DETROIT, July 1 — General Motors Co, which has already called back more than 20 million cars in North America for various fixes this year, recalled 8.45 million more yesterday for defects including ignitions and electrical malfunctions.
Most of them, 8.23 million including Chevrolet Malibus from 1997 to 2005 and Cadillac CTS cars from the 2003 to 2014 model years, are being recalled for unintended ignition-key rotation. Among the vehicles recalled today, GM said it’s aware are of seven crashes, eight injuries and three fatalities. The fatal crashes occurred in older full-size sedans being recalled for the ignition flaw.
It isn’t clear whether the faulty ignition caused those crashes GM said. Shares, which had been temporarily halted, fell 0.9 per cent to US$36.30 (RM116.40) at the close in New York. They had traded at more than the June 27 closing price for most of the day after Kenneth Feinberg explained how the company will compensate victims of an earlier ignition recall of 2.59 million small cars.
“It’s unprecedented,” Karl Brauer, a senior analyst with Kelley Blue Book, said yesterday in a telephone interview. “People are now wondering where’s this going to end, how long is it going to take, how much is it going to cost?”
GM said it expects to take a charge of as much as US$1.2 billion for recall-related repairs announced in the second quarter. It took a US$1.3 billion charge in the first quarter for recalls.
‘Industry standard’
The biggest US automaker is stepping up the pace of recalls as it faces multiple investigations for its slowness in calling back the small cars, including the Chevrolet Cobalt, with ignition issues linked to at least 13 deaths. Since that action began in February, the company has recalled other cars for similar issues, accounting for about 9 million of the fixes before today.
“We undertook what I believe is the most comprehensive safety review in the history of our company because nothing is more important than the safety of our customers,” said Chief Executive Officer Mary Barra. “Our customers deserve more than we delivered in these vehicles. That has hardened my resolve to set a new industry standard for vehicle safety, quality and excellence.”
Ignition engineer
Some of today’s recalled ignitions were worked on by Ray DeGiorgio, the former GM engineer responsible for the faulty ignition switch at the heart of GM’s crisis, Alan Adler, a company spokesman, said in a telephone interview.
He wouldn’t identify which of the new recalled vehicles involved DeGiorgio, who was one of 15 people ousted by the company after an internal investigation released this month found a lack of urgency in the engineering and legal departments led to GM taking more than a decade for the flawed Cobalts and other vehicles to be recalled.
Those vehicles have a defective ignition switch that could be jarred into the “accessory” position, disabling power steering and preventing air bags from deploying.
“This all comes from our review that began after the Cobalt,” Adler said. “We looked at every ignition switch across the company, some of them he was involved with and some of them he wasn’t.”
Missed connections
One of the issues found by GM’s internal investigation into the faulty ignition switches was that company engineers didn’t connect the dots on the danger created by vehicles stalling while in motion. Because they didn’t realise it cut power to the air bags, they didn’t consider it a safety problem.
GM’s decision today to recall millions more cars for “ignition-key rotation,” may mean the automaker has changed its mind on whether stalling by itself is a safety defect, said Clarence Ditlow, executive director of the Centre for Auto Safety.
The huge numbers in yesterday’s announcement, on top of the more than 20 million recalled already in 2014, may cause consumers to wonder whether the rest of the vehicle line is any good, Ditlow said.
“For GM to still be doing ignition-key recalls just calls into doubt their competence,” Ditlow said. “It’s about the worst thing that could happen.”
GM shares and sales have held up so far despite the publicity surrounding the recalls. GM in May had its best month of US auto sales since August 2008, rising 13 per cent to 284,694 vehicles. In April, it reported first-quarter net income, despite US$1.3 billion in recall-related costs. GM rose 2.9 per cent from Feb. 12, the day before the first batch of ignition-related recalls was formally announced, through June 27.
Vehicle details
Yesterday’s ignition recalls also cover the 1998 to 2002 Oldsmobile Intrigue, 1999 to 2004 Oldsmobile Alero, 1999 to 2005 Pontiac Grand Am, 2000 to 2005 Chevrolet Impala and Monte Carlo, 2004 to 2008 Pontiac Grand Prix, and 2004 to 2006 Cadillac SRX.
In addition, GM yesterday also recalled 181,984 SUVs in the US to fix a possible electrical short in the driver’s door, which could disable locks and window switches and overheat, according to a company statement. The recall covers the 2005-07 Buick Rainier, Chevy Trailblazer, GMC Envoy, Isuzu Ascender and Saab 9-7x, as well as the 2006 Trailblazer EXT and Envoy XL.
That recall appears to expand a 2012 action limited to the same models in 21 cold-weather states. In that action, GM advised vehicle owners to park outside until their repairs were complete.
Small actions
Three smaller recalls were also announced for newer models. The 2007-2011 Chevy Silverado HD and GMC Sierra HD with an auxiliary battery were recalled because an electrical overload could lead to melting, smoke or fire and damage wires. That action covers 12,008 vehicles in North America and 9,371 in the US.
GM is recalling 20,134 2011-14 Chevy Cruze, 2012-2014 Chevy Sonic, the 2013-14 Chevy Trax, Buick Encore and Buick Verano to fix insulation on the engine block. And it’s recalling 117 cars in North America to tighten a “superhold” joint fastener, including certain versions of the 2014 Chevy Camaro, Chevy Impala, Buick Regal and Cadillac XTS. — Bloomberg
