Dealership performance and RSI in NY's Beck vs General Motors Case
GNYADA reported that its dealers have recently received a letter from GM that the manufacturer is attempting to modify its sales performance measurement following the NY Court of Appeals decicion in Beck vs General Motors. The GNYADA dealer bulletin includes the following guidance for GM dealers:
- For the time being, RSI alone does not determine whether a dealer is in compliance with the Dealer Agreement’s sales requirements.
- With RSI set aside, dealers must pay particular attention to other aspects of their operation which GM may seek to exert leverage on.
Although this case is relevant to GM dealers, non-GM dealers should pay close attention to GM's modification, as most brands use formulas that are similar to RSI, meanins similar scenarios could potentially play out in other franchise law areas, such as warrantly reimbursement or facility demand.
Lead Attorney, for Arent Fox, Russell P. MCRory said, “Beck Chevrolet’s success will help stop manufacturers from implementing unfair and unreasonable sales standards that are selectively and arbitrarily applied, particularly when broad state or regional averages are applied to dealers located in markets bearing little resemblance to the state or regional benchmarks” said Mr. McRory following the decision. “This precedent could help set a new standard that will be referenced in performance disputes across the country.”
Stay tuned as things develop.
