The political power in the manufacturer-dealer relationship is the reverse of the intuitive picture: rather than the large corporation dominating small dealers, local franchise dealer associations hold disproportionate political clout (especially via contributions to House members), and bankruptcy is the only way for manufacturers to escape these constraints.
causalpending
Speaker
Michael MungerEvidence Quote
“it seems unfair it's actually backward all of the political power lies with the fran cheats franchisees and bankruptcy is the only way to get them out of this”
Source
Michael Munger on Franchising, Vertical Integration, and the Auto Industry 06/22/2009— EconTalkCreated: 6/17/2026, 10:31:26 AM
My Notes
Loading notes...