GM says recalls may last into mid-summer
Published: Wednesday, May 28, 2014 at 2:50 p.m.
Last Modified: Wednesday, May 28, 2014 at 2:50 p.m.
General Motors is telling Wall Street that a recent spate of recalls may last until mid-summer as the company continues to review unresolved safety issues.
The news comes a day after The Associated Press learned that GM CEO Mary Barra told members of Congress that the company cannot make ignition switches fast enough to keep up with demand in its recall of 2.6 million small cars.
The ignition switch problem has been linked to at least 13 deaths in crashes involving Chevrolet Cobalts and Saturn Ions. Congress and the Justice Department are investigating why GM knew about the switch problem for at least a decade but only started recalling the cars this February.
GM has undertaken a safety review that has resulted in 29 U.S. recalls so far this year covering a total of 13.8 million vehicles, more than five times the number of cars and trucks the company sold in the U.S. last year.
In a note to investors, Barclays analyst Brian Johnson wrote that he met with GM management last Wednesday, and was told by product development chief Mark Reuss that GM continues to review safety data for potential recalls and that recalls could persist into mid-summer. Johnson also wrote that it's possible that cars already subject to one recall could be part of future recalls.
Senior management will be more involved in safety, with Reuss leading a team of five people who will decide on future recalls, Johnson wrote. The company is trying to issue recalls as soon as it learns about an issue rather than waiting for more data, according to Johnson.
"This will increase the frequency of recalls, but will reduce the total number of vehicles recalled," the analyst wrote.
Meanwhile, Barra is preparing for a return trip to Capitol Hill as an investigation by an outside attorney into the ignition switch recall delays nears a close. She told lawmakers last Wednesday that GM's plan to compensate victims of small-car crashes could be released at the same time as the results of the investigation, according to a congressional aide who asked not to be identified because the meetings were private.
Barra, who visited lawmakers on Capitol Hill for private meetings last Wednesday, told them that GM's supply of replacement ignition switches like won't catch up to demand until July. She said when that happens, GM plans to start a campaign to persuade people to take cars to dealers for repairs, according to a congressional aide who asked not to be identified because the meetings were private.
Among the lawmakers Barra met with were Sen. Claire McCaskill, D-Missouri, and Dianna DeGette, D-Colorado. Both were highly critical of the chief executive last month when she testified at Senate and House hearings about GM's handling of the ignition switch problem. With victims' families looking on, Barra said she was unable to answer many questions until an internal investigation into the matter was complete.
Frustrated, lawmakers finally elicited a promise from Barra to return to testify when the company's probe was finished.
In late May or early June, she'll have answers. The automaker hired former U.S. Attorney Anton Valukas to investigate why it took so long for GM to recall the small cars. GM has promised an "unvarnished" report, and Barra told Congress last month she will take decisive action on its findings.
Recently, GM admitted to concealing the ignition switch problems from the National Highway Traffic Safety Administration and agreed to pay a $35 million fine, the maximum the agency can impose.
Last Thursday, three senators introduced a bill that would lift the $35 million cap, saying that the current amount is too low to discourage automakers from hiding problems.
Suzuki is recalling more than 184,000 small cars in the U.S. because the steering columns can catch fire.
The recall covers Forenza models from 2004 through 2008 and Reno models from 2005 through 2008. Both vehicles were made for Suzuki by General Motors.
The Japanese automaker says the headlamp switch or daytime running light modules can overheat, melt and catch fire on the left side of the steering column.
The company will notify owners and fix the problem for free. It hasn't scheduled the repairs yet.
Last Wednesday, GM recalled 218,000 Chevrolet Aveo subcompact cars for a similar problem as the company continues to review safety issues and issue recalls.
It was GM's 29th recall this year, bringing its total number of recalled in the U.S. to around 13.8 million.
Toyota said last Thursday it's recalling 516,000 vehicles worldwide — including 430,500 in the U.S. — for three separate safety problems, including brakes that can activate without warning.
The company said it has no reports of accidents or injuries due to the defects. In all three cases, the company will alert owners and dealers will repair the issues for free.
The largest recall, of 450,000 Sienna minivans from the 2004-2011 model years, targets vehicles sold in cold weather areas.
Siennas from the 2004-2010 model years were for the same issue in 2010, and a splash protector and anti-rust protection were applied. But the company says the splash protector can fall off and rust can still occur.
The recall involves 370,000 minivans sold in the U.S., 80,000 in Canada and 400 in Europe.
Also recalled last Thursday were:
16,000 Lexus GS 250 and 350 sedans from the 2013 model year because a manufacturing defect can cause the brakes to activate without warning, and without turning on the brake lights. Most of the vehicles — 10,500 — were sold in the U.S. Also included are left-hand-drive sedans sold in Canada, China and Europe.
50,000 Highlander and Highlander hybrid SUVs from the 2014 model year. Toyota says a software glitch may prevent the vehicle from properly calculating the size of the front passenger when determining whether to fire the air bags. The affected vehicles assume the passenger is smaller, so the bags may not fire or they may fire at a lower speed than necessary for a larger passenger.
Toyota says most of the affected vehicles — 45,287 — were sold in the U.S. Around 3,400 were sold in Canada and the rest were sold in Mexico and Europe.