The legislation, which takes effect March 1, 2003, bans incentives tied to customer satisfaction and other operating standards. Senate Bill 470 also bars manufacturers from including the cost of such illegal incentives in new-vehicle prices.
Under the Ford Blue Oval certification program launched last year, Ford dealers who meet operating and facilities standards are rebated 1.25 percent of the dealer invoice price on each new vehicle sold. Fully certified Lincoln-Mercury dealers receive 2.5 percent of the sticker price as part of a similar program.
"We support the Blue Oval program," said David Farris, vice president of Farris Motors Inc., a Chrysler-Dodge-Jeep dealer in Rocky Mount, N.C., and chairman of the North Carolina Automobile Dealers Association. "But we are opposed to the incentive. It gives the manufacturer too much control over dealerships."
The legislation could cause trouble for Ford in other states. Sixteen other state dealer associations have shown interest in the bill, said Bob Glaser, president of the North Carolina Automobile Dealers Association.
Ford argued that the legislation is discriminatory because it lets other manufacturers that had similar incentives in place before Oct. 1, 1999, continue their programs until Dec. 31, 2007. BMW of North America Inc., Land Rover North America Inc., Mercedes-Benz USA Inc. and Volvo Cars of North America Inc. have incentives that otherwise would be prohibited by the law.
"Why discriminate against Ford?" asked Jim O'Connor, Ford Division president. "I find that to be unfair."
At least 20 Ford dealers who support the Blue Oval incentives opposed the bill and lobbied actively against the legislation, O'Connor said. But Glaser said there are 135 Ford dealers in the state, and most of them supported the legislation.