GM Recalls Crossover SUVs - Analyst Blog


General Motors Company ( GM ) plans to recall 50,000 units of crossover sports utility vehicles (SUVs) due to a problem with their windshield wipers. The recall includes Chevrolet Traverse, Buick Enclave and GMC Acadia from the 2011 and 2012 model years.

All the vehicles were sold in cold-weather states in the U.S. Federal safety regulators revealed that wipers are becoming loose and malfunctioning due to the build up of ice and snow.

GM will notify the owners later this month for the recall. The dealers will tighten the wipers more than the factory specifications in order to fix the problem. The company has not yet received any reports of crashes or injuries due to the problem. 

This is the third recall of SUVs by GM in less than 45 days. Earlier in March, the automaker had announced that it would recall 16,618 units of Chevrolet Captiva and Opel Antara crossover SUVs in China due to a problem with the antilock braking system in the vehicles. The recall involved vehicles that were manufactured between April 11, 2006, and November 9, 2009.

Later in the month, GM announced the recall of 6,000 units of large vans and SUVs from the 2012-model year due to a problem with their gear shaft leading to a loss of steering. The van models include Chevrolet Express and GMC Savana vans, which are mainly used by churches and airport shuttle services. On the other hand, the SUV lineups include Chevrolet Suburban and GMC Yukon XL.

Recently, Ford Motor Co. ( F ) made an announcement of recall due to a problem similarly faced by the crossovers. The company announced that it would recall 140,310 units of its top selling car Focus due to a problem with their passenger-side windshield wiper motors. The vehicles were manufactured between August 1, 2010 and October 18, 2011.             

The filings with the National Highway Traffic Safety Administration (NHTSA) revealed that a seal in the wiper motor wiring of the cars could be missing, increasing the chance of water to get inside. The water inside the motor could cause the wiper to stop working, which could reduce visibility and increase the risk of a crash.

Automotive safety recalls were brought into focus by media after Toyota Motors ' ( TM ) announcement of the largest-ever global recall of 3.8 million vehicles in September 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. The Transportation Department of U.S. also imposed a fine of $48.4 million on the company due to late recall of millions of defective vehicles.

GM, a Zacks #3 Rank (Hold) company, posted a profit of $0.7 billion or 39 cents per share in the fourth quarter of 2011, missing the Zacks Consensus Estimate by 3 cents per share. The results excluded net loss from special items of $0.2 billion or 11 cents per share. It compares with the profit of $0.9 billion or 52 cents per share in the fourth quarter of 2010.

Revenues in the quarter scaled up 3% to $38.0 billion, which was in line with the Zacks Consensus Estimate. Unit sales escalated 3% to 2.2 million vehicles from the fourth quarter of 2010. The automaker occupied a market share of 11.7% during the quarter, up from 11.5% in the year-ago quarter.

FORD MOTOR CO ( F ): Free Stock Analysis Report
GENERAL MOTORS ( GM ): Free Stock Analysis Report

TOYOTA MOTOR CP ( TM ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: F , GM , TM

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