Rivian Teases Jobs For Georgia If The State Considers Direct Sales (jalopnik.com) 86
According to Automotive News, Rivian is using jobs as bait to get direct sales going in Georgia. Jalopnik reports: Last fall, Rivian made a huge announcement. It wanted to invest in Georgia and bring thousands of jobs to the state. The company announced that it had plans to build a $5 billion plant that would eventually employ 7,000 workers and build 400,000 vehicles a year (a tall order for a company that sells vehicles that are more than the median U.S. household income). State lawmakers damn near drooled over the plan. Georgia governor Brian Kemp even proposed spending $125 million on land and training for the plant. But Rivian had a favor to ask: Pass Georgia house bill 460 to allow direct sales in the state. Not just for them, but for all manufacturers. Rivian has pretty much backed the state of Georiga into a corner.
While the state has allowed an exemption for Tesla to perform direct sales since 2015, no other automaker has been allowed to perform direct sales. Of course, dealers see this as a direct threat to their existence. President of Atlanta-based Jim Ellis Automotive Group Jimmy Ellis pretty much argued that dealers give customers the best product selection and service [...]. He then pointed to Tesla's struggle with vehicle service to emphasize his point. Dealers are even arguing about a loss of jobs. But we all know what that is about: Franchise dealers know that direct sales are a better way to do business for the customer. They're just so stuck in their ways and greedy that they don't want to change.
While the state has allowed an exemption for Tesla to perform direct sales since 2015, no other automaker has been allowed to perform direct sales. Of course, dealers see this as a direct threat to their existence. President of Atlanta-based Jim Ellis Automotive Group Jimmy Ellis pretty much argued that dealers give customers the best product selection and service [...]. He then pointed to Tesla's struggle with vehicle service to emphasize his point. Dealers are even arguing about a loss of jobs. But we all know what that is about: Franchise dealers know that direct sales are a better way to do business for the customer. They're just so stuck in their ways and greedy that they don't want to change.
"Dealers give customers the best service" (Score:2)
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Not in the state of "Georiga" :)
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Large businesses naturally enjoy certain advantages like economies of scale and other barriers to entry over smaller businesses, so how do you propose to level the playing field between auto manufacturers and independent dealers?
Re: "Dealers give customers the best service" (Score:2)
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I recall reading that at the time these protection laws were created, they caused competition to decrease and prices to increase, because they brought in the franchising agreements - which resulted in geographic monopolies. (Not typically a huge area; you can get to multiple Honda dealers, for example. But you can't start a new one inside the territory of an existing one.) Based on that, just ending the laws might help level the playing field.
On the other hand, vehicle purchasing and delivery has changed a
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>so how do you propose to level the playing field
>between auto manufacturers and independent
>dealers?
Protecting millionaires from billionaires at the cost of higher consumer prices is hardly a legitimate function of government.
doc hawk, displaced economics professor
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Automotive dealers presently operate within the framework of government-mandated protectionism, in clear contrast to the alleged free enterprise system.
The US and Western Europe do a fair job of promoting competition, compared to other systems and governments. Make no mistake, though, protecting certain segments of business manufacture and distribution from free market competition Benefits these businesses and their political benefactors, not the customers.
On the other hand, the domination of tech by Micro
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So there are no open markets then? Name one sector of the market where there isn't some government regulation. I'm not so sure that you would actually like a truly open market with no government regulations.
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the domination of tech by Microsoft, Google, and Facebook is perhaps more dangerous
It is interesting that the 3 companies you name as "dominant" aren't even the 3 biggest tech companies.
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Apple and Samsung are bigger, at least by measure of annual revenue; though their revenue streams essentially compete with each other on many fronts, essentially negating the lack of competition. These two are not often before governing bodies defending their business models.
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Every day I read on this site about the evils of capitalism, and the need for more government intervention. This is the outcome.
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Every day I read on this site about the evils of capitalism, and the need for more government intervention. This is the outcome.
The irony is that government intervention in the markets (and people's lives) is only occasionally benevolent. Powerful lobbying interests and unfettered campaign contributions virtually assure some measure of control over government by special interest groups.
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This must be why the vast majority of people in North America absolutely loath the very notion of having to go into a car dealership to buy a new car. It is one of the worst experiences that we all get subjected to with all of the bullshit that the sales people throw at you.
