Memos and Correspondence between GM and the Center for Auto Safety

(The following is correspondence between the Center for Auto Safety (CAS) and GM during 1992 and 1993 and was obtained from the Center for Auto Safety. You can obtain original copies from them. See the Frequently Asked Questions on GM Bad Paint Web Page for more information.)

This one is on CAS letterhead. Enjoy.

July 15, 1992
Robert C. Stempel, Chairman
General Motors Corporation
General Motors Building
Detroit MI 48202

Dear Mr. Stempel:

The Center for Auto Safety (CAS) recently filed a petition with the FTC and all 50 state attorneys general regarding paint peel on Ford Motor Company (Ford) F-series trucks. Several attorneys generals have already expressed their intent to investigate Ford's conduct to see if it constitutes a violation of unfair or deceptive trade practices legislation, breach of implied warranties of mechantability and fitness, or common law fraud.

This letter is to ascertain GM's position regarding paint peel on GM cars and trucks outside of the express warranty period. CAS is fully aware that numerous GM makes and models suffer paint peel as the result of a latent product defect. The Center has amassed sufficient documentation and consumer complaints to seek redress from the FTC and state attorneys general on behalf of GM vehicle oweners nationwide. It would of course be better if GM was to address this concern in a proactive manner in order to avoid adverse publicity that would arise were CAS action necessitated.

Historically, GM has shown a willingness to handle paint peel concerns in a quasi-proactive fashion. In its October 18, 1990 edition, Automotive News reported that GM would pay to repaint as many as 323,500 vehicles including 1987 - 1990 Chevy Berettas and Corsicas as well as 1988 - 89 Chevrolet S10 Blazers and S10 Pickups and GMC S15 Jimmys and S15 Pickups. Unfortunately, this adjustment program was unnecessarily restrictive with regard to the paint colors included and the mere three year coverage period. To compound matters, GM failed to provide direct notification to individual owners.

CAS urgers GM to announce a similiar program, yet longer in duration, regarding other makes and models known to be affected. Such a program should not have a mileage limitation given mileage has no direct correlation to the propensity of a vehicle to suffer paint peel from exposure to ultraviolet light. A three year old vehicle with 60,000 miles on it is no more likely to manifest the concern than an identical three year old vehilce with only 15,000 miles.

CAS insists that GM implement a post-warranty adjustment program in which GM pays 100% of the cost to repaint GM vehicles that manifest the paint peel condition. The program should be available to all consumers whose vehicles manifest the paint peel condition within six years of the warranty start date. The program should be made available to the first owners, subsequent owners, and lessees regardless of mileage. The program should be communicated to all registered owners by means of direct correspondence. While costly in the short-term, in the long-term such a program would help foster GM customer loyalty and stem the loss of market share.

It is also requested that GM furnish CAS with a detailed description of the paint process utilized at each and every GM vehicle production facility during the 1985 - 1992 model years. CAS is interested in ascertaining with particularity which models have been produced without the intermediate acrylic urethane primer layers. It is the omission of acrylic urehtane primer between the anti-corriosion primer (aka electrocoast) and colorcoat layers which is responsible for the paint peel condition.

The Center looks forward to your prompt reply to this matter. Knowing full well that this time of year, model year changeover, is a hectic period at GM, CAS will wait until August 15, 1992 for your response before taking any action.

Respectfully Yours,
Clarence M. Ditlow III
Executive Director
cc: Jack F. Smith, President
General Motors Corporation
General Motors Building
Detroit, MI 48202

END LETTER

By the way, GM didn't get back to them by August 15, 1992. In fact, they didn't respond until February 5, 1993. (Based on what I have in front of me).

This letter is on Pontiac letterhead and is dated October 16, 1992.

TO: All Pontiac Dealers
SUBJECT: Partners in Customer Satisfaction Dealer Self-Authorization

Pontiac continually reviews the Warranty Management System to ensure that Warranty Administration achieves its purposes, including high levels of customer satisfaction with after sale treatment.

