General Motors Company
) has entered a damage control mode following the series of
negative news regarding late recall of vehicles by the company.
The automaker has created a new position of Vice President,
Global Vehicle Safety to oversee all safety related issues in
General Motors also announced three separate recalls, which in
combination with the massive recall announced last month, will
lead to a $300 million charge for the company in the first
quarter of 2014. The company has recalled 303,000 Chevrolet
Express and GMC Savana from model years 2009-2014 that have gross
vehicle weight under 10,000 pounds, as they do not meet a head
impact requirement for unrestrained passengers.
Additionally, General Motors has recalled 63,900 Cadillac XTS
sedans from the 2013 and 2014 model years as a problem in the
brake booster pump can result in melting of plastic components as
well as an engine compartment fire. The company has reports of
two engine compartment fires and two instances of melted
components due to this problem.
The third recall involves 1.18 million Buick Enclave and GMC
Acadia models from the 2008-2013 model years, Chevrolet Traverse
from the 2009-2013 model years, and Saturn Outlook from the
2008-2010 model years. These vehicles have problem related to
side impact restraints, including driver and passenger
seat-mounted side air bags, front center air bag, and seat belt
These measures are a result of the heat General Motors is
facing due to delay in recalling 1.6 million vehicles with
ignition switch defect. On Feb 13, the automaker announced the
recall of 778,562 Chevrolet Cobalt and Pontiac G5 compact cars
from model years 2005-2007 in North America to fix faulty
ignition switches. It was found that a heavy key ring or uneven
roads could cause the ignition switch to shift from the run
position, thereby turning off the engine and preventing
deployment of front air bags in the event of a crash.
Later, on Feb 25, General Motors announced a recall of 842,000
2003-2007 Saturn Ions, 2006-2007 Chevrolet HHRs, and 2006-2007
Pontiac Solstice and Saturn Sky models for the same problem.
However, the chronology of events filed with the National Highway
Traffic Safety Administration (NHTSA) indicates that the faulty
ignition switches were identified way back in 2001, during the
pre-production test of the Saturn Ion.
General Motors is facing multiple investigations for the
delay. Two congressional committees and the Justice Department
will examine the reason behind the delayed recall along with an
investigation by the NHTSA. Moreover, General Motors has hired a
team to probe into the ignition switch recall.
General Motors currently holds a Zacks Rank #5 (Strong Sell).
Some better-ranked automobile stocks worth considering are
Tata Motors Limited
Tesla Motors, Inc.
). TTM and DDAIF sport a Zacks Rank #1 (Strong Buy) while TSLA
has a Zacks Rank #2 (Buy).
DAIMLER AG (DDAIF): Get Free Report
GENERAL MOTORS (GM): Free Stock Analysis
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