AutoNation Reneges on No-recall Sales Promise, Blames Trump

Steph Willems
by Steph Willems

Used vehicles with open recalls have begun rolling off AutoNation lots again, 16 months after the country’s largest new vehicle retailer promised an end to the practice.

The retailer, which has a half-billion dollar used vehicle expansion plan in the works, blames the about-face on the incoming Trump administration, with its CEO declaring that the legislative fight for mandatory used car recall repair is dead in the water.

Speaking to Automotive News, AutoNation CEO Mike Jackson claims he’s done all he can.

“If parts are available, we repair them,” Jackson said. “If the parts are not available, we’ll either auction or retail it. In both cases, we use full disclosure if we retail or auction it without having made a repair. It’s been a very difficult journey, but with the Trump administration there’s no way that that issue is going to be addressed from a regulatory point of view.”

Jackson, a self-described Clinton supporter, believed his company’s policy would spur legislation holding all used vehicle retailers to the same standard. Many safety advocates felt that a Clinton win would help pave the way for a federal ban on the sale of used cars with open recalls, not unlike the existing law for new vehicle sales.

By throwing in the towel, the retailer can now rid itself of an expensive burden.

Around 6,000 used vehicles awaiting recall repairs languished in AutoNation’s inventory at the end of November, the bulk of them equipped with Takata airbags. The recall’s scale has made the repair process a slow one. Late last year, AutoNation walked back part of its policy and began sending some recalled vehicles to auction (outfitted with window stickers stating the vehicles’ recalled status).

“The scale of the issue became astronomical,” Jackson said. “If things were ever going to change, Takata would be the rallying cry to say we can’t go on like this anymore.”

Only vehicles that couldn’t be repaired within a six-month period were sent to auction. Still, Jackson claims that most of the disclosure notices were removed, leaving future customers in the dark. By scrapping his policy, Jackson says would-be AutoNation customers will still be notified of the recall status of his company’s used vehicles, allowing them to make an informed decision.

[Image: Michael Sheehan/ Flickr ( CC BY 2.0)]

Steph Willems
Steph Willems

More by Steph Willems

Comments
Join the conversation
2 of 34 comments
  • Ol Shel Ol Shel on Dec 05, 2016

    People will die because of this, but we don't care because we want corporations to make money and we don't think it's anyone in our immediate family who will die. We have lost our way as a society. We're worthless piles of shit who hide behind Jesus as we root for the deaths of others.

  • Acd Acd on Dec 05, 2016

    Trump is a convenient excuse to change a business policy that has cost a lot of money since implementing it.

  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.
  • GregLocock Car companies can only really sell cars that people who are new car buyers will pay a profitable price for. As it turns out fewer and fewer new car buyers want sedans. Large sedans can be nice to drive, certainly, but the number of new car buyers (the only ones that matter in this discussion) are prepared to sacrifice steering and handling for more obvious things like passenger and cargo space, or even some attempt at off roading. We know US new car buyers don't really care about handling because they fell for FWD in large cars.
  • Slavuta Why is everybody sweating? Like sedans? - go buy one. Better - 2. Let CRV/RAV rust on the dealer lot. I have 3 sedans on the driveway. My neighbor - 2. Neighbors on each of our other side - 8 SUVs.
  • Theflyersfan With sedans, especially, I wonder how many of those sales are to rental fleets. With the exception of the Civic and Accord, there are still rows of sedans mixed in with the RAV4s at every airport rental lot. I doubt the breakdown in sales is publicly published, so who knows... GM isn't out of the sedan business - Cadillac exists and I can't believe I'm typing this but they are actually decent - and I think they are making a huge mistake, especially if there's an extended oil price hike (cough...Iran...cough) and people want smaller and hybrids. But if one is only tied to the quarterly shareholder reports and not trends and the big picture, bad decisions like this get made.
Next