Amid all the ballyhoo about the class action lawsuit (and subsequent small claims court suit) against Honda, there’s a simple story of a company that didn’t take care of its customers and now has to face the repercussions.
I used to own a 2003 Honda Civic hybrid and averaged 43 miles per gallon on it. It performed well, but was a little low powered as all early generation hybrids were. Among its problems, people were unhappy with the fuel economy and the batteries prematurely wore out across the fleet.
That resulted in a class action suit about the batteries and fuel economy claims. Honda settled the suit, paid the lawyers millions and millions…and the owners got $100.
I got my settlement documents yesterday just out of the blue, along with a $500 voucher toward the purchase of another Honda. (My car was long ago totaled in an accident, but if I had it available to turn in, that voucher would double to $1,000 toward the purchase of another Honda.)
Well, a former lawyer named Heather Peters who also received paperwork decided she wasn’t happy with the settlement and took them to small claims court for $10,000 in California.
Talk about a media circus. Peters got the reporters to show up en masse at small claims court. The poor judge had to move his whole docket to other judges to try that day because of all the cameras and commotion.
The whole thing with class action lawsuits is so funny. I’ve never had a beef with Honda, except for the batteries. But the company’s reputation got tarnished since they didn’t step up to the plate and just take care of their customers in the first place. Now people who got burned may be less likely to buy again, as Toyota found out when they had their problems.
The lesson is this: Market share once lost is hard to regain. Trust once lost is hard to regain. If you mess up, you have to fess up. If you mess up and cover up, the marketplace is going to kick you hard.