Automotive News - August 25, 2008 - (Page 14) 14 • AUGUST 25, 2008 Dealer-customer mandatory arbitration works Contract provision saves time, money and legal headaches Jim Hudson Mandatory arbitration is an invaluable tool that many dealers, including me, use to settle disputes related to auto sales. The consumer and dealer resolve their issues through an appointed, unbiased arbitrator without the expenses, delays and complications of the court system. If a consumer rejects the mandatory-arbitration clause in a sales contract, the dealer may choose a different style of agreement, or the consumer may choose to do business with another dealer. In countless situations, arbitration has saved me and my customers time, money and courtroom-induced headaches. Undoubtedly, many other dealers have enjoyed the same benefits. But now, auto dealers’ right to include binding-arbitration provisions in sale and lease contracts is under attack from Congress. The Automobile Arbitration Fairness Act of 2008 (H.R. 5312) seeks to ban predispute arbitration agreements from the auto sales and leasing process. On July 15, the bill passed from the House Subcommittee on Commercial and Administrative Law to the House Judiciary Committee. If it becomes law, it will ban mandatory-arbitration provisions in sales and lease agreements between dealers and consumers. Neither party will benefit. That would be particularly devastating to auto dealers, who rely on mandatory arbitration as an effective, affordable and efficient means to resolve disputes. Consumers want a quick and sim- EDITORIAL STAFF 313-446-0361 E-mail autonews@crain.com Web site www.autonews.com Keith E. Crain Publisher and Editor-in-Chief Peter Brown Associate Publisher and Editorial Director DETROIT 313-446-0361 Fax: 313-446-0383 1155 Gratiot Ave. Detroit, MI 48207-2997 David Sedgwick Editor dsedgwick@crain.com Edward Lapham Executive Editor elapham@crain.com Richard Johnson Managing Editor rjohnson@crain.com John K. Teahen Jr. Senior Editor Mary Beth Vander Schaaf Deputy Managing Editor Charles Child International Editor David Kushma Retail Editor Dave Guilford News Editor Philip Nussel Special Projects Editor James B. Treece Industry Editor Jesse Snyder Senior Writer Karen Faust O’Rourke Insight Editor COPY EDITORS: Bob Allen, Tom Fetters, Patricia C. Foley, Kenn Jones, Gregory Skwira Susan Zavela Bamford/Graphics Editor Rick Kranz/Product Editor REPORTERS: Leslie J. 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He owns several dealerships in South Carolina and Georgia. ple settlement when a dispute centers on their day-to-day transportation. Dealers and small-business owners can all agree that this legislation is the most potentially harmful issue facing dealers in the U.S. Congress. Auto dealers’ right to include bindingarbitration provisions in sale and lease contracts is under attack from Congress. clog our already-overburdened legal system. Second, arbitration minimizes protracted, expensive legal battles and provides consumers with relatively quick settlements. Further, I believe anti-arbitration legislation functions primarily as a gift from its proponents in Congress to the powerful Trial Lawyers Association, representing the only group that benefits from a ban on mandatory arbitration. AIADA takes this issue seriously and is fighting back by ensuring that members of Congress are fully educated on the detrimental impact this legislation could have on the auto industry. Reasons for opposition The American International Automobile Dealers Association and its members recognize that this legislation stems from the 2002 debate between dealers and manufacturers over arbitration clauses in franchise contracts. Because of the complex relationship between dealers and their manufacturers, mandated arbitration was not the best method to resolve disputes. Therefore, when Congress passed legislation that allowed dealers to use means other than arbitration to resolve conflicts with manufacturers, we felt it met the needs of both parties. On the other hand, we oppose the ban on mandatory arbitration between auto dealers and consumers for a number of reasons. First, without arbitration clauses in sales and lease contracts, the car-buying process will be more complicated. It will expose dealers to lawsuits and sociations in opposition to H.R. 5312. Countless dealers have written to and met with their elected officials. This issue will not go away soon; I suspect it will be front and center in the next Congress. We have all seen mandatory arbitration work. As a method of resolving the relatively small disputes that arise between dealers and consumers, arbitration delivers high satisfaction rates for both parties. According to studies by Ernst & Young, Harris Interactive and Roper Starch, 79 percent of all arbitrations are resolved in consumers’ favor, and 75 percent of consumers found the arbitration process fair and just. In addition, the arbitration process costs only 25 percent as much as a lawsuit, and 82 percent of adults said they would choose arbitration