Michigan About To Ban Tesla Sales

cartechboy writes It's a story we've come to see quite often: a state trying to ban Tesla's direct sales model. It seems something sneaky just happened in Michigan where Tesla sales are about to be banned. Bill HB 5606 originally intended to offer added protection to franchised dealers and consumers from price gouging by carmakers, and was passed by the Michigan House in September without any anti-Tesla language. However, once it hit the Senate wording was changed that might imply the legality of a manufacturer-owned dealership was removed. The modified bill was passed unanimously by the Senate on October 2, and then sent back to the House that day where it passed with only a single dissenting vote. The bill was modified without any opportunity for public comment. Michigan Governor Rick Snyder has less than a week to sign the bill into law. Of course, Tesla's already fighting this legislation.

Comments

Re:Telsa's lobbiest crashes

[aristotle-dude]

Telsa... you're being banned state by state, what's wrong?

They are not giving out big fat bribes to the right people.

Wonder How Much?

[Forgefather]

Wonder how much the dealer franchises had to pay in bribes for a unanimous vote. Seems a bit overkill when you only need a majority.

Re:Wonder How Much?

[lister king of smeg]

Wonder how much the dealer franchises had to pay in bribes for a unanimous vote. Seems a bit overkill when you only need a majority.

They didn't have to Michigan is the home of Detroit the "Motor City". Any one voting against it would have been shooting themselves in the foot come time for election funding.

Re:Wonder How Much?

[Stargoat]

It doesn't benefit their auto industry.

Re:Wonder How Much?

[Ralph Wiggam]

On Slashdot, bribery and shadowy conspiracies are always the default answer.

Re:Wonder How Much?

[Ralph Wiggam]

And it's wrong a vast majority of the time.

For people that claim to be objective and science-based, people here sure don't seem to have the same rules of evidence for claims they want to be true and claims they don't want to be true.

Re:Wonder How Much?

[schnell]

uh... have you seen the state of Detroit lately?

"Detroit" is only nominally the home of the auto industry, and is maintained by Ford and GM as a brand of sorts to evoke classic American cars.

Other than executive offices, all the big auto manufacturing plants are situated - and nearly all the workers live - well outside the city itself, in the suburbs where (other than being impacted by Detroit's implosion and the overall Great Recession decline) things are pretty good.

So when you hear someone say "Detroit is fighting Tesla," thats not the case. Detroit couldn't fight Pawnee, Indiana and win two out of three. What they really actually mean is "Detroit" the brand/region, i.e. the corporations that employ hundreds of thousands of Michigan voters - and the suppliers/subcontractors/vendors to those companies, who probably employ as many if not more Michigan residents. So don't take Detroit's colossal f***up as any indication that the power of Ford/GM, its ecosystem and perhaps most importantly the UAW as being diminished in any way.

You could at least tell us when TFA is paywalled

[tepples]

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Re:Telsa's lobbiest crashes

[JeffAtl]

That's not really how a constitutional republic works. A simple majority doesn't always get to make the rules.

Re:You could at least tell us when TFA is paywalle

[jae471]

They probably just assume no one reads TFA anyway....

Re:Telsa's lobbiest crashes

[publiclurker]

Don't you mean the majority of the lobbyists?

Let me FTFY

[pr0t0]

We live in an Oligarchy.

If the majority of wealthy car dealers don't want Tesla ruining their state-sponsored, protectionist, big-government, corporate-welfare free ride; they'll send an army of lobbyists to make sure none of them have to compete against one.

Re:Let me FTFY

[Anonymous Coward]

People can't have it both ways: Either money is speech and this is perfectly legitimate, or money isn't speech and it's not. If money is speech, then the auto manufacturers are simply using their freedom of speech to petition their government for a redress of grievances. If Tesla is losing this battle it means they aren't exercising enough free speech, or the public doesn't like what they have to say. It doesn't get much more American than that.

