Pub. 1 2012-2013 Issue 2

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S S U M M E R 2 0 1 2 2 3 new jersey auto retailer W W W . N J C A R . O R G new jersey auto retailer Chairman’s MESSAGE | BY WILLLIAM KUNDERT, JR. So-called “Right To Repair” legislation has been on and off the New Jersey State Legis- lature’s front burner more times than we can count over the past 5 years. Earlier this year, Right- to-Repair legislation was again introduced in the New Jersey As- sembly (A-4295) by Assemblyman Reed Gusciora (D-District 15). The legislation was referred to the Assembly Consumer Affairs Committee, which has not yet scheduled a hearing on the Bill. With the passage of Right-To-Repair legislation inMassachusetts earlier this summer, new political pressure will likely come to bear in New Jersey to pass some sort of legislation. While dealers, manufacturers and other stakeholders signed on to the compro- mise legislation in Massachusetts, the developments there could lead to movement on a more onerous proposal in New Jersey. The Massachusetts bill will allow independent repair shops in Massachusetts to have the same access to repair codes and tool- ing as franchise dealers, with heavy-duty trucks and construc- tion equipment exempted from the law. Manufacturers have until Model Year 2018 to agree to and comply with a universal interface standard. There is language in the Massachusetts law that protects dealer warranty and recall work under their franchise agreements and removes the prohibition on dealer vehicle sales if a manufacturer fails to comply with the law. There are a variety of other details in the Bill that soften the impact on dealership repair facilities, but ANY Right-to-Repair legislation will have a noticeable impact on New Jersey’s dealer- ship repair facilities. NJ CAR has long held that, while the legislationmay be named the “Motor Vehicle Owners’ Right to Repair Act,” it is nothing more than a power-grab that will solely benefit the manufacturers and sellers of knock-off parts. Consumers are NOT the beneficiaries of this proposed legislation, irregardless of the pleasant sounding title. New Jersey’s proposed Right-to-Repair legislation, in its latest form, would require manufacturers to give up detailed engineering specifications and calibration codes for the benefit of knock-off parts makers and big-box auto parts retailers. The legislation is supported by a broad coalition of aftermarket repair shops, non- original equipment parts manufacturers and big-box retailers of non-OEM parts. Supporters of this legislation claim that it is needed because independent repair shops cannot gain access to information that is necessary to complete repairs. This is blatantly FALSE! Every single one of us know that any of our independent repair shop competitors who are prepared to invest in the necessary tools, training, and special equipment already have access to readily- available online repair manuals. All the information necessary to meet their customers’ needs is already available to them. There is no reason to legislate such access. NJ CAR will continue tracking any movement in the New Jersey Legislature related to the Right-to-Repair issue and will keep our members informed if (or more likely, when) some form of this proposed legislation moves to the front burner again. Right-To-Repair Is Still Alive Déjà Vu All Over Again Decades ago, New Jersey passed a franchise law that requiredmanufacturers to pay retail on parts used in warranty repairs. Manufac- turers unilaterally decided “retail” was a 40% mark-up. Dealers knew better. But, until one dealer, Bob Robertazzi at Liberty Lincoln Mercury, decided he had enough, manufacturers just ignored the law. The landmark Liberty Lincoln Mercury case and a number of follow-up lawsuits stemming from that decision tell an all too familiar story in dealer-factory relations. Dealers pass laws to protect themselves—as franchisees—and their customers, and manufacturers ignore the law. Manufacturers know, regardless of what the law says, most dealers don’t want to pick a fight with the factory. Manufacturers have more lawyers, guns and money than any individual dealer. And franchisors have a thousand ways to inflict pain on non-compliant franchisees. So, here we are in New Jersey with new provisions under our Franchise Law that would outlaw stair-step programs and limit factory facility/image mandates. These laws are on the books. Manufacturers, for the most part, are ignor- ing the law; doing things exactly the same way they always have. Not surprising. We’ve read this book. We’ve seen this movie. We know exactly how it ends. Sooner or later, a dealer will get fed up with factory image or incentive pro- grams that violate State franchise rights. That dealer will threaten to sue. The manufacturer will bob and weave, claiming they don’t read the law the same way the dealer does or that their program is compli- ant, even if it is obvious that it is not. They will wait for a dealer to file suit and for a court of law to make them conform. The New Jersey State Legislature and Governor Christie wanted to help New Jersey dealers and unanimously approved revisions to the State franchise law that were intended to help strengthen dealerships and make them more profitable; to keep existing dealerships in place and to protect jobs and economic activity that dealerships pump into just about every community in the State. Unfair incentive programs and unreasonable facilities mandates will destroy dealerships and kill jobs in New Jersey. Fewer deal- erships means less competition and reduced access to qualified service facilities, especially for warranty repairs and safety recalls. That is bad for consumers and it will undermine highway safety. I’m afraid NJ CAR has a tiger by the tail right now. We were suc- cessful in passing a lawdesigned to protect dealers and themotoring public. And if dealers press the issue on stair-step or unreasonable facilities upgrades, certainmanufacturer programs could be struck down. What happens next and what the manufacturers replace them with is anyone’s guess. But, the one thing we know for sure, passing a law is just the beginning. Getting the manufacturers to comply with the law is a whole other story. President’s MESSAGE | BY JAMES B. APPLETON