GM Recalls Trucks for Seat Problem - Analyst Blog

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Less than a week after General Motors Company ( GM ) announced the recall of 1,658 Chevrolet Sonic cars, the company recalled about 22,000 Chevrolet Silverado and GMC Sierra full-size pickup trucks. The recall is being made to examine the seats backs, which can get displaced more than the permitted amount by safety regulators in case the truck gets hit from behind. However, the company was not notified of any injury due to this problem.

Most of the recalled trucks are in North America, with 18,972 in the United States, 2,575 in Canada and 103 in Mexico. The remaining 71 are outside North America.

Last week, General Motors recalled 100 Chevrolet Sonic cars in Canada and 1,558 in the U.S. to fix a problem in the strap welds, which could lead to fire in extreme cases. In September, General Motors announced the recall of the diesel version of Chevrolet Sail. The automaker recalled 4,000 vehicles in India to fix a faulty engine part.


In August, the company recalled its 2011 and 2013 Chevrolet Cruze cars in the U.S. to fix a problem in the power-assisted brakes. In Jul 2013, General Motors had recalled 114,000 Chevrolet Tavera sport-utility vehicles (manufactured from 2005 to 2013) in India to repair problems related to emission standards and other government specifications.

However, General Motors is not the only automaker affected by this problem. Last month, Toyota Motor Corp. ( TM ) announced the recall of 615,000 Sienna minivans in the U.S. to fix a problem in the shift lever assembly.

Earlier in the same month, Toyota recalled 369,000 vehicles worldwide, including about 235,000 in the U.S., roughly 74,000 in Japan and 37,500 in Europe. The automaker will recall 200,000 Highlander Hybrid models manufactured from 2006 to 2010 and Lexus RX 400h vehicles developed during 2006 to 2008 to fix a hybrid-system problem. Toyota also announced the recall of another 169,000 vehicles including Lexus IS 350, IS 350C and GS 350 manufactured between 2006 and 2011 to repair an engine bolt defect.

Automotive safety recalls were brought into focus by media after Toyota's announcement of the then-largest global recall of 3.8 million vehicles in Sep 2009, triggered by a high-speed crash that claimed 4 lives. Later, in Oct 2012, the automaker announced a major worldwide recall of 7.43 million vehicles that included more than a dozen models manufactured between 2005 and 2010.

In Dec 2012, the U.S. Transportation Department slapped a $17.35 million fine on Toyota due to late response to safety regulators and delay in recall regarding a defect in its vehicles. According to safety regulators, it was the maximum allowable fine under the law for not initiating a recall in a timely manner. This was not the first time the company incurred a heavy fine. Toyota also suffered a fine of roughly $48.4 million in 2010, imposed by the U.S. government, due to late recall of defective vehicles.

Many other players in the automobile market are witnessing a series of recalls. Ford Motor Co. ( F ) announced 4 recalls in the last quarter for a total of 1.5 million vehicles and Honda Motor Co., Ltd. ( HMC ) had 2 recalls for about 0.8 million vehicles.

General Motors currently carries a Zacks Rank #2 (Buy).



FORD MOTOR CO (F): Free Stock Analysis Report

GENERAL MOTORS (GM): Free Stock Analysis Report

HONDA MOTOR (HMC): 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 , HMC , TM

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