New Jersey Auto Chiefs Warn Of Negative Economic Impact If AB 2035/SB 927 Becomes Law, says Auto Alliance and Global Automakers

WASHINGTON, June 25, 2014 /PRNewswire-USNewswire/ -- The heads of North American operations for seven global automakers headquartered in New Jersey today sent a letter to Senate President Steven Sweeney detailing their opposition to auto franchise legislation expected to be heard in a Senate committee tomorrow.

"If passed into law, Assembly Bill 2035 and its Senate companion – Senate Bill 927 – would create the most onerous, anti-consumer, anti-business auto franchise regulations in the country," wrote the North American heads of BMW, Jaguar Land Rover, Ferrari, Maserati, Mercedes-Benz, Subaru, and Volvo Cars – all based in New Jersey. 

New Jersey is currently the East Coast home to the U.S. auto industry.  In addition to seven company headquarters, New Jersey is home to countless regional sales offices, finance centers, parts distribution facilities, and port operations.  Collectively, auto manufacturers directly employ 4,000 individuals in over 30 facilities in the state, and their operations impact more than 145,000 New Jersey jobs.  In 2010 alone, auto-related taxes and fees made up 10 percent, or $2.69 billion, of the state's tax revenue.

Automakers have also invested heavily in New Jersey port operations.  According to new federal government data, overall automaker activity at New Jersey ports rose 16 percent in 2013 over the previous year.  Light vehicle-related total imports climbed 12 percent, and light vehicle-related total exports rose a whopping 51 percent.

"SB 927 devalues these significant automaker investments in New Jersey and has the potential to influence future market decisions within a very competitive industry," wrote the group.  "It unfairly restricts automaker input into how the very products we make are presented, marketed, and sold and upends any balance that currently remains between manufacturers and franchised dealers in the state we currently call home."

Automakers warn that if SB 927 is passed as reported by the Assembly, these changes could not only have a significant negative impact on their in-state operations and the business climate in New Jersey for years to come, but also negatively impact New Jersey consumers.

A copy of the letter follows.

The Alliance of Automobile Manufacturers is an association of 12 vehicle manufacturers including BMW Group, Chrysler Group LLC, Ford Motor Company, General Motors Company, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Cars North America.

The Association of Global Automakers represents international motor vehicle manufacturers, original equipment suppliers, and other automotive-related trade associations. We work with industry leaders, legislators, and regulators to create the kind of public policy that improves vehicle safety, encourages technological innovation, and protects our planet. Our goal is to foster a competitive environment in which more vehicles are designed and built to enhance Americans' quality of life. For more information, visit www.globalautomakers.org.

June 25, 2014

Hon. Steven M. Sweeney, President
New Jersey State Senate
State House
Trenton, New Jersey   08625

RE:       ANTI-BUSINESS AUTO FRANCHISE ACTION (SB 927/AB 2035)     

Dear President Sweeney:

As automakers with our North American operations headquartered in the State of New Jersey, we write to express our strong opposition to recent action taken by the New Jersey State Assembly to amend New Jersey auto franchise law.  If passed into law, Assembly Bill 2035 and its Senate companion – Senate Bill 927 – would create the most onerous, anti-consumer, anti-business auto franchise regulations in the country.

AB 2035/SB 927 would not only raise the cost for automakers to do business in the state, but it would also unnecessarily raise costs for consumers to buy and maintain a vehicle in New Jersey through the effective elimination of popular customer incentives like zero percent financing and cash back at sale.  It also has a negative effect on retail auto repair prices across the state.

New Jersey is currently the East Coast home to the U.S. auto industry.  In addition to our companies' headquarters, New Jersey is home to countless regional sales offices, finance centers, parts distribution facilities, and port operations.  Collectively, auto manufacturers directly employ 4,000 individuals in over 30 facilities in the state, and our operations impact more than 145,000 New Jersey jobs.  In 2010 alone, auto-related taxes and fees made up 10 percent, or $2.69 billion, of the state's tax revenue.

Automakers have also invested heavily in New Jersey port operations.  According to new federal government data, overall automaker activity at New Jersey ports rose 16 percent in 2013 over the previous year.  Light vehicle-related total imports climbed 12 percent, and light vehicle-related total exports rose a whopping 51 percent.  All New Jersey port auto-related activity – including vehicles, parts, and accessories – in 2013 totaled over $14.8 billion.  The Port Authority of New York and New Jersey (PANY/NJ) says it is the largest port in the United States for automobile imports and exports – despite countless other East Coast port options – and its enterprises support more than 279,000 jobs representing nearly $12 billion in annual wages. 

SB 927 devalues these significant automaker investments in New Jersey and has the potential to influence future market decisions within a very competitive industry.  It unfairly restricts automaker input into how the very products we make are presented, marketed, and sold and upends any balance that currently remains between manufacturers and franchised dealers in the state we currently call home.

Not only is SB 927 opposed by manufacturers, but organized labor shares serious concerns with this proposed legislation and its impact upon the industry.  And multiple provisions in the legislation would negatively impact New Jersey consumers, unquestionably raising costs and inconvenience.

The last dealer-sponsored change to New Jersey's franchise law was enacted in 2011, which resulted in drastic modifications to the franchise environment in this state.   Dealer representatives have failed to factually demonstrate why further change is warranted or needed.  If passed as reported by the Assembly, these changes could not only have a significant negative impact on our in-state operations and the business climate in New Jersey for years to come, but also negatively impact New Jersey consumers.

We ask that this legislation, as written, be dismissed by the Senate.

Thank you for your consideration.

Sincerely,

Ludwig Willisch
President & CEO
BMW of North America, LLC

David Wertheim
Vice President & General Counsel
Ferrari North America, Inc.

Joachim W. Eberhardt
President & CEO
Jaguar Land Rover North America, LLC

Peter Grady
CEO
Maserati North America, Inc.

Stephen Cannon
President & CEO
Mercedes-Benz USA, LLC

Thomas J. Doll
President & CEO
Subaru of America, Inc.

Tony Nicolosi
President & CEO
Volvo Cars of North America, LLC

SOURCE Auto Alliance