Michigan dealers say all they want to do is to amend the state's outdated franchise law to make it compatible with current retail auto conditions.
The Big 3 say the dealers' proposal is anti-consumer, anti-competitive and anti-business.
Consequently, dealers and the Big 3 have locked horns over proposed revisions to Michigan's Dealer Franchise Protection Act, introduced to the state Legislature on May 1.
The proposal, which is supported by the Detroit Auto Dealers Association and the Michigan Automobile Dealers Association, would:
Limit a manufacturer's right of first refusal.
Widen dealers' sales territories.
Give dealers more control over their business.
The American Automobile Manufacturers Association, which represents General Motors, Ford Motor Co. and Chrysler Corp., say the proposal would, among other things:
Raise the price of vehicles.
Restrict rebate programs that benefit consumers.
Make it more difficult for consumers to get their vehicles serviced.
AAMA also says the proposed transfer of ownership provision and bigger territories would hurt manufacturers' efforts to add minority dealers.
Rod Alberts, executive director of the Detroit Auto Dealers Association, said those allegations are not true.
With 250 dealers in the Detroit area and 850 statewide, there are plenty of dealers to serve consumers in Michigan, he said.
Alberts said several changes have taken place in the retail auto industry since Michigan's law was enacted in 1981 and amended in 1983.
Vehicles have become more technologically sophisticated; many manufacturers have initiated Project 2000 plans to downsize and/or consolidate their dealer networks; and some Michigan dealers' profits are compromised by Chrysler, Ford and GM employee purchase plans.
The battle brewing between Michigan dealers and automakers is not unique.
Franchise law challenges are common in several states, including Texas, which has seen a flurry of activity in recent weeks.
In early May, the Texas Department of Transportation Motor Vehicle Division warned Lincoln that its plan to withhold the 1998 Lincoln Navigator from small-volume dealers may violate sections of the Texas motor vehicle code.
Also last month, an administrative law judge for the Texas Department of Transportation sided with Toyota Motor Sales U.S.A. Inc. and denied a request by Republic Industries Inc. to allow the purchase of Joe Myers Toyota of Houston without a hearing.
In Maryland, a proposal that protects a dealer's rights to transfer ownership to family members in the event that the dealer dies or is incapacitated was passed by the legislature and went into effect Oct. 1, 1996.
Said Joseph Carroll, president of the Maryland New Car & Truck Dealers Association: 'We are very pleased with what we got in 1996; we think it will strengthen our laws.'