A state Senate committee voted this week to reject former Gov. Terry McAuliffe's appointment of a Tesla Motors Inc. employee to a board that oversees automobile dealers, after objections were raised by the Virginia Automobile Dealers Association.
The unusual vote to rebuff a gubernatorial appointment drew a rebuke Wednesday from Tesla, an electric car maker that has been wrangling with the dealers association over whether it can operate company-owned car locations in the state.
The Tesla employee, Cody Arnett, was named to serve a four-year term on the Motor Vehicle Dealer Board. McAuliffe made the announcement earlier this month, just a week before he left office.
But the dealers group said the appointment violates state law because Arnett is an employee - not an owner or top executive - of a car dealership.
The 19-member Motor Vehicle Dealer Board, created in 1995, is charged with the regulation and oversight of new and used car and truck dealers in the state.
Arnett, a 29-year-old Arlington resident, is a former manager at Tesla stores in Northern Virginia and Henrico County. He now is working as a Tesla regional performance coach handling training for the company at various stores.
On Tuesday, the Senate Privileges and Elections Committee voted to strip Arnett’s name from a resolution listing more than 50 gubernatorial appointees to various state boards and agencies before advancing the resolution to the full Senate.
The Virginia Automobile Dealers Association, a powerful trade group that represents independent automobile dealers in the state, sent a letter on Jan. 15 to the committee's chairwoman, Sen. Jill Holtzman Vogel, R-Fauquier, objecting to Arnett's appointment on the grounds that he is licensed as a dealer operator/salesperson and not as a franchised motor vehicle dealer.
Don Hall, the auto group's president and CEO, said that job distinction precludes Arnett from serving on the board under the state code.
"The seat cannot be held by an employee of a dealer," Hall said. "It must be held by the owner of a dealership. I am sure the young man is a nice guy, and I am sure he has got great intentions, but the fact is he does not qualify."
For instance, Hall said Richard L. Sharp served on the motor vehicle board in the mid-1990s as CEO of CarMax but that a CarMax employee could not.
Arnett said in an interview Wednesday that he was approached by the McAuliffe administration about serving on the Motor Vehicle Dealer Board. He said he has worked for Tesla since 2012 and received a dealer-operator license almost three years ago. He already attended one meeting of the board this month.
"I was surprised, and disappointed as well," he said of the Senate committee vote.
California-based Tesla said in a statement Wednesday that Arnett "would have brought an important and innovative perspective to the board and to Virginians.
"Former Gov. McAuliffe recognized this in appointing Cody, and as the holder of a license in Virginia, Tesla has just as much of a right to participate on the MVDB as anyone else," said Brooke Kintz, senior policy manager for Tesla.
"The decision of a small number of legislators to overturn Cody's appointment at the urging of VADA is highly unusual if not unprecedented. It raises basic questions of fairness and improper political influence."
Tesla, which was founded by tech industry tycoon Elon Musk, has opened two company-owned retail stores in Virginia to sell its battery-powered automobiles. The dealers association argues that Tesla should be required to sell its cars through independent, franchise dealerships, as other manufacturers are required to do in most cases under state law.
The dealers group filed a lawsuit last year challenging a decision by Virginia Department of Motor Vehicles Commissioner Richard D. Holcomb that enabled Tesla to open a company-owned store off West Broad Street in western Henrico in August. A court ruling on that legal challenge is pending.
The Senate committee vote was a voice vote, so individual votes were not recorded. The motion to amend the resolution to remove Arnett's name was made by Sen. John Cosgrove, R-Chesapeake.
Only one member of the committee, Sen. Adam Ebbin, D-Alexandria, defended Arnett's appointment during the committee meeting.
Ebbin said Arnett is "a person of high integrity" whose appointment would "diversify" the board.
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