Yesterday's announced recall of all 1976 American Motors Corp. automobiles could cost that company more than $5 million, twice its entire profit for the last quarter, although it is likely the cost will be considerably less.
AMC officials said yesterday that the part of the emission control system ordered replaced by the Environment Protection Agency would cost the auto maker $15, including installation, per car. There will be an additional $2 or $3 cost to track down and notify the owners of the 310,000 cars involved, an AMC spokesman said.
But because it is unclear how many of the cars will be brought in by the owners, the eventual cost to the financially troubled company cannot be pinpointed.
Local AMC dealers said they would be "hassled" by the extra work in their shops, and added that it usually takes 30 to 60 days for AMC to reimburse them for their costs.
According to Carl Raskin, general manager to Alexandria AMC/Jeep, "we don't know about these recalls until they occur. We've raised hell with the factory about that, but we still don't get any advance notice."
Raskin said his staff had difficulty handling consumer calls yesterday morinign. "All we knew was what was in the paper. The phone was ringing off the hook." News of the pending recall was published in yesterday's Washington Post.
"Most dealers feel we aren't reimbursed enough for warranty work," Raskin added, claiming that all of the major auto manufacturers "pay two-thirds or half of the normal charge for the work."
But there is a bright side to this recall, Raskin added. "You'd be surprised but massive recalls can generate business. A lot of people think that since the car is already in, they might as well get some other work done that they have been putting off."
Peter Zourdos, owner of Courtesy AMC/Jeep in Rockville, said he is unsure how many owners will bring their cars in because the recall was not safety related.
"If it was a safety thing, we would be awfully concerned," he said, adding that his sense of "urgency" is not so great when the recall is emissioncaused.
Recalls have become a way of life for auto makers, according to AMC spokesman Richard Priebe. "It's just part of doing business today," he said. The EPA has recalled some 12 million vehicles since 1972 - one-fifth of the new cars sold in the U.S. during that time.
the EPA announced yesterday that it was investigating some 30 other classes of vehicles for similar emission problems, covering 11 million cars produced between 1973 and 1978.
"The fact that a class of vehicles is under investigation is not reason to conclude that a recall necessarily will be ordered as a result," said EPA Deputy Administrator Barbara Blum at a press conference at its Springfield, Va., test site. "It does mean, however, that emmissions data indicate a potential violation of emissions standards or that some defect related to emission controls may exist."
In an unrelated action yesterday, the General Services Administration of the federal government awarded American Motors Corp. a $19.7 million contract for 5,558 Concord compact sedans for the government's passenger car motor pool.