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Dealer agreement issue boiling up again

It was anything but cold for dealers in Alaska’s House Judiciary Committee hearing room on February 13 when H.B. 303 received a favorable Committee vote. But the fact there’s a bill in Alaska’s legislature at all sadly indicates that the decades-long quest for better dealer agreements rolls on.

The reality is if Alaska’s dealers find they must turn to their lawmakers to legislate certain aspects of the manufacturer/dealer relationship, something’s gone wrong. What happened to the proposed new dealer agreements once hailed with great fanfare by both manufacturers and dealers in Washington 3 years ago?

I’m referring, of course, to the Special Task Force chaired by David Slikkers of S2 Yachts, which produced recommendations for unprecedented changes designed to settle the major problems cited by dealers with these agreements. It was also expected to eliminate the need for legislation in the states. Moreover, the recommendations were unanimously approved by the Boards of the NMMA and MRAA. Many boat manufacturers, covering more than 60 brands, committed to adopting the recommendations in their dealer agreements no later than the 2007 model year. Things were definitely looking good!

Why, then, is there a bill in Alaska?

Well, it seems safe to say what was expected to happen hasn’t happened. The excellent work of the Task Force has not found its way into dealer agreements and the dealers in Alaska, at least, have decided to battle it out in their legislature. I say battle, because the NMMA is burning up the bucks flying between Washington and Alaska to oppose the dealer initiative.

Larry Innis, MRAA’s Director of Government Relations, testified in “strong support” of the Alaska bill. The bill, he says, includes fair and timely warranty payments; repurchase of 2-year old boats if cancelled by the manufacturer; territorial rights and protection; the long-term security of multi-year terms; and protection from cancellation including non-renewal without cause, among other issues.

If you compare the Alaskan bill with the Task Force recommendations approved by the NMMA’s Board in 2005, they seem pretty much in line. So, it seems to me the NMMA ought to resolve with Alaska’s dealers the discrepancies between their bill and the Task Force recommendations and save a lot of airfare!

One of the prime reasons the Task Force, made up of 14 dealers and 13 manufacturers, spent more than a year hashing out their recommendations was to end the need to battle this issue in state legislatures across the country. After all, when you stand back and look at it, you see it’s a blatant waste of limited industry financial and human capital on all sides that could be better used to increase demand for our products these days.

But in light of the failure of manufacturers to follow through on their own recommendations, I expect Alaska won’t be the only state where dealers will seek a legislated solution.


3 comments on “Dealer agreement issue boiling up again

  1. George Fischell

    The failure of manufacturers to amend their dealer agreements indicates a deep rooted desire to maintain an iron control of the dealer body. Unless and until the manufacturers begin to look at dealers as allies as opposed to a “necessary evil” we will see more and more legal challenges to these old-time agreements.

  2. Frank Surface

    It is gratifying to learn that Alaskans are hard at improving the manufacturer/dealer relationship. For many years I have participated in the marine industry as a dealer and marina owner and have aways thought that the manufacturers take advantage of the dealers. Marine Max did something about it in the late 90’s and our industry has benefited from the efforts of Marina Max. Our Alaskan friends are helping the entire industry by pushing for better dealer agreements. In economic times like we are in now, it should be obvious to all of us that the industry as a whole suffers from the manufacturer’s one-sided agreements.

  3. Concerned

    I have watched this blog since its inception and I think it is painfully clear as to why the dealer agreements have been bogged down forever. The lack of discussion of this issue in this blog, and everywhere else for that matter, and lack of response speaks volumes. So long as dealers continue to ignore this issue there will be no progress and builders will have their way as they always have. The entire dealer body in this country should be ashamed of their lack of fortitude in tackling this issue.
    We hate parallels being drawn between us and auto dealers, yet they are eons ahead of us in their relationships with their builders. Their warranties are paid daily, their agreements are fair and complete, territories are secure and second rate dealers do not get a franchise.

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