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.