GM dealers field calls, manage inventory while waiting for recall parts

PRIMER
Related Links
Related Topics

General Motors estimates repairs to 2.6 million small cars affected by a massive recall will not start until next week -- not this week as originally expected.

That could leave many customers and dealers frustrated.

Some dealers are fielding dozens of calls daily from customers wanting to know when their car will be fixed.

“They’ve seen no parts. They have a big backlog of customers,” said Tim Doran, president of the Ohio Automobile Dealers Association in Dublin, Ohio.

Dealers in the central and eastern states had expected to start getting parts Monday, April 7, to repair the recalled small cars, while West Coast dealers had expected to start receiving parts for the repairs Wednesday, April 9.

But today, GM said there is no delay in parts, insisting it has always said the parts would arrive “the week of April 7,” Kevin Kelly, GM spokesman, said in an e-mail.

“We plan to send letters this week informing affected customers that parts are arriving at dealerships and to schedule a service appointment with their dealer,” said Kelly. “Repairs are likely to begin to follow soon after the customer letter mailing.”

‘On the ground’

At Motor City Auto Center in Bakersfield, Calif., there are 30 cars waiting for parts that are “actually on the ground” with people in rentals, said John Pitre, general manager.

Pitre said each time his dealership grounds a car, it notifies GM.

“The response we’ve gotten is the parts will be released for those grounded cars on April 12. They will ship parts to dealers who have customers on the ground first,” Pitre said. “The fastest way to get results is to bring your car in and leave it with us and we’ll get parts first and make the fix.”

Pitre said his understanding is that once those cars are repaired, GM will start shipping more parts to fulfill further repair orders.

Lou LaRiche Chevrolet in suburban Detroit was fielding 10 to 12 calls a day from concerned affected customers about a week and a half ago. It is currently down to two to three calls a day, says Vice President Scott LaRiche.

‘Extremely pleased’

LaRiche expected the parts to arrive later today or Wednesday.

He has 10 cars grounded, with the owners in loaner vehicles. He expects to do about 50 repairs, he said.

“Almost everyone,” he said, is “extremely pleased there is a fix coming and very happy to be driving in a vehicle and there are others who say, ‘Just call me when it comes in’ and let them know.”

“There are concerned people, but they’re confident GM’s going to take care of it.”

As soon as the parts arrive, LaRiche will start scheduling repairs with customers. He expects it will be a seamless fix.

“From what I understand, the shipments dealers will be receiving are quite substantial so it should be a quick turnaround,” said LaRiche. “We have four guys who are trained to do it and the general consensus is the repair will take about an hour.”

Waiting

Doran, of the Ohio dealers association, said a small to medium GM dealer in his state has 24 customers in rental cars as they wait for repairs to their cars. There were “a number of others” who turned down a rental car paid for by GM.

Consumers aren’t the only ones frustrated by waiting for parts.

Some dealers have the 2003-07 model year recalled cars in their used-car inventory, and cannot sell those vehicles until the cars’ faulty ignition switches are repaired.

The Ohio dealer with 24 customers in rentals also says about half of his entire used-car inventory is involved in the recall, Doran said. He can’t sell those cars until he fixes them -- which he can’t do until repairing customers’ cars first, Doran said.

“He’s got about 120 used cars in inventory, so about 60 of his cars are embargoed and sitting there waiting and he can’t sell them,” Doran said. “They are HHRs and Cobalts. It definitely puts a crimp in your style in terms of being able to do business.”

Floorplan pinch

It also means paying capital on a floorplan for vehicles that cannot be sold.

Todd Caputo, dealer principal of Sun Chevrolet of Chittenango, N.Y., said he doesn’t stock many used vehicles on his lot older than 2009. But he does have about “four or five” HHRs that he wants to retail, but can’t because he is still waiting on parts.

“It’s tough,” Caputo said. “No. 1, I don’t consider them to be safe and No. 2, you can’t sell them if there is an open recall.

“It’s on floorplan, and I’m not getting anything from the floorplan companies, at all. It puts dealers, who are doing the right thing and not retailing them, in a bad position.”

At a bigger dealership in Ohio, the dealer said there are customers calling daily asking when the dealership is going to have parts, Doran said.

Other dealers said their customers are patient.

‘No screamers’

At Shaheen Chevrolet in Lansing, Mich., no parts have yet arrived to make repairs and the dealership has not received any information on shipment status, said Ralph Shaheen, president of the dealership.

Fortunately, customers are patient, he says.

“We do have some people in rental cars,” Shaheen said. “There are no big issues, no screamers, no derogatory kind of stuff.”

Despite the recall notices and media attention, about 30 percent of all recalled cars are never fixed for one reason or another, said Christopher Basso, public relations manager at Carfax Inc. in Centreville, Va.

Last year, 3.5 million used cars listed for sale online had an unrepaird recall on them, Basso said.

Media coverage will help

“We’ve been working hand-in-hand with the manufacturer to notify people of open recalls and I think the coverage this recall has received will help,” Basso said.

Carfax has the open recall information, which is VIN specific, available to everyone on www.carfax.com.

But, he added, there are instances where the registered owner might not get the recall notice or receives it, but ignores it.

“Some people are unaware of the seriousness of the consequences that can occur with these recalls. There has been a strong effort to make people aware of the fact that these cars can be dangerous if the recalled part fails,” Basso said. “But history shows even though there are serious issues involving recalls with these cars -- we’ve seen it with other manufacturers in the past -- some of these cars won’t get fixed.”

Arlena Sawyers contributed to this report

You can reach Jamie LaReau at jlareau@crain.com. -- Follow Jamie on Twitter


advertising
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)




Rocket Fuel