GM dealers win reprieve on audits to focus on recalls

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DETROIT -- Stop-delivery orders. Mounting inventory costs. Backlogged replacement parts and grouchy customers.

Those are some of the pressures that General Motors dealers have endured over the course of eight months and 65 recall campaigns. But there's one nuisance that they don't have to worry about, at least not until January: GM's audit police.

GM told dealers in an Aug. 8 memo that, in recognition of the "unprecedented times" that dealerships are experiencing with the recall onslaught, the company has suspended audits on warranty claims and sales incentives.

Dealers say the probes, a common practice for automakers, can routinely result in thousands of dollars in chargebacks -- and almost always a week or so of tedious distraction.

Tim Turvey, GM's vice president of North American customer care and aftersales, said GM's dealer councils lobbied to have the audit burden lifted temporarily to free up more time to process recalls.

"This is one thing the dealers said we could take off their plates right now to make sure they're not distracted," Turvey said. The warranty audits "are a disruption and it consumes their time. Right now, we really want them to focus on the customer and the completion of these repairs."

Turvey said the audit freeze began Aug. 18 and will run through Jan. 5. It also applies to audits of sales incentives, which are meant to ensure that dealers properly apply GM's dizzying menu of rebates and incentive offers to each sale and have the proper documentation.

Martin NeSmith, owner of two Chevrolet-Buick-GMC stores in Georgia, said it's a welcome reprieve.

"Managing all of the backlogged parts and stop-sales and negative publicity from the recalls has been a challenge for both the sales and service staffs," NeSmith says. "This helps."

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


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