NCMDA Mulls Franchise Laws

Franchise legislation and the new restrictions on kids’ products were hot topics at the second annual meeting of the National Council of Motorcycle Dealer Associations (NCMDA) that took place here Thursday. Also discussed were the state associations themselves: how they should be organized, how much money they should raise, and how they should recruit dealers. The attendees, who hailed from 18 states, said that in a down economy, dealers should seek security in strong representation.

Imagine arriving somewhere with the intention of speaking with the OEMs — and then being confronted with a roomful of lawyers. Two state dealer associations said that this is what happened to them after introducing 2008 legislation designed, among other things, to stop manufacturers from using rebates at the retail level to encourage dealers to buy more.

The Wisconsin rep said his association last spring introduced legislation based on recently passed franchise laws in Montana. In June he and other board members met with the manufacturers in Milwaukee. The rep said some OEMs agreed to help set up the bill, some said no, and some said nothing. Yamaha is the greatest supporter, the rep claimed. He also reported hearing reports that the MIC is less cohesive because of these disputes.

The California Motorcycle Dealers Association (CMDA), which also introduced a bill last year, had a similar meeting in August at MIC headquarters in Irvine, Calif. The association wanted Ed Lemco to attend as a consultant, but the MIC would not allow it. According to CMDA director John Paliwoda, the OEMs said they would eventually get back to him with suggestions, but they never did. He also said that the MIC and SVIA hired lobbyists to defeat the bill. Due to California’s budget crisis, however, the legislation never made much progress.

Lemco, himself an MIC member, said that lobbying against franchise legislation is an inappropriate use of the council. The MIC is a representative of around 300 companies, he said, not just the major vehicle manufacturers. Some aftermarket members reportedly don’t want to be associated with the killing of franchise laws. Said Lemco, “So there is dissention with the rank and file of the MIC, saying, ‘Hey, this should not be an MIC issue; it should be an OEM issue.”

Georgia’s association rep noted that now is a great time to introduce franchise legislation because the OEMs have less money to fight it. He claimed the OEMs recently lost their lobbyist for his state.

Tim Buche, president of the MIC, confirmed this lack of lobbying funds during the council’s annual meeting Friday. Unfortunately, this will also affect the association’s fight against bills related to off-road access, ATVs, sound and other issues.

Buche explained to Dealernews that no aftermarket funding is used to lobby against franchise laws. The council’s Aftermarket Committee effectively controls those funds, he said. “The MIC may have a collective voice,” he said, “but some [members] may weigh in, some may not, and they may have a different opinion individually… There’s not a single dollar of aftermarket dues money that goes to fund anything but the aftermarket committee’s initiatives. It’s not the aftermarket that is upset. It’s a few companies that happen to be members as aftermarket companies of MIC.”

Why was Lemco barred from the California meeting? “We didn’t feel he would be productive to the process,” Buche said, noting that all NCDMA members were invited to attend, just not the director. “I have been on panels with Ed, and Ed has Ed’s world, and then there’s our reality, and it’s pretty different.”

Buche also made a case against franchise laws from a dealer’s perspective. “A lot of the franchise legislation issues increase costs to consumers because you’re building in possible liabilities that generally protect underperforming dealers, and good dealers end up having higher costs through the products because the manufacturers have to look at all their expenses and include them in the cost of the vehicles. It’s a delicate balance of what’s just right.”

Buche continued: “I just really encourage a good dialogue with the state associations because there’s what you hear and what people say, and then there’s realities, and we find those out when we meet at the state level with the people involved.” Buche also made a call for better communication between MIC members and dealers during his annual meeting comments.

-- Arlo Redwine