Friday, May 14, 2010

Dealers Suffer Either Way with the Brownback Amendment

First, I’d like to go on record as saying that I sincerely believe that the Brownback Amendment is a good thing. The last thing auto dealers need is more regulation. Most dealerships are highly ethical and provide a great service to the public by helping provide affordable auto financing. NADA, as usual, is doing an outstanding job of lobbying for dealers’ interests.

Unfortunately however, the media spotlight this amendment has received has once again brought negative attention to the auto industry. Any way you look at it, the President of the United States, the U.S. Military and numerous consumer groups are fundamentally stating the auto dealers can’t be trusted. That’s never a good thing.

Whether we like it or not, it’s difficult to deny that there are unscrupulous dealers out there who do indeed prey on consumers – often they run small lots close to military bases. This is unfortunate but should not be a reflection of the industry as a whole because these sleazy operations represent just a tiny percentage of auto dealerships in this country.

It’s the other end of the spectrum that is far more concerning. Take for example, the late, great Bill Heard Chevrolet. Here was a dealer group that was in business for almost a century, had 14 big stores, did over $2 billion in annual sales, and employed 3500 people…hardly a corner lot next to a tattoo parlor.

Before they went out of business, Bill Heard was battling all kinds of accusations, lawsuits and regulatory actions - including forgery, deceptive advertising, credit fraud, identity theft, sexual harassment, and just about anything else you can think of. Once the dealerships closed their doors, the media couldn’t say enough about the compliance issues – it was instant national news. Besides the pending lawsuits, hundreds of Consumer Affairs and Better Business Bureau complaints came to light. To add insult to injury, Bill Heard was also cited with labor violations for violating the WARN act after it closed.

Although Bill Heard was a victim of the economy, I can’t help but think that they also suffered the consequences of their own bad behavior in their demise. It’s very sad for the many, many honest, hard-working employees that lost their jobs. As for the few dishonest employees that committed the illegal, unethical acts – they have blemished the entire industry.

 Dealers just don’t need any more bad press.

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