Absentee Owners Are Care-Less Types

Suppose your new car develops a warranty problem. Who’d you rather call? A 1-800 number in Detroit? (For radiators, press 2 now.) Or a local dealer whose kids attend your neighborhood school?

Suppose you live in a medium-sized Eastern Washington city.

Would you rather buy and service a car locally or drive to Seattle? And what do you think will happen to libraries and police if the car dealer closes and stops paying taxes?

Suppose you’re in charge of a charitable fund drive. To whom will you go for major donations, if top local firms have faraway owners?

Locally owned auto dealerships, and all of their civic and economic contributions, are in jeopardy. To help them survive, the Legislature is considering Senate Bill 6220. We hope it passes.

Most auto dealerships have been owned by local business people. But now, auto makers are racing to own dealerships themselves, aiming to close or compete with existing dealers.

Competition between the new and old dealers would not be fair because manufacturers control the game. The likely result? Monopoly. Fewer dealers, declining service, rising prices.

Why should government get involved in this? In fact, it’s involved already. Washington law regulates auto franchises, with good reason. Like consumer laws, franchise law protects the public from destructive, monopolistic business practices.

Auto manufacturers have access to the finances and customer lists of local dealer franchises. So, makers know exactly what it would take to undercut local dealers and steal their customers. Plus, manufacturers control wholesale prices and the supply of the most profitable, in-demand vehicles. A dealer with more of the hottest cars can make a profit; dealers without them can’t.

SB6220 would prohibit manufacturers from owning dealerships. It also would require manufacturers to treat dealers equitably, in pricing and product distribution.

Newspapers have a stake in this because we publish auto advertising. Many others have a stake, too. City and county governments get a big chunk of their tax revenue from auto dealers. Dealerships pay salaries that average $39,000 a year. They contribute generously to local causes. Spokane’s George Gee, for example, is a prominent backer of local schools and sports. Carol Wendle, Roberta Greene and Chris Marr are just a few examples of civic leadership from auto dealer families.

The public will be best served if changes coming to the auto trade preserve locally owned businesses and take advantage of their strengths. Local businesses generate goodwill. They provide consumer choice and specialize in customer service, siding with their customers in warranty disputes with manufacturers. As Internet commerce unfolds, goodwill, service and fair competition should be protected.