By Mike Spector 

General Motors Co. offered cash or an extended warranty to about 135,000 customers after discovering window stickers had overstated the fuel economy on some large crossover vehicles.

Customers who purchased a 2016 Chevrolet Traverse, GMC Acadia or Buick Enclave can choose between a debit card or a 48-month/60,000-mile service protection plan on top of their existing factory warranty, the company said Friday. Those who leased vehicles will be offered the debit card, GM said.

The debit cards are likely to range between $450 and $900, depending on whether customers purchased or leased their vehicles. The type of vehicle and terms of leases will also affect how much customers receive. Some owners of all-wheel-drive models could receive up to $1,500, a GM spokesman said.

GM alerted dealers to the program Friday, and letters are expected to go out to customers starting May 25.

GM, meanwhile, has rushed corrected labels to dealerships after halting sales of some 60,000 of the affected crossovers. A GM spokesman said separate discussions would occur with fleet customers such as corporations that might have expected higher mileage on the affected vehicles.

GM declined to disclose the total expected cost of the program, which aims to reimburse customers who paid more for fuel than they expected after viewing incorrect mileage labels. The Detroit auto maker said the plan wouldn't materially affect financial results.

"We designed this reimbursement program to provide full and fair compensation in a simple, flexible and timely manner," a GM spokesman said, adding that the company apologizes to customers for the misstated labels. An Environmental Protection Agency spokesman declined to comment.

GM earlier this month alerted U.S. environmental regulators and started crafting the compensation program after finding fuel-economy labels on the affected vehicles overstated mileage by 1 to 2 miles a gallon.

The error stemmed from new emissions tests GM was required to conduct, the auto maker said. GM had to conduct the new tests because of new emissions hardware installed on the affected 2016 models.

GM failed to shepherd data from those tests when calculating fuel economy on the affected vehicles, the company said. Engineers discovered the error when working on mileage labels for 2017 models, the company said.

GM's program comes amid widespread environmental transgressions among car makers. Volkswagen AG last year admitted to cheating on U.S. emissions tests with diesel-powered vehicles. Mitsubishi Motors Corp. in April said it manipulated fuel-economy data on vehicles in Japan.

South Korean auto makers Hyundai Motor Co. and Kia Motors Corp. in 2014 agreed to pay penalties and forfeit regulatory credits to settle a government probe of overstated fuel-economy claims. Ford Motor Co. the same year said it would compensate customers for overstated mileage claims.

No evidence has emerged that GM's mileage errors were deliberate, and regulators haven't indicated any plans to penalize the U.S.'s largest auto maker.

GM's reimbursement program assumes fuel prices of $3 a gallon and 15,000 miles of annual driving for five years, GM said. The EPA makes similar assumptions with fuel-economy window labels, GM said.

GM separately faces a purported class-action lawsuit over the mileage errors from the Florida owner of a Chevrolet Traverse. The suit, filed in a Michigan federal court, accuses GM of concealing the incorrect mileage ratings and failing to reveal that "the existence of the defect would diminish the intrinsic and resale value" of the vehicles.

GM executives internally approved the consumer compensation program before the lawsuit was filed, a GM spokesman said. The spokesman declined to comment further on the suit.

Write to Mike Spector at mike.spector@wsj.com

 

(END) Dow Jones Newswires

May 20, 2016 14:01 ET (18:01 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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