Dealer agreement issue boiling up again

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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.

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