GM Recalls More Vehicles Because of Ignition Switch Issues

By Dow Jones Business News, 

By Jeff Bennett

General Motors Co. on Monday pushed its repair-cost estimate for auto recalls this year to $2 billion as it disclosed plans to replace potentially faulty ignition keys on 3.37 million older model cars in North America.

The move comes two days before Chief Executive Mary Barra is set to testify before a House committee on the auto maker's mishandling of an ignition switch recall involving Chevrolet Cobalts and other older models.

The nation's largest auto maker is attempting to "clear the decks" of any potential recall problems ahead of Ms. Barra's testimony in a show of good faith to lawmakers currently investigating its safety operations, according to people familiar with the matter.

Detroit-based GM said it would expand a second quarter charge to earnings by $300 million, to $700 million, to cover the costs for recalling older Buicks, Chevrolets and Cadillacs covered by the latest recall. The charge is in addition to a $1.3 billion spent in the first quarter.

It was the second major ignition switch-related recall in less than a week. The auto maker on Friday recalled 500,000 newer-model Chevrolet Camaros with an ignition-switch that could turn off when jarred. It plans to change the key in those cars.

The auto maker contends these latest recalls aren't linked to a troubled Chevrolet Cobalt recall because the switches are designed differently. However, in all three cases a jarring of the key can move the switch to "accessory" from "run," cutting power to a vehicle's air bags and electric steering and brakes.

On Monday, the House Oversight and Investigations subcommittee outlined a handful of questions it may ask Ms. Barra during her return to Capitol Hill on Wednesday. Lawmakers are probing why GM waited for nearly 11 years to recall 2.6 million Cobalt and other small cars. A defective switch has been linked to accidents resulting in 13 deaths although the auto maker has said the fatalities could be much higher.

In the latest action, GM said it would rework or replace the keys on about 3.37 million 2000 to 2014 model year cars in the U.S. because the ignition switch may inadvertently move out of the "run" position if the key is carrying extra weight and is jarred or bumped.

GM intends to turn the slot on the end of the key head--used to hold a key ring--to a hole, alleviating the weight issue. The auto maker cited eight crashes and six injuries related to the latest recall.

In addition to the key recall, GM also recalled 165,770 vehicles in five separate actions. They include the recall of 68,887 model year 2013-14 Cadillac ATS and 21,863 2014 Cadillac CTS sedans for shift cable problems. The recall of 16,932 model year 2011 Cadillac CTS sedans is because of a possible gasket leak.

The company also recalled 57,192 of its 2015 Chevrolet Silverado and 2015 GMC Sierra heavy-duty pickups to inspect for proper attachment of power steering hose clamps to the power steering pump.

Rounding out the recalls is 712 model year 2014 Chevrolet Corvettes because of a potential air bag problem and 184 model year 2014-15 Chevrolet Silverado and GMC Sierra full-size pickups with vinyl floors and accessory all-weather floor mats purchased new with the vehicle. The mats can slip under the driver's feet because the vinyl floors have no attachments to secure them in place.

Write to Jeff Bennett at

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Referenced Stocks: GM

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