I don't like blackmail in business. Tesla Motors CEO Elon Musk is attempting to blackmail the governor of Michigan into making an exception for him.
Two years ago, Michigan's Legislature tightened a law that bans direct sales of vehicles to consumers.
Under the new law, if manufacturers want to sell automobiles in Michigan, they have to use franchised dealers. There are hundreds of car dealers selling and servicing vehicles for customers in this state.
Tesla applied to sell cars anyway, and that was denied by the Michigan secretary of state last month.
Now Tesla has filed suit in federal court and also is threatening to withhold building a future plant in Michigan. A company executive said late last month that states that have made it difficult to sell cars are poor candidates for plant consideration.
Musk may also want a special tax incentive for someone to buy one of his cars like they have in California.
Sorry, folks, but Tesla has to learn to play by the rules sooner or later.
The Michigan franchise law should not be amended.
Right now, Tesla seems to be surviving with a huge amount of debt and lots of government subsidies. Shortly, Tesla will have more competition, starting with the Chevy Bolt, which you can buy without a deposit and which can be serviced at dealerships across the nation.
Elon Musk is a very bright fellow who apparently thinks that rules are for the other guy.
If he wants to compete in Michigan, he needs to have dealers. I don't know anyone who would want to drive hundreds of miles to buy a car or have it serviced.
A Tesla plant in Michigan is highly unlikely in the first place. But the threat is outrageous. Blackmail is a very bad business practice.
Michigan's franchise law for automobiles is good for the consumer. There are plenty of dealers and plenty of competition.
But most important, the Michigan consumer is served far better than if factories represented themselves.
If you look at the electric car market, there will be plenty of choices available to consumers. If Tesla chooses not to compete, consumers will have lots of vehicles that will have low prices and longer driving ranges.
Gov. Rick Snyder of Michigan should call out Tesla's blackmail attempt for exactly what it is.
If Tesla wants to compete for customers, it knows what it has to do.