On the other hand, if you don't believe money is equivalent to speech because then you can be born with more free speech than someone else, this is totally fucked up.

Re:Let me FTFY

[alexander_686]

Partly it is the American ethos, however romanticized, about the individual over society. A bigger factor, in my opinion, is that America's unions are pretty bad.

But here is the main reason. In business, contributions are split pretty evenly between Democrats and Republicans. It drifts from year to year, from industry to industry, but rarely do you find more than 70% coming from a single industry to a single party. I am not saying that Americans like corporate lobbing, but corporate lobbing does not discriminate.

Unions, on the other hand, give over 95% of their donations to Democrats. Than factor in that the majority of union members work for government. In effect, union members are hiring the managers who will be negotiating their salary. School board elections are notorious for this.

Re:You could at least tell us when TFA is paywalle

[OhPlz]

They probably didn't read it either.

Re:Telsa's lobbiest crashes

[Mysticalfruit]

Odd, because it seems to be going the other way... State by state Telsa is challenging the antiquated archaic franchising laws and winning. Michigan doesn't surprise me.... I can only imagine the lobbyist money that flowed from Detroit to make this happen...

Re:Telsa's lobbiest crashes

[tlhIngan]

Telsa... you're being banned state by state, what's wrong?

They're too successful, that's what. Mess with the Big Three and you're bound to run into trouble.

Sorta kinda like Tucker.

Re:You could at least tell us when TFA is paywalle

[The New Guy 2.0]

Coming from Slashdot used to be an exemption to the WSJ paywall... looks like the Slashdot/WSJ bridge is down.

so im sure the pitch for this one was great.

[nimbius]

auto exec:: you have to do something!!! Tesla will RUIN us with their online sales tactics and futuristic car designs they probably stole from us!! hard working people from michigan will lose their jobs!
governor: what about flint, saginaw, pontiac, and detroit...theyre all completely bankrupt from 40 years of your bullshit.
auto exec: yeah but that was just the hand of the free market and the customers werent buying and stocks too, those were bad.
governor:so you're telling me you cant compete against another american car maker...but you already have an electric car called the volt...and you could just revive the 2 or 3 GM electric vehicles you designed in the past...those worked and were cheap.
auto exec: yeah, we could, but thats all way more expensive than our 2015 strategy: Fucking do what we say or you're ass is out of office.
Governor: Tesla?! why didnt you tell me about these flaming terrorist shariah abortion clinics on wheels sooner!

It's a Republican Thing

[Jodka]

According to this map, state bans on Tesla sales are a Republican thing.

The Governor of Michigan, Rick Snyder, is a Republican. The Michigan State Senate has a 26-to-12 Republican majority and in the House a 59-to-50 Republican majority. With control of both the executive and legislative branches of government, it is certainly Republicans who are accountable for revoking the freedom to purchase a Tesla in Michigan.

By the way, it is election season, and I have noticed signs in my neighborhood stating, "For freedom, vote Republican."

Re:It's a Republican Thing

[tomhath]

state bans on Tesla sales are a Republican thing.

Your chart doesn't support that statement. Blue states are almost evenly split with the majority allowing sales; Red somewhat less even against allowing direct sales. But it's hardly what anyone would call a "Republican thing".

Re:It's a Republican Thing

[CoderJoe]

And for the irony, aren't the Republicans usually all for the free market and against restrictions? But here they're pushing for the opposite: restrict the market to block out competition and support the entrenched.

Re:It's a Republican Thing

[JeffOwl]

The Michigan State Senate has a 26-to-12 Republican majority and in the House a 59-to-50 Republican majority. With control of both the executive and legislative branches of government, it is certainly Republicans who are accountable for revoking the freedom to purchase a Tesla in Michigan.

So wait, 49 of the 50 democrat reps vote for this and all 12 democrat senators vote for this and it's a Republican thing?

you must be trolling.

