Historic Win for Dealers! ALJ Says No To GM's Retail Sales Index 

In a Historic win for franchised dealers in New York State a DMV Administrative Law Judge (ALJ) has decided that GM’s Retail Sales Index (RSI) was unreasonable as it does not realistically reflect the Chevrolet sales challenges that a New York Metro area Chevrolet dealer and other New York City area dealers face. The ALJ also noted that GM was not applying the RSI uniformly to all dealers in New York and thus GM lacks due cause to terminate the franchise.

GM served a Notice of Termination on the New York Metro Area Chevrolet dealer for failing to meet the agreed upon sales performance requirements. A six day hearing took place at the DMV’s Yonkers office. During this hearing the Chevrolet dealer was able to show that in 2012 there were 15 other GM dealers in New York that had RSI’s that were below or equal to this Chevrolet dealer and none of them had received termination notices. In 2013 there were 22 GM dealers that had lower RSI’s than the dealer in question and none of them in the NYC Metro area faced termination. The Chevrolet dealer argued that their RSI should be based upon the NYC Metro area GM dealers and not a state wide average. This position was supported by a letter sent by NYSADA to GM in July 2013 which was introduced as evidence on behalf of the dealer. The dealer was also able to show that their sales have almost doubled from 2009 to 2014 and yet their RSI only increased from 40.4 to 50.2 based on statewide RSI. The dealer was also able to show they were not the worst performing dealer by sales in NYC Metro area and their CSI of 92.6 was well above many other GM dealers. Therefore, the ALJ found that GM lacked Due Cause to terminate the Chevrolet dealer’s franchise based on RSI.

NYSADA would like to note that the victorious Chevrolet dealer was able to use the Administrative Hearing Process which took effect in 2008 for their victory!

The Administrative Hearing Process was the brain child of past NYSADA Chairman Jim Farley, who recently passed away. This is part of Jim’s legacy and no one would be happier than him about this dealer victory.

The Administrative Hearing Process creates a less expensive and faster system in adjudicating franchisee/franchisor disputes giving the dealers an option besides litigation. It allows dealers to enforce the franchise law in an administrative hearing. A franchise dealer can file a complaint directly with the DMV and if there is no settlement the case is heard by a DMV Administrative Law Judge. The DMV Commissioner then issues the final order. The DMV Commissioner also has the ability to fine a party for not following the final order. This fine can be enforced through a civil action. Both parties have the right to appeal.

NYSADA would also like to announce that we have just received a rough draft from the Anderson Group on our long awaited Sales Effectiveness and Market Conditions survey. NYSADA commissioned this survey in the hopes of being able to help dealers that are having problems with their manufacturer using state wide sales averages and threatening termination. This survey will soon be available for member dealers and when put together with this recent decision greatly strengthens franchised dealers position with their manufacturer when it comes to issues involving sales effectiveness.

NYSADA Request Member Suggestions for Informational Webinars/Seminars

NYSADA Education Committee Chairman, John McClurg, has asked that we reach out to the membership and ask for recommendations regarding webinar and/or seminar topics that you would find interesting and helpful. Potential topics can run the gamut from State/Federal regulatory compliance issues to business/industry relates subjects.

If you have a suggestion for a webinar and/or seminar either call or email Peter Marthy at 518-463-1148 (ext. 206) or peterm@nysada.com.