VOL. 38 | NO. 20 | Friday, May 16, 2014
GM recalls 2.7M more cars; industry on record pace
DETROIT (AP) — General Motors recalled an additional 2.7 million vehicles Thursday as a deep dive into safety issues at the nation's biggest automaker turned up more problems with some of the cars it built over the past decade.
The latest recalls bring GM's total for the year in the U.S. to more than 11 million cars and trucks, close to its annual recall record of 11.8 million vehicles, set in 2004.
The auto industry also is on track to set a single-year record for recalls. Auto companies have recalled 15.4 million vehicles in a little more than four months. The old single-year record for recalls is 30.8 million vehicles in 2004. Toyota, Ford, and Chrysler also have announced sizeable recalls this year.
Several factors are behind the industry's recall binge. GM is reviewing all of its vehicles for safety issues following the recall earlier this year of 2.6 million older small cars with a defective ignition switch. GM knew about the switch problem for a decade before finally issuing a recall. The company links the problem to 13 deaths and faces multiple investigations, including one by the Justice Department, over its handling of the matter.
Industrywide, automakers are moving faster to fix problems than they have in the past in a bid to avoid bad publicity and record fines from government agencies.
Jeff Boyer, the new safety chief at GM, said in an interview with The Associated Press that the company is looking at cases that were under review in its system and moving to resolve them as fast as possible. GM, he said, has added 35 people to its recall review team.
"We're not waiting for warranty trends to develop over time," Boyer said. "It's not only about frequency, it has to be about the seriousness of the potential defect as well."
GM said the new recalls will fix problems with brake lights, headlamps, power brakes and windshield wipers. The Detroit automaker will take a $200 million charge this quarter, on top of a $1.3 billion charge in the first quarter, mostly to cover the repairs. Shares fell 2 percent in afternoon trading.
The largest of Thursday's recalls shows how GM is behaving differently. The company is recalling 2.4 million Chevrolet Malibu, Pontiac G6 and Saturn Aura midsize cars from the 2004 through 2012 model years because the brake light wires can corrode, causing the lights to fail. GM says it knew of the problem nearly six years ago, but previously only issued a bulletin telling dealers of the problem and fixed a small number under a service campaign.
The Detroit automaker said it knows of several hundred complaints, 13 crashes and two injuries caused by the problem.
Overall, the industry's approach to recalls is changing. Bob Carter, Toyota's U.S. automotive operations chief, told analysts last month that car owners can expect more frequent recalls because the regulatory and competitive environments have changed. Instead of recalling cars for known defects, companies are now "recalling vehicles to change problems that we anticipate might happen," Carter said.
It's also brought a shake-up in the ranks, with two top engineers leaving the company, two more suspended with pay and Boyer being appointed to oversee safety.
GM shares fell 79 cents, or 2.3 percent, to $34.15.
Other GM recalls announced Thursday include:
— More than 140,000 Malibus from 2014, where a software problem in the brake control computer can disable the power brakes. That means drivers would have to push the brakes harder to stop, and stopping distances would increase.
— Nearly 112,000 Chevy Corvettes from 2005 through 2007 because they can lose low-beam headlights. GM says when the engine is warm, an electrical housing can expand and bend a wire, causing it to fracture. GM will also repair Corvettes from 2008 through 2013 if owners have the problem.
— 19,000 Cadillac CTS sports sedans because the windshield wipers can fail after the cars are jump-started and the wipers are stuck by ice and snow.
— 477 Chevy Silverado and GMC Sierra pickups and Chevy Tahoe SUVs. A suspension part can detach from the steering and cause loss of steering. GM has offered to tow the trucks to dealers.
Thursday's recalls also cover about 290,000 vehicles in Canada, Mexico and other countries, bringing the global number of recalled vehicles to more than 2.9 million.
The auto industry set the standing recall record in 2004 after U.S. laws were changed requiring them to report more defects to the National Highway Traffic Safety Administration. Experts also blamed the high number on vehicles that rely more heavily on computers, more common parts across each company's model lineup and more safeguards at litigation-sensitive automakers to catch flaws earlier.