• Sign in to follow this  
    Followers 0

    Massachusetts Dealer Association Denied Injunction Against Tesla


    William Maley

    Staff Writer - CheersandGears.com

    November 21, 2012

    Last week, the Massachusetts Superior Court denied a request from the Massachusetts State Automobile Dealers Association for an injunction against Tesla to stop them from running a store in Boston.

    The lawsuit filled on October 16th argued that Tesla violates Massachusetts' licensing, consumer protection and franchise laws since the company runs their own stores. If granted the injunction, Tesla could only use their storefronts as a place showing a locked vehicle with no staff.

    “Tesla looks forward to continuing to focus on advancing the knowledge of EVs in a convenient, accessible environment. We remain hopeful for a positive outcome of this case,” said Tesla spokeswoman, Shanna Hendriks.

    Robert O’Koniewski, executive vice president of the Massachusetts State Automobile Dealers Association tells Automotive News they are far from giving up.

    "Dropping the lawsuit is not an option at this point. We feel very strongly that Tesla is operating a factory store outside parameters of our franchise law and our license law, and they are operating that store illegally," O’Koniewski said.

    O’Koniewski goes onto say that the group is currently considering an appeal and other judicial remedies.

    Source: Automotive News (Subscription Required)

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster.

    Related Stories:

    Tesla's Factory Stores Draws Ire From Dealers

    Tesla Gets Sued By Dealer Associations In Two States

    0


    Sign in to follow this  
    Followers 0


    User Feedback


    Association WAKE UP!!! You are like the FREAKIN UNIONS!! You had your day and there are better ways to buy than have your enforced franchise crap.

    Join the 21st Century! :fryingpan:

    0

    Share this comment


    Link to comment
    Share on other sites

    This is a problem only in Massachusetts and a few states with laws designed specifically to protect dealer franchises. Basically, the law (93B in Massachusetts) is an anti-competitive ordinance which prohibits automobile manufacturers from also owning a dealership. Or at least that is the Dealer's Association reading of the law. The law does not actually say that. It says that an automobile manufacturer cannot own a dealership and get into direct competition with its own franchise dealerships.

    The law came into being to protect dealers who had invested in their dealer franchises from being out competed by manufacturer owned dealerships -- which presumably will have an unfair pricing and/or inventory advantageous owing to their factory ownership. For instance, if Ford has 23 dealer franchises in Massachusetts and each one had invested considerable time and money in their premises and operations, Ford buying up a few of those dealerships or opening a dealership in direct competition with its franchise dealers may potentially make those business nonviable and unfairly threaten the investment the dealers made into their businesses. The law prohibits that.

    However, Tesla does not have any dealers in Massachusetts, does not intend to franchise any dealerships and there does not currently exist any "investment" by anyone outside of Tesla to the marketing, inventory, sales or support of Tesla products. Hence, the protection of commitment and investment argument is ludicrous. And in Tesla's view, it is not buying any up any dealer franchises, it is not competing with any of its own dealer franchises (they don't exist) and it is not planning to operate factory stores in parallel with franchise dealers. Hence, the franchise law does not apply simply on the ground that the franchise system does not exist.

    Basically, if the dealers win. A precedent will be set that says that automobile manufacturers cannot sell direct to customers and that only a middle man system, with non-manufacturer owned dealerships acting as the go between, will be the ONLY legal business model for the sales of automobiles.

    1

    Share this comment


    Link to comment
    Share on other sites

    This is similar to Chrysler's situation in California correct? Their manufacturer owned "Flagship" store was too close to other franchised dealerships...otherwise it wouldn't (or shouldn't) have been a problem...

    0

    Share this comment


    Link to comment
    Share on other sites

    Cubical-aka-Moltar, on , said:

    Dealer franchising laws made sense in the 1910s...they have no place today.

    +1

    Actually, I kinda agree with the premise of the law, but not the extension of it to require manufacturers to sell cars through dealers.

    I'll rewrite the laws to clearly state that:-

    (1) An automobile manufacturer may sell directly to consumers by any means it deems fit, but only if it does not have any franchise dealerships in the state.

    (2) If it does decide to have franchise dealership(s), it may not operate a factory store or market directly to the consumer in direct competition with its franchised dealers unless all franchise agreements are nullified or terminated, and suitable termination notice and compensation are made.

