On March 4, the U.S. Supreme Court said they wouldn’t hear an application filed by several manufacturers that challenged the New Hampshire law that included farm equipment and other dealers under the state’s “Dealer Bill of Rights.” The bill, was passed in 2013, signed by the state’s governor and, after the manufacturers’ challenge, upheld by the New Hampshire Supreme Court.
According to published reports, the law offers several protections, like requiring “good cause” before ending a dealer’s business, limits forcing dealers to sell their business, limits on mandatory upgrades to facilities, a buy local provision to save on expenses, and proper reimbursement for warranty work done by dealers. The New Hampshire law extends these provisions to construction and farm equipment dealers.
In an interview with Ag Equipment Intelligence’s On the Record, which aired last Friday, Pete McNamara, president of New Hampshire’s Automobile Dealers Assn., said, Deere and the other manufacturers involved in the appeal were trying to argue that their relationship with their dealers and their business model is different from the auto and truck makers.
“If you were to put car and truck dealers and motorcycle and snowmobile and equipment dealers all in the same room and say, ‘Talk about your relationship that you have with your manufacturer and how you are treated, but don’t tell us what you sell,’ you wouldn’t be able to pick out who was which. It’s all identical.”
I guess the increasingly adversarial relationship between manufacturers and their dealers that seems to be more and more apparent in the farm equipment business is the same, regardless of the industry. If you think about it, it’s really hard to believe that manufacturers would want to subjugate their dealers to the point where dealers feel they need state and/or federal laws to protect themselves.
(Manufacturers should be careful about asserting too much control over their dealers. There’s been rumblings that McDonald’s control of its franchisees, to the point of regulating employee behavior and appearance, may be considered a “co-employer,” thus directly liable as a partner in employee litigation.)
In any case, last week I got a call from a farm equipment dealer who happens to also own a car dealership. His was a bit irritated that his state association hasn’t taken similar action as the dealers in New Hampshire. “They don’t have to re-invent the wheel,” he said, implying that auto dealers have a bit more juice than that farm or construction equipment dealers when it comes to passing legislation.
Well, at least the dealers in New Hampshire have acted, and the Supreme Court backed them up! I believe there may be some others as well. With what we’ve seen recently, it would seem prudent for those who haven’t already had a conversation with their automotive counterparts, might want to do so — posthaste.