Mr. Speaker, Bill S-2 is about something that I am somewhat familiar with from the fact that before I came to this place, I worked in a Chrysler dealership and performed many recalls over the years.
The interesting thing about the recalls is that there is no similarity between any two of them. As mechanics tasked with correcting the issue, we often wondered why one thing was recalled and another was not, or why the same part was often recalled several times in a row. That goes to some of the issues the bill is trying to correct. I am not necessarily convinced that the bill will correct them, because in some cases we are truly not able to squeeze blood from a stone. In particular, we have seen this with the recalls of airbags. Many automotive manufacturers use the same supplier of airbags, and so the airbag recall crossed several different companies. It will be interesting to see how this goes forward. I know there is anxiety that comes with that. My own vehicle has had that particular airbag recalled, and people keep getting a notice saying there is problem but no fix or parts for it. That is ongoing.
The recalls are interesting, particularly from the dealership perspective. I see we are talking about the 1% of the price, and things like that. Now, there are games that get played with that 1% of the price. The same part being purchased at retail would be $150. If a recall part that could not be ordered for a retail customer was coming through the dealership, it might only be $10. We get the 1%, but it is 1% of $10, not of $150, or maybe even more if that exact same part was being ordered for a customer. Since it is the percentages that are being put on, that dramatically reduces the price to the dealership.
Parts departments run on percentages. Everything is a percentage. Typically, they have an 18% handling cost. Of every part that comes in to a dealership and gets shipped back out again or is sold, 18% of that sale is the cost of their storing it, the cost of their employees, the cost of keeping the lights on, and all of those kinds of things.
In the amendments we were talking about, there is a good initiative to put the percentage in. It helps the local dealerships. It is always interesting how the games get played. To some degree, the free market will have to work this out. In a lot of cases, the dealers already have these agreements with the manufacturers on how they are going to get paid for recalls. Recalls have been happening for a long time now, and so a lot of these things have been worked out through the free market.
I commend this bill. It is supportable. There is no problem with that. I would just acknowledge that we might be coming late to the party in the fact that most recalls go off without a hitch. There are already vast agreements in place for them. The free market, typically through the court system, will often demand a recall of this or that. Often, these recalls are worldwide or global. If something happens in one jurisdiction, the company gets alerted to the fact there is a particular problem with a particular piece. The entire fleet of that vehicle is then recalled. A problem might be discovered in Mexico and the vehicles in Canada are recalled. The companies themselves do that just to limit their liability from these kinds of things. They are facing a lawsuit in one country and do not want to face it in other countries, and so they will issue the recall.
When it comes to the dealership level, it is always interesting that things get downloaded all the time. The costs of doing business typically end up getting downloaded to the dealership level.
It is relatively easy to announce that there is a recall for something, but it is the dealership that faces the customer. The manufacturer announces there is a recall and says there are no parts. The dealership has to deal with the fact that every time the customer gets a notice, they might come to the dealership and ask what it means. The dealership then has to outline what the notice means. A lot of times there will be one or two notices before they actually get the parts. Each time the customer shows up at the dealership, it takes resources from the dealership. Instead of being able to deal with a customer who brings money in, the service writer has to deal with a customer who is just there for a recall notice. They are not going to be booking an appointment or anything. The customer is going to leave without any cash flow coming to the dealership. There is a significant cost associated with doing that. We need to ensure our network of dealers across the country get paid for the recalls that are put in place.
If it is the minister who puts the recall in and the manufacturer says it is not, that gets really interesting in terms of who pays. They are saying the manufacturer will pay. That is great, but we need to ensure the manufacturer, or someone, continues to pay the dealerships when it comes to a mandated recall by the minister. That is my reading of the amendment, anyway.
The whole system is in place already for when a manufacturer declares a recall, but it gets a little more interesting if the minister is going to declare the recall. Can the manufacturer at that point just say that since it is the minister who is declaring it, the parts will be made available and they will pay for getting the job done, but not necessarily reimburse the dealership's parts department or ensure they can actually make some money on it, particularly in the case of recalls that take a long time to develop the parts or develop the solution.
We have been talking a lot about recalls in the abstract. We just say the word “recall”. I would like to talk about a couple of instances when I performed recalls. One particular issue was on a certain vehicle. On this vehicle, if the window was left open and the rain came in, it would flood the window switch and cause an electrical fire in the window switches. We had to replace thousands of window switches. That is what a recall looks like. A particular piece could get rainwater in it and it could cause a fire, so that piece had to be replaced.
Another recall I did many times was in a windshield wiper system. There was one piece that could fall apart at some point, so we replaced a lot of windshield wiper motors on a particular vehicle. We got really good at it because we did a lot of them in a short period of time. We were replacing windshield wiper motors to prevent the wipers from failing on the highway and causing a driver not to be able to see where he was going.
Another one I can think of was a shifter recall in a particular car. In this case the shifter might not actually go into park. When the vehicle was shut off and the driver pushed the shifter forward, it would say it was in park, but the transmission might not have actually been in park, and could have been in reverse, which could be bad. We had to replace the shifter, or in some cases reprogram the computer in order to prevent that from happening.
Those are some pictures of what recalls look like. No two of them were ever the same. Sometimes it was a really big job, sometimes not. The window switch, for example, literally took minutes. It took longer to drive the vehicle into the shop than it did to replace the part. Other times it was a really big deal. I can think of one particular recall that was issued because the subframe could rust and break, so we were replacing a subframe under a vehicle and doing a wheel alignment afterwards. That was kind of a big deal.
I thought I would explain to the chamber, from my experience, what a recall actually looks like in terms of the guy who has to do it. Getting paid for it can sometimes be an issue when, as I explained earlier, we are dealing with percentages and the manufacturer just lowers the price. They give the dealership the percentage, but it does not necessarily mean we can get paid.
Those are my comments. I come at it with a little more practical experience, so I look forward to the questions.