Automotive News has an interesting story about a Billionaire mega-dealer in Florida who's suing GM over their Essential Brands Elements (EBE) program.
The dealer, Norman Braman, reportedly has a net-worth in excess of $1.5 Billion and is the former owner of the Philadelphia Eagles football team. He's suing GM because he feels GM's EBE program establishes two-tier pricing in violation of the federal Robinson-Patman act. His suit further contends that GM's EBE program does not conform to a Florida law calling for reasonable payments.
The Florida law caught my eye - I had never heard of it before. As I understand it the law requires OEMs to pay at least 80% of their incentives to all dealers regardless of facility requirements. Said another way, an OEM could only withhold 20% of a dealer cash incentive if the dealer failed to comply with the OEM's facility requirements.
The goal of the Florida law is to narrow the spread of two-tier pricing. Braman contends his failure to comply with GM's EBE facility demands puts him at a $700 disadvantage to his competitors - the Florida law is supposed to narrow that gap to $140.
Props to Mr. Braman for leading this fight when so few other dealers can afford to take on the factory.
On a final note, not surprisingly, the NADA is sitting on their hands concerning this case as they try to figure out which side they're on.