The only way I have been able to get away from this treatment was to spec out a new vehicle online, call a dealership and tell them that this is precisely what I want, give me a price. The ones who insist that I go in to the dealership b
Re: "Dealers give customers the best service" (Score:2)
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I get the best service from a dealer. Have you actually gotten better service from an unauthorized shop? They're all shady out by me. Dealers may cost 2-3x more, but they've always been nice and accommodating by me. Most also offer benefits to their employees, but those small shops don't.
I can't imagine manufacturers giving better service. Manufacturers fight every warranty, but dealers still make money off of those services. You'd pretty much be relying on the manufacturer to both diagnose and approve the
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One can find examples of both good dealers and really foul direct sales. There's a real question in my mind as to which is better on the average. That said, many manufacturers try to cut responsibilities as much as possible, and some resellers make their business on improved service. Also resellers tend to be smaller, and thus more dependent on local reputation. But, of course, this only works if there's some way to find out what their real reputation is, and a managed communication channel doesn't prov
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I get the best service from a dealer. Have you actually gotten better service from an unauthorized shop?
I wouldn't go near a dealer unless it's free warranty work. My local shop has been in business for decades and they'll even install parts that I purchased.
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I get the best service from a dealer. Have you actually gotten better service from an unauthorized shop? They're all shady out by me. Dealers may cost 2-3x more, but they've always been nice and accommodating by me.
What does that have to do with buying a car? They can continue to provide that exact same service even if you bought the car somewhere else.
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I get the best service from a dealer. Have you actually gotten better service from an unauthorized shop? They're all shady out by me. Dealers may cost 2-3x more, but they've always been nice and accommodating by me. Most also offer benefits to their employees, but those small shops don't.
The dealership I bought my car from was great. They handled service in a timely manner, they were friendly, not pushy at all, and honestly felt like they cared about my business.
The dealership near where I now live, I feel like they don't give two bits about my business. They never seem to be pleasant and the service team always takes twice as long as they quoted. I haven't been shopping for a new car in over 10 years now, so I can't speak to how they act for the actual sales process.
The shop I take my c
Re: "Dealers give customers the best service" (Score:2)
They make it up in blinker fluid changes.
Well, they do (Score:2)
Yeah, I can go to the dealer and I know
Political Suicide (Score:2)
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Everywhere else you get pills in blister packaging directly from the factory lines, but in the U.S., the pharmacist has to count the pills into small containers with a new label. Where's the added value to the actual person who has to take the pills for their illness?
And then people wonder, why medication is so expensive in the U.S..
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FWIW, I live in the US, and many medicines that I take come in blister packages. I hate those things, because they're always so difficult to open, if it often results in a pill either crumbling or ending up on the floor. When given an option I always pick the bottle, even if it means I need to order a different quantity.
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But in the U.S., every medication has to be packaged by a pharmacist. That's why in the U.S. movies and series, people always carry those small plastic containers with their medication around
I would advise against getting your medical knowledge from movies and series. By that reasoning every computer can be backed up in less than a minute just by plugging in a USB drive.
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In the UK they just sell different size packs. 7, 14, 28 days' worth are common. The doctor chooses the pack size, and if you are taking medication long term they can prescribe multiple packs which keeps the cost down (we pay a flat rate per prescription).
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Because they don't? One of my prescriptions comes in branded, sealed bottles that are clearly manufactured that way. The pharmacist isn't involved in packaging the pills.
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Are you sure the blister pack of pills is coming directly from the manufacturer? Most pharmacies can blister pack pills as well. Our local pharmacist would blister pack my mother's pills into daily requirements (each day had morning, noon, supper and bedtime allotments). I don't think you will find a manufacturer that can do that for you (especially since the pills weren't all from the same manufacturer). If you only need one type of pill there is probably a supplier that makes blister packs for that pill (
Re: Political Suicide (Score:2)
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No guarantees Rivian will be successful in car biz. Those promised jobs could be fleeting.
Nice try but entrenched interests have dug their claws in deep. Car companies come n Go depending on innovative products but dealers they uh are a plenty. The dealers push up car prices but they help used car market with extending warranty service.
They also push off a lot of the risk for manufacturers since they wind up holding, and paying for, cars until they are sold. They also provide valuable feedback on local demand so the manufacturer doesn't have to estimate demand in each area. My guess is the rea
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Rivian have an actual product that they are shipping to customers, albeit slowly. They seem like a reasonable investment to make, they have proven that they can deliver and so far customers seem happy with their trucks.
