It is time to pass SOLD Act and help Wisconsin auto dealers

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William Sepic
Tuesday, July 5, 2011

Most Wisconsinites probably don’t realize that local car dealers are one of the most important employers in our state. A lot of people probably also don’t realize that auto dealerships are privately owned, independent businesses that are 100 percent funded by the dealer owners. Dealers pay for everything, including the vehicles on the lot, facilities, employee training and promotional items.

Hidden by the corporate logos, local dealers account for more than 20,000 good-paying jobs in our state. These small businesses are a key to Wisconsin’s economic engine, but they’re being held back by an industry that has done little to help the state in recent years and a lot to hurt it.

Large automakers have taken advantage of their taxpayer-funded bailouts and bankruptcy protections to force local car dealers into unfair business agreements, costing the dealers’ money and jobs.

For instance, under current Wisconsin law, automakers can require dealers to make expensive cosmetic changes to their facilities without reason. The dealer, not the manufacturer, pays for these out-of-pocket expenses.

In one case, a Wisconsin car dealer had to redesign his dealership’s front entry by shrinking it by a mere couple of feet to meet the automaker’s demands. The change cost $150,000 and came just three years after the dealer spent $1.2 million remodeling the facility to manufacturer specifications. Imagine if that dealer had the $150,000 or, better yet, the $1.2 million to invest in staff and salaries instead.

What’s more, under current Wisconsin law, automakers can prevent dealers from selling new cars from other manufacturers in the same facility without justification, meaning dealers are forced to weather the good and the bad with one auto manufacturer.

Clearly car dealers should have a say in making these kinds of decisions. After all, it’s the auto industry—not the dealers—that readily took millions of dollars in Wisconsin tax breaks, only to turn around and force layoffs of hundreds of Wisconsin taxpayers by shutting manufacturing plants and closing 100 Wisconsin dealerships.

For years automakers have been shedding jobs and making questionable market choices. Their mismanagement should not be our state’s misfortune. We need to rebalance the nearly 80-year-old law that governs the relationship between automakers and auto sellers to give more control to local dealers and create jobs.

The Save Our Local Dealers Act (SOLD Act) that is being debated in Madison is a step in the right direction. The SOLD Act empowers local dealers to make the best decisions for their businesses without placing undue burdens on the automakers.

Should a manufacturer want to see a dealership remodeled, for instance, they’re free to do so as long as they provide proof that the change makes both esthetic and economic sense.

The SOLD Act puts job creators back in the driver’s seat and restores the balance of power between big automakers and local auto dealers.

Wisconsin business owners and workers have been down one too many detours with the automakers. It’s time to start heading in the right direction.

William Sepic is president of the Wisconsin Automobile & Truck Dealers Association, P.O. Box 5345, Madison, WI 53705-0345.

Last updated: 5:58 pm Thursday, December 13, 2012

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