Published DateCONCORD — Donna Gaudet Hosmer of Laconia, a principal of the AutoServ dealerships of Tilton and Laconia who chairs the New Hampshire Automobile Dealers Association (NHADA), said yesterday that by strengthening current law, Senate Bill 126, the "Dealer Bill of Rights," will help to ensure a balanced relationship between local dealerships and national manufacturers.
Sponsored by 20 of the 24 members of the New Hampshire Senate, SB-126 carried this week by a bipartisan majority of 21 to 2. Senators Peter Bragdon (R-Milford), president of the Senate, and John Reagan (R-Deerfield) were the lone dissenters while Hosmer's husband, Senator Andrew Hosmer (D-Laconia), vice-president of AutoServ of Tilton, did not vote, citing a conflict of interest.
The bill now goes before the House of Representatives where Pete McNamara, president of the NHADA, said he was optimistic that it would succeed.
McNamara said that the relationship between dealerships and manufacturers is regulated by law in all 50 states and that the New Hampshire statute (RSA 357-C) was enacted in 1981.
Donna Gaudet Hosmer explained that the NHADA, which represents more than 550 car, truck, motorcycle, heavy equipment and recreational vehicle dealers, sought to stiffen the law when relations between dealerships and manufacturers soured during and after the Great Recession. Threatened with collapse, manufacturers, especially Chrysler Corporation and General Motors, closed some 1,700 dealerships across the country and called in the "floor plans", the credit lines that finance inventory, at others, she said. Stressing that dealerships are small, independent businesses that together employ some 14,400 people in the state, Hosmer said that "we all struggled through the last few years."
As the industry began to recover, Hosmer said that car makers required dealerships to construct new or renovate old facilities to designs and specifications set by manufacturers. "I call them 'garage-mahals,'" she remarked. Moreover, she said that dealerships had to purchase materials and furnishings from vendors, usually located outside New Hampshire, specified by the manufacturers.
SB-126, McNamara said, follows the lead of other states by prohibiting manufacturers from requiring the construction and renovation of new facilities more frequently than once in 15 years. He said that there is no evidence that uniform facilities have any impact on sales. Likewise, the bill authorizes dealerships to deal with local contractors and suppliers. McNamara said that the bill "will stop the unfair pressure and spending mandates passed down to us from manufacturers."
Hosmer emphasized the importance of the capacity to "shop local," noting that like other businesses, automobile dealers are members of the community who establish and sustain relationships with neighboring businesses by patronizing them whenever possible. "We want to price shop, but we also want to shop locally when we can," she said.
A unique feature of SB-126 would offer dealers access to manufacturer's files on dealerships, which are akin to the personnel files of employees. If access is denied, the bill would forestall manufacturers from using information from the files to make decisions about allocating inventory or qualifying dealers for sales promotions and pricing events.
Stressing that dealerships are independent businesses, Hosmer said that the pressure from manufacturers weighs especially heavily on the smaller operations in rural areas, for which the cost of conforming to the manufacturer's requirements is onerous. She feared manufacturers would target dealerships that failed to conform, which could ultimately lead to a less competitive marketplace overshadowed by "mega dealers."
Hosmer said that while SB-126 aims to protect dealerships by ensuring their balanced relationship with manufacturers, it also preserves competition, which is ultimately beneficial to the consumer.