The OEM Playbook
Joanna L. Johnson is AOCA’s policy advisor and president of Johnson Policy Associates, Inc., a research and consulting firm specializing in environmental, safety, competition, consumer protection, and transportation issues.
She has represented the fast lube industry on every major agency action impacting it since 1991 and assists fast lube operators with everything from Superfund settlements and facility acquisitions to regulatory citations and franchisee education.
To highlight some of the education sessions during this month’s iFLEX, Johnson talked to NOLN about the biggest industry topics.
As told to Mike Munzenrider
As discussed in detail during AOCA’s education sessions, the phenomenon of automakers and their authorized dealers ignoring the Magnuson Moss Warranty Act (MMWA) has actually increased in recent years despite successful Federal Trade Commission (FTC) enforcement activities, such as the AOCA-initiated 2015 Consent Order against BMW (File No. 132 3150) for requiring oil changes occur only at MINI dealers. A decade of research reveals a well-worn path to OEMs’ success in dodging the law, made possible by a lack of consumer education and an aftermarket defense blind-spot.
Consider the typical engine seizure scenario where an automotive aftermarket service customer has their vehicle towed to an OEM dealer:
• Without a complete engine tear-down to establish causation, the dealer blames the last non-OEM service provider to touch the vehicle, alleging the seizure was caused by a non-OEM part; and/or non-OEM service.
• The dealer doesn’t provide the allegations in writing.
• The customer doesn’t know about their MMWA rights, or about engines and, therefore, doesn’t recognize dubious allegations, for example blaming rod knock on a non-OEM oil filter.
• The customer doesn’t know about NHTSA recall and TSB lookup, their correct service interval or that the dealer might’ve been obligated to update it to provide more maintenance to prevent the engine problem. They tend to believe the dealer because they’re supposed to have superior info about their OEM’s vehicles.
At this point, the customer contacts their aftermarket maintenance professional (AMP) who typically makes some or all of the following mistakes that lead to paying the claim, despite not being at fault:
• Doesn’t require right of inspection or limit mileage to recommended OEM service intervals in their facility’s service warranty.
• Doesn’t tell customers about MMWA or insist customers provide the OEM dealer warranty denial in writing, or at least provide a signed, written description of what they were told, which means FTC and local courts will likely ignore the case because the OEM can simply deny it ever happened.
• Doesn’t inspect the vehicle immediately and take photographic evidence to establish actual condition.
• Doesn’t check the vehicle’s VIN against NHTSA recalls and TSBs for related engine problems.
• Doesn’t get the vehicle’s service interval history to find out if the consumer consistently complied with OEM recommendations. OEMs deny warranty coverage if a customer fails to properly maintain their vehicle—why would an AMP do otherwise?
In the fast lube industry, this disconnect stems from a blind spot that’s a combination of honest focus on customer satisfaction and a misunderstanding of how to pursue a MMWA claim in the age of telematics and rampant engine defects. Engine problems that lead to engine seizure usually show up in the diagnostic codes—like Hyundai/Kia P1326 for rod knock—but professional maintenance centers typically don’t check for them. Meanwhile, although some makes consistently top the list of engine defects, any given OEM dealer may have great incentive to avoid the lengthy diagnostic processes required to determine whether an engine is functioning within OEM specifications or must be replaced—and that’s without being able to guarantee a replacement engine is even available. Why not point the finger at an AMP?
It's time for fast lube operators to claim their power by reversing the mistakes outlined above and staying in touch with AOCA. For more information specific to ongoing Hyundai/Kia issues, operators can go to the members-only section of AOCA’s website.