    In short, you can sell direct or utilize dealers. You cannot do both. If you already have dealers, need to buy them all out. You cannot simply operate a competing factory store and uncut them out of business and skirt franchise termination compensations.

    0

    Share this comment


    Link to comment
    Share on other sites

    How would you address a new brand sold by an old company. What if GM wanted to bring out a brand, we'll call it Jupiter, and sell it only in factory direct stores?

    0

    Share this comment


    Link to comment
    Share on other sites

    How would you address a new brand sold by an old company. What if GM wanted to bring out a brand, we'll call it Jupiter, and sell it only in factory direct stores?

    Another grey area, except even greyer. One argument is that the dealership franchises are GM dealerships, hence GM marketing a direct sales model on a new brand is still pitting factory direct GM vehicles against dealer sold GM vehicles. The counter argument is that Jupiter brand vehicles are a differentiated product from Chevy and Cadillac Vehicles, so the dealers' claim that it out-competes them and is unfair to their investment into the franchise of selling Chevies or Cadillacs is as bogus as saying that Hyundai out competes them because their vehicles have a lower price or they offer their dealers better terms.

    With my bias, I'll say that the court rules that the manufacturer cannot do that only if it's the same brand, and that in the case of Jupiter its OK unless GM also franchises Jupiter Dealerships in parallel to factory stores. But, that's me. It'll be fought over in the courts for sure.

    Forget about factory outlets and company owned stores. Just think of it this way. Do you think it's fair to an owner of a car dealership who has put up 5 million dollars of his own money, 10 years of his time and assumed all the financial risks of operating a Chevy dealership, only to have GM decide to sell Chevies on Chevrolet.com at DEALER INVOICE price with free delivery? His business and investment would be totally compromised overnight, and GM has acted to put him out of business through (unfair) competition rather than going through the (expensive) compensatory process of terminating his franchise per their franchise agreement. I believe that illustrates the spirit of the law and what it is trying to prevent.

    0

    Share this comment


    Link to comment
    Share on other sites

    Well then another question... does this only apply to cars? It seems to. There are Corp owned McDonalds and Franchise owned McDonalds. There are corporate owned Marriots and Franchise owned Marriotts. There are corporate owned cell phone dealers and franchise cell phone dealers and big box cell phone dealers (which has further confusing model of stores within stores)

    0

    Share this comment


    Link to comment
    Share on other sites

    on a certain level, there would be some benefits to factory direct sales. One that i can think of, it may allow manuf's to develop a more beneficial custom order and special order process. one reason so many makes and models have color and trim problems is the dealer's misinterpretation of what customers really want.

    but having worked at a dealer, you do see the effects that those dealers who do make the investment in the land and facilities pay off. And the dealers that do well do their best to be competitive on price and leading on service and experience.

    A lot of the features of factory direct sales could be realized if the dealerships would come into the new era and be open to new ways of providing the cars. But they are skeptical of change like everyone else. The internet already has changed the game so much in the last 15 years, but their are still customers out there that would not be able to function in a factory direct manner. There also would be problems selling factory direct without the factory basically duplicating so many functions that already exist at dealer level.

    Manuf's need dealers, and vice versa. I would like to see a more factory direct option for those who want it, but too much of it would erode the whole experience for everyone else who still treat the process in a more traditional way.

    I would like to see 'test drive centers' where you can go drive new iron, no questions asked, no sales pitch.

    0

    Share this comment


    Link to comment
    Share on other sites

    Well then another question... does this only apply to cars? It seems to. There are Corp owned McDonalds and Franchise owned McDonalds. There are corporate owned Marriots and Franchise owned Marriotts. There are corporate owned cell phone dealers and franchise cell phone dealers and big box cell phone dealers (which has further confusing model of stores within stores)

    Not this particular law. 93B pertains exclusively to automobile franchises.

    0

    Share this comment


    Link to comment
    Share on other sites


    Your content will need to be approved by a moderator

    Guest
    You are commenting as a guest. If you have an account, please sign in.
    Add a comment...

