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March 17, 2014 5:42 pm
General Motors’ new chief executive on Monday issued recalls for more than 1.5m vehicles, including some current models, amid an effort to restore the company’s reputation after a previous cover-up.
The company, the biggest carmaker by sales in North America, said the recalls resulted from the decision by Mary Barra, who became chief executive in January, for a “comprehensive internal safety review”. Ms Barra made that call after delays in recalling 1.37m older vehicles over faulty ignition switches.
The latest recalls involve 1.18m sports utility vehicles – mainly Buick Enclaves and GMC Acadias – 303,000 GMC Savana and Chevrolet Express vans and 63,900 Cadillac XTS sedans.
None of the latest faults is connected to last month’s recall of older compact cars, dating back to between 2002 and 2007. GM said that the ignition switch on those vehicles, which sold under a range of names including Chevrolet Cobalt and Pontiac G5, could shift out of the “run” position while the vehicle was being driven, cutting power to the vehicle’s engine and disabling the air bags.
A GM investigation discovered that 12 people had died in 31 crashes associated with the ignition switch problem and that the company had suspected a problem as long ago as 2004. GM faces an inquiry by the National Highway Traffic Safety Administration into its handling of the recall.
There is no suggestion that the latest faults have led to any serious incidents, although GM said the fault in the XTS, which can lead to a short circuit in part of the braking system, had caused two fires in vehicles awaiting sale.
The company said on Monday it expected to take a $300m charge for the first quarter to cover the costs both of the ignition switch recall and the latest three announcements.
Ms Barra said she had asked the company’s team to redouble its efforts on pending product reviews, to bring them forward and resolve them quickly.
January 14, 2014: Robert Wright, US Industry correspondent at the Financial Times, reports from the Detroit auto show on how intensifying competition is driving carmakers to seek new niches and up their game.
“We are conducting an intense review of our internal processes and will have more developments to announce as we move forward,” Ms Barra said.
Nearly all the vehicles involved in the latest recalls have been manufactured and sold since GM’s government-managed bankruptcy in 2009. The company has sought since then to burnish its reputation for quality to match those of its non-US competitors.
Jack Nerad, a market analyst at Kelley Blue Book, the car information service, said GM appeared to be following a strategy by announcing so many recalls simultaneously.
“If they want to cleanse their reputation, getting all this stuff out and putting it behind them is absolutely the right thing to do,” he said.
GM’s shares rose 1.6 per cent to close at $34.63 in New York on Monday.
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