æÃæü¤ÇéÎåÔÂÌì

12/4/2015 7:00 AM

By Philip Gruber Staff Writer

Pennsylvania farm machinery dealers are renewing their efforts to prohibit manufacturer practices they say are unfair.

æÃæü¤ÇéÎåÔÂÌì-makers, meanwhile, say a bill now with the state House Commerce Committee unnecessarily meddles in mutual business agreements.

The bill, which has foundered in the past two legislative sessions, would update the fair dealership law passed in 1987.

“This will put (dealers) in the same category as our automobile dealers,” said Rep. Will Tallman, R-New Oxford, the prime sponsor of House Bill 1553.

“We support the private right to contract with our dealers and maintain that the government should not get involved with private rights to contract between two approving parties,” said Barry Nelson, a John Deere spokesman.

Under the bill, manufacturers would not be able prevent a dealer from selling other makes of machinery.

Currently, dealers can be, and have been, forced to drop lines or brands the manufacturer thinks will compete with its products, said Tim Wentz, field director at the Northeast æÃæü¤ÇéÎåÔÂÌì Dealers Association.

Customers who bought from the dropped line then have to go elsewhere for service, he said.

Popular specialty brands like Kubota and Bobcat are particularly vulnerable to being edged out. “The dealers have to have the ability to pick that stuff up,” Wentz said.

New Holland allows dealers to sell other brands of machinery, said Chris Ballentine, a company spokesman.

“Case IH dealers in Pennsylvania currently sell many other brands of machinery,” said Dan Danford, a spokesman.

Manufacturer-seller relationships are defined in dealer agreements, which generally last for an indefinite period of time and can be unilaterally changed by the manufacturers at any time, Wentz said.

The dealer is offered a new contract when the business comes under new ownership, but it’s a take-it-or-leave-it proposition, Wentz said.

“There’s something fundamentally wrong with that,” Wentz said.

New Holland and Case IH’s agreements are standard for all of their dealers in Pennsylvania but allow negotiation, Ballentine and Danford said.

Both companies are in the process of updating their dealer agreement after last making big changes more than 15 years ago.

Case IH has “consulted extensively” with its dealer advisory board and the North American æÃæü¤ÇéÎåÔÂÌì Dealers Association on the changes, Danford said.

Neither Case IH nor New Holland discusses the contents of its dealer agreements publicly.

Tallman’s bill also tweaks procedures for terminating dealer agreements, amends warranty obligations and prevents parties from waiving their right to a jury trial as a method of resolving disputes.

The goal is to give local, family-owned companies more power in relationship to the big corporations. “They’re really at a disadvantage,” Tallman said.

The bill also re-affirms the existing ban on coercing dealers to accept machinery and parts they did not order.

Some manufacturers try to dictate dealers’ orders to some degree, Wentz said.

“New Holland does not exercise any control over dealer purchasing decisions,” Ballentine said.

The need for the changes has become more urgent as falling commodity prices have undercut equipment sales. Wentz said that has made manufacturers more aggressive with the dealers.

“The manufacturers are all scrambling for stockholder value,” he said.

Some 38 states have enacted or made big changes to their fair dealership laws since 1999.

In the past few years, the Northeast æÃæü¤ÇéÎåÔÂÌì Dealers Association has helped pass such legislation in Maine and New Hampshire.

The New Hampshire Supreme Court heard arguments on the law in October after manufacturers sued, Wentz said.

In Pennsylvania, “we’re not asking for anything that isn’t already done in the Northeast, much less the rest of the U.S.,” Wentz said.

An even more dealer-friendly version of the bill passed the House in a previous legislative session and the Senate in another session.

Now the dealers association has “pared down our ask” in hopes of getting the bill passed, Wentz said.

The current bill has the support from the Pennsylvania Farm Bureau and the Pennsylvania State Council of Farm Organizations.

“When equipment dealers go out of business, it typically results in even higher costs for farmers due to less competition in the marketplace. It can also result in less timely service calls,” said Mark O’Neill, a Farm Bureau spokesman.

Traveling long distances to get a part or look at equipment is inconvenient and increases the farmer’s costs, O’Neill said.

Tallman, the bill’s sponsor, said he has lost his nearest John Deere dealership, and farmers in parts of north-central Pennsylvania now must go to New York state because they lost their local dealer.

Glenn Wenger, president of Wengers of Myerstown, said he was not aware of any ways that the bill would affect his family’s dealership, which sells used equipment and gets its parts from machinery the company dismantles.

Wenger said he was aware of the issues involved in the bill but not familiar enough with the bill’s wording to comment on it.

Other dealers contacted for the story were not available or did not return a call.