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Just standard Republican hypocrisy.
Their my body my choice argument is the most biggest load of shit yet. If they honestly believed that then they would shut up about abortion.
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All politics is local. Maybe allow them near the factory and near Tesla dealerships so they compete against each other
Greedy? (Score:2)
Is it really greedy if the law poses an existential threat? I mean, yes, they want to continue making profit, but allowing direct sales essentially threatens to put all those franchises out of business.
So while I support the direct sale model, I’m not sure that I would use the adjective “greedy” to describe their opposition
Jobs from big companies: Always a pipe dream (Score:2)
How did the idea of big new factory jobs work with Foxconn in Wisconsin? How well has it ever worked?
If a state wants lots of jobs, it should plan on doing it the old-fashioned way: Makework. Hire a lot of people, and give them jobs where they do nothing productive. Most bureaucrats are like the people hired to dig holes and then fill them in. The real benefit is that employing them moves tax money around.
Expecting Rivian to hire a bunch of people for their factory just because of direct sales is dumb.
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Well .. not always. It requires a good contract with enforceable penalties that will be enforced, but it can be done. Of course, most companies wouldn't be very attracted by a deal that wouldn't let them back out or not live up to their promises.
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Where is the existence proof that "it can be done"?
Specifically, I think we are talking about cases where significant incentives are provided to induce a company to locate lots of new jobs in a particular city or state, and the benefits to the city or state clearly exceed the costs of the incentive.
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Various "company town"s come to mind. Other than that I admit I can't think of many. I suspect this is because companies won't do it unless they have lots of control, or can easily get out. China has a few examples. (Of course, they bribed the companies with promises of allowing them to sell products in the country.)
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How did the idea of big new factory jobs work with Foxconn in Wisconsin?
The man who was involved in the whole debacle tells you everything you need to know. Maybe Foxconn had a better understanding of Art Of The Deal.
Related Story (Score:3)
What's different here are some of the other factors. Some locals just want to hate on electric vehicles. Unlike Ford's Model T, most of the locals are unlikely to be able to afford a Rivian. The fact that George Soros has $2 billion invested in Rivian brings out the usual creeps, kooks, and conspiratorial types. The fact that it's a California (gasp!) company making green (gasp!) technology makes some suspicious that it's a plot to make Georgia more Democratic: good-ol' boy farmers being pushed out by kambucha-sipping techies, some weird take on Replacement Theory. The incumbent Republican governor, Brian Kemp, has been a booster of this project. His Trump-backed primary opponent, former US Senator David Perdue, has lambasted the project for all the reasons listed above.
The article concludes that, in spite of some of the vocal griping, a poll by the Georgia Chamber found two in three favor the project and, unless some major shift happens, it'll probably move forward.
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What necto81 said is true, but slightly off.
The people in the area of the proposed Rivian plant that are objecting aren't farmers nor are they locals. It's well to do Atlantans who retired to 5 acre plots in the country or have well paying jobs that they can commute to. It's really just a distant suburb. They want to be near Atlanta for the amenities and medical care, but they want to avoid the hassles of city living, noise, traffic, and crime. A big manufacturing plant would bring all those things, they sa
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Not really. What he's saying sort of matches my memories. They didn't exactly switch sides, because neither was really about protecting the populace, and neither is. They're about loyalty to the party power structure. Since the Warren court more minorities will vote for Democrats, so the Democrats try to get the minorities to vote, and the Republicans try to suppress that vote. If a particular minority switches which way it votes, the parties will immediately switch positions. But they haven't switche
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Not really. What he's saying sort of matches my memories. They didn't exactly switch sides, because neither was really about protecting the populace, and neither is. They're about loyalty to the party power structure.
It's about getting elected.
Before the CRA southern Democrats got elected by appealing to poor white folks who wanted to protect their place in society from black people. Post CRA that appeal got harder to make, so the segregationist Democrats either started supporting more civil rights or they became Republicans, but some of them managed to hold onto that constituency longer than others.
Right now those folks are mostly gone, in the red states the Democrats who succeed are those like Manchin, Conservative De
First Ukraine, now Georgia? (Score:2)
Tell Putin that Georgia, over Stalin's dead body, ain't for sale.
