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Head Of State's Auto Retailers Fights For Dealerships Adjusting To New Reality

James T. Fleming, 54, has been president of the Connecticut Automotive Retailers Association since March 2008. Its 270 members, down from 325 a year ago, are licensed to sell new cars. In addition to working in the private sector, Fleming previously served 18 years in the Connecticut General Assembly and more recently as commissioner of the state departments of Public Utility Control, Public Works and Consumer Protection. He lives with his family in Simsbury.

Q. What have car dealers, who are on the front lines of the auto industry, been saying to the executives at GM, Ford and Chrysler?

A. There has always been a difficult relationship between manufacturers and car dealers. All of the new cars that people buy are bought from dealers who bought them from Detroit, or elsewhere. There have been disagreements about what types of cars are going to sell best. For example, in Connecticut and the East, people are more inclined to be thinking green when buying a vehicle than consumers in the central part of the country.

Q. What are some of the innovative ways that Connecticut dealers are adjusting to the new economic reality?

A. Well, first, the U.S. Congress passed a bill this spring that allows you to write off a portion of the sales tax of a new car against your taxable income, so what dealers have been doing is publicizing that. We also run an auto show in Hartford that is one of the biggest in the United States and where dealers can emphasize special aspects about their cars, being green and so on.

Q. What are you hearing the most from your members?

A. It's changed a lot in the last few months. The most important thing to a car dealer is consumer credit and the ability to finance the inventory that is on their lot. Late last year, there was absolutely no consumer credit available because of the banking crisis. That situation has begun to free up because of the actions of the federal government to make sure the banks are stable and to pump money into the economy. That's been a positive. Cars are moving now. But right now domestic car dealers — General Motors and Chrysler dealers, even Ford — are having a much more difficult time obtaining financing for their vehicle floor plans because of the bankruptcy proceedings and the actions of the bankruptcy courts. Banks aren't sure what the rules are anymore.

Q. What changes has your association made to address the crisis?

A. I have spent an inordinate amount of time talking to our congressional delegation. Since November, I have probably been in Washington every other week. In early July, I met with members of the Presidential Task Force on the Auto Industry. Our educational role has gone way up. We have seminars to educate our members on new laws that are being passed, on bankruptcy law, on what their lawyers should know.

Q. You wrote in a recent op-ed piece that forcing dealerships to close, as Chrysler has done with seven Connecticut dealerships, doesn't save Detroit a penny. What would be their motivation then, in your opinion?

A. It's pretty hard to figure out. They've made a determination that they are better off with fewer dealers. You may want to shrink the number of dealers, but the way to do that is to let the market do it. What Chrysler and GM are doing is a cookie-cutter decision. They come into Connecticut and say, "These guys are gone and we're going to decide where the new dealers are placed." They don't know the first thing about the east and west sides of the Connecticut River, or the "Quiet Corner," nothing about New London County.

The way those decisions should be made, and that franchise laws provide for, is that the market makes that decision. The consumers in Connecticut should make that decision. The bankruptcy courts have ignored those franchise laws.

Copyright © 2014, The Baltimore Sun
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