AFF- AUTOMOBILE SALES
Intro:
1c- Pass this BC it will encourage competition within the US
W- TTB we will respecting the principles of free market capitalism
D- Steve Chapman, Editorial Writer, Chicago Tribune, June 2013
● The effort to prevent direct sales comes from existing car dealers, who like the arrangement they have.
● They claim to be trying to prevent "unfair competition," but the competition they prevent looks unfair only to those who profit from a protected market (a market w/o competition).
!- We all have to remember that a fundamental part of competition is to allow consumers to buy what they want however they choose to do so.
D- Economic Consultant Gerald Bodisch released a report on the Department of Justice in 2009:
● Performed a meta-analysis of the economic effects of laws that prohibit the direct sale concluded that it harms consumers and the economy.
!- We must pass this bill to encourage more of those direct sales and make sure that we can stimulate the economy and respect competition within the United States --competition will only benefit us.
2c- Pass this BC it will help consumers
W- TTB citizens won’t be forced to pay for added accessories
D- Francine Lafontaine, Director of the Bureau of Economics, Federal Trade Commission, May 2015
● (Like Tesla,) Elio Motors will pursue a direct customer sales plan to keep down the price of its new vehicle at around $6,800.
D- According to The official website of Elio Motors
● Most auto dealers add car bundles liked added heaters, leather seats, and so on, in order to make a profit. This drives car prices up past what they’d be if consumers could buy from manufacturers.
● At Elio, you can add accessories after you purchase the car for that base price.
!- Emily Badger, The Washington Post, April 1, 2014
● Many people can’t afford cars; but having unreliable transportation leads to an increased chance of losing one’s job. This means not only are people without a job unable to get cars bc of how overpriced they’ve become, but without cars, those people are going to have a harder time getting and keeping a job.
● In 2011, the number of people with no car and no reliable public transportation was 700,000; that’s 700,000 people at risk of losing their jobs simply because cars are too expensive to buy. Pass this, and change their lives.
1-
http://articles.chicagotribune.com/2013-06-20/news/ct-oped-0620-chapman-20130620_1_tesla-motors-car-dealers-car-costs
The effort to prevent direct sales comes from existing car dealers, who like the arrangement they have. They claim to be trying to prevent "unfair competition," but the competition they prevent looks unfair only to those who profit from a protected market.
https://www.justice.gov/atr/economic-effects-state-bans-direct-manufacturer-sales-car-buyers
With dealer networks being rationalized as part of cost-cutting initiatives, direct manufacturer sales to car buyers may present an additional opportunity to lower distribution costs. Such sales might range from consumers' simply ordering assembled vehicles of their choice directly from automakers to a scenario along the lines of the "Dell Direct" build-to-order model that revolutionized the personal computer production and sale process. GM initiated a build-to-order sales model in Brazil for its Chevrolet Celta economy car over eight years ago. In 2008, the Celta was among the sales leaders in Brazil.(3) At the time of the Celta's introduction, an auto analyst said that build-to-order could result in "spectacular improvements in the company's competitiveness and profitability."(4)
In the United States, however, direct manufacturer auto sales are prohibited in almost every state by franchise laws requiring that new cars be sold only by dealers. These bans on direct manufacturer sales are part of a broad array of state laws that bar manufacturer ownership of dealers and regulate entry and exit of dealers through territorial restrictions and provisions on dealer termination. Analysis of the economic effects of these laws has led some to conclude that they harm consumers and should be eliminated.(5) The focus here is more narrow – state laws banning direct manufacturer sales, since they may be curtailing development of a more cost-effective method of auto distribution.(6)
2- https://www.bloomberg.com/news/articles/2016-09-22/tesla-lawsuit-claims-michigan-direct-sales-ban-unconstitutional
Tesla eschews the traditional franchise dealership model, saying that electric cars -- as a new technology -- are best sold to consumers directly from the manufacturer, in part because consumers have so many questions about safety, batteries and how to charge their vehicles.