Re:It's a Republican Thing

[tomhath]

And for the irony, aren't the Republicans usually all for the free market and against restrictions?

No. In general they don't like big government, but that's not the same as no regulation.

In this case it's not clear if the driving force is dealers or the UAW, probably both. Odd bedfellows and all that.

Re:Telsa's lobbiest crashes

[MildlyTangy]

Telsa... you're being banned state by state, what's wrong?

Thats a very very good question. What is wrong here? Look at everywhere else in the world. ONLY in the US do these batshit crazy weird laws against carmakers selling cars to consumers exist.

Its one of the strangest laws you guys have. Its akin to banning HP from selling computers to consumers, or banning Mc Donalds from selling Big Macs directly to consumers. It makes absolutely no logical or ethical sense whatsoever. Not in the slightest.

Whats wrong?

Seriously. What is going on here?

Republicans Control Michigan

[Anonymous Coward]

Here is where the logic fails

1) Republicans control the House, Senate, and Governorship of Michigan.
2) Republicans are "pro-business".
3) Republicans believe in "minimal government".
4) Republicans believe in "minimal regulation"

It would stand to reason that people holding this philosophy would let the "market forces" take their course without government interference. However, this is not how they behave. Hmmm.

Re:Republicans Control Michigan

[x0ra]

3) and 4) are only valid in during election when it's time to manufacture consent. Trust me, they are very pro-government and pro-regulation if it goes in the interest of the companies paying their multi-millions campaign.

Re:Republicans Control Michigan

[asylumx]

Republicans believe in states rights, which means minimal federal government. They do NOT believe in "minimal government" as you called it. Republicans in state positions are VERY heavy-handed.

And yes, Republicans control Michigan which is not likely to change anytime soon. That said, even if they didn't, auto mfg is the big industry here and most politicians R or D are not likely to do anything that would harm that industry, especially right now after they have just recently "recovered."

Re:Telsa's lobbiest crashes

[whyAreAllNicksTaken]

Except their trouble isn't coming from the Big Three. It's coming from the independent dealers who already have the Big Three under their collective thumb and want Tesla there too.

2 Questions

[CanHasDIY]

I have 2 questions I'd like answered by someone who's not financially nor emotionally invested in the whole "Tesla vs the Gobermint" debate:

1) For what reason would a state legislature want to make it illegal for a manufacturer to own their own dealership?

2) For what reason would a manufacturer not want to franchise their dealerships?

Thanks (to the probably 2 out of 100 responses that will actually fit my criteria) in advance.

Re:2 Questions

[Anonymous Coward]

1) So the manufacturer cannot give their own dealership an unfair advantage over franchised dealerships. This is what happened back in the early 20th century when Ford and others were trying to strong-arm their franchisees.

2) So they can sell direct to consumers. They feel that existing franchised auto-dealerships will not give them a fair shake. They'll steer customers unfairly to buy the Ford, Chevy, Nissan, whatever else they're selling if Tesla doesn't give them a bigger commission. Think of the last time you visit a commission based electronics store (ABC Warehouse as an example), the salesmen will push a consumer to purchase the goods which give them the biggest commission. It doesn't matter what the consumer needs, they want a bigger payday, and honestly with that model it's hard to blame them.

Using the electronics example, Tesla is taking the Apple approach, where they want to control the presentation of their goods and who sells them. Apple might not get the greatest shake from the salesman at ABC Warehouse if Samsung is offering a higher commission. However when you go to an Apple Store, you get a salesman who is not paid on commission and their job is to solely educate you about Apple products. Tesla wants the same experience, come to a store where the salesman knows everything about a Tesla and can sell it to you in an environment catered to it. These are niche products that won't get a fair shake from the existing dealerships without a good bribe, just like our Congress in Michigan has shown.

Re: 2 Questions

[valkraider]

Can't believe that to be the case, because that would mean the people in charge of Tesla's Marketing Department are complete morons - never has a new car salesman tried to "steer" a potential sale to their competitors.

