GM recalls 2.7M more cars

General Motors' efforts to root out lingering safety problems across its wide range of cars and trucks has produced another big recall — and highlights a sudden shift at GM and throughout the industry toward issuing recalls instead of avoiding them.
AP Wire
May 16, 2014

The nation's largest automaker announced a total of five recalls covering 2.7 million vehicles Thursday. The biggest involves 2.4 million midsize cars from model years 2004 to 2012 with brake lights that can fail.

GM acknowledged it knew about the brake light problem as early as 2008. That year it issued what's known as a technical service bulletin, but that only required dealers to offer to fix the problem if the owner became aware of it. Such bulletins typically cover problems an automaker considers minor, and avoid the larger cost of a recall. But a driver's safety could be jeopardized by unknowingly operating a car with a defective part.

In announcing the recall, GM said the brake light problem has been tied to 13 accidents and 2 injuries.

GM launched a top-to-bottom safety review after recalling 2.6 million small cars earlier this year for faulty ignition switches. GM knew about that problem for at least a decade, issuing service bulletins years before it started to recall the cars. The switch problem, which can unexpectedly shut down a car's engine, has been linked to at least 13 deaths and has prompted multiple investigations, including one by the Justice Department.

"These additional recalls underscore how important it is to keep the pressure on GM to make sure the company is being as transparent as possible," said Sen. Clare McCaskill, D-Missouri, who heads a Senate subcommittee looking into GM's handling of the ignition switch problem.

The recalls could also add to scrutiny of federal safety regulators, who were criticized for their handling of the ignition switch problem. Documents filed with the National Highway Traffic Safety Administration show that neither the company nor the government sought a recall to fix the brake light issue despite 1,300 consumer complaints and more than 14,000 warranty claims as of February of last year.

The agency said in a statement Thursday that an investigation it opened into the problem last year influenced GM's decision to recall the cars.

Jeff Boyer, GM's newly appointed safety chief, said GM now will recall cars as soon as it sees a safety problem. The company, he said, has added 35 safety investigators to its team as it sifts through records looking for cars that should have been recalled earlier.

"We're not waiting for warranty trends to develop over time," he said. "It's not only about frequency, it has to be about seriousness of the potential defect as well."

GM has now recalled more than 11 million cars and trucks in the U.S. so far this year, close to its annual recall record of 11.8 million set in 2004.

The auto industry also is on track to set a single-year record for U.S. recalls. Companies have recalled 15.4 million vehicles in a little more than four months, according to government records. 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.

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.

"All manufacturers are recalibrating their recall programs to go from 'if in doubt, don't recall' to 'if in doubt, recall,'" said Clarence Ditlow, executive director of the nonprofit Center for Auto Safety.

Earlier this year, the Justice Department made Toyota pay a $1.2 billion penalty and admit to concealing problems with unintended acceleration in its cars and trucks. That fine and the GM investigation — which could bring criminal charges against individuals — have changed the way automakers view recalls.

GM said the recalls announced Thursday also will fix problems with 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. GM shares fell 1.7 percent to close at $34.36.

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.

Comments

Real estate maven

Gee and it only cost the taxpayers $11 billion to keep this company alive.

W.MI.MAN

Delphi made the ignition.
GM used the ignition switch supplied to them by a supplier. Who was supposed to test it in a real world test. Delphi failed to do so.
Not saying GM isn't at fault!
Delphi, a British company, will not be held accountable. For their part in this fiasco!!!

"How does that work?"

Tri-cities realist

Apparently you are not familiar with the validation practices of the automotive industry. There is component level testing, along with sub-system, system, and vehicle level testing. Suppliers validate their product to the requirements that are established by the OEM's. Usually the OEM's perform the vehicle level testing, and if any issues are found they work together with the supplier to resolve them. It is not financially viable for all auto suppliers to perform vehicle level testing on hundreds of pre production vehicles which cost several times their sticker price to produce, just to validate their $0.50 part. Besides it would be redundant and a huge waste of resources. The suppliers validate their parts or systems, and the OEM validates that all work together properly at the vehicle level. So this IS a GM issue, likely caused either by the orientation of the ignition in the vehicle (Delphi would have little to no say in how the ignition is oriented in the vehicle), or GM incorrectly specified the ignition torque/ detent efforts, or a combination of the 2. Or perhaps GM's customers had too much weight on their key rings.

