THE GM RECALL

GM dangles dealer bonuses to speed ignition-switch repairs

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DETROIT -- General Motors is rolling out a series of initiatives to accelerate the fix of 2.6 million cars with faulty ignition switches, including offering dealerships bonus money for speedy repairs.

GM is offering $250 in credit redeemable at an online gift shop to both service and parts managers at dealerships that are able to install at least 90 percent of the ignition-switch replacement kits shipped to them by July 7, according to a June 13 e-mail sent to all U.S. Chevrolet, Buick, GMC and Cadillac dealerships.

The "Ignition Switch Recall Completion Initiative" also will randomly select 50 qualifying dealerships to receive $4,000 in incentive credits, to be split between parts and service managers. One store will be randomly picked for its parts and service managers to share $10,000, according to the notice to dealers.

"As we continue to ramp up ignition switch recall parts availability, it is imperative that dealers quickly schedule customers to have their vehicles repaired," the e-mail reads.

GM spokeswoman Ryndee Carney confirmed the company is offering an incentive to dealership personnel as part of a broad effort to get the recalled cars fixed as quickly as possible.

While GM routinely offers dealers incentive money for hitting sales targets, the chance at bonuses is rare for managers in fixed operations.

Other moves

Separately, GM notified dealers this week of two other measures to speed repairs to cars with the defective ignition switch, which GM has linked to 54 crashes and 13 deaths: 

• GM will conduct an "e-mail outreach" over the next few weeks to contact owners who have not yet initiated the process of getting their cars fixed.

• For the first time since GM dealerships began replacing the ignition switches in early April, GM has loosened the unusually stringent rules in place for ordering replacement parts.

Until this week, dealer orders were tied to specific vehicle identification numbers. Now, dealers are allowed to install replacement parts on a car other than the one for which they initially ordered the kit, only if the customer for whom it was intended does not return for the repairs "in a reasonable time," according to a notice sent to dealers on Wednesday. 

GM instructed dealers to continue to contact the customers who originally ordered the parts but haven’t followed up for an appointment.

Many dealers have said their lots are jammed with dozens or even hundreds of Chevy Cobalts, Saturn Ions and other recalled cars awaiting replacement parts. Until recently, orders for repair kits were taking several weeks to arrive at dealerships. Dealers say that the parts recently began arriving in larger numbers.

GM is overseeing production of ignition switches at a Delphi plant in Mexico, where two assembly lines are running and a third is making test parts, GM spokesman Jim Cain said.

Updated statistics

Through June 16, GM had fixed 199,457 of the recalled cars, according to a GM Web site that tracks the repairs. GM has shipped nearly 400,000 repair kits, a House committee investigating the recall said this week.

GM has said that it will have produced enough replacement parts to fix the majority of the recalled cars by sometime in October.

Dealers are replacing the bad ignition switches as well as ignition lock cylinders, which are part of a separate recall. Customers also are being issued new keys. GM has allotted dealers 70 minutes in labor to perform the work.

You can reach Mike Colias at mcolias@crain.com.

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