Bill Overview
Title: Supply Chain Disruptions Relief Act
Description: This bill modifies the treatment of liquidations of new motor vehicle inventory as qualified LIFO (last in first out accounting method) inventory. It allows new motor vehicle dealers to elect to wait until the end of 2025 to replace their inventory for purposes of determining income attributable to the sale of such inventory during 2020 and 2021.
Sponsors: Sen. Brown, Sherrod [D-OH]
Target Audience
Population: motor vehicle dealers
Estimated Size: 16000
- The bill targets motor vehicle dealers specifically.
- Motor vehicle dealers are a subset of all business owners, dealing specifically in automotive sales.
- The legislation allows these dealers to adjust financial practices related to inventory management.
- Globally, dealerships exist in nearly every country.
- The global automotive market includes new vehicle sales as a significant component, impacting a large number of dealerships.
Reasoning
- The policy predominantly affects motor vehicle dealerships by allowing them more flexible accounting practices in the wake of supply chain disruptions. This specific demographic is relatively small, consisting of about 16,000 franchised dealerships across the US, which limits the cost and logistical challenges of implementing the policy.
- Dealerships come in various sizes, from large chains to small family-owned businesses, so the impact of the policy can range significantly, influencing how well-being changes over time for individuals involved.
- While the policy directly impacts the owners and perhaps key employees in these dealerships, it might indirectly influence customers through potential changes in vehicle prices and availability.
- It's crucial to include interviews from both directly impacted individuals (dealers, owners) and those indirectly affected (mechanics, customers) to gauge a comprehensive view of the policy's impact.
Simulated Interviews
Owner of a franchised car dealership (Detroit, MI)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- The policy seems beneficial as it provides some breathing room to get our inventory back on track without immediate tax implications.
- It might allow us to stabilize finances and eventually save jobs which were under threat during the pandemic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 8 | 3 |
Sales manager at a car dealership (Los Angeles, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I think the policy could help us manage our finances better, especially during these unpredictable times.
- It should help stabilize the job market within the dealership industry.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 7 | 5 |
Car mechanic (Miami, FL)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- While it sounds like it's mostly for the owners, anything that keeps the dealership running is good for my job.
- I'm cautiously optimistic but unsure how directly it will affect pay or job security for mechanics like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 4 |
Independent car dealership owner (Dallas, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 6/20
Statement of Opinion:
- It's a relief to adjust accounting for the losses during 2020 and 2021.
- This policy might mean being able to stay open a little longer without major losses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 4 |
| Year 10 | 7 | 3 |
| Year 20 | 7 | 2 |
Retired car dealership accountant (New York, NY)
Age: 62 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- This policy is long overdue for the struggling vehicle industry.
- While it doesn't affect me directly anymore, it would have made a significant difference in my years working during the pandemic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Franchised dealership service manager (Chicago, IL)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The policy might stabilize our work operations and prevent layoffs.
- It's crucial that this support comes during such a turbulent business climate.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 4 |
Automobile association executive (Phoenix, AZ)
Age: 50 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 1/20
Statement of Opinion:
- The relief act is a significant step forward for dealerships trying to recover from recent disasters.
- We hope this sets a precedent for more supportive policies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 4 |
Automotive journalist (Seattle, WA)
Age: 27 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- This policy is a boon for the dealerships but far removed from ordinary consumers.
- It helps a niche group but misses broader supply chain issues.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
New car sales representative (Atlanta, GA)
Age: 41 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- I hope this policy helps increase availability of cars, which would directly improve my sales numbers.
- Anything that saves jobs in the dealership is welcome.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 3 |
| Year 20 | 6 | 2 |
Car buyer and enthusiast (Boston, MA)
Age: 48 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- This policy seems beneficial for those directly in the industry, but I doubt it will significantly impact me immediately.
- I'm more focused on seeing how this affects car price trends.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $1500000000 (Low: $1200000000, High: $1800000000)
Year 2: $1250000000 (Low: $1000000000, High: $1500000000)
Year 3: $1000000000 (Low: $800000000, High: $1200000000)
Year 5: $500000000 (Low: $400000000, High: $600000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- This policy is contingent on fluctuating inventory and sales cycles specific to the automotive industry, which are subject to significant market volatility and consumer demand.
- The measure is partly a response to extraordinary supply chain disruptions during the COVID-19 pandemic, acknowledging that these were atypical circumstances.
- The LIFO accounting provision is a strategic choice to offer dealerships more agility in financial planning during uncertain times.