knowing its cost-effectiveness. Mandatory arbitration between consumers and auto dealers is one of the most effective forms of dispute resolution. Do you want Congress to make it extinct? What do you think? We would like to hear from you. Send a letter to the editor via e-mail (autonews@crain.com) or to the Detroit address near the top of the box at right. Here’s what we need. No more than 250 words Your name and title, company name if we can print it, city and state; or tell us about your connection to the auto industry Your phone number or e-mail address Your permission to print it Cheaper, more effective AIADA and its members are leading the way in opposing the attempt to ban mandatory arbitration, and we are doing everything we can to stop the momentum. We are 11,000 franchises strong, and there is power in our numbers, but we must also ensure that Congress knows how this legislation would negatively affect our businesses. Fortunately, we have been joined by three national auto associations and 30 state and metro dealer as- Advance ads cost a lot, but help little continued from Page 12 Customers are least likely to leave their current brand if the other guy’s styling is similar and there is no significant difference in quality or economy. In other words, it will take a dropdead, good-looking, gotta-have-it product lineup to entice people back to GM. JOHN DELEHANTY Delehanty Pontiac Flushing, Mich. 15-year-old may have the answer To the Editor: Thomas A. Wills posed the question, “Why won’t consumers buy Detroit cars?” He wondered whether it could be marketing, perception, arrogance, ignorance, product or the dealer network. Based on the comments of my 15-year-old daughter and her soon-to-be car-driving and buying friends, I lean heavily toward perception. For example, my daughter’s top choice for a car is a Mazda3. I asked To the Editor: I agree with Harold Brown’s letter, “Don’t advertise them until they’re on sale” (July 28). I have sold Chevrolet vehicles for 30 years. General Motors has wasted so much on advertising vehicles that have not even been built. I know you have to let the public know about new product, but the money that was wasted on the movie Transformers could have been put to better use. The same will happen with the Chevrolet Traverse. GM did the same thing with the SSR. Then, when it did hit the lot, the price was in the mid-40s. I am willing to say that some poor dealers still have one or two SSRs. General Motors wastes money advertising vehicles that haven’t been built, says the letter writer, a Chevrolet dealer. He cites the SSR, shown, as an example. When it did arrive, he says, GM didn’t offer much help with sales. And GM did not offer much help with selling those, either. Chevrolet has been advertising the new Camaro for more than two years. I hope it doesn’t stall like the SSR. KENT STEVENS Stevens Chevrolet Co. La Center, Ky. her why. She said the Mazda3 is cute and cool. She also said a Smart car would be right up there, along with the Volkswagen Jetta. She said there was no way she would drive a Ford, Chrysler or Chevy. She said all of them are “too old-fashioned.” She didn’t discuss specific models; her perception is clearly that those brands don’t appeal to her or her friends. She doesn’t know and doesn’t care about which vehicles are imports or domestic. Her opinion is based exclusivel http://www.autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - August 25, 2008 Automotive News - August 25, 2008 Looming cuts worry L-M dealers Bad blood Study: Toyota top U.S. lender How the kid got in the picture Hyundai affiliate to build transmission plant White House names acting NHTSA chief S&P lowers outlook on Sonic, Group 1 Now you can talk back: Join our online community Dodge dealers: We're in a box Company gets a fix-it list for pickups, SUVs from J.D. Power Mahindra delays U.S. launch Dealer Beyer now selling a 2009 Obama Nissan to leap into U.S. commercial-truck fray in 2010 China's Brilliance to show cars in Detroit Lawsuit alleges insider trades by CarMax execs Honda: Dealerships will have Fits more than a month early Infiniti's stylish stretch Cadillac will offer 4-cylinder sedan in '10 Chrysler redesigns new design boss' spot in exec ranks Genesis aims at low-priced luxury Letter to the Editor It's show and tell for auto industry in Washington Price cuts both ways The love affair continues Advance ads cost a lot, but help little Dealer-customer mandatory arbitration works Lithia sheds 2 of its Detroit 3 stores Japan sales slide; output, exports keep expanding L.A. dealers split on taking thumbprints of buyers Picture This With redesigned TL, Acura adds power, awd Personnel Chevrolet adjusts plans for coming decade GM revamps its vehicle lineup to succeed in a changed world Caddy relies on model updates over product development Buick buzzes about China Dismal sales make future of Hummer uncertain Budgets may crimp the lineup at Saturn Dreams aside, Pontiac will rely on small fwd cars Will GMC overhaul truck offerings? GM downsizes product lineup GM's