U.S. dealers grapple with recall pain -- missing parts, overtime, lost sales

Bob Cockerham, general manager of University Volkswagen Mazda, in Albuquerque, N.M., says he has no complaints about how VW of America is handling a recent stop-sell order for certain cars.
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Todd Caputo, dealer principal of Sun Chevrolet in Chittenango, N.Y., says he can’t recall a time he had to deal with so many recalls.

So many that in the last month he lost floorplan financing money on dozens of used GMC Acadia, Chevy Traverse and Buick Enclave crossovers, Chevy HHRs, and Chevy Express vans that he couldn’t sell because he didn’t have parts to fix them.

So many that it is putting a strain on his service department’s ability to fix both customers’ vehicles and used and new vehicles on his lot.

And so many that he lost sales -- and potential finance and insurance revenue from those sales -- when customers grew tired of waiting for a vehicle they wanted to purchase.

“Within the span of about a week, we got so many notices about recalls and stop deliveries that it created a tough business environment in my dealership,” Caputo says.

Missing parts, service technicians who have to work overtime and lost sales are all part of the recall routine at many dealerships.

All brands

Chevy dealers such as Caputo are in the eye of General Motors’ 2.6 million-vehicle recall storm covering defective ignition switches and cylinder locks. But dealers of non-GM brands that have recently announced recalls face similar issues.

Earl Stewart, dealer principal of Earl Stewart Toyota in Lake Park, Fla., says it’s not good for business or the brand’s image when he has to turn customers away who show up with their vehicles for recall repairs because he doesn’t have the parts.

He says his service department is open seven days a week. It handles 100 service appointments and about 25 to 35 unscheduled jobs per day. The added volume created by recalls, especially when widely publicized, can disrupt the flow of his service department.

From March 31 to April 14, Toyota Motor Corp. recalled 1.9 million vehicles, according to the National Highway Traffic Safety Administration Web site.

‘Fit people in’

“When we get a bunch of recalls, you have to somehow fit people in to get recalls done that don’t need service, causing my regular customers to have to wait -- as well as the people coming in for recalls,” Stewart says.

Bill Wallace, dealer principal at Wallace Auto Group in Stuart, Fla., operates dealerships representing a dozen brands, many of which have recalled vehicles in recent weeks.

While he welcomes the manufacturer-paid service work, he is annoyed that, no matter the brand, when a recall is announced, the required parts for the fix are never available.

He has to appease customers who want their vehicles fixed -- now. He also must remind his employees, who grow weary of facing customers with little or no information about when parts will arrive, that recalls give the dealership an opportunity to win over customers once the parts are available.

‘Wears you out’

“It’s a lot of cheerleading and it almost wears you out,” he says, laughing. He tells employees, “Let’s answer the phone with a positive attitude and let’s get them in here and take care of it.”

Bob Cockerham, general manager of University Volkswagen Mazda, in Albuquerque, N.M., says he has no complaints about how VW of America is handling a stop-sell order involving newer cars equipped with an automatic transmission and VW’s 1.8-liter EA888 engine.

He says he learned about the recall on Thursday, April 10, and received the parts for the fix the following Monday. “Kudos to VW,” Cockerham said. “They moved at lightning speed.”

You can reach Arlena Sawyers at asawyers@crain.com.


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