At GM, do problems run deeper than MPG overstatements?(Read article summary)
Last week, reports began to emerge that GM was planning to compensate 170,000 or so consumers who'd already purchased one of those vehicles to make up for the inaccurate MPG figures. Now comes word that GM's plan is nearly finalized.
Two weeks ago, General Motors ordered dealers to stop selling the 2016 Buick Enclave, Chevrolet Traverse, and GMC Acadia until it could replace EPA stickers that overstated the SUVs' fuel economy. Last week, reports began to emerge that GM was planning to compensate 170,000 or so consumers who'd already purchased one of those vehicles to make up for the inaccurate MPG figures.
Now comes word that GM's plan is nearly finalized. The good news is, the number of consumers affected has dropped to 135,000. The bad news? Compensating them will still cost GM roughly $100 million.
The compensation will come by way of debit cards ranging in value from $300 to $1,500, depending on how badly fuel economy was misstated and whether the consumer bought or leased the vehicle. Buyers will be given the option of receiving an extended warranty in lieu of the gift card, but lessees will only receive the card.
If the reports are correct, consumers should begin receiving notice of the offer this Thursday.
Is that all there is?
GM says that the $100 million hit won't have a substantial effect on its bottom line. However, as we reported last week, a class-action suit has already been filed, which could result in bigger payouts to consumers and a bigger loss for GM.
What's more, the problem may go back further than the 2016 model-year. Consumer Reports says that EPA figures on the Enclave, Traverse, and Acadia, as well as the long-discontinued Saturn Outlook, may have been inaccurate for quite some time.
Indeed, historical data from Consumer Reports' road tests suggest that stats on all four models may have been overstated by as much as three miles per gallon. GM has said that the problem with 2016 models doesn't affect those from prior years (which doesn't eliminate the possibility the latter fell prey to different problems).
At this point, there's no indication that the EPA is planning an investigation of older GM models, but that could change. With plenty of attention now focused on shady practices at Volkswagen and Mitsubishi, increased scrutiny across the auto industry is probably to be expected.
This article first appeared at The Car Connection.