https://www.ftc.gov/news-events/blogs/competition-matters/2015/05/direct-consumer-auto-sales-its-not-just-about-tesla
Elio Motors(link is external) has announced plans to manufacture an innovative low-cost, high-mileage, enclosed three-wheeled vehicle. According to announcements by the company, it plans to offer its products for a base price of $6800—less than a tenth the price(link is external) of the cheapest Tesla Model S. The firm plans to manufacture the vehicles at a facility in Shreveport, Louisiana, beginning in 2016. As of March 29, 2015, it had accepted more than 41,000 reservations for the vehicles. Like Tesla, Elio Motors does not intend to establish an independent dealer network, but rather plans to pursue a direct customer sales plan(link is external) to keep down the price of its products.
https://www.washingtonpost.com/news/wonk/wp/2014/04/01/why-the-poor-need-better-access-to-cars/?utm_term=.5a54d990263a
"The prescriptions that we’ve been hearing for the last few years – this is philanthropy, the news, at the federal level, and in the academic research – the dominant ideas have been about improving and investing in transit," says the Urban Institute's Rolf Pendall, one of the lead investigators of the study, along with Casey Dawkins and Evelyn Blumenberg. "And I think that’s imbalanced. I do think that low-income neighborhoods need more and better transit, for sure. But I think we have to be able to talk about cars, too.
"It’s puzzling to me that we can’t. That we haven’t more."
Families with cars in the Moving to Opportunity program were twice as likely to find a job and four times as likely to stay employed, a finding that's consistent with another common reality for the low-income: Unreliable transportation is one of the primary reasons why they lose their jobs. Both car and transit access had a positive effect on earnings, although the effect was much larger for car ownership.
(Wash Po 2011)
https://www.washingtonpost.com/blogs/ezra-klein/post/is-it-a-problem-that-so-many-americans-dont-have-cars/2011/09/08/gIQAhVpICK_blog.html?utm_term=.9fdb90e39aff
But is this really a problem in any way? Don’t people have other options besides cars? Well, sort of. For one thing, some 700,000 of these zero-vehicle households don’t actually have access to transit options, suggesting that there are sizeable gaps in metro transit systems that could stand to be filled in. But set that aside. Another relevant fact is that the typical household without a car can only reach a small fraction of the jobs in the metro area.
NEG - AUTOMOBILE SALES
Intro: The Representatives on the Affirmation have been DRIVING me crazy with their arguments:
1c- Fail this BC it will threaten small businesses
W- TTB it leads to unfair competition by large corporations
D- Business Reporter Dana Hull, Bloomberg, Sept. 22, 2016
● Michigan passed an amendment in 2014 in its law regulating motor vehicle manufacturers, distributors, wholesalers and dealers designed to favor the state’s automakers and franchise dealers.
● They have franchise laws that were put in place to prevent manufacturers from opening stores that would compete directly with mom and pop dealers.
!- States like Michigan are prohibiting direct-to-consumer automobile sales for the sole purpose of making sure that their other small, family oriented businesses aren’t overpowered by larger corporations like Tesla. This started in the 1930s-era…
D- Writer Elaine Povich, Pew Charitable Trusts, December 2015
● Laws were created that aimed at prohibiting big manufacturers like Ford and General Motors from selling directly to consumer.
● The fear was the big manufacturers would undercut the dealers on prices, drive them out of business and lessen competition.
!- Jason Nazar, Forbes Magazine, September 2013,
● Small businesses like the ones endangered by this bill, employ over 50% of the US workforce. If you wish to endanger millions of jobs, that’s on you _&_, but I’m going to negate.
2c- Fail this BC dealerships offer an economic buffer for the auto industry
w- TTB they are able to sustain a healthy car flow even during economic downturns
D- According to CEO of TRED Automotive Dealer, Grant Feek, August 2013,
● Explained that Direct to Consumer auto sales are dangerous for car manufacturers because of the potential decline in auto sales.
● Currently, auto manufacturers like General Motors and Ford can keep producing cars even when they are not selling well, without having to lay off any workers. This is because dealerships are able to buy cars and hold on to them to sell later, serving as a buffer and allowing for a strong auto production industry, regardless of the status quo of the economy.
!- According to United States Bureau of Labor Statistics, in December of 2016,
● The auto industry employs over 4 million American workers.
Moreover, according to The Center for Automotive Research, in 2015
● The automotive industry impacts over 7.25 million US jobs.
And the National Automotives Dealer’s Association, 2012,
● Explained Auto sales take up 15% of US retail sales.
!- strong auto means strong economy and solid jobs. Passing this puts all at risk.
