We asked dealers what they thought about today's vehicle quality, all those manufacturers' recalls, warranty work and such.
Here's what they had to say:
Don Wessel, owner, Don Wessel Oldsmobile Honda, Springfield, MO:
Is there a quality problem?
“I'm convinced that the problems started when guys like Lopez and Nasser came in and started cutting supplier costs. The cuts have resulted in a reduction of quality.
“Five years ago, my Oldsmobile warranty costs were four times higher than my Honda warranty costs.”
What makes Honda better in quality?
“When you tell the Honda folks there is a problem with the car - which is rare - they jump on it right away. The GM folks tell you you're the only one who has told them about the problem, and don't seem too worried about it.
“Honda and Toyota are just concerned with building good vehicles. They're not concerned with squeezing suppliers — and their cars cost the same as the domestics to build.”
Peter Brandow, owner, The Brandow Group, Philadelphia, PA area:
What's the effect of the recalls?
“Customers are bummed out when they need service, they are more annoyed when the service is prolonged with long lines and back-ordered parts. They are livid when the recall is a partial fix. And they are furious when the vehicle is potentially still unsafe after the fix such as with the Ford initiative where the tire company is suggesting that the tires are not the issue, and Ford says the vehicle is not the issue, but the fix is a tire exchange.”
Why the increase in recalls?
“There is significant pressure for new product with new fuel efficient but high torque power plants and with new sheet metal. At the same time OEMs are being pressured to take cost out of the vehicles and to increase their margins.
They have already squeezed the dealer's margins lower than is healthy so it stands to reason that they are rushing to market with the lowest cost suppliers on content and designs and engineering that are produced by downsized staffs. Something has to give and it is not a stretch that it will be quality. Just a guess, but I'd bet on it.
“GM's newest batch of small and mid-sized trucks are, perhaps an interesting exception. They seem to be better trucks with more horsepower and great design. I think they will ultimately take a bite, a big one, out of Ford in the next go-around. The one caveat: GM better share a bit of the success with its dealer body or the deal will not make it to the streets.”
Frank Thompson, owner, Overland Park Jeep, Overland Park, KS:
Have you been hurt by recalls?
“As a stand alone Jeep dealer, I don't have the recall problems some of the other bands have. My products keep getting better and better. Since the Chrysler and Mercedes merger, quality seems to have gotten better. I think the Chrysler folks have become more concerned with quality since the merger.”
How has the improved quality helped your dealership?
“As quality gets better, my labor warranty goes down. As a result, I'm really focusing on building my customer pay. Things like brake jobs and oil changes and other maintenance items - I want the customer coming to my store to have them done. I'm pretty competitive with the independent shops like Midas or Speedy.”
Frank Pauli, owner, St. Johns Ford Mercury Sales Inc., Saint Johns, MI:
Why all the recalls?
“I know the cars are of better quality-there's no question. They're much better today than 20 years ago.
“We have so many recalls because the manufacturers are proactive these days. I don't think that's the public's opinion-they think there's something wrong with the car. When customers start seeing so many recalls, they see a red flag?
“We have recalls all the time but I don't hear a lot from the customers-it's not part of daily conversations. Our recalls are not like the Explorer/Firestone issues.”
Sam Pack, owner, Sam Pack's Lee Jarmon Ford, Carrolton, TX:
How has Ford been communicating with the dealers about the quality issues?
“We just met with Jac Nasser here in Dallas and the quality issues are a top priority for Ford Motor Company. They are working closely with the dealer body to address the problems. Mr. Nasser said Ford is hiring additional engineers and placing them inside the plants and with the suppliers.”
How has the customer been reacting to the recalls?
“One thing that might surprise you is that with the second Firestone recall and the Owner Notification program, the customer has a different mentality than what they had during the first go-around. The anxiety and urgency just is not there, and I'm not sure why that is.”
Bill Schicker, owner, McMahon Ford, St. Louis, MO:
What is your take on the quality problems that seem to be plaguing Ford?
“I don't think quality is a real problem. Ford is pushing hard to be the top quality organization. Ford is trying to be very proactive at catching these things before they become real problems.
“The media is painting Ford dealers with a broad brush. It's ridiculous to say Ford dealers have no confidence in Ford's upper management. Jim O'Connor (president of Ford Division and a former dealership general manager) is a tremendous leader and has been unfairly criticized in the media.”
Kent Hagan, president, Midway Ford and North Hollywood Toyota, Southern California:
Do you think there is a quality problem today?
“Obviously, quality is a problem, whether it's a perception or real problem is immaterial. Perception is reality in a consumer's market.
“I think there is a real quality problem. It's just my opinion, but I think the general pride in workmanship that use to characterize the U.S. years ago is not there now. The manufacturers have a human problem in their factories.”
How do the recalls affect your dealerships?
‘The effects of recalls can be either good or bad — it depends on what you sell and on your location.
“For example, at my Toyota store, we're very dependent on new vehicle sales. In fact, 75% of our revenue is generated by vehicle sales. A recall could be devastating to our Toyota franchise, especially if it happens to one of our top-selling lines.
“I'm glad the Ford store is not structured like the Toyota store. Midway Ford is much more dependent on its back-end operations. I make 72% on my warranty labor. So for the short term, recalls are good for the dealership. But looking long-term, it can't be good.
“I've been able to recapture some customers I had lost to the independent repair and service shops. If I take care of them, they'll keep coming back to me.
“With the Firestone recall, I had more customers coming in than what I could handle. As a result, I stopped all of advertising. That's $15,000 a month I'm saving. Also, since the recall, my service revenue has increased from $75,000 a month to $236,000 a month.
What has Ford been saying to the dealers?
“Ford has asked the dealers to join the Ford team. They've said, ‘You can bash us or you can join us to help solve the problem.’ They have been totally up front. Dealers have asked in meetings how to answer media inquiries and Ford has responded, ‘Just be truthful. Tell them how you feel.’”
Joe Blouin, general manager, LaFontaine Buick-GMC, Detroit, MI:
What's with all the recalls?
“The recalls are no big deal. The manufacturers are more cautious because of fear of litigation. But maybe we're just being conditioned to them.
“General Motors seems to be stepping up and handling any potential problems pretty well.”
Morton Zetlin, owner, American Service Center, Arlington, VA:
Is there a quality problem today in the automotive industry?
“I can only comment on Mercedes because that's who I know. You would expect a company with Mercedes' reputation not to have many recalls.”
Why do you think Mercedes' quality is so strong?
“I've been in their factories and they have sophisticated robotics which allow them to make each car the same. At the end of the day each vehicle is tested rigorously. They find fixes for the problems before they get out of control.”
