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Michigan Governor Signs Bill Banning Electronic Car Sales

Dan Gilbert jabs Rick Snyder for signing a bill tat ensures Tesla Motors can't sell directly to consumers in Michigan.

By Nathan Bomey

 

Detroit billionaire Dan Gilbert today jabbed Gov. Rick Snyder for signing a bill that ensures Silicon Valley automaker Tesla Motors can't sell cars directly to consumers in Michigan.

Gilbert, who said he's a fan of Snyder, raised the issue while guest-hosting CNBC's "Squawk Box" and interviewing Dallas Mavericks owner Mark Cuban.

He said Snyder's move "sends a bad message" about the influence of lobbyists in lawmaking.

"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," Gilbert said. He also criticized the powerful auto dealer lobby for battling Tesla, which wants to sell cars through "stores" instead of franchises.

"Why don't you man up and compete like everybody else does?" Gilbert said.

Adam Jonas, auto analyst with Morgan Stanley, agreed with Gilbert. "As Tesla grows in significance and expands its sales network, we expect more debate at the Federal level on the double standard in the application of dealer franchise laws," Jonas wrote in a note to clients.

"It's only a matter of time before something gives. We expect that in the next two to three years, this could likely mushroom into a national issue. We believe these laws exist to support the weakest link in the network."

But Sandy Baruah, president of the Detroit Regional Chamber of Commerce, supported the governor's action.

"The Chamber believes that the Detroit region, as the epicenter of the global automotive industry and the leader in next generation mobility, should have a business environment where all participants play by a common set of rules," Baruah said. "The Chamber supports the rationale Gov. Snyder utilized for signing this legislation and looks forward to the continued discussion the governor calls for."

(c)2014 the Detroit Free Press

 

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