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GM Recalls Hummer SUVs for Heating Issue, Shares Fall - Analyst Blog

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Share price of General Motors CompanyGM declined 0.6% to $31.01 after the automaker announced the recall of around 196,379 Hummer SUVs worldwide. The recall has been announced to rectify the overheating of ventilation fan motor controls in the vehicle which may even lead to a fire.

Notably, among the total vehicles recalled, 164,993 Hummers are from the U.S and the rest mainly from Canada and Mexico. The vehicles covered under the recall mainly include Hummer H3 of model years 2006 to 2010 and Hummer H3T of model years 2009 to 2010.

General Motors identified that the module which controls the heating and air conditioning blower motor speed may get overheated if operated for a long time. This will result in the melting of the plastic around it and also create the risk of a fire. There have been around 42 cases of fire due to this issue, with three reports of minor burns.

The automaker confirmed that dealers will replace the faulty module and wiring harness free of cost. In 2009, when General Motors went bankrupt, the company vended four brands, Hummer being one.

In addition to the Hummer recall, General Motors announced the recall of around 51,000 subcompact vehicles in the U.S. and Canada. These vehicles have a software problem which obstructs normal functioning of the safety alarms.

The vehicles covered under this recall mainly include Chevrolet Sparks of model year 2014 and 2015 and Chevrolet Sonics of 2015. These vehicles featured base radio with General Motors' OnStar safety system. Most of the Spark vehicles have been recalled from the U.S, and the remaining from Canada.

In relation to the radio recall, General Motors stated that the radio software may breakdown when played on the OnStar navigation mode. This may result in a blank radio display and also disable all audio functions, including warnings for situation when the keys are left in the ignition mode or the driver seat belt is not properly engaged. In addition, the driver may not be able to switch off the radio which will drain off the battery.

General Motors further stated that there has been no report of any crash or injury related to this problem. The automaker will be updating the radio software to resolve the issue.

General Motors is a Zacks Rank #3 (Hold) stock. Better-ranked stocks in the auto industry include Meritor, Inc. MTOR , Autoliv, Inc. ALV and PACCAR Inc. PCAR , all carrying a Zacks Rank #2 (Buy).

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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 Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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