GM dealers grapple with recall avalanche – USA TODAY
As General Motors continues to pile on recalls, the scope has become staggering — and the work and customer interaction will all fall to the automaker’s franchised dealers.
They’re the ones who will perform the actual repairs on what is already 17.73 million vehicles in the U.S. — with the likelihood, GM says, of still more recalls by midsummer.
When it comes to replacing the faulty ignition switches that have cost 13 lives, the February and March recalls that started the avalanche, GM dealers have gotten new parts and performed the repairs on 177,000. That’s a fraction of the nearly 2.2 million vehicles in the U.S. under the switch recall. GM has pledged the repairs will be substantially done by October.
Given the burden, no wonder General Motors CEO Mary Barra singled out for praise GM’s hundreds of dealers on the front line of carrying out recall repairs.
So far, the dealers aren’t complaining. The pace of available parts to fix recalled vehicles has been a stream, not a river, so they aren’t overwhelmed. Customers, for the most part, haven’t hounded them for repairs. And the payments from GM for performing the repairs will certainly be a nice supplement to service department revenues.
There are, however, concerns. Some fret about any long-term damage to the GM brand. Others say the recalls, 44 so far this year and counting, also have resulted in delivery holdups for some top-selling models until the recall parts arrive and they can be fixed. That hurts the sales side of the business.
“If I had 200 Escalades, I could sell them,” says Inder Dosanjh, a GM dealer in Dublin, Calif. Yet, the 2015 Cadillac Escalade full-size luxury SUV, like some other GM vehicles, can’t be delivered until it’s fixed under recall. In its case, the issue is passenger air bags that might not work.
Likewise, GM’s popular Chevrolet Traverse, GMC Acadia and Buick Enclave crossovers were put off sale because of problematic front-seat belts.
For the moment, GM dealers are hanging in there. The sales business remains vibrant. GM has hung onto its crown as the nation’s top automaker. It had a particularly strong month in May, when sales climbed 12.2%, one of the stronger performances in the industry.
The switch issue, though overwhelming in sheer numbers, amounts to a relatively uncomplicated repair once the parts are in hand.
Steve Isola, who just had his silver 2007 Chevrolet Cobalt receive an ignition switch recall repair after a two-month wait, says the dealer near Duluth, Minn., told him they were overwhelmed, but “everyone was very pleasant.” Seeing the hours being put in by the dealer’s mechanics, he says, “My heart goes out to the workers.”
Dealers are more concerned long term about image issues for GM. “Every time there is a media burst, the phones really light up in the store,” says Mike Maroone, president of AutoNation, the huge national dealership chain that has 36 locations selling GM vehicles, 27 of which are Chevrolet dealers.
About the best news so far is that most of the owners they have seen seem to be taking the recall in stride. Some customers have taken up GM on its offer of a free loaner car until their car can be fixed, but not many compared with the 2.2 million cars that fall under the recall.
Dealers, many of whom own multiple showrooms covering the gamut of automakers, say the current recall hasn’t created the same atmosphere of fear as the one that engulfed Toyota in 2009 regarding unintended acceleration recalls.
“You had people working overnight to get those (recall repairs) done, ” says Jack Fitzgerald, a Maryland-based dealer whose brands include Chevrolet and Toyota. “The ignition switch doesn’t sound as horrific as unintended acceleration.”
He says owners of GM cars now are more apt to ask whether it’s OK to keep using the cars until they can be repaired rather than park them and seek the loaners GM has offered. And the good news for them: They can. GM says it’s safe to drive the recalled Chevrolet Cobalt, Saturn Ion and other small cars as long as a single key with no attachments is used.
Still, Fitzgerald’s son John, who runs Fitzgerald Chevrolet in Frederick, Md., sees this as the worst of times. “I wish we weren’t going through this,” he says. “It doesn’t help the brand to be going through all these recalls all at one time.”
Perhaps because the switch-recall cars are safe to drive, that recall has “been kind of a non-event,” says Tommy Brasher, a GM dealer in Weimar, Texas. He says only one customer has asked for a loaner car. The bigger problem has been customers who bring their cars to get in line for the recall, then don’t return when the parts are ready. When interviewed, Brasher said he had eight or 10 boxes of spare parts waiting for customers who asked for recall repairs. He fears they won’t come back for the repair because they have grown lackadaisical about it.
GM says it is doing the best it can to get parts to dealers, including opening long-shut assembly lines for the ignition systems of older cars. Barra said last week that GM has produced 113,000 ignition-switch replacement kits so far and remains on target to have enough to repair all the cars this year.
“The numbers go up weekly,” says spokesman Alan Adler about the availability of ignition switch parts. “We’ll have enough parts in dealers by October to fix them all.”
Some dealers see the recalls of the older cars as an opportunity. They’re using it as an occasion to reacquaint themselves with customers who are on the cusp of needing new cars, anyway. Some throw in a car wash, or maybe top off their gas tanks, hoping customers will come back for basic service needs.
Dealer Duane Paddock of Paddock Chevrolet in Kenmore, N.Y., says consumers have been “very understanding” about the recall, mostly because of how GM has forthrightly addressed the issue.
“I would be naive to think it wouldn’t have some effect,” he says. But he says his dealership’s sales are up 12% so far this year, and he thinks the long-term impact will be minimal.
“A lot has to do with how GM approached this,” he says. When you can “do the right thing from the start, it calms the waters.”