Pub. 15 2016-2017 Issue 4

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 7 new jersey auto retailer W W W . N J C A R . O R G What a difference a few years can make. Just a few years ago, Chrysler terminated hundreds of dealerships across the country, claiming that closing those locations would allow the company to emerge from bankruptcy stronger. Now, Fiat Chrysler Automobiles (FCA) is looking to ADD hundreds of dealers across the country in order to…wait for it…make the company stronger. It’s bad enough that FCA management can’t get its story straight. But the methods they are using to try to force new dealership loca- tions should give every dealer pause, because if FCA is successful, other manufacturers will, undoubtedly, try to use the same tactics. A manufacturer’s power to create a new dealership location is the power to destroy an existing dealership or any number of existing dealerships within the market. Dealers want their manufacturer to be strong and optimistic about future growth. But adding a bunch of new locations threatens the financial stability of incumbent dealerships, the employees who work there and the consumers and communities that rely on these established businesses. New Jersey has a powerful Franchise Practices Act; a comprehen- sive statute that offers dealers many protections frommanufacturer overreach. One of those protections is the dealers’ right to protest a new or relocated dealership point, under certain circumstances. But a right of protest doesn’t give a dealer veto power over the manufacturers’ decision. It simply gives the dealer a chance to argue a new or relocated point would harm their investment or destabilize the market. And challenging a manufacturer is an expensive proposition, which can keep many dealers from mak- ing sure their automaker stays true to the letter of the law in New Jersey. But some take up the task, for their own benefit and to ensure protections remain in place and are strengthened against future challenges. NJ CAR recently filed a motion as a “friend-of-the-court” in a dealer protest matter brought by Teterboro Chrysler Dodge Jeep Ram against FCA. Teterboro is protesting FCA’s intent to appoint a new dealer near their location. The challenge addresses two legal issues, which could affect all franchised car and truck dealers in New Jersey. The first issue involves the legality of the manufacturer’s Notice of Intent to grant a franchise at a proposed location, without having an actual franchisee in place at the time its Notice of Intent was issued. The second issue involves FCA’s attempt to dismiss the protest, claiming certain agreements between the manufacturer and dealer included a “waiver” of the dealer’s right to protest future dealer appointments. If FCA is successful, this would signify a massive shift in the playing field between manufacturer and dealer. Every franchisee in the State would likely see manufacturers “testing the waters” or stockpiling approved locations for future dealer appointments, merely by issuing Notices of Intent for given locations. President’s MESSAGE | BY JAMES B. APPLETON PRESIDENT’S MESSAGE  continued on page 10 Manufacturers Can’t Be Allowed to “Stockpile” Approved Points Dealers want their manufacturer to be strong and optimistic about future growth. But adding a bunch of new locations threatens the financial stability of incumbent dealerships, the employees who work there and the consumers and communities that rely on these established businesses.