Welcome to another edition of Inside Automotive with anchor Jim Fitzpatrick. Today, we’re pleased to welcome back Brian Maas, President of the California New Car Dealers Association (CNCDA). In this segment, Jim and Brian discuss updates on California’s Private Attorneys General Act, Ford Motor Company’s direct sales ambitions, and safeguarding the franchised dealer network.
The auto industry is doing very well in California right now. In fact, an economist for the CNCDA predicts 1.8 new vehicle sales for the state in 2022, down only slightly from pre-COVID numbers. There is still a significant demand for vehicles across the state.
Electric vehicles are taking off in California, says Maas. Residents who can afford to switch to electric vehicles are doing so quickly. Tesla had the top two vehicles in the first quarter. However, Maas believes consumers tend to buy the biggest vehicles they can afford. Many families have been stuck at home during the pandemic and want an aspirational vehicle to go on trips. Trucks and SUVs fit that bill.
On the agenda for CNCDA this year is the push to replace California’s Private Attorneys General Act (PAGA). PAGA “authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations,” according to California’s Department of Industrial Relations. As part of a coalition, CNCDA recently completed the signature-gathering process to qualify its wage and hour reform initiative for the 2024 ballot.
The initiative aims to “cut third-party trial attorneys out of the picture. When an employee feels they have been wronged by their employer, they can take their case directly to the state Labor and Workforce Development Agency (LWDA) and have their grievances heard, with the state mediating the dispute,” says the CNCDA website. The Supreme Court of the United States is also expected to rule on whether or not to allow arbitration in PAGA cases once again.
The direct sales model that Tesla pursued, and other OEMs want to emulate, has nothing to do with the advent of electric vehicles, explains Maas. How a car is powered should not change the way it is sold. In regards to Ford CEO Jim Farley’s comments several days ago, the franchised dealer network has served Ford well for over 100 years, and it will continue to serve Ford well for the next 100 years regardless of the type of vehicles for sale.
“Ford’s job is to make the cars, and the franchise dealer’s job is to sell the cars, and the fact that Ford appears to want to intrude on the purview of dealers is problematic and something that we’re watching closely,” says Maas.
Watch Brian’s entire interview above for more great insight.
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