in practice the breweries tend to stick with a single distributor and the distributors negotiate with the retailers for the best shelf-space. Likewise, smaller brews tend to be clustered together because they tend to work together with an amenable distributor to secure shelf-space. Frequently, however, you won't find that new microbrew on your grocery shelf at all because it takes time, money, and volume to work through the distributors and the microbrews aren't allowed to go straight to retailers to sell their products.

The lobbying efforts of groups like the Wine and Spirits Wholesalers of America [wikipedia.org] to protect this odd system are likewise a form of rentseeking.

Re:Rentseeking (1)

drinkypoo (153816) | about a year ago | (#44128407)

With independent dealers, states hoped to insulate themselves from concentrated corporate power and force it to serve their communities if it wanted to sell to them.

Of course, all of that is a lot of bullshit, because dealers were never actually independent. They still had to form relationships with manufacturers, and they couldn't just force the manufacturers to sell them cars for resale. Therefore the manufacturers still wound up tightly coupled to the dealerships. As time has gone by, more and more special-purpose, maker-specific tools have crept into use (you can work on cars from the fifties and sixties with pretty much only generic tools; try that on cars from the nineties or later, hahahaha!) especially including expensive scan tools only available to licensed dealerships without which it is all but impossible to maintain modern vehicles. After a few years, some rogue dealers work with reverse engineers to determine how these tools work so that some knockoff third-party tools can be made; otherwise, the automakers still have complete control over these necessities.

These laws never protected consumers, and they were never intended to do so.

So why not have Tesla dealers? (1)

Anonymous Coward | about a year ago | (#44127935)

Seems like rather than fight, Tesla could simply set up dealerships in those states. I'd imagine there are some dealers who would like to add Tesla to their portfolio.

Re:So why not have Tesla dealers? (3, Interesting)

ImdatS (958642) | about a year ago | (#44127983)

From what I understand, Elon Musk wants to control the Purchase Experience as close as Apple does with their computers.

Remember the time before Apple Stores? When you went into a computer store to buy a Mac, the sales guys would try to sell you anything else but not a Mac. Because it was so much easier for them.

With the Apple Store, that all changed and the purchase experienced is fully managed by Apple.

Elon Musk, being an adherent of Steve Jobs' approach, also wants to display his products in the best possible way and he believes that only sales people who exclusively sell Tesla cars (i.e. stores that only sell Tesla cars) can sell it right and that these people should then be also employed by Tesla Motors.

I get that and if I was him, I would do the same. This is really a crucial time for Tesla (and electric cars in general) and I wouldn't want any GM, Ford or Chrysler-sales person trying to sell my cars - next to all the other cars he has on display...

Re:So why not have Tesla dealers? (0)

Anonymous Coward | about a year ago | (#44128261)

Ever wonder what life was like before jobs? The darkness, the cold, the emptyness... Then jobs came, and the world was different.

C'mon, people have been concerned with the presentation of their product for YEARS.

You deal with this on a daily basis when you walk into an office and an attractive friendly person greats you....

Re:So why not have Tesla dealers? (1)

recoiledsnake (879048) | about a year ago | (#44128483)

Elon Musk, being an adherent of Steve Jobs' approach, also wants to display his products in the best possible way and he believes that only sales people who exclusively sell Tesla cars (i.e. stores that only sell Tesla cars) can sell it right and that these people should then be also employed by Tesla Motors.

I get that and if I was him, I would do the same. This is really a crucial time for Tesla (and electric cars in general) and I wouldn't want any GM, Ford or Chrysler-sales person trying to sell my cars - next to all the other cars he has on display...

Where is the dealership that sells different companies' cars in the same facility? All I see around are specialized dealerships that deal only in Toyota or Ford etc.

Re:So why not have Tesla dealers? (1)

osu-neko (2604) | about a year ago | (#44128163)

Seems like rather than fight, Tesla could simply set up dealerships in those states. I'd imagine there are some dealers who would like to add Tesla to their portfolio.

Ah, the old "just pay the bribe, it's easier that way and really isn't that expensive" mentality...

Relevant planet money story (2)

angrytuna (599871) | about a year ago | (#44127963)

Planet Money did a great piece [npr.org] on dealership laws awhile back, talking about a startup that wanted to sell cars directly, and how insurmountable the obstacles they faced ended up being.

Well connected crony (-1, Troll)

amightywind (691887) | about a year ago | (#44128089)

Surely such a well connected Obama crony as Elon Musk can call in a few favors are get around some pesky regulations. Now, if he only had a car that worked.

Dealerships make Liquidity (-1)

Anonymous Coward | about a year ago | (#44128109)

Dealerships generate Liquidity for the automotive market. If you don't understand Liquidity and Markets then your an idiot and shouldn't have an opinion. In fact, we plan to introduce HFAD (High Frequency Automotive Dealerships) where car brokers sell cars with federally recognized certifications, such as NASBRA (National Automotive Sellers and Brokers Regulatory Agency).

Where would the madness end? (0)

Anonymous Coward | about a year ago | (#44128471)

Up next, must have a dealership for that Starbucks you want, and that Apple or Dell computer you looked at. Dealers started as an easy method for the car manufacturers to finance production since they could ship every day and let the dealer hold excess inventory while consumers bought in inevitable surges (seasonality). Then the tail wags the dogs. Tesla only needs to sign up a company that is everywhere, like starbucks, to showroom their brochures or a brake shop chain for maintenance and call it a 'dealer network'. Or they create a new LLC with sufficient funds to build retail outlets (like Apple stores) and spin it off as its own company, shares on wall street, more cash.
 

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