2c- Fail this BC we need to adhere to the constitution
W- TTB states are allowed certain powers under the 10th amendment
D- Cornell University Law School
● 10th: The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
!- As long as states aren’t in violation of the Commerce Clause….
D- Cornell University Law School
● ...which prohibits states from passing legislation that discriminates against or excessively burdens interstate commerce.
!- ...there is no reason as to why we should not allow them to prohibit the direct sale of automobiles to consumers. It’s their right and we should not take it away--they understand the risk of having unfair competition from the large manufacturers. The states that don’t prohibit this understand it as well and choose not to prohibit it.
1-
https://www.bloomberg.com/news/articles/2016-09-22/tesla-lawsuit-claims-michigan-direct-sales-ban-unconstitutional
Michigan passed an amendment in 2014 in its law regulating motor vehicle manufacturers, distributors, wholesalers and dealers. The bill, signed by Michigan Governor Rick Snyder, was an “anti-Tesla” amendment, designed to favor the state’s automakers and franchise dealers, the company said in the suit. Tesla owners in Michigan currently have to travel to Cleveland or Columbus, in Ohio, to get their vehicles serviced.
Instead of dealerships with large lots, Tesla operates stores in highly visible retail locations where there is a lot of foot traffic. General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV have operated under franchise laws that have been on the books for decades and were originally put in place to prevent manufacturers from opening stores that would compete directly with mom-and-pop dealers.
http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/12/16/for-tesla-a-fight-to-sell-in-some-states
The reasons for the restrictions vary, but they all stem from 1930s-era laws that were aimed at prohibiting big manufacturers like Ford and General Motors from selling directly to consumers and bypassing dealerships. The fear was the big manufacturers would undercut the dealers on prices, drive them out of business and lessen competition.
Jason Nazar, September 9, 2013
http://www.forbes.com/sites/jasonnazar/2013/09/09/16-surprising-statistics-about-small-businesses/#7f450493078c
Over 50% of the working population (120 million individuals) works in a small business
2-
https://medium.com/@RudiThun/don-t-bet-on-direct-to-consumer-automotive-retail-just-yet-c6d9fe0c5d08#.jzuh3x6cp
Tred CEO Grant Feek does a nice job breaking down the potential shortcomings of the Tesla direct-to-consumer model in a post from August 19, 2013:
While manufacturers want to keep car factories cranking as often as possible, consumer demand for cars can be lumpy and difficult to predict. As a result, car makers depend on franchise dealerships to offer a steady sales channel and inventory buffer between their uniform supply and the end consumer’s erratic demand. If Tesla wants to sell 100,000 cars annually (or one million), it will need to transition from a “pull” a la carte retailer to a “push” wholesaler, and to leverage the inventory buffer that franchises provide.
https://www.engadget.com/2014/07/17/tesla-motors-us-sales/
You've likely guessed already, right? It's the auto dealers associations. Not only is the National Automobile Dealers Association (NADA) number 19 on the top all-time political donations list, but sales from auto dealers account for about 15 percent of all retail sales in the US (according to 2012 data from NADA). When an industry accounts for more than one-seventh of the country's total retail sales, that industry has some political clout. When that industry also has a heavy-hitting political lobby arm in Washington, DC, it's far more powerful.
2- https://www.law.cornell.edu/wex/commerce_clause
The Commerce Clause refers to Article 1, Section 8, Clause 3 of the U.S. Constitution, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.”
The Constitution enumerates certain powers for the federal government. The Tenth Amendment provides that any powers that are not delegated to Congress by the Constitution are reserved for the states. Congress has often used the Commerce Clause to justify exercising legislative power over the activities of states and their citizens, leading to significant and ongoing controversy regarding the balance of power between the federal government and the states.
The Commerce Clause has historically been viewed as both a grant of congressional authority and as a restriction on the regulatory authority of the States. The “dormant” Commerce Clause refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce. Of particular importance here, is the prevention of protectionist state policies that favor state citizens or businesses at the expense of non-citizens conducting business within that state. In West Lynn Creamery, for example, the Supreme Court found that a Massachusetts state tax on milk products, in conjunction with a subsidy program for in-state dairy farmers, functionally violated the dormant commerce clause as it impeded interstate commercial activity by discriminating against non-Massachusetts citizens.