MRAA, NMMA split over dealer bill

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The Marine Retailers Association of America is lobbying for passage of a new dealer bill in Alaska, calling it a necessary measure to protect dealers as well as consumers.

The National Marine Manufacturers Association is against the bill, arguing that it will disproportionally transfer business risks from marine dealers to marine manufacturers.

Larry Innis, MRAA’s director of government relations, testified April 6 before the House Labor and Commerce Committee on behalf of marine retailers in strong support of the Alaska dealer bill, H.B. 177. Joining with about 10 other supporters, including boat dealers, consumer advocates and an automobile dealer, Innis described the history of the dealer agreement controversy dating back to 1976. He stressed the importance of a strong warranty reimbursement program, stronger assurances from boat manufacturers on future business relationships to correspond with the increased financial commitment required by manufacturers to keep a product line, and the need to build a viable business with assets to sell or transfer.

Other dealers and consumers described problems with current warranty procedures, quality control of boats, and the challenges in Alaska to fulfill wage demands of employees when dealers receive insufficient reimbursements for warranty claims. Members of the committee and several organizations that testified say H.B. 177 will greatly benefit consumers and even referred to it several times as a consumer bill, according to Innis.

The bill passed the House Labor and Commerce Committee, 7-0, and was referred to the House Rules Committee awaiting floor action. It is expected the Senate will look at the House-passed bill in the next few days.

“The Alaska Dealer Bill addresses many of the issues expressed by boat dealers throughout the long history of this issue and has strong support in the Alaska legislature, but time is fast running toward adjournment,” MRAA chairman Ed Lofgren said in a statement. “Action in the next couple of weeks will be critical.  MRAA will continue to work closely with the Alaska boat dealers to help passage.”

However, NMMA’s David Dickerson told Soundings Trade Only that the bill is a “misguided attempt to regulate relationships between marine dealers and manufacturers.”

Overall, H.B. 177′s mandates would protect dealers from poor repair service, override technician training requirements set by manufacturers, and set unrealistic requirements for a manufacturer replacing or refunding the cost of a boat, according to Dickerson, NMMA’s director of state government relations.

Specifically, the NMMA objects to:

  • regulation of cancellations/non-renewals
  • repurchase obligations that require manufacturers to buy back three years of models if a contract is not renewed without cause
  • warranty reimbursements, requiring manufacturers to pay top-dollar reimbursement without requiring any training
  • replacement of product (“lemon law” protection), because marine products are usually an assembly of components manufactured by different companies under different warranties

Dickerson said the bill also relies on a flawed assumption that marine dealer-manufacturer relationships are similar to automobile dealer-manufacturer relationships.

“The bill will not only hurt manufacturers who are already struggling in this difficult economic environment, but provide consumers with lower service standards and warranty protection,” he said.

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Comments

4 comments on “MRAA, NMMA split over dealer bill

  1. Mark Qualkinbush

    Wow manufacturers will actually be held accountable and have to accept some of the same risks as a dealer.  Actually I’m against any kind of regulations.  I agree that something needs to be done to create a positive working environment between dealers and builders.  As an ex-dealer it is currently a one sided game in favor of builders.  No dealer should ever sign a contract with the 30 or 60 day opt out clause that releases contractual agreements. No dealer should ever be forced to take more inventory if they have a higher market share in their local market than the builder has nationwide.
    Enough said, we know the problems but I do think it’s time for dealers to join together to protect their rights.
    Mark Q

  2. capn bill

    Having been involved in this complex issue in the past, I believe there is a great need for a stronger dealer agreement. I also believe training and csi should be part of  that agreement. The days of the one sided manufactures agreement need to come to an end, but certain reasonable requirements are needed on the dealer side.
    That said, you can bet that the manufacturers will mount a forceful response to this. I been envolved at both the state and national level and you can rest assured they will not give up their superior role in the dealer manufacturer relationship without a no holds bared fight. What fair is secondary to their desire to have the upper hand. It does need to bcome a two way street.
    Capn Bill

  3. Phil Friedman

    MRRA and NMMA need to get on the same page, and off the totally non-productive adversarial horse. As a former VP Operations for a multi-location dealership in Florida (many years ago), I can vouch for the need that dealers have for being protected in the event of arbitrary (without cause) cancellation of a dealership agreement. Especially in view of the move to increase the required financial commitments of dealerships. And manufacturers need absolutely to increase the warranty reserve they build into their pricing, so that servicing dealers can be propely recompensed for warranty work.
    On the other side, it’s time for dealers to stop trying to make warranty work a profit center. Granted service should be, but warranty should be break even only.
    This is a time for interest-based, not positional, negotiation.

  4. Dudley

    In response to Mr Friedman’s comment. I believe he is missing or forgetting the facts that the MRAA and the NMMA had a joint Committee headed up by Slikkers of S2 5 years ago that did develop a model dealer agreement that both sides agreed was needed. It states and requires that warranty labor by a dealer shall be at shop rate for the repair time required to fix the problem AND full retail on all parts used in warranty repairs. His comment about a dealer should not be able to realize a profit for warranty work is astounding. How does a dealer earn back the costs of all of his technician schools, special tools, software fees, infrastructure costs etc. If the average dealer nets a 2-4 percent of sales pretax profit and the manufacturer is not paying retail on fixing the manufacturers mistakes, the dealer loses money on warranty work period. As long as the systems in place allow a manufacturer to get it fixed “in the field” cheaper than building it correctly the first time, this industry will continue to be plagued by quality problems and unhappy customers. Holding anyone, dealer or manufacturer fully accountable for their mistakes will only benefit the marine industry and be fair to the consumer.

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