GM Prepares Consumer Compensation for Misstated Fuel Economy – Wall Street Journal
General Motors Co. is in the final stages of preparing a program to compensate more than 130,000 owners of large crossover vehicles with misstated fuel-economy labels, said a person familiar with the matter.
GM plans to offer the owners cash in some form, the person said, adding that the compensation program could be rolled out to customers and dealers as soon as next week. Additional details of the program remained unclear, but other auto makers such as Volkswagen AG in the past have given customers cash gift cards to address fuel-economy or emissions lapses.
GM halted sales of some 60,000 2016 Chevrolet Traverse, GMC Acadia and Buick Enclave vehicles last week after it discovered labels overstated mileage by 1 to 2 miles a gallon. The Detroit auto maker said it alerted the Environmental Protection Agency promptly and that the inaccurate labels were the result of an “inadvertent error.” GM has rushed corrected labels to dealerships and expects the problem to be resolved within days, a company spokesman said.
More than 130,000 customers have purchased the affected vehicles, the person familiar with the matter said. The compensation is likely to address fuel-savings customers would have expected based on the overstated mileage figures, the person said.
GM in a statement Wednesday said the mistake stemmed from failing to shepherd data from new emissions tests the auto maker was required to conduct when it calculated fuel economy for the 2016 models. GM had to conduct new emissions tests because of new hardware installed on the 2016 models, the company said.
GM engineers discovered the error while working on 2017 model-year labels, the company said. GM continues to work with regulators on the issue, it said.
“New emissions-related hardware in the 2016 Chevrolet Traverse, GMC Acadia and Buick Enclave required new emissions testing for these vehicles,” GM said in a statement. “The fuel economy data from these tests were not captured in calculations made for EPA fuel economy labels for the 2016 model year Traverse, Acadia and Enclave (causing 2016 model year fuel economy numbers to be overstated). This error does not impact prior model year vehicles.”
EPA representatives had no immediate comment.
Automotive News earlier reported on GM’s compensation plans.
Separately, a Florida man on Tuesday filed a purported class-action lawsuit against GM in a Michigan federal court accusing the auto maker of marketing and selling the vehicles with false fuel-economy ratings.
The suit accuses GM of concealing the incorrect fuel-economy ratings and failing to reveal that “the existence of the defect would diminish the intrinsic and resale value” of the vehicles.
A GM spokesman declined to comment on the lawsuit.
Front-wheel-drive versions of the vehicles get an estimated 15 mpg in city driving, 22 mpg on the highway and 18 mpg combined, according to GM. All-wheel-drive versions of the vehicles get an estimated 15 mpg in the city, 22 mpg highway and 17 mpg combined. The incorrect labels boosted those figures by 1 to 2 miles a gallon depending on the category.
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