Pub. 15 2016-2017 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 29 new jersey auto retailer W W W . N J C A R . O R G these international automakers produced almost 5.4 million vehicles in America, which accounted for 46 percent of all U.S. vehicle production. By manufacturing these cars in America’s backyard, international automakers and their dealers are able to provide vehicles to consumers at a more cost-effective price point. In addition to imported vehicles and those vehicles built in America, protectionism also hurts exported vehicles. Inter- national automakers are big U.S. exporters. In fact, 750,000 vehicles were exported from American factories operated by international automakers to 140 countries around the globe last year. After all, the U.S. currently has trade agreements with 20 countries that represent just ten percent of the world’s economy. But these countries buy nearly 50 percent of our exported goods. Trade agreements generate more favorable markets for U.S.-built goods. The trade rhetoric espoused by this year’s presidential candidates would undermine this. All of this investment by international automakers adds up to jobs for Americans—from the corporate and manufacturing level down to the local dealership. Last year, international automakers directly employed 126,500 Americans with a pay- roll of $9.9 billion. Many of these jobs were in high-skill areas, which historically provide better pay. Their dealers also have a staggering impact on the jobs front as 9,500 international nameplate dealer franchises—including hundreds of franchises in New Jersey—employed 570,000 Americans, resulting in a payroll of $32 billion. It’s clear the auto industry—including dealers—would be heavily impacted by the kind of changes in U.S. trade policy espoused by this year’s presidential candi- dates. But those invested in the auto industry should also take a broader economic view of the importance of trade to Americans. Without agreements like TPP and TTIP, Americans’ spending power will plunge by up to 62 percent and markets for the goods they produce will close. Without trade, Americans will have less money, fewer jobs, and less choice. Dealers should also note the enormous role trade plays in our national security. Without trade we have fewer allies in key areas like the Pacific region, and are demonstrably less safe. The facts are clear: trade matters to the auto industry and to dealers. If our presidential candidates make good on their threats to pull back from agreements like TTIP and TPP, regular Americans will suffer. This fall, as trade continues to be debated on the national stage, let’s ensure that our voices are heard. Share the points above with your employees, fellow dealers, and on social media. If this election hinges on trade, let’s make sure that, as representatives of the auto industry, we do everything in our power to come out of it with a pro-trade agenda in Washington, D.C. Cody Lusk is President of the American International Automobile Dealers As- sociation. (AIADA) He can be reached at 800.462.4232. investment of the dealer. The Pinnacle Program appears to be a modification to an “agreement,” and it is likely to “substantially” alter the rights, obligations, investment or return on investment of Cadillac dealers in New Jersey. The DSSA also limits the manufacturers’ authority to impose equipment, technology, tools, training and other requirements on dealers to those that are reasonable on a dealer-by-dealer basis, taking costs into consideration. The burdens and costs associated with compliance with the Pinnacle Program will be unreasonable for many dealers. While the Pinnacle Program is “voluntary,” most New Jersey dealers will be compelled to participate due to the uncompetitive position they will be put in if they do not. Cadillac has pressured dealers to enroll in the Pinnacle program, even before the company provided essential details (including individual sales goals) dealers need to make an informed decision. NJ CAR has raised these and other issues with Cadillac. Thus far, the manufacturer has shown a willingness to discuss dealer concerns and consider modifications to the program. Cadillac’s Pinnacle Program is just the latest in a long line of stair-step programs that challenge a dealership’s ability to for- mulate a cohesive and consistent business plan that meets their individual needs. The problem is, whether 60, 70, 80% or more oppose two-tier pricing programs, manufacturers have created an environment where many dealers cannot or would not be profit- able without them. In essence, manufacturers have thrown dealers in a pool and cre- ated a need to tread faster and faster just to keep their head above water. PRESIDENT’S MESSAGE  continued from page 7