From the Dealernews Blog: Dealer is Mad As Hell About Kids' ATV Ban

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Remember that classic old movie from 1976, "Network?" If you do, you’ll remember the famous line from Howard Blake’s network anchor character, “I’m mad as hell, and I’m not going to take it anymore.”

That’s the way Malcolm Smith feels about the ban on the sale of kids' ATVs, motorcycles, and related parts, garments and accessories. That’s why he plans to take some drastic action.

Malcolm is putting his money where his mouth is. Literally. He’s challenging the ban by selling kids' machines out of his dazzling powersports dealership in Riverside, Calif., on Thursday. (The sale starts at 4 p.m. PT March 19.)

The move could cost him big bucks, a lot more than he’ll get selling a few little dirt bikes. Fines can run as much as $100,000 per violation, up to $15 million, and there are criminal penalties involved, as well. For you non-lawyers, that means, worst case, that Malcolm could end up in jail, if authorities decide to get really nasty.

When I talked with Malcolm today, I asked him what would happen if the authorities come in Thursday and tell him to stop selling. The cagey veteran avoided a direct answer, but I could almost see him smiling over the phone: “It’ll make a good show,” he said softly.”

He told me that he’s not certain what he’ll do after Thursday. “It depends on what other dealers do,” he says. “I don’t want to be the only one that is completely out of business.”

For those of you who have not been following the ban, here’s the deal: The Consumer Product Safety Improvement Act (CPSIA), passed last year, put strict limits on the amount of lead contained in products made for youths aged 12 and younger. The Consumer Product Safety Commission (CPSC) was charged with implementing the law.

Fair enough, except that the agency folks said the law was so poorly written that they were being forced to ban the use of many products, such as books and clothing and, of course, ATVs and motorcycles. That ban became effective Feb. 10, known as Black Tuesday to powersports business people. “We have no choice,” say agency representatives. “Yes, you do,” say Congressional leaders.

In the meantime, while the bickering continues in Washington, none of these units are moving out of dealerships during this, the top selling season in states such as California. The season for off-road riding ends in many states in the next month or so. And it’s costing dealers money they can’t afford to lose in this down economy.

There are 45 kids' units sitting in Smith’s store today. “When Malcolm looks at all those units sitting in his showroom with ‘Not For Sale,’ tags on them,” says one person close to the situation, “it drives him crazy.”

Malcolm, 68, isn’t your average, seat-of-the-pants dealer, who runs his business out of a shoebox. He sold about 1,300 units in 2008, an off year, and rang up about $20 million in revenues. Malcolm Smith Motorsports recently was named the top dealership in the nation by Dealernews magazine, the oldest and largest business magazine serving the North American powersports industry.

He’s also an award-winning motorcycle racer and is a member of Motorsports Hall of Fame and the Motorcycle Hall of Fame. Oh, and he co-starred with actor Steve McQueen in the classic motorcycle movie, “On Any Sunday.”

Smith figures he’s lost at least $5,000 in net profit since Feb. 10, on lost revenues of more than $30,000 for units and parts and riding gear that he couldn’t sell. The Motorcycle Industry Council (MIC) estimates that the ban could cost the industry $1 billion this year, and Dealernews magazine estimates there is more than $100 million of unsold inventory sitting in dealer storage areas.

For all of his achievements, Malcolm Smith is a very quiet, soft-spoken gentleman. So, it was a shock to hear him answer quietly, when I asked him why he would do this. “The government is f_ _ _ _ _ up,” he said, simply.

“How in the world did they think kids would go licking their ATVs? I think you can go to any Target store and buy silverware from China that’s not lead tested and you can eat off that.” Hmmmm. Good point.

“This (law) is unbelievably not thought out,” says Smith, as he warms to the topic. “That’s the same government that couldn’t catch Bernie Madoff (who ran a $50 billion investment scam) for 20 years. We were told about two weeks before (the February deadline) that we couldn’t sell the things. If you’re going to do something like that, you’ve got to give the factories some warning.”

Smith says the current ban prevents parents from buying safety gear, such as helmets, for their kids and it encourages parents to buy machines that are too large for their children, a real safety hazard, one that’s much more dangerous than the remote possibility of lead ingestion.

Banning children’s machines also cuts off an important source of new riders, argues Smith. “We need to get people into the sport,” he says. “This is the biggest issue that I see this industry facing — there’s no way to feed new riders in. What are we, a Nanny state, where we need Big Brother out there telling us what’s safe for everybody?

“The bottom line,” says Smith, “is that consumer protection protection people are trying to do away with ATVs and motorcycles for kids.”