Following a recent review, Pontiac has decided to provide dealers authorization for cases involving paint repairs for vehicles up to six years from date of delivery without regard to paint mileage. This is a change from the current PICS dealer self-authorization which allows paint repair goodwill adjustments to be made up to 6 years/60,000 miles. Dealers who have deductible override capabilities may also waive deductibles as they see appropriate on this type of repair.

Paint repairs are only to be authorized beyond the warranty period by the Dealership Service Manager on a case by case basis as with any other goodwill policy adjustment.

Assistance should only be considered for cases involving evidence of a defect in materials or workmanship by the manufacturer. Assistance should not be considered for conditions related to wear and tear and/or lack of maintenance (such as fading, stone chips, scratches, environmental damage, etc.).

Please contact your Zone representative if you have specific questions.

(signed)

Perry S. White
Director of Service/Customer Satisfaction

END LETTER

(FAQ AUTHOR'S NOTE: According to this letter, a defect exists. Look at the second to last paragraph. So in all those cases where dealerships painted cars, there was evidence of a defect. Hey, these aren't my words, folks.)

Here's a another one from Pontiac. Seems like the media coverage back in 1993 was making them sweat a little....

BEGIN LETTER:

On Pontiac letterhead, and dated January 20, 1993.

Recently, there have been several newspaper articles and/or TV broadcasts concerning paint on General Motors vehicles. In many cases, dealers or dealer personnel have been interviewed and have done an excellent job of representing General Motors. These efforts are appreciated.

The purpose of this letter is to reiterate the need to make every effort to achieve high levels of customer satisfaction with owners who may have experienced paint problems. Achieving customer satisfaction will require a reasonably prompt, quality repair of our owner's vehicles. If necessary, to avoid long customer delays, subletting of paint repairs is encouraged. Reimbursement for past repairs should also be reviewed if requested. In other cases where the condition does not merit Pontiac's participation, a patient and empathic explanation will be necessary.

Attached for you use is a copy of our October 16, 1992 letter or your empowerment for paint repairs and the news release DCS'ed to your dealership recently.

Thank you for your continued efforts to satisfy our owners.

Sincerely,
(signed)

E.M. Schlesinger

END LETTER

This next one is GOOD. I mean real good. It's from the CAS to General Motors. It is on CAS letterhead.

BEGIN LETTER:

February 5, 1993

William L. Weber, Jr.
Office of General Counsel
General Motors Corp.
PO Box 33122
Detroit, MI 48232

Dear Mr. Weber:

By letter of July 15, the Center for Auto Safety (CAS) urged General Motors to establish a program to address the problem of paint delamination. CAS called on GM to implement a post-warranty adjustment program which provided:

* 100% reimbursement for repainting affected vehicles
* six years coverage from date delivery
* unlimited mileage
* available to first owners, subsequent owners and lessees
* direct notification to all registered owners

In response, GM has begun to initiate a post-warranty adjustment program for all divisions accept Saturn which includes:

* broad dealer discretion
* six years coverage from date of delivery
* unlimited mileage
* deductibles may be waived
* not limited to delamination

Some aspects of the program are even better than what the CAS sought, but others are less. GM is to be commended for establishing a post-warranty adjustment program that covers all paint problems and not just delamination. In providing for full reimbursement for paint defects for six years with no mileage limit, GM would have the most comprehensive and responsible paint policy within the industry as far as we are aware. This would go a long way toward achieving GM customer satisfaction with paint quality.

In its July 15 leter, CAS stated we had amassed sufficient documentation and consumer complaints to seek redress from the FTC and state attorney's general on behalf of GM vehicle owners nationwide. We deferred such actions pending GM's response. The substantive adopted policy covered paint defects through six years with no mileage limit is excellent as long as it is fully implemented to reach all affected owners.

To implement this adjustment program, GM states it has sent out Technical Service Bulletins to its dealers and has issued a national press statement. While CAS believes direct consumer notification is more effective in reaching owners, CAS will not petition the FTC and state attorney's for redress as it did in the case of Ford-F-series paint delamination because GM has agreed to %100 repair responsibility unlike Ford which negotiated responsibility through its zone offices.

