During a special panel discussion at the Dealership Minds Summit, we brought in John Schmeiser, retired dealer association exec,  and COO of TI Technology Corp; Eric Wareham, vice president of policy with AED and Brett Davis, CEO of NAEDA, to help break down the impact the FTC/Deere agreement will have on dealers of all colors. 

At the end of the day, Davis says the agreement isn’t a major change and that Deere — and the industry as a whole — was already moving in this direction. 

"Not even just Deere. I think the industry was moving in the general direction. I mean, I go back and if you do a quick comparison between the famous MOUs with the OEMs from the Farm Bureau, which is the Federal Farm Bureau, there's not that much different in the settlement from the MOU if you read the language in the context. So it's nothing all that earth shattering. And the one thing that is completely absent, there is no mention of the Farm Bureau in the settlement at all and no commitment. So we're still going to see the states have causes of actions. That's still going to continue because that's not prohibited by the settlement whatsoever. But honestly, I don't think it really going to change that much. When I look at a dealer's profile, could they lose a little bit of service here and there? Sure. But they may also have an opportunity to make it up on additional parts sales too and some of the tool sales."

"So it could be a balance. I don't think it's earth shattering. I think it looked big in the paper, but at the end of the day, it's kind of like John alluded to, I'm not sure it really changes the landscape materially."

While the industry was moving this way with the MOUs various OEMs had agreed to, Wareham says this adds an enforcement mechanism.

"While we're searching, I'll just add this. One of the important distinctions, Brett said it, that largely the settlement codifies the MOU. It mirrors it in a lot of. And he's correct. One of the big distinctions is that in all of the battles at the state level or provincial level, when we talk about MOUs, the criticism was always that they're kind of a pinky promise, that there was no enforcement mechanism for the MOUs. Now, I mean, the reality is that the reputational risk, if you violated those MOUs would be insurmountable for a manufacturer. But still, it was a legitimate criticism that there was not a legal enforcement mechanism. With this settlement, that is no longer true. This is a court settlement. There is a complaint mechanism within the settlement that anyone can bring to the FTC and thereby get adjudicated by the courts. And so now there is an enforcement mechanism."

"This is legally binding. That's a huge distinction to go to the state legislatures and say, what do you need to run legislation for? One, it may conflict with the settlement. But two, there's no need. There's an enforcement mechanism and it's a living mechanism that's going to last for 10 years."

Schmeiser stresses that while the settlement is specific to Deere, the other OEMs are likely working on their response and how they will handle it right now. 

"So this is an industry issue. And like you said, Deere was the whipping boy on this. And I think one of the challenges that both NAEDA and AED are going to have when we see a state bill come is they're going to say, well, yeah, that FTC settlement affects John Deere, but there's Case IH, there's New Holland, there's AGCO, there's Claas out there as well. And so my assumption would be that those companies right now are looking about what they can do because they were part of the industry commitment going back, when was that? 10 years ago where the industry commitment came together and all these OEMs came together and said, "We're going to provide special tools and diagnostic equipment." Because they took an initiative then, I'm sure they're looking at where do they go now? Because they're going to be asked about it. The customers, dealers are already asking their OEMs, "What are you going to do in response to this?" So I do believe that they're working on that response right now."

"And it's probably going to align with what Deere has, but Case IH or New Holland's solution to this can't be identical to what Deere's is because they're different companies. And the same thing with maybe like a shortline manufacturer. They're different as well. So everyone is probably going to have the same principle that Deere has, but tweaked for their individual business."

All three agreed that for the most part this settlement doesn’t shift the needle drastically for the industry on the issue and that we are largely sitting in the same spot as we were previously