From: Lib Mendonça [LMendonca@sja.ca]
Sent: Sunday, March 28, 1999 4:23 PM
To: 'I_am_mad_too@bmwlemon.com'; 'NANCY.J.ROTH@cpmx.saic.com';
'mendonca@cyberus.ca'; 'giwatson@fes.uwaterloo.ca';
'lemon-talk-on@lists.lemon.org'
Subject: BMW Settles out of court

BMW Canada and Elite Automobiles Inc. have agreed to pay Mr. Lib Mendonça of Ottawa, Ontario, Canada the sum of Cdn$1,050.00 to settle a Small Claims Court suit, regarding the Timing Case Profile Gasket Defect of the M42 engine. The agreement was reached on Thursday February 25th at the Pre-Trial Conference. 

The settlement was less than the claim of over $4,000.00 because, in Ontario, Small Claims actions can only cover direct costs, which in this case were approximately $1,500.00. The settlement is much better than the $300.00 credit towards future repairs originally offered by BMW Customer Service, but less than the $2,000.00 offer, made by Mr. Ian Sideco, Manager of Legal Affairs for BMW Canada, immediately after the suit was filed. Deputy Judge Houlahan, acting as referee, judged the offer by BMW adequate and subtracted the costs to have Mr. Sideco fly in from Toronto, Mr. Louis L'Heureux attend from Montreal, and Mr. Bill Lockyer spend the morning away from Elite Automobiles.

Ironically the $1,050.00 settlement, had it been offered initially by BMW Customer Service, would have been more than enough to cement customer loyalty. Instead the need to file suit to recover the costs of a defective engine has resulted in an embittered owner. BMW's appalling customer service has guaranteed no future sales to this customer.

The published material gathered as evidence of the gasket defect was judged not to be admissible, but BMW seemed very willing to settle anyway. The recent Ford and GM warranty extensions for gasket problems indicate an industry standard for durability that BMW does not wish to be compared against. The cost of appearing in court may have been a factor as well. BMW was willing to extend the warranty for the M60 V8 engine and its faulty cylinder sleeves, but the lowly 318 gets no respect.

There is an obvious lesson to be learned from this unpleasant episode: BMW will not admit any fault with the M42 engine, and will not be reasonable in responding to customer complaints, until they are forced. At the Pre-Trial conference Mr. L'Heureux stated that there was no defect in the M42 engine, a blatant falsehood. The solution is obvious: a Small Claims Court action costs very little to file but seems to get their attention. Consider their offer to settle, and remember that only direct costs can be claimed (in Ontario at least). Any manufacturer, which does not stand behind their product, deserves no customer loyalty.

Fight On!

Lib Mendonça