Tesla exec calls Snyder offer ‘empty gesture’

Melissa Burden
The Detroit News

Romulus — A Tesla Motors Inc. executive lashed out at against the state of Michigan and Gov. Rick Snyder Thursday after the electric-car maker filed a federal lawsuit last week against the state challenging the prohibition against selling cars because Michigan law says news cars must be sold through franchised dealers.

Diarmuid O’Connell, Tesla’s executive vice president of business development, told the World Mobility Leadership Forum here that Tesla filed the lawsuit because “of the frustration we couldn’t get a fair hearing in this state.”

He criticized Snyder over what he called a “wonderful and empty gesture.” Snyder told The Detroit News on Wednesday that he was still open to working with Tesla so it could sell its electric cars here, as long as it was through the traditional dealer network.

He mentioned the Gateway Inc. computer company, of which Snyder was chairman. O’Connell he said he believes Gateway was the first or one of the first computer companies to operate some retail stores.

“At Tesla, we’re not in the business of putting franchised dealers out of business. We’re in the business of launching new technology,” O’Connell said. “I think we’re moving toward a new and innovative future, not just with technology but with how people use and access vehicles. And Michigan as the birthplace of the industry in the United states should be in the (forefront) of that.”

Palo Alto, California-based Tesla has been seeking the ability to directly sell and service its vehicles in the state for several years. State law requires vehicles to be sold through dealers franchised through manufacturers. Tesla’s lawsuit challenges Michigan law as unconstitutional rather than arguing Tesla’s right to operate under state laws, and comes after the state officially denied Tesla a new-dealership license earlier this month.

“In Michigan, it’s very unfortunate that residents of Michigan have to drive to Ohio and Illinois in order to pick up their cars, in order to have their cars serviced,” O’Connell said. “That’s a disservice to citizens of Michigan.”

O’Connell told reporters following his speech that he is not aware of any response from the state on the lawsuit, except the comments Snyder made to the news media Wednesday evening as part of the conference.

Tesla has a tool and die shop on the west side of Michigan and does business with dozens of suppliers, O’Connell said.

O’Connell told reporters that at some point Tesla will need to expand its manufacturing footprint and it would be logical to do so in places such as Michigan given the industry’s history. He said in dealing with legislators, the company doesn’t make promises.

“But it’s also true that a state that doesn’t allow us to engage in our core business, which is selling and servicing vehicles, is a very poor candidate for manufacturing operations,” he said.

He said Tesla faces challenges with a large dealer lobby. He said an unnamed Michigan legislator told Tesla that: “ ‘The dealers don’t want you here in Michigan, the manufacturers don’t want you here in Michigan, so you’re not going to be in Michigan.’ ”

“It was like a ‘Godfather’ moment,” O’Connell told reporters.

O’Connell told reporters that Tesla has been successful in overturning legislative restrictions in three states: Georgia, Marlyand and New Jersey. Tesla currently is banned from selling vehicles in Michigan, Texas, Connecticut and Utah.

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