Like some of you, I have been reading the books that try to explain the events surrounding the General Motors and Chrysler bankruptcies. While the authors' viewpoints and perspectives on the causes and treatments of those near-fatal events differ, one thing is constant — lack of sympathy for the dealers.
This usually manifests itself in a simple observation: The dealers are problems for all manufacturers because of their clout in state legislatures where they have been successful in obtaining protective legislation.
There is no discussion of why that legislation is necessary and fair. There is never a word mentioned about the hundreds of billions of dollars dealers have saved franchisors who have not had to build their own systems of vehicle distribution and warranty service.
There is no consideration of the hundreds of thousands of dealer jobs at risk or the millions of customers who may suffer if factories can jettison dealers at a whim.
There is never any analysis of the importance of state laws in preventing a franchisor from wiping out millions of dollars a dealer has invested and ruining the dealer's livelihood simply because he or she gets on the wrong side of this year's zone manager.
Why is it that the businesses of dealers are so misunderstood by these authors? It's probably because they started out as reporters. (Even the auto czar author was once a financial reporter.)
Most reporters who cover the business world for newspapers, news magazines or Internet news organizations, or even those who are on the auto beat, have no clue about dealers' businesses.
Many of them think dealers have profit margins of 50% or more like jewelry stores and mattress “discounters.” Even more believe the franchisors consign inventory to dealers so that the hundreds of new cars on a dealer's lot are there on the cuff.
So why not find out about dealers' businesses? Because dealer issues are not the beat that they want to cover. General business reporters want to get national attention by interviewing captains of industry and by covering big auto stories. What about dealers? Well dealer profiles are the stuff of community advertising rags, not important newspapers, newsmagazines and Internet news sites.
And what about auto beat reporters? Shouldn't they take the time to understand the businesses of the dealers that sell the fully loaded, luxurious cars they constantly test drive? Unfortunately, a reporter that comes out against the factories to side with dealers, could risk his nice ride. The fully-loaded evaluation vehicles delivered with full gas tanks beat the heck out of the Pontiac Aztek parked in the driveway.
So reporters don't tell the dealers' stories because they don't take the time to know and understand them. They have no clue about the 14-hour days dealers put in to build their businesses.
They know nothing about the family sacrifices and contributions involved. They don't concern themselves with the many employees who rely on the businesses (and the many more employee family members), not to mention the millions of dealer customers around the country.
If the GM and Chrysler bankruptcies taught dealers anything, it is that misinformation about their businesses can be disastrous. The dealers' trade associations and others who represent dealers can tell some of the story. But it is up to the thousands of dealers in this country to really educate those who matter.
So, never duck the chance to tell your story. Do you advertise in local media? Request meetings with the business and auto reporters and tell your story.
Do you have an opportunity to meet with a federal or state legislator or bureaucrat? Tell your story.
If you get the chance to testify before a committee of your state legislature, or your county commission, or your town council, take it. And tell your story.
Michael Charapp, an attorney with Charapp & Weiss, LLP who specializes in representing motor vehicle dealers, can be reached at (703) 564-0220 or [email protected]
Questions or comments about this column?
Send us an e-mail at [email protected].