Remember - most dealerships sell multiple makes. If one of their makes gives the dealership more kickback - the dealership pushes that make. Also, dealerships sell many models. They push the models they want - instead of simply answering questions, informing the consumer, and helping the consumer into an appropriate configuration. Finally - dealerships make a ton of money on "add ons". If a particular model has fewer available after sale add ons available - a dealership will avoid that model. This is all before considering the profits they make on service. Can't sell oil changes to Tesla buyers - so let's push the BMW or Porsche instead... Look. Tactics like these laws are simply fear. Dealerships suck. Everyone knows they suck. The only people I know who defend dealerships are people who work there.

Re:Telsa's lobbiest crashes

[poetmatt]

Look at the existing franchise laws and how they are being used. It's not really a question that bribes are occurring, it's what lobbying is by it's very definition.

Re:Telsa's lobbiest crashes

[Forgefather]

It's a trend in our lawmakers that make them so sensitive to being anti anything that they come up with weird circuitous laws to ban things that they don't like or have donations to eliminate.

In this case lawmakers were attempting to protect small mom and pop style dealerships from the Detroit auto industries shady business practices, but I bet they didn't want to seem "anti capitalism" for regulating the pricing of cars to ensure that the dealers weren't dumping cars to drive out the competition. So instead we get a crazy law that bans direct sales. Because its much harder to construe that as anti something, and the politicians can always fire back with a similar "anti mom and pop stores" nonsense.

For a more modern example look at abortion laws. In my great state the politicians are too afraid to go one way or the other so they come up with bullshit like waiting times. In order for a woman to get an abortion she has to wait three days. No reason. She just has to. This is because someone couldn't get an anti abortion law passed so they settled for attempting to shame the woman into keeping the child with arbitrary regulations and rules.

Same across every regulatory statute as well. We rarely ban any activity out right, but instead mire in a quicksand of impenetrable regulations and taxes.

Re:You could at least tell us when TFA is paywalle

[XxtraLarGe]

Here, this one's free.

why do cowboys hate freedom?

[Thud457]

Are you colour blind?!! From the very map you cite, it looks like an even break between red & blue states.

With the exception of a few states, this looks more like a Western (non-coastal) state thing.
Western : Montana, Wyoming, Utah, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Texas.
Plus a scattered handful : Arkansas, Louisiana, Wisconsin, Michigan, Kentucky, Alabama, Virginia, South Carolina, Maine, Rhode Island, Connecticut, New Jersey & Delaware.

The Car Dealership-Industrial Complex

[Livius]

Okay, I've always assumed that the stereotypes about the honest of car dealers were true, but I never suspected that they were this much of an entrenched monied special interest group.

Well if people are getting this rich off of essentially retail, then there are bigger things wrong with this picture than we thought.

Re:The Car Dealership-Industrial Complex

[RaySt]

If they had competitive cars to sell, they probably wouldn't mind so much - they'd just buckle down, and emphasize the value they bring to the table (perceived or real). But they don't have ultra-high-tech, hyped cars to compete, and now their lifeline is at risk. I'm not surprised they go this route.
But Tesla is in a better position here I think. First, nothing says "this product is awesome" than competitors trying to ban it. Second, they can up the game. I was an evil strategist, I'd start by building extra many free charging stations in MI, run a large ad campaign, then offer the car at a discount for MI residents.

Re:Telsa's lobbiest crashes

[NotDrWho]

No. Lobbying involves talking and bribery involves illegal money.

Oh, to be so young and naive again. Yes, little Jimmy, lobbying just involves talking--and Santa Claus is real too.

Gaming the legislature

[Anonymous Coward]

Anyone else slightly concerned that we can bait-and-switch bills like this? You can't just push a process past all the reviews and then modify the document at the last second in the hope no-one will notice. If it could be proven that the change was in support of a specific goal (as this one looks to be) then this is horribly dishonest. ...oh wait, we're talking about politics, sorry I forgot.

