Like most of you, I was proud of South
Dakota's billing as America's Top State for Business for 2013 by CNBC in July.
It was something that we, as business people, already knew. It was great to see
the rest of the world let in on that well-kept secret and the coverage provided
invaluable exposure for our state.
The fact that we have no corporate income
tax, no personal income tax, no business inventory tax, no personal property
tax and no inheritance tax played into South Dakota's high rating. But let us not
take any of this for granted. Every year, there are bills submitted in the
legislature that go right at the heart of these advantages we enjoy. We need to
be vigilant in protecting these strengths.
We must continue to work hard to ensure
that our regulations and laws are reasonable and eliminate unnecessary burdens
for our businesses and for those entrepreneurs who want to start a business. Governor
Daugaard made these points in an editorial published in many of the states' newspapers.
As community leaders, let us work to continue
to build the South Dakota tradition of being "great place to do
business".
Why the Dealer Franchise System Is Here to Stay
Franchised auto dealers are on track to
sell more than 15 million new cars and trucks this year, including a half
million electric, natural gas, hybrid and other alternative technology
vehicles. These Main Street businesses – the backbone of their communities –
are leading America’s economic recovery. Franchised auto dealers employ nearly
a million Americans, provide good jobs that can’t be shipped overseas and
engage in robust market competition.
For more than 100 years, automakers have
contracted with franchised dealers to sell and service their vehicles for one
simple reason – it’s the most efficient and cost effective way of doing so.
Franchised auto dealers’ cumulative investment in land, equipment and
facilities exceeds $200 billion – expenses that auto manufacturers would
otherwise have to incur. Ford and GM tried owning their own dealerships and
failed. These experiments proved that factory stores did not deliver better customer
service or reduce consumer costs.
A question has been raised as to whether
automakers should be licensed to sell directly to consumers. A better question
is who should decide this licensing issue – and the answer is the states. In
our federal system, states have the right to license lots of important retail
industries – everything from eyewear to alcoholic beverages. The states are
best positioned to decide what level of accountability, regulation and
competition is best for their citizens. Although all states regulate the auto
retail marketplace, their approaches differ widely: many allow automakers to
sell direct; others require a local licensee as an additional layer of
accountability. This reflects the fact that, when it comes to auto retailing,
one size doesn’t fit all.
It is easy to understand the rationale
behind state laws that foster the presence of a well-capitalized, independent
dealer network. New vehicles are expensive, generally require financing and
often involve a trade-in. Consumers are better served by multiple retailers
competing for their business. A Ford dealer’s biggest competitor, for example,
is usually the other Ford dealer down the street. Most buyers, according to the
Harvard Business Review, value a combination of online service, personal
service and physical locations over standalone Web distribution – which sounds
exactly like the dealer franchise system that’s currently in place.
2014 ATD Convention: Online Registration and Housing for New
Orleans Now Open
The city of New Orleans will host the
51st annual ATD Convention & Expo next January. The Big Easy has recently
undergone major restoration projects, such as $800 million in hotel upgrades,
$77 million in street improvements that includes a new streetcar line connecting
the Sports District to the Central Business District and French Quarter, and a
55 percent increase in the number of restaurants over the past seven years.
“There’s a limited number of hotel rooms available at the Hilton Riverside,
which is the ATD headquarters hotel, so we're encouraging dealers to register
as soon as possible,” said ATD Convention Chairman Steve Parker. “A benefit of
staying at the Hilton Riverside is that ATD dealers, managers, spouses and
relatives can attend the daily continental breakfasts and evening receptions
sponsored by Eaton.” The ATD convention runs concurrently with NADA from
Friday, Jan. 24 to Monday, Jan. 27. ATD attendees who register by Oct. 7 will
receive a $150 discount from the onsite rate. For more information or to register,
visit www.atdconvention.org.
