San Antonio Express-News (Sunday)
Mazda attempts to sever ties with franchise
Accusing World Car Mazda North of failing to make critical repairs on vehicles with defective Takata airbags, Mazda Motor of America Inc. is trying to end its relationship with the dealership.
“Your dealership poses a threat to the public,” a Mazda official stated in a termination letter sent to World Car late last year.
“World Car North reported vehicles subject to the Takata Recall as repaired, when in fact, no work had been done on the vehicle,” Lawrence Chou, a regional general manager, wrote in late December. “We have had multiple instances of failed performances, and Mazda is in many instances left to guess whether these vehicles have been properly repaired.”
All Star Imports Inc., which owns World Car, protested the termination, and the matter is now set for a hearing next spring before a state administrative law judge in Austin.
In a statement, the company dismissed Mazda’s attempt to terminate the franchise agreement as being “pretextual and without merit.”
It claims World Car was congratulated this spring by a Mazda employee for doing “an outstanding job so far in achieving the highest recall completion percentage in the district.”
It further asserted the airbag problems were all linked to one “Mazda-certified technician”
who has since been fired.
“Every customer potentially impacted by his work was contacted, and any issues have been addressed,” the company said.
The dealership on Interstate 35 North near Judson Road is one of five in the San Antonio area owned by Ahmad Zabihian.
Mazda is one of more than 20 vehicle manufacturers involved in a worldwide recall of more than 100 million defective Takata airbags.
In the U.S., about 200 people have been injured and more than 20 killed since the hazard became apparent in 2013.
More than 40 million vehicles have been recalled in the U.S., making it the country’s largest automotive recall. This includes more than 1.3 million Mazdas, of which about 800,000 have had defective airbags replaced.
In 2017, Takata pleaded guilty in the U.S. to wire fraud and agreed to pay $1 billion in penalties. Later that year, the company declared bankruptcy. It has since been acquired by a Chinese company.
Officials at Mazda’s U.S. headquarters in Irvine, Calif., did not respond to calls and emails. A spokesperson later cited a company policy of not commenting on pending litigation.
The termination of the World Car dealership would have taken effect in late February had not the dealership filed a protest with the Texas Department of Motor Vehicles, which licenses and regulates car dealerships.
That triggered a mandatory referral of the dispute to the state office of administrative hearings.
An attempt at mediation this summer quickly ended in an impasse. The case is now set for a full hearing next spring.
In its filings in Austin, the dealership has not specifically addressed the alleged failure to make airbag replacements.
Instead, it has simply denied that its “service operations are inadequate” and that it poses a “threat of injury to the public.”
In his December letter, Mazda manager Chao reminded World Car it had repeatedly failed to mend its ways. He cited at least three “Cure Letters” sent by Mazda’s regional office to the dealership since August 2018.
“We estimate that at least half of all the (warranty) repair orders sent by World Car Mazda had some issue at some time,” he stated.
When problems persisted, he said, Mazda had no choice but to sever ties with the dealership, citing the potential “threat of injury to the public.”
“In absence of this validation, we cannot just assume that the recall has been done,” he said, adding, “We are left with no alternative than to move forward with our notice of intention to terminate.”