GM and VA dealers dont see eye-to-eye on new enacted facilities upgrade sourcing law

GM and VA dealers dont see eye-to-eye on new enacted facilities upgrade sourcing law

GM told its Virginia dealers that it will terminate its Essential Brand Elements (EBE) program by the end of March if legislation just passed by the General Assembly that would enable dealers to source these elements from non-GM authorized vendors is signed by the governor.

The GM EBE program is designed to assist dealers with the cost of upgrading their facilities and is funded by a 1% addition to the invoice of all vehicles purchased by GM dealers. The Virginia Automobile Dealers Association has insisted from the outset that the legislation is not directed to and has no impact on the EBE program that is already in effect in the commonwealth. GM sees it differently, however, and has notified its Virginia dealers that it views the legislation as incompatible with the EBEs purpose and intended operation and that it will terminate the program in Virginia, effective March 31, 2011.

In response, VADA arranged for an amendment to the measure that provides specifically that the new measure shall not apply to a program that is in effect with more than one dealer in the commonwealth on the effective date of the measure. GM has not yet responded to VADAs action or correspondence from VADA president Don Hall wherein he says that GM, at a minimum, will be obliged to return any vehicle surcharges for EBE it assessed to dealers should the company persist in ending the program.