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GM dealers worry ignition switch defect, recalls may affect sales

Rep. Diana DeGette, (D-Colo.), ranking member of the

Rep. Diana DeGette, (D-Colo.), ranking member of the House Energy and Commerce Committee, holds faulty General Motors ignition switch during a hearing on the GM's recall of the switch on April 1, 2014. Credit: Getty Images / Jim Watson

An ignition switch defect linked to deadly crashes and mounting recalls is raising anxiety in some General Motors Co. showrooms.

GM chief executive Mary Barra on Wednesday endured a withering attack at a U.S. Senate hearing that opened with accusations that the company fostered "a culture of cover-up."

GM spokesman Jim Cain said the company is aware that some dealers are worried about how the recall might affect sales.

"In the long term, we will be judged on how we take care of customers," Cain said. "We have advertising incentives and other tools to use if there's evidence that sales in the short term may be impacted. But we haven't seen that."

Interviews by Reuters with more than 20 U.S. GM dealerships this week revealed concerns that sales would be pressured, even in a recovering auto market. Dealers also made clear there's an escalating number of jittery current GM owners, and demands for repairs threaten to clog some repair facilities.

Customers "are calling for information. People are a little confused about what they need to do. There are a lot of these cars out there," said Al Belford, fixed operations director at Ed Bozarth Chevrolet in Las Vegas, which has been getting about 50 customer calls a day for the last three weeks.

Not all GM dealers are seeing fallout. At Eagle Chevrolet in Riverhead, owner Mark Calisi said his staff has gotten only 20 to 25 calls from owners of the affected models, despite more than a month of publicity about the series of recalls. He notes that some of cars date back to 2003 and might no longer be on the road.

He said he's seen no indication so far that the negative publicity will hurt sales. "I was concerned -- I was absolutely concerned," he said. "But we were actually up in March over last year."

With Tom Incantalupo

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