    ×   You have pasted content with formatting.   Remove formatting

      Only 75 emoticons maximum are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor




  • Popular Stories

  • Similar Content

    • By dfelt
      First Video of Tesla 3
       
    • By William Maley
      A group of Shelby GT350 owners are not happy with Ford.
      Yesterday, a lawsuit was filed in the U.S. District Court for the Southern District of Florida claiming that the track-ready GT350 isn't. According to filling, owners complain that the vehicle overheats in as little as 15 minutes due faulty transmissions and rear differentials when driven on a track. When the vehicle does overheat, it goes into a limp mode that reduces power to protect the powertrain. The filing goes on to say that Ford fixed this issue in the 2017 model, but told owners of the 2016 model to make the fixes themselves - a possible breach of the car's warranty.
      “When Ford marketed and sold these Shelby GT350 Mustangs, it knew exactly how to appeal to track-enthusiasts: it marketed enhanced performance in a limited-edition iconic vehicle that has been associated with racing for generations,” said Steve Berman, managing partner of Hagens Berman, the law firm handling the case.
      “We believe that Ford induced purchasers with its ‘track-ready’ marketing, when in fact it knew that this defect would ultimately bar these Mustangs from ever being the hotrod consumers paid for.”
      At the moment, the lawsuit has four named plaintiffs. Hagens Berman estimates about 4,000 owners are affected by this issue. 
      “Ford is committed to providing our customers with top-quality vehicles. However, we do not comment on pending litigation,” said Ford spokesman Bradley Carroll to The Detroit News.
      Source: Automotive News (Subscription Required), The Detroit News

      View full article
    • By William Maley
      A group of Shelby GT350 owners are not happy with Ford.
      Yesterday, a lawsuit was filed in the U.S. District Court for the Southern District of Florida claiming that the track-ready GT350 isn't. According to filling, owners complain that the vehicle overheats in as little as 15 minutes due faulty transmissions and rear differentials when driven on a track. When the vehicle does overheat, it goes into a limp mode that reduces power to protect the powertrain. The filing goes on to say that Ford fixed this issue in the 2017 model, but told owners of the 2016 model to make the fixes themselves - a possible breach of the car's warranty.
      “When Ford marketed and sold these Shelby GT350 Mustangs, it knew exactly how to appeal to track-enthusiasts: it marketed enhanced performance in a limited-edition iconic vehicle that has been associated with racing for generations,” said Steve Berman, managing partner of Hagens Berman, the law firm handling the case.
      “We believe that Ford induced purchasers with its ‘track-ready’ marketing, when in fact it knew that this defect would ultimately bar these Mustangs from ever being the hotrod consumers paid for.”
      At the moment, the lawsuit has four named plaintiffs. Hagens Berman estimates about 4,000 owners are affected by this issue. 
      “Ford is committed to providing our customers with top-quality vehicles. However, we do not comment on pending litigation,” said Ford spokesman Bradley Carroll to The Detroit News.
      Source: Automotive News (Subscription Required), The Detroit News
    • By dfelt
      G. David Felt - Staff Writer Alternative Energy - www.cheersandgears.com
      Tesla Officially in Trouble, Business Insider Says!