powertrain plan: Less weight, better technology Hummer hopes pickup brings new buyers Dealers 'Ambush' boosts GM Certified DealerTrack adds market price checks Wholesale used-vehicle prices inch up in July Mexico sales up 2.6% in July; '08 near pace of '07 Collectors revive GM classics Honda's new Fit subcompact: Bigger, sportier Survey: Suppliers reconsider business with Chrysler Web site offers vehicle listings from Detroit 3 Nissan trains inspectors to improve quality A bumpy ride for dealer/lawmaker Buchanan Detroit dealers duel over bulk mailing Story links Nissan suicides, work pressure Times change, but supplier talk doesn't Garbage in, good stuff out Creed's creations Automotive News - August 25, 2008 Automotive News - August 25, 2008 - (Page Intro) Automotive News - August 25, 2008 - (Page BRC1) Automotive News - August 25, 2008 - (Page BRC2) Automotive News - August 25, 2008 - Study: Toyota top U.S. lender (Page 1) Automotive News - August 25, 2008 - Study: Toyota top U.S. lender (Page 2) Automotive News - August 25, 2008 - Dodge dealers: We're in a box (Page 3) Automotive News - August 25, 2008 - Nissan to leap into U.S. commercial-truck fray in 2010 (Page 4) Automotive News - August 25, 2008 - Nissan to leap into U.S. commercial-truck fray in 2010 (Page 5) Automotive News - August 25, 2008 - Cadillac will offer 4-cylinder sedan in '10 (Page 6) Automotive News - August 25, 2008 - Cadillac will offer 4-cylinder sedan in '10 (Page 7) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 8) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 9) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 10) Automotive News - August 25, 2008 - Genesis aims at low-priced luxury (Page 11) Automotive News - August 25, 2008 - The love affair continues (Page 12) Automotive News - August 25, 2008 - The love affair continues (Page 13) Automotive News - August 25, 2008 - Dealer-customer mandatory arbitration works (Page 14) Automotive News - August 25, 2008 - Dealer-customer mandatory arbitration works (Page 15) Automotive News - August 25, 2008 - Lithia sheds 2 of its Detroit 3 stores (Page 16) Automotive News - August 25, 2008 - Lithia sheds 2 of its Detroit 3 stores (Page 16a) Automotive News - August 25, 2008 - Lithia sheds 2 of its Detroit 3 stores (Page 16b) Automotive News - August 25, 2008 - Japan sales slide; output, exports keep expanding (Page 17) Automotive News - August 25, 2008 - Japan sales slide; output, exports keep expanding (Page 18) Automotive News - August 25, 2008 - Japan sales slide; output, exports keep expanding (Page 19) Automotive News - August 25, 2008 - Picture This (Page 20) Automotive News - August 25, 2008 - Picture This (Page 21) Automotive News - August 25, 2008 - Picture This (Page 22) Automotive News - August 25, 2008 - With redesigned TL, Acura adds power, awd (Page 23) Automotive News - August 25, 2008 - Personnel (Page 24) Automotive News - August 25, 2008 - Personnel (Page 24a) Automotive News - August 25, 2008 - Personnel (Page 24b) Automotive News - August 25, 2008 - Personnel (Page 24c) Automotive News - August 25, 2008 - Personnel (Page 24d) Automotive News - August 25, 2008 - Personnel (Page 25) Automotive News - August 25, 2008 - GM revamps its vehicle lineup to succeed in a changed world (Page 26) Automotive News - August 25, 2008 - Caddy relies on model updates over product development (Page 27) Automotive News - August 25, 2008 - Budgets may crimp the lineup at Saturn (Page 28) Automotive News - August 25, 2008 - Budgets may crimp the lineup at Saturn (Page 29) Automotive News - August 25, 2008 - Dreams aside, Pontiac will rely on small fwd cars (Page 30) Automotive News - August 25, 2008 - GM downsizes product lineup (Page 31) Automotive News - August 25, 2008 - GM's powertrain plan: Less weight, better technology (Page 32) Automotive News - August 25, 2008 - Dealers (Page 33) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 34) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 35) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 36) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 37) Automotive News - August 25, 2008 - Wholesale used-vehicle prices inch up in July (Page 38) Automotive News - August 25, 2008 - Mexico sales up 2.6% in July; '08 near pace of '07 (Page 39) Automotive News - August 25, 2008 - Collectors revive GM classics (Page 40) Automotive News - August 25, 2008 - Honda's new Fit subcompact: Bigger, sportier (Page 41) Automotive News - August 25, 2008 - Survey: Suppliers reconsider business with Chrysler (Page 42) Automotive News - August 25, 2008 - Survey: Suppliers reconsider business with Chrysler (Page 43) Automotive News - August 25, 2008 - Nissan trains inspectors to improve quality (Page 44) Automotive News - August 25, 2008 - Nissan trains inspectors to improve quality (Page 45) Automotive News - August 25, 2008 - Creed's creations (Page 46) Automotive News - August 25, 2008 - Creed's creations (Page 47) Automotive News - August 25, 2008 - Creed's creations (Page 48)
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