In the initial phase of the program, we have seen considerable dealer confusion over the program with some saying second owners are not covered, that consumers must pay a portion or even that there is no such program. In the first week after GM's press statement on the program, we have received more letters on GM paint quality than on any single manufacturer problem in CAS history in such a short period of time. Thus, we continue to have concern about how well GM is getting its message out to consumers on this program. We expect GM to improve on this in the future as it implements the adjustment program.

In closing, we recognize that GM has adopted many of the points raised in our letter and has even gone beyond some. We will simply continue to disagree on the best way to convey information on post-warranty adjustment programs to consumers. Others may have different opinions on this issue of which GM must take cognizance. The substantive provisions of this program (100% coverage for 6-years with no mileage limit for all owners) are truly excellent and deserve only praise.

Sincerely,
(signed)
Clarence M. Ditlow
Executive Directior

END LETTER

Ok, so what did we learn? We learned that GM should have told us all about this problem, but the CAS backed down on this. We learned that dealerships have been, uh, "forgetting" to tell customers about the correct policies. Oh, and we learned that according to the CAS, that this is the biggest screw up' in automotive complaint history.

**My suggestion: Write to the CAS and let them know that GM is not living up to their end of the bargain. Those of you with newer cars, let the CAS know that the problem is starting again, and GM is not being co-operative. Especially you guys with the 1996 Saturns!**

BEGIN LETTER

On GM letterhead: General Motors Corporation Legal Staff. Phone: 313-XXX-XXXX

Fax: 313-XXX-XXXX
Mr. Clarence M. Ditlow
Executive Director
CAS
2001 S. Street, N.W. Suite 410
Washington, DC 20009

Dear Mr. Ditlow:

Re: Paint Repairs

This is in response to your letter requesting General Motors position with respect to possible paint delamination on GM cars and trucks which might occur outside the express warranty. You urged GM to take a proactive approach in handling customers complaining of paint delamination.

GM has a proactive procedure to accomplish customer satisfaction in the event paint delamination occurs beyond the period of warranty coverage. Since receiving your letter, applicable GM car and truck marketing divisions have furnished a letter (the October 16,1992 one above - FAQ Author) to their dealers which empower them to repair paitn conditions for vehicles up to six years old on a case by case basis. The terms of this letter include:

* broad dealer discretion
* six years from the date of delivery
* no mileage limitation
* deductibles may be waived
* not limited to delamination

In carrying out this self authorization approach, the dealer is given authority to inspect the vehicle and authorize repairs paid for by GM without first checking with the division. This feature should promote expeditious treatment of our customers' concerns and avoid administrative delays. The letter should go a long way toward achieving GM's objective of satisfying customer complaints. We are confident that this approach is providing appropriate relief to our customers.

In addition, a comprehensive paint repair procedure was furnished in October 1992 to GM dealers through the Technical Service Bulletin process. (It's on the Web Page - FAQ Author). This important paint repair procedure enables our dealership service personnel to ensure that a proper paint repair is conducted.

In order to assure that our customers are aware of the action GM hs taken in this matter, GM issued a nationwide press statement (It's on the Web Page by John Divan - FAQ Author) to all major newspaper, television and radio station outlets. Also enclosed is a letter dated Janaury 20, 1993 (It's above- FAQ Author) we sent to our dealers to alert them regarding the nationwide release and reinforce our position concerning their empowerment.

In closing, we note that GM's approach to paint concerns is consistent with many of the points raised in your letter. We have received favorable feedback from our customers and believe that our efforts to achieve customer satisfaction will be accomplished.

Very Truly Yours,
William L. Weber, Jr.
Attorney

END LETTER

Well, that's it for now. I hope this shows everyone what kind of bullshit is being shoveled here. And I have a question, and I am sure many of you have the same one: "If these letters are written in 1992/1993, why are 1995 and 1996 cars still peeling?"
Remember this when you go to make your next car purchase decision.

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