Did General Motors prompt Michigan's 'anti-Tesla' law?

Michigan Governor Rick Snyder signed a bill into law yesterday effectively banning Tesla from setting up shop in the Wolverine state. He did so after General Motors, a major  Michigan employer, issued a statement supporting the so-called 'anti-Tesla' bill. 

Carlos Osorio/AP/File
Michigan Gov. Rick Snyder speaks during a Republican rally in Troy, Mich. Snyder signed a bill into law this week preventing Tesla from doing business in the state, immediately after General Motors issued a statement in support of the bill.

Last week, we told you about a hastily amended bill in Michigan that would prevent Tesla from setting up shop in the Wolverine State. It had passed both houses of the legislature and was headed to Governor Rick Snyder's desk. The only question remaining was: would Snyder sign it?

Then yesterday, according to Detroit News, General Motors officially voiced support for the bill. Shortly thereafter, Governor Snyder put pen to paper

The latter isn't surprising. Even though Snyder is a Republican, and even though Republicans have often agreed -- in principle -- with allowing Tesla to sell directly to consumers and let the marketplace determine its success or failure, he is the governor of Michigan, homebase for America's Big Three automakers. It seems logical that he'd try to protect those companies, which employ huge numbers of Michiganders.*

What is surprising, though, is that GM would announce support for the bill. Sure, it makes sense for GM to approve of it, but why issue a statement in support? No other automaker went that far. 

There are a range of possibilities, but two seem likelier than most. 

It's entirely possible that dealers encouraged GM to make a public show of support. Snyder's reluctance to state whether he would sign or veto the measure clearly indicated some ambivalence on his part, so it makes perfect sense that members of the Michigan Automobile Dealers Association, which lobbied hard for the bill, would encourage GM to weigh in. To hear an opinion from such a huge corporation could've been a determining factor in Synder's decision.

It's also possible that GM sees Tesla as a threat. At this point, it's not a significant threat to GM's bottom line. However, Tesla's new business model -- web-centric, commission-free, haggle-free -- could encourage dealers and consumers to demand changes in the status quo. Those changes could affect what consumers are willing to pay for new vehicles, the ebb and flow of money between dealerships and GM, or any number of things that GM (and its shareholders) would dislike. 

It appears that Tesla has no recourse in Michigan: the bill is now law. However, if significant numbers of consumers begin crossing state lines to purchase Tesla vehicles -- or if the blowback against GM and dealers becomes too severe -- maybe that will change.

* For what it's worth, Snyder says that the new law doesn't affect Tesla because car companies were already prohibited from selling directly to consumers under state law. In a blog post, however, Tesla notes that the law imposes a range of new restrictions: " It also seeks to prevent Tesla from operating a gallery in Michigan that simply provides information without conducting sales. We could even be barred from telling people about our car."

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Did General Motors prompt Michigan's 'anti-Tesla' law?
Read this article in
QR Code to Subscription page
Start your subscription today