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SEARS CHAIRMAN EDWARD A. BRENNAN'S REMARKS AT PRESS CONFERENCE

 SEARS CHAIRMAN EDWARD A. BRENNAN'S REMARKS AT PRESS CONFERENCE
 CHICAGO, June 22 /PRNewswire/ -- Edward A. Brennan, chairman and chief executive officer of Sears, Roebuck & Co. (NYSE: S), made the following remarks at a press conference today:
 Today we are announcing a series of actions with one purpose: To make it clear that we intend to preserve the most precious asset we have...the more than century-old bond of trust between Sears and the American consumer. This bond reflects what we have always considered to be a unique and highly personal relationship with our customers. Whenever that bond is tested we realize we must take considered, but decisive, action. That, indeed, has been the case with regard to recent allegations against the business practices of our auto centers in California and New Jersey.
 The clear objective of the actions announced today is to safeguard against such allegations arising again. Only in this way will our customers be able to drive into our auto centers with the confidence and peace of mind they've always had about doing business with Sears.
 First of all, I would like to share a realization we have reached after some very painful soul searching and a thorough review of the allegations. That is this: Our auto center incentive compensation programs and goal setting process for service advisors created an environment where mistakes did occur. They may have been the result of rigid attention to goals, or they could have been the result of aggressive selling. We sincerely believe they were isolated incidents and do not support allegations of fraud. But that doesn't matter. We have talked to enough people over the last 12 days to believe that the policies for compensation and goal setting, created by management for our service advisors in the auto centers, were mistakes. And, when I refer to management, the buck stops with me. Even one mistake that might have been caused by the policy is one mistake too many.
 Because of this, we are announcing today that we will eliminate our incentive compensation program for automotive service advisors. We will replace it with a new non-commission program designed to reward these advisors for achieving higher customer satisfaction levels. For those of you unfamiliar with our terminology, the service advisor is the person who recommends repairs for the customer's approval, inspects vehicles, identifies problems, and explains and recommends appropriate measures to the customer. The customer then determines whether repairs will be made -- which, by the way, has always been our practice.
 We are also immediately discontinuing product-specific sales goals for automotive service advisors. We want to eliminate anything that could even lead to the perception that our associates could be motivated to sell our customers unneeded repairs.
 Making these changes indicates we take this situation very, very seriously. When our integrity is on the line -- we must do more than just react...we must overreact.
 We're also taking a number of other steps that reflect our sincere commitment to get out in front of this issue.
 I have written every state attorney general in the country inviting them to compare our auto repair standards and practices with those of their state. We are sending our automotive repair policies and procedures and code of ethical conduct to each state.
 In addition, Sears will help fund and organize an industry-consumer- government effort to review current auto repair practices and recommend uniform industry standards. We've convened a meeting of industry participants this week to decide what the charter should be and who should be recruited from consumer and government circles to work with us.
 Finally, we intend to retain an independent organization to conduct ongoing, unannounced "shopping audits" of our automotive services to ensure that company policies and standards are met. This "shopping audit" will augment our already existing internal monitoring of services.
 I'd like to return for a moment to the allegations in California. To repeat: We deny allegations of fraud or systemic problems in our auto centers. Isolated errors? Yes. But a pattern of misconduct? Absolutely not.
 Further, I am confident that the overall service of our 34,000 automotive associates nationwide is excellent. In fact, I will compare our overall service record for customer satisfaction with anyone's.
 A large part of the dispute in California, we believe, is over a concept that is central to Sears auto repair philosophy -- that of preventive maintenance. If a part is on its last legs, but still has a few thousand miles to go, we'll tell you that. And we'll tell you that to play it safe, you may want to consider replacing it. But, again, the ultimate decision as to what to do about that part belongs to the customer.
 In fact, the majority of our customers agree with our approach. In a nationwide survey we conducted this weekend, more than 75 percent of consumers we talked to confirmed that auto repair centers should recommend replacement parts for preventive maintenance.
 I would like to make another observation; namely, about the world in which we live. Today, the perception of wrongdoing seems to many people to be tantamount to wrongdoing itself. Allegations must be disproven rather than proven, and perception quickly becomes reality.
 But we must accept that condition, act, and move on. And our actions must be based on the premise that a business that has worked more than a century to build a reputation for the highest ethical standards can be severely harmed by allegations and suppositions.
 What we are announcing today is the result of literally days and nights of work to determine what happened and what we must do to prevent it from happening again. Some might have wanted us to move faster. But this issue is complex. It's not just a matter of recalling a product or giving someone their money back, although we do that all the time. Keep in mind that the concept of "Satisfaction guaranteed or your money back" has been our hallmark for more than 105 years.
 We've always taken the position that when you shop at Sears, you can have the confidence and the trust that if anything goes wrong, if a mistake is made, if a product fails...you can come back and we'll take care of it. We'll give you your money back, we'll replace the product -- that's the kind of company that we've always been...and it is still the kind of company we are today. What is true for Sears as a company is certainly true about Sears Auto Centers. Sears has always played it straight with the American consumer and we're doing it here again today.
 Now, I'll answer any questions you may have.
 /end of opening remarks at press conference/
 -0- 6/22/92
 /CONTACT: Gerald E. Buldak of Sears, Roebuck and Co., 312-875-8371/
 (S) CO: Sears, Roebuck & Co. ST: Illinois, California, New Jersey IN: AUT SU:


GK -- NY061 -- 2501 06/22/92 15:22 EDT
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Date:Jun 22, 1992
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