MRAA, NMMA split over dealer bill - Trade Only Today

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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