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Discussion Starter #1 (Edited by Moderator)
It appears that GM has assumed the leadership role in propping up the broken dealership franchise model.
I love my Volt but I really wish GM would get with the program and phase out the stealership model. The most negative ownership experience by far (and by a HUGE margin) was in the dealership experience (both sales and subsequent service appointments). It took all my willpower just to complete the deal after I already walked out once due to shady sales practices. The dealership sure didn't due GM any favors and will be a major strike against a GM product when the next purchase rolls around. I know not all dealers are bad, but given the large number that are, I think it's clear that GM executives have lost control of their ability to control the customer service experience at their dealerships.

GM, please compete through innovation, not government regulation.
 

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How quickly people forget...:)
http://www.ibj.com/articles/15769-legislation-to-protect-car-dealers-re-emerges-at-statehouse

GM's dealer network was equally problematic. Dealer franchise laws in nearly every state make it easy for dealers to sue if GM gets rid of a brand. The company's decision in 2000 to close Oldsmobile cost it some $2 billion.
http://www.bloomberg.com/news/articles/2009-06-01/gm-files-for-bankruptcybusinessweek-business-news-stock-market-and-financial-advice

In addition to these ad hoc interventions, Congress passed a law in December 2009 giving terminated dealers special rights in seeking arbitration — a process that has burdened GM with substantial delays and costs. According to an August 2010 report in Automotive News, of cases that had actually gone to arbitration, GM had won 39 and lost 23. Furthermore, the company had entered into letters of intent for conditions for reinstatement with 702 other dealerships. Taken together, those dealers reinstated through arbitration and those offered reinstatement through letters of intent represented 62% of all the dealers that had filed claims for arbitration. In addition, GM had settled disputes with 408 dealers under undisclosed terms; according to lawyers for the dealers, however, the dealerships were usually terminated only after GM paid case settlements — settlements that, in some instances, reached as high as several million dollars. The result of the 2009 law has thus been an unimpressive arbitration record for General Motors, and the retention of many more dealerships than sound business principles could justify.
 

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GM, please compete through innovation, not government regulation.
Let me get this straight. The law says car manufacturers must do X. Tesla gains a significant advantage by doing Y. GM says, "Tesla should have to do X as well." The court reviews the law and says, "Yes, Tesla must also do X."

How is this GM's fault? Maybe GM corporate agrees with you about the dealership model. Pushing the issue might be the only way they can bring about a change for all auto manufacturers.
 

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^ I agree. If the law is a bad law, we need to get the law changed via elected officials. Not blame a company.

By the way, let's not forget that the dealership model means different businesses have to engage in price competition for a given model. With Tesla, they can set any price they want. Nobody is going to sell you a new Model S for $10K less.
 

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Discussion Starter #5 (Edited)
^ I agree. If the law is a bad law, we need to get the law changed via elected officials. Not blame a company.

By the way, let's not forget that the dealership model means different businesses have to engage in price competition for a given model. With Tesla, they can set any price they want. Nobody is going to sell you a new Model S for $10K less.
Connecticut was in the process of changing an antiquated law via elected officials, but GM intervened to stop it. GM intervened not because the law is a bad for the citizens of Connecticut, but because GM is too antiquated, entrenched in old business models, or unwilling to adapt to a newer business model. What business does GM have in forcing me to purchase (or not to purchase) a competitors product the way that I choose to?

For the record, nobody (or VERY few at the most) purchase any vehicle for $10K less than GM sells it for. The haggle of $10K is out of middle man (dealer) markup based on inflated Manfacture Suggested prices, or discounts passed by GM to the dealer, consumer, or both. GM should get out of politics and start innovating a way to sell cars better in the 21st century.

Tesla can't just set any price it wants to set on the Model S. That price is still set by the market. If Model S sales started to dive (price too high, better product elsewhere, quality issues, etc.) and there was a surplus of Model S production, Tesla would be forced to discount the price, offer incentives, or implement other price lowering tactics just like GM currently does on it's unsold inventory. The free market will work when the free market isn't too heavily regulated.

Anyway, the point is, GM continues to intervene in the legislative process to continue an antiquated business model exclusive to automobiles, one no consumer appears to like, one that obscures the actual price of the product, and one that greatly discourages free-market competition. Propping up an antiquated business model through regulation is never healthy for the economy or business long term.
 

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Let me get this straight. The law says car manufacturers must do X. Tesla gains a significant advantage by doing Y. GM says, "Tesla should have to do X as well." The court reviews the law and says, "Yes, Tesla must also do X."

