First Comes Recall, Then Class Action; Small SUVs Selling

ONCE MORE, WITH FEELING: Sales of of the Jeep Grand Cherokee, this year’s Winter Car of the Year, are up in 2014, 21 percent nationally and 23 percent in the Northeast. CHRYSLER

By Bill Griffith

April 6, 2014

4 minutes to read

Many years ago, a military course at the Department of Defense Information School included a public relations lesson on dealing with accidents and other bad news.

The protocol instructed military information personnel to make full disclosure, explain what had happened and what, if anything, would be done to prevent future occurrences. The theory was that even though the story would make a big splash, there wouldn’t be a long series of aftershocks.

Of course, watching the armed services deal with those stories was like witnessing exactly the opposite—usually, there would be a denial before details started to come out piecemeal, going from rumors to speculation to final confirmation, thus giving the story longer legs.

GM’s current situation with its ignition switch recall reminds me of the worst way to handle such problems. The defects have been ignored and denied, now the truth is trickling out. Time and public reaction will tell how this plays.

However, the all-too-predictable reaction of lawyers jumping into the situation by filing a class action lawsuit is another matter.

With nearly three million cars in question, there’s a big enough class that a consortium of legal firms already is on the case.

Anticipating that owners of GM vehicles are going to be receiving an impressive mailing asking them to join the class, we offer this unsolicited advice.

Having been part of several suits (after being similarly contacted by legal firms pressing the suit), you come to realize that the average class member gets merely a pittance—a check for $3.99 or $4.89 years down the road.

When I ran this scenario by a legal advisor, he confirmed my suspicions.

“Short of the named plaintiff in the case, the remainder of the class typically gets very little money for joining the class. As you noted, lawyers make a large amount for each case. The lawyers’ fees are negotiated first, and then the class fees are negotiated, so you can see why lawyers like class action settlements,’’ he explained.

“In today’s climate, an affected person would be much better served to sue GM directly rather than join a class,’’ he advised.

Much more important if you’re a GM owner is to have your switch replaced and to try not to have a night watchman-sized ring of keys hanging from the steering column, one of the triggers for the switches’ initial failure.

Compact SUVs Big Sellers

One of any auto manufacturer’s goals is to increase market share. A tenth of a percent gain is a good thing.

These days, market share growth is found in the compact SUV ranks. So far in 2014, the segment has grown three full percentage points, accounting for 17.6 percent of new vehicle sales, according to recent analysis by J.D. Power.

A year ago, the segment was No. 3 in sales, trailing midsize and compact vehicles. Now those positions are reversed, with those segments each representing 14.9 percent of 2014 retail sales.

Power notes that compact SUVs command a premium price, averaging $25,600 per transaction, $6,200 higher than compact cars and $3,400 more than midsize cars.

“Part of the compact SUV segment’s success is the number of new or recently redesigned models,’’ says Thomas King, a senior director for Power. “In addition, the harsh winter has enticed some consumers to move into the crossover SUV market because of their all-wheel-drive or four-wheel-drive capabilities.’’

Grand Cherokee Redux

Two things were missing in last Sunday’s Auto Notes about the 2014 Jeep Grand Cherokee being named the Official Winter Vehicle of New England by the New England Motor Press Association for the fourth straight year.

One was the reaction of Mike Manley, president and CEO of Jeep Brand for Chrysler. Deadline for that weekend’s section arrived before his words.

“Particularly in one of the harshest winters on record, we’re delighted that the influential members of the New England Motor Press Association have once again recognized the all-weather capability of the Jeep Grand Cherokee,’’ said Manley. “Our new EcoDiesel engine and eight-speed transmission further add to the blend of capability, refinement, and fuel efficiency that have made Grand Cherokee the most awarded SUV ever.’’

Hmm. That’s pretty much what NEMPA said.

The other was a picture of the correct car. Last week’s accompanying photo was of a previous generation Grand Cherokee; of course, it was a past winner of the award, too.

Let’s see if we did better this weekend. Grand Cherokee certainly is. Sales in 2014 are up 21 percent nationally and 23 percent in the Northeast.

Etc.

Congratulations to Patrick Cornelissen of Endicott College, who received the 2014 Outstanding Individual Achievement Award from the Association of Collegiate Conference and Events Directors last month. The award was for his “conceptualization, unconventional approach, and dedication in successfully making the Misselwood Concours d’Elegance a premier event.’’ In its first four years, the event has become arguably the premier show in New England. This year’s dates are July 26-27. Check Endicott.edu/concours for details … Maybe spring is coming after all. The Minuteman Chapter of the Buick Club of America is gathering on April 26 for a ride and tour of LeBaron Bonney’s upholstery and interior shop in Amesbury. On the same day, the Northeast Region of the National El Camino Owners Association convenes at Jimmy’s Famous Pizza in North Andover for a spring dust-off, short cruise, and surprise shop stop.