Originally created 02/11/99

Car dealers take issue to Legislature

ATLANTA -- Georgia's car dealers have taken their battle with automakers to the General Assembly in a fight over who can sell their brands.

Independent dealers fear manufacturers' plans to counter national dealership chains could spell the end of mom-and-pop-run showrooms. They persuaded Democratic Rep. Dubose Porter of Dublin and Sen. Charles Walker of Augusta to introduce bills prohibiting auto manufacturers from owning more than 10 percent of a dealership.

"This is kind of trying to sweep back the tide," said Dwight Davis, an attorney specializing in franchise issues with King & Spalding in Atlanta.

"If someone is going to put the mom-and-pop operations out of business, it is the Republics," he said.

Large firms like Republic Industries and CarMax have been building or buying out dealerships around the country. They have lowered their overhead costs by centralizing operations like accounting and purchasing, giving them the ability to offer some cars to the public at lower prices.

Ford and Saturn have plans to allow their dealers to sell all or part of their dealerships to a manufacturer-sponsored organization that aims to take advantage of similar economies of scale.

Members of the Georgia Automobile Dealers Association see a more sinister motive.

"They are going to take the bottom line that was the dealer's bottom line, and it will now be Ford's bottom line. They are not going to lower (retail) prices," said Lou Litchfield, a lobbyist for the 600-member association.

With $16 billion in cash, Ford can easily buy out an attractive dealership, according to William F. Morie, the association's president.

"The big misconception is that we are out to put our dealers out of business," responded Robert Cucchi, Ford's regional governmental affairs director. "To me the General Assembly has better things to do than swatting at ghosts."

Both sides claim they are protecting consumers by offering them more choices to buy their cars at better prices.


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