I'm not defending GM or Delphi, I certainly know each have their issues. And as soon as the severity of the defect was known, GM should have issued a recall.

Lanivan

Your opinion, if you care to give it, regarding the following:

1. If GM had knowledge of an ignition problem that spanned over a decade, why didn't they eventually laser-focus on a possibly faulty design and rectify it? We know they SHOULD have, but what could the reason be behind the fact that they didn't.

2. Do you feel that government controls on the auto industry in relation to recalls are a positive or a negative?

Tri-cities realist

Thanks for asking!

1. My opinion is that the culture at GM hasn't changed much over the last few decades. As the #1 maker of vehicles there is an arrogance and apathy that still persists. My guess is that the leadership at the time didn't take the reports seriously and after that decision was made, everybody looked the other way, because they felt it wasn't their problem anymore. Yep, horrible culture. This is one of the biggest reasons I was so opposed to the bailout (along with my opposition to using taxpayer money to bailout a business, especially one that has major issues). While a bankruptcy would have been difficult for GM employees and suppliers (the investors had already taken a bath), it would have been the best chance to clean house and change the culture once and for all. I hope Mary Barra is successful, but unfortunately I'm doubtful that she will be able to change the culture with its remnants of the old boys club. Sad, but likely true.

2. My opinion is that govt controls are as usual, ineffective. They tend to absolve the automakers from doing the right thing. If the Feds don't require a recall, the OEM's can hide behind them, which is not in the best interest of the automakers or their customers. The OEM's are too afraid of a recall so they do everything they can to avoid them, whether they should recall or not. If the OEM's were responsive to their customers instead of the regulators, I believe we would all be better off.

Wingmaster

Interesting read an opinion TCR.

GM is kind of a reflection of where our government is at! Apathy and disenchantment of the people (workers) causing a great nation (company) to fail.

In both cases, good leadership can change course. Leadership cannot be self serving and it needs to listen, gather facts, and make decisions for the greater good. Decisions that are inconsistent with what made the company (country) great have a weakening effect and are a breeding ground for further bad decisions. This weakness as you so accurately stated, has occurred over decades.

Tri-cities realist

Well I tried to keep politics out of it, for fear of the wrath of Lani ;-)

But the similarities as you note are profound.

Ironically the bailout deal GM got from the Feds may prevent accountability of the "new" GM for the old GM's products. True, bankruptcy may have done the same thing, but the Feds wouldn't have been an active participant, normal bankruptcy practices would have been applied.

Another reason the Feds should stop trying to run businesses.

And NHTSA, the govt "watchdog" was asleep at the wheel. They were aware of the issue but yet there was no recall.

Lanivan

Hi! I would never want to disappoint TCR when he went to so much trouble to put an obvious political bias into his comment!

I'm not sure why the NHTSA dropped the ball on this, but they certainly have a record that speaks otherwise. Looks like a very cooperative partnership between the auto industry and government, to me.

I honestly can't imagine how anyone, especially a Michigan resident, which I assume, by your name, you are, could suggest this state, region, and country would be better off if GM had entered into bankruptcy liquidation. Given that there wasn't a creditor in the entire global community that would put up the money to save GM, or any other entity at that time, it fell on the US government to save capitalism.

"The National Traffic and Motor Vehicle Safety Act (originally enacted in 1966 and now recodified as 49 U.S.C. Chapter 301) gives the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) the authority to issue vehicle safety standards and to require manufacturers to recall vehicles that have safety-related defects or do not meet Federal safety standards. Since then, more than 390 million cars, trucks, buses, recreational vehicles, motorcycles, and mopeds, as well as 46 million tires, 66 million pieces of motor vehicle equipment, and 42 million child safety seats have been recalled to correct safety defects.

