Pub. 55 2014-2015 Issue 3

14 O n January 28, TADA participated in a debate with Tesla Motors at the Texas Conservative Coalition Research Institute Freedom Summit. The discussion focused on whether state law should prohibit any manufacturer from selling its products directly to consumers. The following comments were presented by TADA during the debate. Questions for TADA advanced during the debate are also included in the text. TADA Statement We are here today to discuss why dealer franchise laws exist and why Texas is best served by the presence of new car and truck deal- erships throughout the state supported by Texas franchise laws. • There are 1,257 principally family owned dealerships in 284 Texas cities and towns providing opportunities for sales and service to every Texan, regardless of where they live. • Franchise laws are the reason so many dealerships are pres- ent in Texas, and the reason that so many Texas families who own dealerships compete with each other to give Texas buyers the best price and the highest level of service throughout the state. • Franchise laws were passed to support this competitive shop- ping environment, ready access to service, and availability of dealerships to handle warranty repairs and recalls and to provide safe operation of vehicles to Texas drivers. • The quality of life of 27 million Texans depends upon per- sonal transportation. Franchised dealers to a great degree insure that quality of life while competing with each other to provide the best price and service possible to Texas drivers. • These competitive dealers, supported by the franchise laws, serve Texas and Texans in many other ways. They are one of the largest employers, tax payers and investors in Texas communities. • By collecting and remitting $3.5 billion each year in motor vehicle sales tax, title and license fees, they are the state’s largest uncompensated tax collector. • These 1,257 principally family owned businesses have an annual payroll of $5.3 billion, providing 92,000 good paying jobs. Texas franchised dealers added 4,000 new employees in the past two years without any taxpayer subsidies. • Dealers and their suppliers contribute $1 billion every year in capital investment, again with no taxpayer incentives. • Dealers pay their own way, investing their own money, taking a risk every day putting their family reputation on the line serving Texas and Texans; all the while, support- ing their communities, the schools, hospitals, churches and institutions that make Texas a great place to live and work. • When you consider that there are 63 million vehicles under recall in this country, approximately 5million inTexas, fran- chised dealers who have invested in service facilities, tools, equipment and trained technicians are there to represent the consumer and to repair these vehicles and get Texans back safely on the road. • Here is what the debate is about. An exception to a state law that today supports all of these contributions to our state and its communities. An exception to a state law which would create a monopoly in the sale of a vehicle for a California corporation that refuses to establish dealerships with multiple owners who would compete for the custom- ers’ business, just as 1,257 franchised Texas dealerships do TCCRI Economic FreedomSummit