Saturn Recalls 350,000 Cars to Fix Wiring : Autos: The scope of the callback, to prevent engine fires, could sully the reputation of GM's popular vehicle.

By DONALD W. NAUSS

Aug. 11, 1993 12 AM PT

TIMES STAFF WRITER

DETROIT — Saturn Corp., the General Motors subsidiary with a reputation for building high-quality vehicles, said Tuesday that it is recalling more than 350,000 cars--every car Saturn had built up to April 15--to correct a wiring defect that can cause engine fires.

The recall--prompted by reports of 34 vehicle fires, none of which caused injuries--could damage the innovative division’s reputation, experts said.

It also offers a stark contrast to GM’s stubborn refusal to recall millions of full-size pickup trucks with side-saddle gas tanks that federal regulators say could burst into flames in side-impact collisions. GM insists the 4.7 million trucks are safe and meet federal safety rules.

Company officials said the Saturn problem involves a wiring harness that could suffer an electrical overload in the event of a short circuit in the car’s generator. Repairs will be made for free, and dealers nationwide have already begun to fix cars brought in for routine maintenance.

Tim Mendenhall, sales manager of Saturn of the Valley in Sepulveda, said his dealership is scheduling appointments to meet customers’ needs. “If they can only come in on a Sunday or at 10 o’clock at night, that’s OK,” he said.

Still the scope of the Saturn recall--involving 352,767 sedans, coupes and station wagons built between 1991 and April 15--could sully the unit’s reputation as it struggles to become profitable.

“This will tarnish its image and could hurt long-term sales,” said Margarethe Wiersema, a professor of strategic management at UC Irvine and a former GM financial analyst.

But Wiersema and other analysts praised Saturn for confronting the problem head-on, a strategy they said could limit the damage and help sustain Saturn’s standing with consumers. “It could turn into a positive if they show the customers they stand behind the product,” said John Hammond, an analyst for J.D. Power & Associates.

By adopting new, sometimes unusual tactics--both in the factory and on the showroom floor--Saturn has become GM’s hottest-selling brand. It recently ranked third in J.D. Power’s highly regarded customer satisfaction survey, behind two Japanese luxury brands.

Saturn has had to deal with minor defects before, including repairs to brake boosters in 1991 and the repurchase that year of 1,800 cars that had been filled with the wrong radiator coolant.

But the latest problem is far more extensive.

Cliff Friendlay, owner of Saturn of West Sahara in Las Vegas, has dispatched three technicians to his used-car service center to deal exclusively with the wiring problem. “We are scheduling them just like a barber,” he said. “Fifteen minutes and you’re done.”

To further ease the inconvenience, Friendlay is providing free transportation to a nearby casino, along with a ticket for a free buffet meal. “I think it will help our image with our customers,” he said. “My concern is the guy that just reads the papers and never deals with us.”

Saturn declined to say what the recall would cost, but analysts put the expense at anywhere from $8 million to $20 million.

Such sums would not have a big impact on Saturn’s earnings. But neither Saturn nor GM has much margin for negatives.

GM, which has lost more than $12 billion in North America the last two years, is hoping to return to profitability through cost cutting. And Saturn, which cost $5 billion to create, has lost money the last two years. The division had its first profitable month in May and was optimistic about breaking even in 1993.

Demand for the cars has continued to outstrip supply. But that has required Saturn to run its Spring Hill, Tenn., plant at full capacity on three shifts, contributing to labor tensions.

Potholes on the Saturn Road

Saturn Corp. has voluntarily recalled cars eight times since the General Motors Corp. subsidiary began building them in 1990: February, 1991

1,480 cars recalled

Fix seat back recliners May, 1991

1,836 cars recalled

Replace cars because improper coolant installed July, 1992

633 care recalled

Inspect automatic transaxle valve assembly October, 1992

43,000 cars recalled

Fix trunk lid release January, 1993

14,830 cars recalled

Replace windshield wiper motor assembly February, 1993