Pub. 12 2013-2014 Issue 3

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 5 new jersey auto retailer W W W . N J C A R . O R G President’s MESSAGE | BY JAMES B. APPLETON Where You Stand Depends on Where You Sit Many dealers have received phone calls, personal visits and written communication frommanufacturers about NJ CAR-backed legislation intended to clarify and strengthen dealer franchise rights. Not surprisingly, manufacturers don’t like the bill. And, also not surprisingly, somemanufac- turers are trying to convince dealers that they have your best interests at heart, not NJ CAR. Reasonable people can disagree about the best way to protect and advance dealer rights under thelaw. Butknowthis: noautomakerisreaching out to any dealer because a bill under consider- ation in Trenton is bad for the dealer. They are reaching out to you because the bill strengthens dealer rights, improves andprotects the value of yourfranchiseandmakesitmoredifficultforthe manufacturer to dictate every last detail of how you retail cars inNew Jersey. A respected team of dealer lawyers and a com- mittee of NJ CAR dealer-members have been meeting for the past year to look at the New Jersey Franchise Practices Act and to develop a series of amendments to clarify and reinforce certain provisions of that law in order to: • Protect the transferability of motor vehicle dealerships and the ability for business owners to negotiate the sale of the business without interference frommanufacturers; • Prevent manufacturers from unilaterally and substantially diminishing the value of a dealership enterprise by entering into an agreement or other arrangement with a competing non-franchisee to sell, service or install parts, components or accessories or to perform warranty service on such parts, components or accessories; • Limit the manufacturer’s ability to impose on dealers unreasonable charge backs in connection with sales or warranty audits, or to attempt to recover from a new car dealer the manufacturer’s costs associated with the dealer’s performance of warranty service on behalf of consumers; • Promote the establishment and maintenance of a stable and secure network of independent franchisees operatingwithin a definedmarket area, which promotes investment in motor vehicle franchises and preserves healthy com- petition in the automotivemarketplace; and • Introduce a more effective enforcement tool to ensure that manufacturers obey the law in New Jersey and respect the franchise rights of local business owners by giving dealers who have been mistreated by their manufacturer the ability to recover treble damages. It’sthislastprovision—thetrebledamagesprovi- sion—thatreallyhastheautomakers’attention. NewJerseyhasoneofthetoughest,mostdealer- friendly franchise laws in the country. But there is just one problem: the manufacturers ignore the lawand it’s up to the dealers, individually, to sue theirmanufacturer if theyhaveacomplaint. Nodealerwants todo that and themanufactur- ers know it. And, even when a dealer does sue themanufacturer to get what they deserve or to force the manufacturer to give back something they never should have taken, the dealer gets madewhole,butthemanufacturerrisksnothing. Treble damages changes all of that. NJ CAR doesn’t go marching down to the State House looking to change the franchise law without a great deal of forethought and consultationwithdealers. Preserving thevalue of your franchise and ensuring a level playing field for newcar dealers is our number one pri- ority. The legislativeproposal that is embodied inS3085/A4562 represents theCoalition’s best thinking about how to protect and advance dealer rights in New Jersey. It was carefully considered by the Executive Committee and the Trustees and approved at our Boardmeet- ing on November 20, 2013. Having said all that, NJ CAR remains ready, willing and able to discuss the issues with manufacturers, legislators and dealers who want to learnmore andwho sincerelywant to work with us to strengthen and clarify dealer rights. The bills were introduced late in the 2012-2013 legislative session and have engen- dered a great deal of controversy and debate around the State House. NJ CAR is pressing to have the bills heard and passed before the end of the 2012-2013 legislative sessionwhich draws to a close January 14, 2014. If we’re successful, the bill will be presented to the Governor for his signature. If not, we start all over again on January 15th. Eitherway,NJCAR is fighting to improve the value of your franchise by strengthening and clarifying the rights of newcar dealers inNew Jersey. So, when your manufacturer comes calling on you, complaining that NJ CAR has pressed for a bill that will hurt your interests, ask yourself this question: when was the last time your manufacturer reached out to you because it was in your interest? You know one thing for certain: auto manufacturers will do what is in their best interests—not yours—100%of the time, every time, without fail...you can count on it!