General Motors Company
) recalled 144 units of its newly launched 2013 Buick Encores in
order to fix their steering wheel fastener that may not have been
properly installed. The Detroit-based automaker has informed that
the steering wheel in the vehicles could come loose or separate
from the steering column.
The new compact crossover Encore is built by GM Korea between Dec
9 and Dec 28. The same model is sold in Europe as Opel Mokka.
General Motors has not yet received any reports of injuries or
accidents due to the defect. So far, the automaker contacted 59
Encore owners, who have experienced the heated steering wheel
problem. The company has already inspected 85 unsold vehicles at
Buick dealerships and found no problem in them.
Automotive safety recalls were brought into focus by media after
) announcement of the largest-ever global recall of 3.8 million
vehicles in Sep 2009, triggered by a high-speed crash that killed
4 members of a family. Later on, a string of recalls has led
Toyota to face numerous personal injury and wrongful death
lawsuits in federal courts.
Recently, the Transportation Department of U.S. slapped a fine of
$17.35 million on Toyota due to late response regarding a defect
in its vehicles to safety regulators as well as late recall of
those vehicles. According to the department, it was the maximum
allowable fine under the law for not initiating a recall in a
timely manner. The latest fine adds to $48.4 million imposed by
the U.S. government on the company in 2010 due to late recall of
millions of defective vehicles.
Last month, General Motors announced plans to recall 33,700 units
of Buick LaCrosse sedans and Cadillac SRX crossover vehicles
globally from the 2013 model year in order to fix a software
glitch that could lead to a crash. GM will recall 26,582 vehicles
in the U.S. and the remaining vehicles in Canada, Mexico, the
Middle East and China.
General Motors revealed that the software glitch could cause the
transmission to unexpectedly switch from manual to automatic
mode. The automaker has not yet received any reports of crashes
or injuries related to the problem. Its dealers will reprogram
the transmission control module free of cost upon recalling the
General Motors also announced that it would recall 48 units of
compressed natural gas-powered versions of Chevrolet Express
full-sized vans from the 2011 model year. The company intends to
repair an improperly built pressure relief vent pipe in the
vehicles that could allow natural gas into the passenger
compartment and increase the risk of fire. It has not yet
received any reports of crashes, injuries or fires related to the
defective vehicles that were sold to three U.S. fleet customers
and one dealer.
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GM, a Zacks Rank #3 (Hold) stock, posted higher profits of $0.8
billion or 48 cents per share in the fourth quarter of 2012,
compared with $0.7 billion or 39 cents in the same quarter of
2011. However, earnings missed the Zacks Consensus Estimate by a
penny. The results excluded net gain from special items of $0.1
billion or 6 cents in the 2012-quarter and net loss from special
items of $0.2 billion, or 11 cents in the 2011-quarter.
Revenues in the quarter scaled up 3.4% to $39.3 billion, which
was higher than the Zacks Consensus Estimate of $38.6 billion.
Unit sales escalated 4.2% to 2.3 million vehicles. The automaker
occupied a market share of 11.5% during the quarter, down from
11.6% in the year-ago quarter.
General Motors expects to boost its top-line in 2013 with the
help of new vehicle launches. At the same time, the company
believes cost control measures will boost its bottom line growth.
It expects 2013 capital expenditures to be at the 2012-level.
Few stocks that are performing well in the industry where GM
). Both the stocks carry a Zacks Rank #1 (Strong Buy).