Manufacturers voluntarily initiate many of these recalls, while others are either influenced by NHTSA investigations or ordered by NHTSA via the courts. If a safety defect is discovered, the manufacturer must notify NHTSA, as well as vehicle or equipment owners, dealers, and distributors. The manufacturer is then required to remedy the problem at no charge to the owner. NHTSA is responsible for monitoring the manufacturer’s corrective action to ensure successful completion of the recall campaign." http://www-odi.nhtsa.dot.gov/rec...

Tri-cities realist

You were so close to connecting the dots.

"I honestly can't imagine how anyone, especially a Michigan resident, which I assume, by your name, you are, could suggest this state, region, and country would be better off if GM had entered into bankruptcy liquidation. Given that there wasn't a creditor in the entire global community that would put up the money to save GM, or any other entity at that time..." If you had stopped there, you would have shown your understanding of why they needed reorganization through bankruptcy.

Perhaps asked another way it will become more clear: If no other entity would put up the money to save GM, why would the govt think this is a good idea? Is the market too stupid? Did others not see the "gem in the rough" that GM was? Hardly.

"it fell on the US government to save capitalism". Lord help us. Please explain how the govt picking winners and losers by propping up a loser by investing and losing billions is "saving capitalism". Apparently our definitions of capitalism differ. When the root of the word (capital) comes from the govt. it is called something different... Socialism (Marxism). And because you are so fond of links...

http://en.m.wikipedia.org/wiki/S...(Marxism)

Lanivan

As the financial industry was on the precipice of collapse, which, had it continued, would have been global in it's reach, and GM and Chrysler were in the same basic position, there were no creditors anywhere who were in a position to lend money. I've written at length about this. Check it out. No second thought, maybe not. The facts might make you uncomfortable.

Again, anybody - particularly a Michigan resident - who believes Michigan, the region, and the country would be better off to allow GM to liquidate is seriously foolhardy and in denial. There was a great deal of reorganization, and the move was hardly socialism. But then again, I realize you guys get a vicarious thrill by calling the government socialist - oh, you bad boys! Meanwhile, most all economists and historians agree it was a successful action, GM is back making record profits, along with recalls - just like the rest of the auto industry. Gee - now how is this socialism, again?

Tri-cities realist

The govt picking and choosing winners and losers by bailing out some, how is this NOT socialism?

As one who often claims to want a level playing field, why should bankruptcy laws apply to some businesses and not others? There is no such thing as too big to fail. If the market needs correction it will correct itself... If the govt allows it to.

Tri-cities realist

If GM had designed their keys with a small single hole for the key ring, instead of a slot, the issue likely would never have happened. If you understand torque, it is quite simple. The shape of a keyhole leading to deaths... Yes the devil is in the details, perhaps now you can understand why I'm such a stickler for details.

Lanivan

I understand and appreciate detail sticklers!

Tri-cities realist

By calling them nit-pickers?

Lanivan

Detail sticklers become nit-pickers when they cherry-pick the nits, selectively highlight the details, are sticklers only when they choose to be, and disconnect the dots with their eyes closed.

Tri-cities realist

Well if I had more time, I would devote more time to stickling your nitty details. Thankfully Vlad has that handled for the most part.

Lanivan

Haha!! I understand exactly what you mean....but your observation could get us all recalled with the casual reader (and/or moderators)...!!

ghresident

$11 Billion to bail them out, $35 million dollar fine just announced along with 4 major recalls in the past couple months....why would anyone want to own a GM vechicle.....er government motors.

At least the technicians are staying busy.

BTL2A

To be fair they have the third lowest recall rate. Behind only Mercedes and Mazda.

Better than BMW, Honda, Toyta, Subaru and many others.

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