The year of massive recalls continues as General Motors (NYSE:
another call back
Monday on over forty thousand vehicles that may have a defective
part than can cause a fuel leak.
The specific models include the Chevrolet Cobalt and Pontiac
G5 from model years 2007-2009 and the Chevrolet Equinox, Pontiac
Torrent and Saturn Ion from model year 2007. Dealerships have
been notified by General Motors to replace the defective plastic
fuel pump module free of charge, as the break can cause a fuel
leak possibly leading to a fire.
The announcement comes on the heels of a
larger recall from General Motors
that included over 470,000 vehicles for a gear shift malfunction
that could cause the car to move despite being placed in the
"park" position. This had yet to yield any injuries from the
malfunction, and as of yet the faulty fuel pump module has yet to
start any fires.
This particular recall only affects those vehicles that were
sold or are currently registered in Arizona, California, Florida,
Nevada and Texas, while the 2009 recall of Cobalts and G5s
includes Oklahoma and Arkansas as well.
In other automotive news, General Motors and Ford (NYSE:
nine and ten speed automatic transmissions in a mutual effort to
improve fuel economy across their respective lineups of vehicles.
Nine speed automatic transmissions are being developed for
General Motors' front wheel drive cars while Ford is developing
the ten speed automatic transmission for its rear wheel drive
Pressure to meet Corporate Average Fuel Economy (
) standards of 54.5 miles per gallon by 2025 are the cause for
change and such a relationship could benefit both parties in
terms of manufacturing and volume costs. This is the second joint
transmission effort between the two companies, as they joined
forces in 2002 to create a new six speed automatic transmission
for front drive vehicles that produced over eight million units
starting in 2006.
Pre-market, shares of General Motors are flat while being up
12.23 percent year to date. No doubt news of another recall has
negatively impacted shares, but long-term the joint partnership
between General Motors and Ford could prove accretive to shares
of both companies if production is on the same scale as the
previous joint transmission development relationship. Shares of
Ford are up 0.81 percent pre-market, yet are down 8.36 percent
year to date as the company has made several recalls announcement
in 2012 thus far.
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