How is this GM's fault? Maybe GM corporate agrees with you about the dealership model. Pushing the issue might be the only way they can bring about a change for all auto manufacturers.
No, you have it incorrect.
The contracts and laws that reinforce them said "an Auto Manufacturer shall not sell direct in the same state in which they have franchisees/dealers".
Tesla follows this law, as they have no dealers.

In a few states, dealer lobbyists have gotten the laws expanded such that NO manufacturer can sell direct under any circumstances.
They have, in essence, outlawed the direct sales model explicitly for autos.
This is protectionist lawmaking and does not have a place in law, especially in states that SAY they are proud of the free market.

Now, this is not GM's fault. They created a monster which has gotten more powerful than themselves.

What IS their fault is their support of this archaic, inefficient business model's further strengthening their total control over the way consumers are allowed to buy their vehicles.
 

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This argument will never go away.........

GM gives a flip about Tesla. Tesla takes nothing away from them that they'd miss. GM doesn't want Ford trying it. :p
 

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...
Tesla can't just set any price it wants to set on the Model S. That price is still set by the market. ...
It appears Tesla has been selling cars at a loss since 2009. I would say that proves they price cars anywhere they want. Most companies can't lose money for 7 years, much less car companies.

And? In late 2017, it is highly unlikely anyone is going make money on 215+ mile EVs that have 250+ HP and sell for $35k, especially if manufactured in California. BYD can't even sell cars that cheap (Chinese made).

Tesla's own admission is that they expect to dump cars at a loss until 2020. If Tesla worries so much about the existing auto market being "unfair", then how do they justify dumping?
 

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No, you have it incorrect.
The contracts and laws that reinforce them said "an Auto Manufacturer shall not sell direct in the same state in which they have franchisees/dealers".
Tesla follows this law, as they have no dealers.

In a few states, dealer lobbyists have gotten the laws expanded such that NO manufacturer can sell direct under any circumstances.
They have, in essence, outlawed the direct sales model explicitly for autos.
This is protectionist lawmaking and does not have a place in law, especially in states that SAY they are proud of the free market.

Now, this is not GM's fault. They created a monster which has gotten more powerful than themselves.

What IS their fault is their support of this archaic, inefficient business model's further strengthening their total control over the way consumers are allowed to buy their vehicles.
I don't see GM, Ford, or Chrysler's names listed as the authors of this Minnesota legislation...:)

http://www.mada.org/legal-resources/manufacturer

2015 Minnesota Statutes

Resources
Search Minnesota Statutes
About Minnesota Statutes
2015 Table of Chapters
2015 Statutes New, Amended or Repealed
2015 Statutes Topics (Index)
Chapter 80E
Table of Sections
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Section 80E.01
Version List
Topics
Motor Vehicle Franchises
80E.01 LEGISLATIVE PURPOSE AND INTENT.
The legislature finds and declares that the distribution and sale of motor vehicles within this state vitally affects the general economy of the state and the public interest and the public welfare, and that in order to promote the public interest and the public welfare, and in the exercise of its police power, it is necessary to regulate and license motor vehicle manufacturers, distributors or wholesalers, and factory or distributor representatives, and to regulate dealers of motor vehicles doing business in this state in order to prevent fraud, impositions, and other abuses upon its citizens and to protect and preserve the investments and properties of the citizens of this state.

Historical background...sure seems like the dealerships got with their Minnesota legislators to keep the bad old auto manufacturers from doing what Tesla seems to be doing now...:rolleyes:

CHAPTER 59— H.F.No. 332
An act relating to franchises; providing for the regulation of motor vehicle franchises; prohibiting certain practices by motor vehicle manufacturers; removing motor vehicle franchises from the general statutory provisions regarding franchises; requiring motor fuel franchises to extend to and bind the successors of both parties; prescribing penalties; providing remedies; amending Minnesota Statutes 1980, Section 80C.OL Subdivision 4; proposing new law coded as Minnesota Statutes, Chapters 80C and 80E; repealing Minnesota Statutes 1980, Sections 168.27, Subdivision 21; and 325D.I7 to 325D.29.
 

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Tesla's own admission is that they expect to dump cars at a loss until 2020. If Tesla worries so much about the existing auto market being "unfair", then how do they justify dumping?
YEAH!! What about THAT mister Mush?
 

