Yesterday, Michigan Governor Rick Snyder (above) signed a law that included a last-minute legal tweak that would ban Tesla’s direct-to-customers auto sales model in the Midwestern state. Snyder has been taking a lot of heat for the move–including from Detroit billionaire Dan Gilbert, who took advantage of his stint guest-hosting this morning’s Squawk Box on CNBC to blast the governor’s decision to support the legislation crammed in by Michigan’s dealership cartel.
“To me you have to have a philosophy and you have to stick to it and you can’t let your personal circumstances compromise that,” said Gilbert, who says he’s otherwise a fan of Snyder, on the morning talk show. And he’s not feeling any friendliness toward the Michigan Automobile Dealers Association, the group behind the legislation. ”Why don’t you man up and compete like everybody else does?” Gilbert said.
The legislative move was accomplished by tweaking the wording of an existing law banning auto manufacturers from selling to customers through anything other than a franchise dealership. That tweak was submitted by Republican State Senator Joe Hune, who counts the Michigan Auto Dealers Association as one of his top financial backers, and officially supported by GM, the largest U.S.-based automaker. Governor Snyder, also a Republican, is up for re-election in a few weeks in a race he leads by a slim margin. It’s not hard to imagine the flood of auto-dealer-funded attack ads Governor Snyder would have faced if he backed down from this law.
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Still, we stand with Gilbert: Anti-competitive measures hurt consumers, hurt the marketplace, and hurt American innovation. We’re optimistic that those who oppose Tesla’s new model of car sales will end up on the wrong side of the history.
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