General Motors Company
) announced it would recall 38,000 units of Chevrolet Impala police
cars in North America after receiving complaints from two police
fleet about front lower control arms that had fractured. The
recall, which is expected to begin on August 21, covers 36,413 cars
in the U.S. and 1,713 in Canada from the 2008-2012 model years.
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A vehicle's control arms support its wheels. According to National
Highway Traffic Safety Administration (NHTSA), a fracture in the
arms can lead to loss of control, increasing the risk of a crash.
The authority revealed that at the time of fracture, a tire
"squeal" may be heard when turning at low speeds.
GM intends to replace both front lower control arms at the time of
recall. It has not yet received any reports of accidents or
injuries due to defective front lower control arms in the vehicles.
Automotive safety recalls were brought into focus by media after
) 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
Last month, GM had recalled 475,418 units of its popular compact
Chevrolet Cruze sedans in order to fix a problem with their engine
compartment. The recalled vehicles belong to 2011 and 2012 model
years and were built at the company's Lordstown plant in Ohio from
September 2010 through May 2012.
GM, a Zacks #3 Rank (Hold) company, reported a sharp 41% fall in
profits to $1.49 billion or 90 cents per share in the second
quarter of the year from $2.52 billion or $1.54 in the same quarter
of 2011. Nevertheless, profits exceeded the Zacks Consensus
Estimate by 15 cents per share.
Revenues in the quarter fell 4.5% to $37.61 billion, which is lower
than the Zacks Consensus Estimate of $37.98 billion. Unit sales
rose 3% to 2.39 million vehicles from 2.32 million vehicles in the
second quarter of 2011. The automaker occupied a worldwide market
share of 11.6% during the quarter, down from 12.3% a year-ago.
Adjusted earnings before interest and tax (EBIT) dipped 28% to
$2.12 billion from $2.96 billion in the second quarter of 2011.
Operating profit ebbed 26% to $1.82 billion from $2.45 billion a
The decline in profits and revenues was attributable to
strengthening of U.S. dollar against most of the major currencies
as well as weak macroeconomic conditions globally, especially in
Europe and South America.