Equipment dealers hope to mix colors

ROCK SPRINGS, Pa. — Led by Agriculture Committee Chairman Michael Hanna, equipment dealers across Pennsylvania are hoping to pass House Bill 1498, which will give them more freedom to run their businesses.

The bill updates Act 86, also known as the Pennsylvania Fair Dealership Law, that was passed in 1987.

(See bottom of page for bill provisions)

Four members of the Northeast Equipment Dealers Association, among other bill supporters, spoke at a special hearing for the bill at Ag Progress Days Aug. 18.

The members — Field Representative Tim Wentz; Brad Finch of Finch Services, Inc.; Jaye Meyers, retired from Meyers Implement; and Ralph Perilli of M&R Power Equipment, Inc. — discussed the challenges of running a dealership under the current legislation.

A panel of nine House Representatives who serve on the Commerce Committee, including Chairman Peter Daley and Minority Chairman Dick Hess, listened as agricultural professionals voiced their support of this bill.

Support

Hanna reported that although more than 1,500 dealers were in business in 1987, only 500 dealers remain today. One of the reasons for this decrease, he said, is because of an imbalance of power between dealers and manufacturers.

Under the current legislation, Hanna said many dealers are forced to terminate contracts with other manufacturers, allowing them to sell only one brand of equipment.

Hanna also discussed cases of dealers being forced by suppliers to retire or sell their businesses because of unfair contract agreements.

Pennsylvania Agriculture Secretary Dennis Wolff, Jennifer Reed-Harry, legislative affairs for PennAg Industries Association, and Joel Rotz, Pennsylvania Farm Bureau government relations director, discussed the importance of multiple dealers to Pennsylvania’s agricultural infrastructure.

Rotz said some farmers have to drive two hours or more to find a dealer and even then, the dealer might not carry the parts the farmers need for their line of equipment.

Opposition

Opposing statements were prepared and submitted prior to the hearing by Jerry Parkin, director of ag public affairs for John Deere, and Dennis Slater, president of the Association of Equipment Manufacturers.

Slater said the proposed amendments would not create jobs or strengthen the commonwealth’s economy and instead create more difficulties for manufacturers.

From John Deere’s viewpoint, Parkin agreed dealers should be allowed to sell multiple lines of equipment, but they should do so in separate facilities.

“We believe dealers should have one facility that’s focused on John Deere and its products,” he said. “If it’s a product that we don’t make, we don’t have a strong objection.”

Parkin said this system would still allow for a competitive marketplace.

He also believes the bill language should be adjusted to include that when it comes to suppliers repurchasing specialized repair tools, those tools should be current and unique to the purchasing supplier.

Dealer numbers

Parkin conceded to the decreasing number of dealerships over the years and problems of farmers not having access to equipment or parts because of their location in relation to a dealer’s location. However, he added, more dealers might not be the solution.

“Farms have become larger, and dealerships more sophisticated,” he said. “Larger dealerships are better able to provide the services and products farmers need.”

Parkin said even though a smaller dealer might be closer to a farm, it might not have the parts available to be next-day delivered and the remote service crews of farther away but more efficient dealerships.

Next step

Parkin said that similar legislation in other states had been passed after collaboration between dealers and manufacturers had occurred, and he hoped for a similar opportunity to sit down with Pennsylvania legislators and bill supporters.

The hearing wrapped up with members of the Northeast Equipment Dealers Association agreeing to work on the bill language, making certain clauses more specific and clear.

Pennsylvania equipment dealers’ bill proposals:

*Dealers are able to terminate supplier agreements with good cause, and it is unlawful for suppliers to terminate agreements without good cause.

*In the event of the death or incapacity of a dealer, suppliers will repurchase equipment, repair parts and specialized repair tools.

*It will be a violation for suppliers to require or coerce a dealer to accept delivery or purchase equipment or parts not required by law or voluntarily ordered by the dealer.

*It will be a violation for suppliers to prevent dealers from selling multiple lines of equipment or acquiring other business.

*Suppliers will compensate dealers for warranty work performed, and pay for shipping of the parts necessary for the warranty work

About the Author

Emily Caldwell of Beaver Falls, Pa., serves as the 2009 Farm and Dairy editorial intern. She is a graduate of Penn State University, where she studied agribusiness and agricultural communications. Feel free to follow her on Twitter at http://twitter.com/emily718. More Stories by Emily Caldwell

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