International-Brand U.S. Auto Dealers Put on the Gloves

LAS VEGAS – They stopped short of singing a fight song.

But feistiness, even outrage, was in the air at times during the American International Automobile Dealers Assn.’s annual meeting and luncheon during the National Automobile Dealers Assn.’s annual convention and expo here.

Speaker after speaker denounced the object of the anger: President Biden’s proposal to increase federal tax credits for electric vehicles from the current $7,500 to $12,500 – but only for U.S. union-made vehicles.

Foreign automakers from BMW to Volvo operate so-called transplant plants in the U.S., most in the South and none unionized.

So, the tax credit proposal would not apply to the international-nameplate vehicles that AIADA’s 9,400 U.S. dealers sell.

“The government is up to business-killing, short-term shenanigans,” says 2022 AIADA Chairman John Connelly, an Acura dealer in Ohio.

“Tax credits only for union-built EVs?” he adds “What’s next? Tax incentives to buy only union-made televisions and furniture? This is anti-American.”

His immediate predecessor, 2021 AIADA Chairman Steve Gates, calls the bill now before Congress a “discriminatory” tax break.

“We’ve taken punches and we’ll take some more as long as politicians exist who will say, ‘buy American,’” he says.

To that point, the trade association is quick to counter with statistics.

Among those:   

In rallying the troops, AIADA President Cody Lusk quotes former champion boxer Mike Tyson who said: “Everyone has a plan until they get punched in the face.”

Lusk adds: “This industry has proven we can take a punch and keep going. We’re fighters, taxpayers and employers.”

Lobbying all-out against the proposed legislation, AIADA will make it the main focus of its annual May “Washington Fly-In” in which members travel to Washington, D.C., to meet with their congressional representatives.

“The goal is to guarantee an even playing field,” says Gates.

Connelly claims Biden and many congressional leaders “want to pretend that international nameplate brands, our stores and our employees don’t exist. They sincerely believe that a non-unionized American job isn’t worth protecting.”

Connelly is no stranger to Washington. After earning a law degree, he worked for a senator on Capitol Hill, then opened his own law practice. He became a second-generation auto retailer in 2008 when he bought into his family’s dealership.

It may seem ironic that the non-domestic automakers’ plants in the U.S. are non-union, yet their home-country factories are solidly unionized.

South Korean auto workers at times come close to being union militants. In Germany, union officers hold company board positions.

Over the years, the UAW has attempted to unionize the transplant plants in the U.S., in particular Volkswagen’s vast assembly facility in Chattanooga, TN.

VW went so far as to declare neutrality on the issue, but workers still voted down the unionization efforts.

Steve Finlay is a retired Wards senior editor. He can be reached at [email protected].