By Dow Jones Business News,
June 16, 2014, 05:45:00 PM EDT
General Motors Co. said Monday that it now expects to spend $2 billion during the first half of the year to cover its
recall costs and announced plans to replace potentially faulty ignition keys on 3.37 million cars in North America.
The announcement comes two days before Chief Executive Mary Barra is set to testify before a congressional committee
on the auto maker's mishandling of an ignition switch recall in the Chevrolet Cobalt and other older models.
Company insiders say GM is working to "clear the decks" of any potential recall problems in a show of good faith to
lawmakers who are currently investigating the auto maker.
The auto maker said it would take a $700 million charge in the second quarter, ended June 30, to cover the costs. The
expense is in addition to the $1.3 billion the company spent in the first quarter.
This is now the second major ignition switch-related recall in less than a week, which is bound to confuse consumers.
The auto maker recently recalled a half-million Chevrolet Camaros for switch issues.
The auto maker contends these latest recalls aren't linked to the Chevrolet Cobalt because the switches are designed
differently. However, in all three cases a bumping or jarring of the ignition key can move the switch to "accessory"
from "run," cutting power to the electric steering and air bag deployment.
GM will rework or replace the ignition 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 experiences
some jarring event.
GM intends to turn the slot on the end of the key head--used to hold a key ring--to a hole thereby alleviating the
weight issue. The auto maker didn't disclose if any injuries were attributed to the problem.
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 model year 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 email@example.com
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