Rift Develops Between RVIA and RVDA Over Franchise and Mandatory Arbitration Legislation

Although a tentative agreement on mandatory binding arbitration was reached between the national manufacturer's association, RVIA, and the national dealer's association, RVDA, a recent disagreement over a proposed National Automobile Dealers Association (NADA) bill pending before the U.S. Congress has sidetracked that initiative.

RVIA and RVDA had previously agreed that they would jointly testify against the bill; however, after the RVDA board of directors heard NADA's views, RVDA changed its mind about the joint testimony. RVDA had previously supported the exclusion of the RV industry in this legislation.

According to Mike Molino, president of RVDA, NADA convinced RV dealers that they should not appose the NADA bill because RV dealers had little assurance that RV manufacturers will act any differently than automobile manufacturers.

RVIA believes that RVDA's decision to not promote the substitution of the RV specific franchise legislation in place of auto franchise legislation and the reversal of its decision to support a federal bill proposed by NADA that would make mandatory binding arbitration illegal in automotive franchise laws is a major setback in talks between the two groups.

RVDA Chairman Randy Biles, owner of Pikes Peak Traveland, Colorado Springs, CO, sees the issue as more far reaching than the proposed NADA legislation.
   
He said, "RV dealers see two major gaps in the areas of industry relations:
    a. Obtaining essential support from manufacturers in repair parts, warranty payments, and information to satisfy our customers throughout the life of the vehicles we sell.
    b. Protecting the investment we have and the value we have created in our dealerships so that we, as business people whose "life savings are on the line every day," can be assured:
    1. of continuing to carry a manufacturer's line with exclusive territory for as long as we do a good job of selling and servicing that line.
    2. that manufacturers pay us adequately for the warranty service we perform
on their products and for the parts we have to inventory to perform that service.
    3. that we can pass on or sell our business and recoup our investment when it's time."

Biles said that to close these important gaps, RVDA plans to continue its eleven-year effort to have manufacturers voluntarily improve the quality of their sales agreements and then live by them in the spirit of cooperation, and also, help dealers sponsor state "franchise" legislation in states where RV dealers are not properly protected to obtain appropriate legal protections for dealers and consumers.

As a result of RVDA's action, the RVIA board of directors passed several motions in regard to franchise legislation at their March meeting.

First, the RVIA board confirmed its belief that including RVs in automotive franchise legislation is detrimental to the best interests of end users, dealers, manufacturers and suppliers.

It was also unanimously resolved that "until such time that RVDA confirms, in writing, its intention to remove RVs from car franchise laws and its commitment to actively promote and encourage the substitution of an RV specific model law, and until RVDA submits any final desired terms for the RV specific model law, all further work with RVDA on such law will be suspended.

    Further, pending such commitment by RVDA, RVIA's November 1999 approval of the draft RV specific model bill and its provisions is withdrawn."

The RVIA board also reaffirmed its commitment to participate in Vision 2000 activities, separate from the matter of RV specific model legislation, as long as those activities remain productive.

RVIA President David Humphreys said, "We've worked very closely with RVDA in developing a mandatory binding arbitration program and RV specific model legislation so that arbitration rather than litigation could be used to resolve disputes between manufacturers and dealers. It seems that RVDA has reversed its position after a great deal of effort has gone into working on these two initiatives. That's unfortunate because we felt this would substantially help our industry by providing an avenue to settle disputes in a fair, amicable and inexpensive manner."

    Biles believes that many RV dealers are hesitant to voice their concerns because they have no protection from the repercussions that could result. He said, "State laws that protect dealers and consumers could give us the confidence that our investments are protected."

Responding to RVIA's reaction, Biles said, "Some well-meaning and respected people in the industry see the situation differently than we do. They see our actions as disrupting industry unity and threatening the future of the industry. They also seem to believe that dealers are content with their dealership agreements and the legal protections they currently have because dealers don't complain to their manufacturers, and they see our recent position on outlawing the mandatory mediation-arbitration as a major change.

"It really isn't, in our opinion."

    Addressing those in attendance at RVIA's Annual Meeting Humphreys said, "Dealer relations is our association's number one priority and the resulting industry unity is the secret to our success, but right now we are not on a positive track in this area.

"Our respective associations have met with each other's board of directors to discuss this topic. There is no ill will and no one has been misled."

Humphreys emphasized that the conflict on franchising issues will not impact the cooperation between manufacturers and dealers in other areas.

He continued, "We may do battle in some state legislatures on franchising, but those disagreements are okay. We are not going to give up on our cooperation in other areas such as Go RVing and industry education. We will still continue to work on strengthening our relations with dealers and, in the end, will end up with a stronger relationship."

Pointing to RVIA's 25th anniversary as an association, Humphreys recalled the turmoil and mistrust that surrounded the industry in 1974 when two feuding associations -- the Trailer Coach Association and the Recreational Vehicle Institute -- united to become RVIA.

He said, "The mountain we overcame in joining together 25 years ago was much higher than the bump in road we have now. Hopefully, next year we'll be reporting that we've put all this behind us and we are back on track with RVDA in this area."

RVN