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Same old same old...
GM didn't make these laws, in many states they have existed for over 50 years.
They exist to prevent multi-national corporations from pushing out small-business franchisees
Don't be so quick to judge the merits of these laws

Could GM sell direct to consumer and make more $$. Sure. But at a huge sacrifice to localized economies everywhere.
Every dollar from every sale from a Model S sale goes right back into Tesla's pocket.
No sales commissions, no pay to a local sales person, no worry, or care, or ownership for the needs of the people within the communities they "serve".

Meanwhile "mom and pop" shop car dealers are "small business" yet still are supporting your local economies with jobs, taxes, donations and sponsorship money for local causes, charities, and sports teams. There's the local benefits from these dealers having to pay big dollars in municipal taxes for commercial frontage and huge footprints. This helps fund local infrastructure.

In short this "antiquated" business model is really a "share the wealth" relationship spreading the profits from selling cars to thousands and to the benefit of your community .

Meanwhile Tesla rents the minimal of floor space in a mall, relies on the internet to sell cars sight-unseen, employs a skeleton staff and pays them like big-box electronics staff AND any profits should they exist don't "stick around" at all with it all going back to the mothership to be spent elsewhere.

Is this really the business model people want? Why? So they don't have to leave their chair to buy a car? lol Don't like to "haggle" LOL

When I start seeing TESLA on the backs of baseball/soccer/hockey jerseys and newspapers and flyers stating Tesla is funding local charities and causes as dealers often do, and putting local people to work by the dozens, then let's talk about business models however antiquated.

I won't hold my breath.

JMO
WOT
 

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Meanwhile Tesla rents the minimal of floor space in a mall, relies on the internet to sell cars sight-unseen, employs a skeleton staff and pays them like big-box electronics staff AND any profits should they exist don't "stick around" at all with it all going back to the mothership to be spent elsewhere.
Wow, you make it sound like White Castle. ;)
 

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This argument will never go away.........

GM gives a flip about Tesla. Tesla takes nothing away from them that they'd miss. GM doesn't want Ford trying it. :p
Ford has the same dealer handcuffs as GM and Chrysler. I think they may be worried more about Chinese (or Apple, Google) auto manufacturers following in Tesla's steps.
 

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Ford has the same dealer handcuffs as GM and Chrysler. I think they may be worried more about Chinese (or Apple, Google) auto manufacturers following in Tesla's steps.
Good point. We know how they like to dump product to trash our industries. I wonder if Mush speaks Mandarin......

Only if White Castle takes 2 years to make your burger ... :D
LOL - are you sure those Slyders aren't 2 years old?
 

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I don't see GM, Ford, or Chrysler's names listed as the authors of this Minnesota legislation...:)
...
Exactly, which just shows how the dealers association has more power and owns more legistlatures than GM does.
When the MADA sponsored changes were going through committee hearings it was actually quite fascinating.
GM stayed out of this one, unlike the Conneticut hearings.

The MADA rep was sitting right next to the Rep that sponsored the bill. As the sponsor answered questions from the committee.
When the point was raised that this change would outlaw Tesla in MN, the sponsoring rep was very surprised.

I don't think he was happy being used so transparently by MADA. At least, I can hope.
 

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Same old same old...
GM didn't make these laws, in many states they have existed for over 50 years.
...
Which is exactly what I said. Dealers got these laws passed, and expanded. They exist to prevent GM, Ford, etc from abusing their dealers, and to enforce their contracts.

As for all the money spent on baseball teams, local businesses, lawsuits to outlaw legal business models, pay lots of sales reps, etc. Just where do you think that money originated?
Yep, consumer pockets.

When you buy a car if you want some of that money to go towards local sport teams, influencing politicians, etc, great! Go for it.
If I want to support the local sports teams I'll donate, coach, or send money to politicians I want to support.

If I want to support a well paid staff of people that don't try to cajole, cheat, pressure me when interested in their cars, I'll stick with a direct seller. Right now, that is Tesla, but in the future, who knows, perhaps Apple.
If I want to support a company who's reps try to talk me out of a Volt, or simple refuse to let me drive it, I'll turn to GM.
 

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I wish GM would support their cars
 

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If I want to support a company who's reps try to talk me out of a Volt, or simple refuse to let me drive it, I'll turn to GM.
I've never had this experience at any GM dealer, Chevy, Pontiac or Saturn. No one tried to talk me into or out of anything. I knew what I wanted and they sold me what I asked for. The only diversion that occurred was an attempt to find me a car already on a dealer lot. But there were none that I wanted, so we got past that step and they placed my order.

They also went to extra measures for my convenience, such as putting my aftermarket wheels on for free, and purchasing a scale diecast Volt model and shipping it to my house, because I asked them to.

Maybe I live in a better neighborhood?
 
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