http://www.bloomberg.com/news/articles/2015-02-17/koch-brothers-sierra-club-join-tesla-in-fight-with-dealers Koch Brothers, Sierra Club Join Tesla in Fight With Dealers by Dana Hull February 17, 2015
(Bloomberg) -- Talk about strange bedfellows. The environmental group Sierra Club and Americans for Prosperity, the political action group funded by the Koch brothers, are both backing Tesla Motors Inc. in its battle to avoid franchised dealers and sell cars direct to consumers. Both are among 10 public-interest groups that have signed a letter to U.S. governors and legislators in support of the electric-car maker. Tesla has been fighting legal battles in many states to be able to sell cars without enlisting independent franchised dealers. Tesla has been trying to get around the dealer franchise system that has controlled who can sell cars for decades. The public-interest groups’ letter, set to be released Tuesday, argues that existing franchise laws “retard innovation.” “Tesla’s market entry through direct distribution is providing consumers with beneficial new choices on what vehicles they buy and how they buy them,” the groups said. “Moreover, our concerns are not limited to Tesla, as these laws have similarly negative effects on any company seeking to distribute their cars directly to consumers.” The automaker has battled car dealers in states including Michigan, New Jersey and Texas over the right to sell its Model S sedan through company-owned stores. The Palo Alto, California-based company has argued that state franchise laws create a monopoly for dealerships and has said that car dealers are coordinating efforts to hinder Tesla sales. The signers of the letter include three free-market groups, four competition and consumer-protection organizations, two environmental organizations and the Information Technology and Innovation Foundation. Daniel Crane, associate dean for faculty and research at the University of Michigan Law School, led the effort in hopes of influencing legislators in the states such as New Jersey, where new-car dealers are required to have a franchise agreement to get a state license. Tesla has bypassed the dealership model and said that consumer education, from the manufacturer, is key. The auto industry is far more competitive than it was decades ago when many of the laws were passed, according to the groups’ letter. [© bloomberg.com] ... http://en.wikipedia.org/wiki/Koch_family Profit-loving Koch brothers ... http://www.sierraclub.org/sierra/2013-4-july-august/feature/rise-plug-hybrids Hybrid-loving Serria Club ... http://en.wikipedia.org/wiki/Tesla_Motors#Business_model_and_US_automotive_dealership_disputes AAM dealership disputes ... http://www.govtech.com/state/Legislation-Would-Let-Tesla-Sell-in-Texas.html Pending Legislation Would Let Tesla Sell in Texas by Jim Malewitz, The Texas Tribune / February 20, 2015 ... [dated] http://www.wsj.com/video/tesla-toughest-challenge-your-local-car-dealer/0CA16854-846A-426A-9F93-741C958473FF.html Tesla's Toughest Challenge: Your Local Car Dealer 6/18/2013 http://www.mlive.com/auto/index.ssf/2015/02/koch_brothers_and_sierra_club.html Koch brothers and Sierra Club unite behind Tesla By David Muller | February 18, 2015 [images (flash slideshow)] DETROIT, MI - What would it take to get the Koch brothers and the Sierra Club to stand beneath the same tent? The answer is purported anti-consumer laws affecting Tesla Motors, a California-based electric carmaker that has its direct-to-consumer sales outlawed in Michigan and elsewhere. The Koch brothers' Americans for Prosperity conservative political advocacy group and environmental protection group the Sierra Club have signed a letter decrying the "anti-consumer effects" of laws barring direct vehicle sales in states like Michigan. Acknowledging their broad range of public interests, the signatories of the letter, listed below, note they frequently find themselves on different sides of policy debates. "However, we now find common ground on an issue of considerable public importance concerning state laws that restrict the purchase and sale of automobiles," states the letter, released Tuesday. "In short, we oppose efforts by state legislatures or regulatory commissions to forbid car manufacturers from opening their own stores or service centers in order to deal directly with consumers." In October, Gov. Rick Snyder signed a bill his office described as bipartisan legislation that simply strengthens existing law as it pertains to automobile dealership sales in Michigan. But Tesla's legal team argued the bill - HB 5606 - is a direct effort at shutting the company and its unique, direct-to-consumer sales model out of Michigan. The bill was approved 38-0 in the Senate and 106-1 in the House of Representatives after being presented to state legislators as aimed at prohibiting car dealerships in the state from dictating fees they charge customers. With the legislation, dealerships can decide whether or not to charge certain transaction fees. "This bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan - because this is already prohibited under Michigan law," Snyder said in a letter to lawmakers that accompanies the signed bill. Todd Maron, general counsel for Tesla, said at the time that not only does it further ensure that company cannot sell directly to consumers in the state, it goes so far as to prohibit Tesla from displaying its cars to and communicating with potential customers in Michigan. Tesla has also run into what some see as dealership-backed laws preventing its direct-to-consumer sales in places such as Texas, Arizona, New Jersey, and to some degree, Maryland, too. "At the time these laws were passed many decades ago, the car dealers argued that manufacturers should not be allowed to compete directly with their own franchised dealers, since they might then be able unfairly to undercut their dealers on price," Tuesday's letter reads. "However valid these concerns may or may not have been at a time when the 'Big Three' manufacturers dominated the market, it is important that the law keep up with the changes that have occurred in the automobile market today." General Motors for its part released a statement shortly after the bill was signed, throwing its support behind it. "We believe that House Bill 5606 will help ensure that all automotive manufacturers follow the same rules to operate in the State of Michigan; therefore, we encourage Governor Snyder to sign it," read GM's one-sentence statement, posted to its media webpage. The letter from Tuesday goes on to say that the group's concerns are not limited to just Tesla, but apply also to other companies seeking to distribute their cars directly to consumers - something the signatories argue could reduce costs and increase consumer satisfaction. The group argues that laws preventing direct-to-consumer sales "retard innovation." The coalition was brought together with the help of University of Michigan law professor Daniel Crane, who specializes in anti-trust laws. The letter is signed by American Antitrust Institute, Americans for Prosperity, Consumer Federation of America, Consumer Action, Consumers for Auto Reliability and Safety ("C.A.R.S."), Institute for Justice, The Information Technology & Innovation Foundation, Mackinac Center, Sierra Club - National and Environment America with chapters from 28 states, including Michigan. 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