GM struggles to provide loaners

Carmaker, dealers scramble to make good on recall promise.

All Steve Isola wanted was to take up General Motors on its offer of a loaner until his recalled 2007 Chevrolet Cobalt is fixed. But neither his dealer nor GM has been able to give him one.

GM says it’s had 9,000 requests such as Isola’s, and intends to fill them all. But sometimes the best intentions don’t mesh with practical reality.

Dwayne Haapanen, general manager at Kolar Chevrolet in Hermantown, Minn., near Duluth, says customers have parked nine recalled cars on his lot, refusing to drive them until fixed.

But it’s taken awhile to get rental cars for Isola and three other customers; Haapanen said he’ll have them all “squared away” today. “There’s been a bit of a struggle finding the cars. I

burned up all my loaner fleet, and we’ve been renting from Enterprise and now they’re out of cars.”

Such are the rough edges of General Motors’ recall of 1.62 million cars worldwide that need new ignition switches to prevent the kinds of crashes blamed for 12 deaths. The switches can jostle out of the “run” position into “accessory,” shutting off the engine and killing power to the air bags.

GM CEO Mary Barra told a reporters in Detroit on March 18 that GM has told dealers to give any owner of a recalled model a free loaner vehicle if requested. Owners don’t have to prove their switches are faulty or that they’ve been in accidents to qualify, GM says, and the company is paying all the costs of loaner cars.

It also is making arrangements for college- age customers who might have trouble renting.

Isola was in a jam. His daughters won’t let their kids ride in his Cobalt. And when he called the GM recall hotline, no one would help. He says he got really “ticked off” when the representative denied him a rental car, saying GM “can’t provide that to everyone.”

He replied: “I’m not everybody. I’m a Cobalt owner with a safety concern. I’m not some crackpot.”

Despite the loaner scramble, Haapanen says he’s “encouraged GM is stepping up right from Day One.” Still, it has taken more than saying it should be so.

GM has beefed up call centers and provided training, hoping to prevent long waits and wrong answers, such as Isola initially got.

GM says dealers should have the first batch of new switches — 60,000 by April 7. Barra said the goal for a full supply is October.

“It’s a mixed bag,” says Aaron Jacoby, who specializes in dealer issues as head of the automotive practice of Arent Fox, a law firm. “It’s not that dealers are entirely unhappy there is a GM recall,” he says, because it’s a chance to woo new patrons when they bring in their cars for recall repairs.

Some dealers aren’t having problems. At Len Lyall Chevrolet in Aurora, Colo., for instance, General Manager Dan Johnson said he’s had only one request for a rental car. But he’s had to put two of the used cars in his inventory — a Chevrolet Cobalt and HHR, both on the recall list — “out back” until repaired.

GM spokesman Greg Martin says, “Dealers should ensure all recall repairs are performed on a vehicle before it is loaned, rented or sold,” as Lyall Chevrolet is doing, to be sure the loaners aren’t themselves under recall.

“We will work overtime,” Johnson pledges. “We will do what we need to do” — and if he can throw in a free oil change to keep owners of recalled models coming back, or “trade for a few cars,” so much the better.

GM says that owners of the recalled cars can safely driv e them if they use the ignition key by itself, with no attachments.

The recalled vehicles: 2005- 07 Chevrolet Cobalt and 2006- 07 HHR, 2007 Pontiac G5 and 200607 Solstice and 2003- 07 Saturn Ion and 2007 Sky.

TY WRIGHT, BLOOMBERG NEWS