I don't know how I feel about this... (Score:2)
While I can't stand dealers I don't trust the car manufacturer to do the right thing. If I were the governor I would say yes provided that vehicles delivered to Georgia came with all keys delivered to the owner, digital and physical. With technical as well as owner manuals need to also be provided. Warranty service centres cannot be more than 25 miles from populations of 100K or more. The owner of the car has complete and total access. Then yes.
Re: The Internet in year 2000 and 2022 = day and n (Score:2)
Dealers and Greed (Score:2)
It's not exactly that dealers are stuck in their ways and greedy, it's that their business model depends on these protections, and if this legal change happens then there will be very few dealers left 5 years afterwards.
The change should still happen; dealers should go the way of horse and buggy, but mischaracterising them is not necessary.
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I'm not really certain about that. Centralized power structures tend to offer less flexibility and fewer choices. And they are harder to argue with. OTOH, the only power the customer really has these days is to select who they're going to do business with. But narrowing the range of choices isn't likely to improve things.
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Little meaningful flexibility or choices are added when what's being sold is essentially the same thing from dealer to dealer. Generally dealers just take a cut and add no meaningful value (even when they do, it almost never is worth their cut).
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Perhaps you need to select your dealer more carefully, which can be difficult with the limited information. I was quite happy with a dealer I selected after first buying a used car from them, and then observing how they serviced that car when it needed service.
Re: Dealers and Greed (Score:2)
Dealerships will have to evolve to mobile-first c
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Re: Dealers and Greed (Score:2)
when self-drive comes along
Why do all the socialists think self driving technology will have anything to do with automobile ownership models? You will check out a Hyundai Accent from the pool (the one the homeless guy threw up in). Stop waiting for my self driving Bentley.
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It's not exactly that dealers are stuck in their ways and greedy, it's that their business model depends on these protections, and if this legal change happens then there will be very few dealers left 5 years afterwards..
I think dealers will still be around but in different forms. The big chains, such as AutoNation will be best positioned because they have scale vs a small locally owned one. One challenge for the manufacturers is warranty work. How will they do that? Dealers don't like doing it because it pays much less than other work, but do it because of the franchise agreement. So unless the manufacturers want to setup warranty centers they still need dealers. A lot of the costs dealers now have, such as storage, p
A Brief History of Dealer Franchise Laws (Score:3)
II. The Anatomy of Dealer Protectionism
A. A Brief History of Dealer Franchise Laws
Automotive manufacturer franchising of dealers began in 1898 with a franchise by General Motors to sell steam automobiles.9 However, for the first few decades of the 20th century, manufacturers employed a wide variety of distribution methods, including dealer franchising, direct distribution through factory-owned stores and traveling salesmen, and distribution through wholesalers, retail department stores, and consignment arrangements.10 Dealer franchising was not the early predominant model. As automobile consumption intensified, however, the manufacturers found it necessary to move increasingly to a franchise model in order to focus on their core competency in manufacturing and find additional sources of capital to fund their distribution operations.11
The dealer-franchise system with which we are accustomed today grew out of intensive lobbying efforts by car dealers from the 1930s to the 1950s in response to perceived abuses of the franchise relationship by car manufacturers.12 At that time, the car companies were large, powerful, and few in number—the Big Three dominated the market. Dealers were largely “mom and pop” shops, organized on a small scale.13 Manufacturers were able to secure contracts that imposed draconian terms on the dealers.14 For example, during the Depression, Henry Ford kept his factories running at “full tilt” and allegedly was able to “force” dealers to buy inventories of Model Ts that they would be unable to sell, under threat of not getting any more inventory in the future if they refused delivery.15 According to a 1956 Senate Committee report, franchise agreements of the 1950s typically did not require the manufacturer to supply the dealer with any inventory and allowed the manufacturer to terminate the franchise relationship at will without any showing of cause.16 Conversely, as with the Ford example, the manufacturers could often force dealerships to accept cars whether the dealer could sell them or not.17 Thus, the franchise agreements were perceived as shifting risk downward to dealers and reward upwards to the manufacturers.
