Common Sense Needed In New Hampshire

As we mentioned in the last issue of this newsletter, we are very concerned about legislation now pending in the state of New Hampshire, which would supersede the contract language freely negotiated between our members and the independent dealers selling the shortline farm equipment they manufacture.

New Hampshire’s Senate Bill 126 first seeks to amend the definition of a “motor vehicle”, which current law specifically exempts “farm tractors and other machines and tools used in the production, harvesting, and care of farm products” from being defined as a motor vehicle.

The pending legislation then decrees, not only are farm and utility tractors, forestry equipment, industrial and construction equipment now “motor vehicles” but goes further and identifies farm implements, farm machinery, yard and garden equipment, attachments, accessories and repair parts all as “motor vehicles”.

Making matters worse, once SB-126 defines everything from a posthole digger to repair parts for a sprayer as a “motor vehicle”, it takes the next step and covers anyone selling shortline farm equipment or repair parts as a “motor vehicle dealer”.

The sponsors of SB-126 do provide some very targeted relief by exempting “single line equipment dealers” who purchase 90% or more of their total product inventory from a single supplier and have total annual average sales volume for the previous three years in excess of $100,000,000. That might be nice for a manufacturer like Caterpillar, but if they deserve an exemption, why not also exempt shortline farm equipment manufacturers?

SB-126 goes even further adding that warranty service shall include the cost, including labor, to transport a “motor vehicle” (aka farm equipment) under warranty in order to perform the warranty work and to return the “motor vehicle” (farm equipment) to the customer, or to travel to and return from the locations of the motor vehicle if the warranty repairs are performed at the location of the motor vehicle.

We are not sure how a shortline farm equipment manufacturer would recover the additional warranty costs the new state law would mandate. We do know that increasing the price on farm equipment sold to dealers in New Hampshire would not be an available option. SB-126 provides that a manufacturer or distributor may not recover all or any portion of its costs for compensating its dealers in this state for warranty parts and labor, including an increase in the wholesale price of a vehicle or by a reduction in the amount due to the dealer or by separate charge, surcharge or other imposition.

It’s clear to anyone paying attention that following the U.S. Federal Government takeover of General Motors and Chrysler, many local dealers were adversely affected and some saw a lifetime of work vanish before their eyes as auto makers closed and consolidate much of their franchised dealer networks.

What is equally as clear is that shortline manufacturers compete with great vigor for the local dealer’s business in every state and province, and in no way do they possess the ability, history or desire to use coercion, threats or intimidations to force any dealer into agreeing to one-sided language in any contract.

In fact, recent equipment dealer consolidations efforts by the majors often leave the dealer group with the upper hand when it comes to the negation of contracts dealing with termination, buyback, warranty and such with shortline manufacturers.

Our Association and its members welcome the opportunity to work with the sponsors and the farm equipment dealers in New Hampshire on this and any issues that need to be addressed. Defining almost everything our members manufacturer as a “motor vehicle”, would bring up an entire list of titling, registration and tax issues that would set a horrible precedent, and in our opinion, should be rejected by the 424 member New Hampshire legislature.