Exclusivity is a great marketing ploy.

[namhash]

I think this works in Teslas' favour. Nothing better than making something illegal to get the attention of everyone and make them want it more.

Re:I would vote against Tesla's cradle-to-grave...

[khallow]

My view is quite simple: vertical monopolies are bad.

"Vertical monopoly" is just a nonsense phrase, like a "pink monopoly". Tesla has no monopolies, vertical, pink, or otherwise.

What Tesla has is vertical integration which is an approach that Elon Musk has used before (with SpaceX).

Stop assuming everyone who doesn't agree with you is on the take, guys.

It's pretty clear in this case that a lot of legislators are on the take here. It's pure rent seeking to protect car dealerships and has no value to the public.

Re:Telsa's lobbiest crashes

[LordLimecat]

So he asks for evidence, you dont provide any, and you get a +5 mod.

Good work, guys.

You want evidence? Here it is:

[Chas]

So he asks for evidence, you dont provide any, and you get a +5 mod.

Good work, guys.

https://www.opensecrets.org/lo...

Re:Telsa's lobbiest crashes

[msauve]

They don't have to bribe all 50 states. They only have to convince Congress to exercise its authority over Interstate Commerce to prohibit these anti-competitive state laws.

Re:Telsa's lobbiest crashes

[Ralph Wiggam]

I was saying that "lobbying" and "bribery" have actual definitions as words.

So do you just ignore all facts that conflict with your narrative and make up word definitions as needed?

Re:Telsa's lobbiest crashes

[Anonymous Coward]

At the core. Money changed hands by a company or someone who wants something to go their way.

A company does NOT and NEVER has just given money to people without a reason. Has Verizon or the national associations of car dealers sent you a check, or anyone in the US for that matter? Do you know why? Because you can't do anything for them. Why do they send money to politicians? Because they know it works and they will get what they want. How that is not a bribe and why it is tolerated is beyond me. If lobbying did not change votes or lean things in the direction of the person/company giving the money, no company in the world would be doing it. The simple fact companies do it shows that money talks. Money is changing hands and favorable things are happening. Fck the definition of bribe and lobby but to me, they are the same exact thing with the same exact outcome. Lobbying is tolerated because and somehow legal because those getting the money are able to use the money for their benefit and no one is willing to change that.

Re:Telsa's lobbiest crashes

[msauve]

You've never read the Constitution, have you? Fact is, this would be one of the increasingly rare legitimate uses for Article 1, Section 8, Clause 3, which gives Congress the power

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

If SCOTUS can claim that growing a garden for personal use is Interstate Commerce, then so to is an automobile company in one state selling cars in another.

Re:Telsa's lobbiest crashes

[Ritz_Just_Ritz]

I love all the chatter about how Tesla is "harming the industry" by selling direct. **rolling eyes**

Directly selling cars to the public is only harmful to the middlemen in the dealerships that ARE indeed greasing their state legislators with fat political contributions. Why should auto manufacturers be forced to deal with middlemen to sell to the public? How in the world does direct sales "harm the industry"? Are large home builders forbidden to sell houses directly to consumers? The whole concept of protecting a parasitic middleman is just ridiculous. It results in inefficiency and higher prices.

Re:Telsa's lobbiest crashes

[budgenator]

In Michigan being labeled anti-auto is pretty much end of career for a politician and it's not illegal bribery it's campaign contributions and providing volunteer union minions as campaign workers.

Which other CEO

[future assassin]

in history managed to fuck with the system in suck a positive way? It's so frereshing.

Re:Telsa's lobbiest crashes

[shilly]

You don't need legislation to deal with this.

The hassle of a repair will figure into people's purchasing decisions. Other businesses will spring up, who make money from facilitating the repair process. Etc

Link

[synapse7]

How about a link to the Tesla article.

http://www.teslamotors.com/blo...