Car Maker Will Replace 1,836 Faulty Saturns : Automobiles: General Motors says the damage from bad coolant is too extensive to repair. The replacement effort is an industry first.
Saturn Corp., the new General Motors division that was created to make a high-quality car to compete with the Japanese, is replacing 1,836 vehicles that have suffered damage to their engine cooling systems because a faulty antifreeze was used at the factory.
It is believed to be the industry’s first mass replacement of defective cars.
Saturn officials said they decided to give customers new cars rather than make repairs, in part because of the potential extent of the damage.
Saturn also took the unusual step of pointing fingers: It identified Texaco Inc., the oil company, as the supplier of the faulty coolant. Texaco issued a statement indicating it had goofed.
The sweeping action reflects the tenuous position of the Saturn division, which launched its coupe and sedan last year as GM’s final and most elaborate attempt to compete with the Japanese in the small-car market.
The Saturn has won generally good marks from car reviewers and early owners. But it was plagued with early production problems and was introduced as car sales were plummeting because of the recession and the Persian Gulf War. In February, it recalled 1,210 models because of a faulty seat-recliner mechanism.
“I’d be concerned about this one,” said Thomas O’Grady, president of Integrated Automotive Resources of Wayne, Pa., which surveys consumers’ car-buying intentions. “It’s nice they’re taking this action, but they’re in a very fragile situation.”
A Saturn spokeswoman said the problem surfaced as owners began returning cars with failed water pumps and other damage.
“Concern regarding the potential damage which may have been caused by the coolant, logistics of providing replacement parts and the extent of repair procedures led to this decision,” Saturn said.
Owners were being notified by overnight mail of the offer to replace their Saturns with ones of equal value. If the desired model isn’t immediately available, owners will get a free loaner and their new-car order will get priority.
The letter said the improperly mixed coolant will cause components in the engine cooling system to degrade. The first symptoms are a coolant leak and engine overheating, Saturn said.
About 1,100 of the cars are already in owners’ hands, Saturn said. The rest are at dealerships. The replacement covers cars built between March 25 and April 4 at Saturn’s new assembly complex in Spring Hill, Tenn. That is about 7% of all Saturns built so far.
Texaco Refining and Marketing Inc., the Houston-based Texaco subsidiary that supplied the coolant, said the error was the result of a “blending accident” involving a shipment of 59 barrels of premixed engine coolant to Saturn. It was “isolated and non-recurring,” the oil company said.
Texaco said it doesn’t normally ship premixed coolants to auto manufacturers. This was a small shipment made in response to a special request.
Saturn officials said they didn’t know how much the replacements will cost or who will pay for it. At an average of $10,000 per car, the tab will be about $18 million. Presumably, Texaco will shoulder some or all of the cost.
“We are working with Saturn at this time to correct this unfortunate situation promptly and effectively,” said Glenn F. Tilton, president of the Texaco subsidiary.
Said O’Grady: “It’s really not a Saturn car problem. I’m sure that Texaco is paying the bill.” Referring to discussions between the firms, he said: “Wouldn’t you have liked to tap those phone lines? Maybe Texaco will take them as fleet cars.”
Saturn said the cars will be returned to the assembly plant in Spring Hill. It hasn’t decided what to do with them after that.
Replacing the cars outright, rather than risking the dissatisfaction of owners inconvenienced by the repair process, is an extreme example of auto companies going to greater lengths to keep customers happy in a time of intense competition.
For example, several auto firms, such as Toyota’s Lexus luxury-car division, have tried to turn recalls into pluses rather than negatives by offering to fix the cars at the owners’ homes or accommodate them in other ways.
GM created Saturn as an all-new company responsible for its own engineering, manufacturing and sales to distance itself from problems that seemed to permeate U.S. auto makers. Revamping the dealerships and their ties to customers is billed as an important part of the process.
But Saturn’s limited production to date and its fledgling ranks of dealers means that the new division hasn’t yet been put to a full test in the marketplace. It didn’t need the antifreeze problem.
“The war took away their whole launch,” O’Grady said. “They’re relaunching the whole vehicle now. You have to be concerned about the fragility of their situation.”
Times researcher Amy Harmon in Detroit contributed to this story.