      To quote Business Insider final comments on Tesla and the Chevy Bolt:
      "Clearly, Tesla would be in less trouble if the Chevy Bolt were a bad car. But it isn't. Teslas have always blown me away. The Bolt blew me away for different reasons. I just hope Tesla is prepared to take this into account." 
      Matthew is a Business Insider senior correspondent who covers transportation and as a fan of Tesla was excited to check out a Chevy BOLT as comparison to the Tesla. On a recent trip to california he took time to visit the closet Chevrolet Dealer to his hotel and this is what he found.
      He states that to borrow Barkley's line, "Tesla is in trouble." You have one of the world's biggest auto companies that is known for killing the electric auto stepping off the sidelines and actually committing considerable resources to building a long range EV where it can afford to lose money on it long term till the market changes. Tesla has 400,000 plus pre-orders, but is burning through cash by the billions and while the launch of the Tesla 3 is near and Tesla still has Sexy much like Apple to an iPhone. Tesla does not have the depth of customer auto experience to pull from and as the author points out, Tesla balance sheet is precarious as it is based on raising funds on a growth story. The author goes onto say that no one will cross shop a Tesla S or X with the Chevy BOLT. They will due to limited options cross shop the Tesla 3 to the Bolt.
      To pull some interesting statements from the story, the author had the following to say:
      "I found it more fun to drive than both the Tesla Model S and the Model X, but not the original Roadster, a much smaller vehicle."
      "The Bolt is plenty fast for most people."
      "GM isn't going to overwhelm Tesla with Bolt sales. I actually think the Model 3 will greatly outsell the Bolt once Tesla's car arrives. However, it's also possible that if the Model 3 is delayed or is slow to ramp up, Chevy will be preparing a mid-cycle refresh of the Bolt before Model 3 sales start to achieve some major momentum. In other words, GM will always be ahead, and the company — barring another massive financial meltdown — will never stop putting the Bolt up against the Model 3."
      BI covered the BOLT in follow stories with the next one being more of an official review that starts off with covering the auto with the following statement: "A platform, not business as usual!" 
      From ride-hailing to ride-sharing, self driving Chevy has delivered an auto for the future that gives GM options on how they build and expand their EV lineup. BI took delivery of their white Premier BOLT just before the blizzard that hit NY. Clearly a compact-crossover-hatchback look, design is what the magazine employees felt it was and is. Surprising the BI reviewers was the amount of cargo the auto can hold and how well it handled 4 people and grocery getting. BI states that GM has told them the next addition to the BOLT lineup will be a larger auto that can accommodate 5 or more people. An exceptionally well executed minimalist design that comes with an interior that feels more premium in comparison to auto's this size in the past from GM that felt clearly parts bin cheap. The review goes on to talk about how setting the front seat for a 6'4" tall driver and getting in the back with room ahead of the knees for the same size person is a nice welcome addition to such a compact auto. Heated steering wheel was welcomed by all. Apple CarPlay and Android Auto kept everyone happily connected to their phone while driving.
      The final statement to quote from the review is as follows:
      "We were impressed with the Bolt, as a car, as an electric car, and as a mobility concept. In many ways, it is GM's post-bankruptcy masterpiece, a real feather in the cap of CEO Mary Barra and her executive team, who took what the company had achieved with its ill-fated EV-1 back in the 1990s and turned it up to 11. 
      I also flat-out loved driving it. I blasted in and out of New York City twice, rocketed around the streets of Gotham, darting through traffic, and cruised along the highways of New Jersey. I also enjoyed just driving it around the quiet streets of the suburb where I live.
      The steering is quick and responsive, and the handling is sharp enough to provide the confidence you need when surfing that sweet EV torque.
      The single-pedal mode is also very cool — I dug not using the brakes at all for extended excursions in my town. After a bit of practice, you get into a kind of Zen state with it. 
      Not a single person asked me about the car, and that can be chalked up to the ho-hum design. But I didn't care. I was lovin' it. Plain and simple, the Bolt is fun."
      Here is where we have overlap between story #2 and Story #3 which covers the 7 Killer Features:
      Dual Screens- 10.2" touch screen infotainment center & an 8" drivers console display which are totally customizable. Auto's wireless charging console. BOLT App allowing you to be connected to your auto at all times. Five cameras: front, rear, side mirrors and their 360 camera. 9hr full charge time from a 240 volt charger. 25 miles per hour, faster with Level 3 DC charging. Lane Keep assist feature. Modern Seat design allowing for maximum space inside. Over all these writeups show that GM has delivered a superior auto to the Prius, Leaf, 500e, etc. The future will be bright for the BOLT as GM move the platform forward.

      BI Story #1
      BI Story #2
      BI Story #3
    • By William Maley
      Tesla will be dropping the Model S 60 and 60 D next month. According to Electrek, Tesla sent out emails to potential buyers last week letting them know that they have until April 16th to place an order for the 60. 
      The 60-kWh version of the Model S was an odd model since it was equipped with a 75kWh battery pack that was limited via software to act like a smaller battery. Tesla offered the ability to unlock the full capacity of the battery for only $9.500.
      Tesla confirmed this and explained the reason they are dropping the 60 is most buyers tend to go for the battery upgrade and they want to streamline the ordering process.
      Source: Electrek

      View full article
  • Recent Status Updates

  • Who's Online (See full list)