Sidelined dealers to lobby for Olds stores

NADA agenda placed on back burner after terrorist attacks

A dealer agenda, deferred for now
  • Tax breaks for Olds dealers

  • Ban on mandatory binding arbitration

  • Resistance to excessive CAFE

  • WASHINGTON - Automobile dealers are ready to throw support behind a newly introduced bill in Congress to provide tax breaks to Oldsmobile dealers who are losing their franchises.

    Hundreds of members of the National Automobile Dealers Association were in Washington last week to lobby Congress for that bill and other issues on the association's agenda. It was NADA's annual legislative conference.

    But because of terrorist attacks on the World Trade Center in New York and the Pentagon - just three miles from the dealers' Washington hotel - the conference was canceled abruptly. NADA members struggled to find ways home.

    NADA leaders, stating the obvious, advised members that their agenda would be put on the back burner, but they encouraged dealers to follow up later with their own members of Congress.

    "Our hearts and minds right now are concerned with the events that have occurred, with the people whose lives have already been lost in this tragedy and how this country is going to respond to this terroristic war that has begun," NADA Chairman Robert Maguire said.

    On front lines

    He said the dealers, state association executives and NADA staff - about 450 conferees -inadvertently had become a "captive audience" to the unfolding events and found themselves "on the front lines" of that war.

    The bill to benefit Oldsmobile dealers would allow them to defer taxes on payments they receive from General Motors for terminating the brand.

    If a dealer chose to reinvest the proceeds in another franchise within two years, no tax would be owed. If a dealer chose not to reinvest, the bill would provide for installment payments of the tax owed.

    Automotive News reported Monday, Sept. 10, that GM is offering buyouts of up to $2,900 per new vehicle sold by an exclusive Olds dealership in its best year of the past three years.

    So, a dealership that sold 500 cars would get up to $1.45 million - and the owner would face a potentially large tax bill. The proposed tax break was introduced by Rep. Dave Camp, R-Mich., in late June.

    Friendly makers

    Before the legislative conference ended prematurely, lawmakers advised NADA the tax break for Oldsmobile dealers would be difficult to enact this year because Democrats in Congress are opposed to more tax cuts. But odds for the measure should be better next year, Maguire said.

    The chairman said a bill to ban mandatory binding arbitration from dealer franchise agreements still heads NADA's agenda.

    He said that measure's chances have improved since the Alliance of Automobile Manufacturers decided to take a neutral stand on the bill instead of opposing it, as the automakers have done in past sessions of Congress.

    Maguire said he also is encouraged by more dealer-friendly gestures from GM and Toyota Motor Sales U.S.A. Inc.

    NADA contends that binding arbitration denies dealers the rights they have earned through state franchise laws to settle disputes with manufacturers at state boards or in court.

    Maguire said dealers also support manufacturers' efforts to prevent an unreasonable increase in corporate average fuel economy standards, known as CAFE.

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