General Motors Company
) plans to recall 69,000 units of pickup trucks, sports utility
vehicles (SUVs) and vans worldwide because the vehicles are built
with faulty park lock cables or malformed steering column lock
gears. The problem could cause the vehicles to roll away
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The recall affects Chevrolet Silverado and GMC Sierra full size
pickup trucks, Suburban, Tahoe and Yukon SUVs, Avalanche truck,
Express and Savana vans, and Cadillac Escalade full size SUV.
All the vehicles are from the 2013 model year. About 55,000
vehicles will be recalled in the U.S. and 14,000 units in Canada,
Mexico and other parts of the world.
GM revealed that due to defective steering column, the vehicles
can move out of its parking position even if the ignition key has
been turned off or removed. However, most of the defective
vehicles are not yet sold and about one in a thousand has the
problem. The company's dealers will replace the steering column
free of charge if needed.
GM seems to be very cautious about finding and fixing the defects
in their vehicles in order to keep its brand value intact. Of
late, the company made a number of vehicle safety recalls.
Recently, the automaker decided to recall 145,628 units of
mid-sized pickup trucks across its global markets because their
hoods can open unexpectedly and obstruct the driver's view,
increasing the risk of a crash. The recall involved Chevrolet
Colorado and GMC Canyon midsize trucks from 2010-2012 model
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.
Recently, the Transportation Department of U.S. slapped a fine of
$17.35 million on Toyota due to late response regarding a defect
in its vehicles to safety regulators as well as late recall of
those vehicles. According to the department, it was the maximum
allowable fine under the law for not initiating a recall in a
timely manner. The latest fine adds to $48.4 million imposed by
the U.S. government on the company in 2010 due to late recall of
millions of defective vehicles.
Toyota also decided to pay $1.1 billion to settle a class-action
lawsuit related to complaints of unintended acceleration in its
vehicles. According to a plaintiff lawyer, the settlement is one
of the largest in a lawsuit in the history of automotive
GM, a Zacks #2 Rank (Buy) stock, posted a 9.7% fall in earnings
to 93 cents per share (excluding special items) in the third
quarter of the year from $1.03 in the corresponding quarter a
year ago. However, earnings per share in the quarter far exceeded
the Zacks Consensus Estimate of 61 cents.
Total profit ebbed 5.9% to $1.6 billion from $1.7 billion a year
go. The decline in profit was attributable to lower profits from
North America and increased loss in Europe.
Revenues in the quarter grew 2.5% to $37.6 billion, surpassing
the Zacks Consensus Estimate of $36.3 billion. Worldwide sales
volume inched up 1.6% to 2.3 million units from 2.2 million units
a year ago. However, total market share declined to 11.6% from
12.1% in the third quarter of 2011.
Operating income fell 11.2% to $1.6 billion from $1.8 billion a
year ago. However, adjusted earnings before interest and tax
(EBIT) rose 4.5% to $2.3 billion from $2.2 billion a year ago.