The dealers made some headway in the courts challenging the franchise agreements as contracts of adhesion.18 But the relief they ultimately needed was legislative. During the 1930s to 1950s, the dealers pressured Congress to enact a statutory scheme protecting them from the power of the Big Three. They obtained relatively little of what they wanted from the federal government. A 1939 report by the Federal Trade Commission (“FTC”), which had been encouraged by the car dealers, did find some franchising abuses by manufacturers, but one of the report’s headlines was that the use of manufacturer power to squeeze the dealers actually created intensive retail competition to the benefit of consumers.19 The FTC also turned the tables on the dealers and accused them of various anticompetitive or anti-consumer practices, such as “padding” new car prices, price fixing, and “packing” finance charges—not the news the dealers wanted.20 Eventually, the dealers secured a modest federal victory with the Automobile Dealers’ Day in Court Act of 1956, which allows dealers to bring a federal suit against a manufacturer who, without good faith, fails to comply with the terms of a franchise agreement or terminates, cancels, or refuses to renew a franchise.21
The dealers secured more significant victories in state legislatures. During the same time period, states began to pass statutes governing automotive franchise relations.22 Today, such laws are on the books in all 50 states.23 Their terms vary, but they commonly include prohibitions on forcing dealers to accept unwanted cars, protections against termination of franchise agreements, and restrictions on granting additional franchises in a franchised dealer’s geographic market area.24
https://ilr.law.uiowa.edu/prin... [uiowa.edu]
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If they're going to kill dealers (Score:3)
I'd really like to see requirements to allow independent repair shops access to everything needed to repair the cars.
That'd actually be a win/win since dealer repair shops and dealer salespeople both are awful.
Tell them to pound sand (Score:2)
Just on principle. These sorts of deals pretty much never work out well for the state.
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Huh? Why? I'd agree with you if this was another (typical) case of a business wanting massive tax breaks and incentives to put a facility in the state. (Those deals always involve big promises about "job creation" and so forth, but wind up where the state effectively pays huge amounts in lost revenue per individual hired, thanks to all the negotiated breaks for the business. And whenever the deal expires, the company looks at moving someplace else.)
A demand to change the law in the state to let them do d
lottery (Score:2)
These places always seem to want to jump from backwater to silicon valley in one move, loke a lottery windfall.
If instead they had fostered a good tech environment (well educated locals, startup spaces, infrastructure) they could have grown organically over the last 10 years. They want the results without the work and wonder why is all falls flat.
Dealers are thieves in loud sports jackets (Score:2)
"Jimmy Ellis pretty much argued that dealers give customers the best product selection and service"
When talking about car dealerships, anybody mentioning "dealer" and "service" in the same sentence is using "service" in the barnyard sense.
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I agree with you 100%. There's plenty of evidence that unregulated manufacturers are no more ethical than unregulated dealers. There's just something about the way dealerships run, though, that's really infuriating. I don't know anybody who's ever dealt with a dealership who doesn't have a story about how they got screwed over in one way or another.
Only dealing with a huge company has disadvantages (Score:2)
re: Tesla service (Score:2)
I'm in a similar situation (bought a used 2014 Model S first and then owned a used X for a while and now drive a Model 3).
To be honest though? Tesla's service, while frustrating in some ways, has still ultimately been better than what I ever got from companies like Ford or Chrysler or Nissan.
Yes, they hide behind their app for scheduling service and won't let you just call and talk to somebody. But I also realize that's part of their business model to improve efficiency. (It wastes a lot of time if your ser
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Here is my experience: Tesla service is terrible.
My experience has been exactly the opposite. My Model X just had an A/C failure last week. I scheduled service on the app. Constant communication from the service team. Given a $100 a day credit for Uber. Delivered it to service for a compressor replacement two days later. Got an app notification within 4 hours that the car was repaired and ready for pickup. Picked up the car and all is well. Very painless.
"Free Market" Republicans (Score:2)
Why is it "free market" Republicans never support free market and less government unless it helps their cause? ;-)
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It's astonishing to see monopoly allowed in USA (Score:2)
Lots of local opposition to Rivian factory (Score:2)
People are upset that the factory will receive millions of dollars in taxpayer funds as a subsidy.
Also being built on a greenfield site.
https://www.nytimes.com/2022/0... [nytimes.com]
Opponents cite a range of concerns. Some fear the factory will contaminate the groundwater. Others disapprove of the lucrative public incentives being offered to Rivian. Many worry the huge facility will change the area’s bucolic character, increasing light pollution, snarling traffic and spurring more development.