Chrysler sues to oust Md. dealer for poor service Action first ever for a Big 3 automaker

May 21, 1993|By New York Times News Service

WASHINGTON -- For the first time, one of the Big Three automakers has sued a dealer to end a franchise because of poor customer service.

In the past, automakers have often sent representatives to urge improvements in service and, if necessary, to help negotiate the sale of a franchise.

But in this case, Chrysler Corp. filed suit earlier this year in U.S. District Court in Baltimore to end the franchise of Lowe Jeep Eagle, of Upper Marlboro, a Washington suburb.

In the suit, the automaker said that five years of corporate warnings of very low customer satisfaction had gone unheeded and that the dealer had refused to voluntarily give up the franchise.

"This is a first for the industry," said Lewis H. Goldfarb, Chrysler's assistant general counsel.

Lowe Jeep Eagle insisted that it had given its customers "the highest level of service." In court papers, the dealer acknowledged customer dissatisfaction, but said that it was "subjective."

Chrysler's action comes as the automobile industry is putting more emphasis on service as the key to getting repeat customers. The Big Three face increasing pressure from overseas manufacturers, especially the Japanese, who put a priority on customer satisfaction.

"We in the industry have got to shake the image that we have," saidTom Pappert, Chrysler's vice president for sales.

"When we run across a situation that's gone on for five years, we do what we have to do."

Mr. Goldfarb said Chrysler would go to court to end the franchise of any of its 4,700 dealers who could not be persuaded to improve substandard service.

The lawsuit over Lowe Jeep Eagle alleges that since 1988, the dealership has received very low marks on Chrysler's Customer Satisfaction Index, as low as 1.86 on a scale of 1 to 4. Chrysler officials said that the average was above 3.

The index is based upon the company's surveys of customers who have bought vehicles from the dealer and had them repaired there.

Richard Giordano, general manager of the dealership, declined to comment on the case. However, in a countersuit, Lowe alleged that "it provided Jeep and Eagle customers with the highest level of service."

"Chrysler's customer service satisfaction surveys are a highly subjective, unscientific and inaccurate method for determining the quality of a dealer's service," Lowe said. Dissatisfied customers were more likely to return the surveys, the dealer said.

Lowe also alleged that "Chrysler has, from time to time, provided and continues to provide to Lowe some vehicles of inferior quality or which are difficult to service."

Stephen C. Winter, lawyer for Lowe Jeep Eagle, said that he was unaware that Chrysler had any hidden agenda in seeking to revoke thefranchise.

But in its lawsuit, Lowe also said Chrysler had "attempted to coerce Lowe to make capital improvements to its dealership and to require Lowe to increase its Jeep Eagle parts inventory as a condition to the continuation of its franchise."

Mr. Goldfarb responded, "One person's coercion is another's normal business dealings," adding, "We have standards we expect of our dealerships."

Joan Claybrook, president of Public Citizen, a public interest advocacy group, said, "I'm delighted that Chrysler is focusing on customer service, because competition certainly warrants that they do that."

Ms. Claybrook noted, however, that relationships between dealers and manufacturers were often strained, and suggested that Chrysler might be punishing Lowe for failing to sell enough cars. But Chrysler officials said that Lowe had exceeded the company's sales goal by 400 percent.

General Motors and Ford also have programs intended to improve customer satisfaction. "We go in and work with dealers with low Consumer Satisfaction Indexes," said Ed Lechtzin, a spokesman for General Motors.

Al Chambers, a spokesman for Ford, said, "We have been working hard on customer satisfaction, and have developed standards on improving the relationship between the manufacturer and the dealer and the customer."

Mr. Pappert said that last year Chrysler began a $30 million program to help dealers satisfy their customers.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.