The high-ups at General Motors are feeling the brunt of the backlash from the recall of more than 2.6 million cars over faulty ignition switches. CEO Mary Barra was questioned at length by Congress last week, where she also met up with the families of those who died as a result of the faulty switch and listened to their stories of loss. The effects of the recall aren’t limited to GM’s high ranking executives though, it also has owners and operators of GM dealerships worried about their business.
“It’s a little bit unnerving because GM is on the front page – not of the business section, but the front page of the paper and the lead story on the news every day,” John McEleney, owner of McEleney Chevrolet in Clinton, Iowa, told Businessweek. “People are concerned because they’re GM owners and they see all this publicity regarding GM.”
BW notes the dealers have had to act as pseudo therapists for the customers, who have flooded dealer phone lines with questions and concerns in regards to the recall. Dealers claim customers are confused and concerned about the recall and frequently call in asking if their car is one of the affected models and if it is safe to drive. GM has assured customers the vehicles are safe to drive so long as they remove any keys from their key ring which may provoke the key to fall out of the ‘On’ position. Barra has stated she would be comfortable with her teenage son driving one of the recalled models.
Jim Stutzman, a Chevrolet-Cadillac dealer in Winchester, Virginia, said the recall has caused less comfort among his customers.
“This stirs our owners who are in possession of those cars into a panic,” said Stutzman. “It’s setting this thing up like it’s this catastrophic emergency situation and that they could be killed at any moment driving their car. And that’s not the case.”
Stutzman says the congressional hearings GM underwent last week have caused similar damage to the company’s reputation as the hearings in regards to its government bailout and 2009 bankruptcy filing did.
“It’s like reliving the bankruptcy experience all over again,” he said. “There are people who have walked away from General Motors products and dealers because they felt the bailout was wrong.”
Now, just like with the bankruptcy, some customers are giving up on GM and turning away because of the recall.
“We had great momentum coming out of February,” Stutzman said. “Then we definitely saw a slowdown in our traffic and people’s interest in our products. I don’t think we’re alone. When we talk to other dealers in our region, I think a lot of people are feeling it.”
Dealers will have the opportunity to relinquish any negative opinions customers have formed about them when owners begin to come in for ignition switch repairs starting today. This gives dealers the chance to treat the customer well and resolve their problem in a quick fashion. It also lets dealers inform customers about the $500 rebates being offered to owners of recalled vehicles to purchase a new model, though GM has advised dealers to do this in a ‘respectful’ manner.