GM Ramps Up Recalls, Adds 1.3 Million Units
General Motors rolled out three separate recalls on Monday as a result of the request by new chief executive officer Mary Barra for a comprehensive internal safety review following the ignition switch recall that’s created so much turmoil for the domestic OEM.
Included in GM’s newest campaigns are:
— 303,000 Chevrolet Express and GMC Savana from the 2009 through 2014 model years with gross vehicle weight under 10,000 pounds
— 63,900 Cadillac XTS full-size sedan from the 2013 and 2014 model years
— 1.18 million Buick Enclave and GMC Acadia models from the 2008 through 2013 model years, Chevrolet Traverse from the 2009 through 2013 model years, and Saturn Outlook from the 2008 through 2010 model years
“I asked our team to redouble our efforts on our pending product reviews, bring them forward and resolve them quickly,” Barra said. “That is what today’s GM is all about.”
GM explained the full-size vans with gross vehicle weights of 10,000 pounds or less do not comply with a head impact requirement for unrestrained occupants, requiring a rework of the passenger instrument panel material.
The automaker indicated unsold vehicles have been placed on a stop delivery until development of the solution has been completed and parts are available. Customers will be notified at that time. Repairs will be made at no charge to customers.
In the XTS, the OEM said a brake booster pump can create positive pressure within the wiring harness attached to the pump relay. This pressure can lead to the dislodging of a plug in the brake booster pump relay, allowing corrosive elements to enter the connector and form a low-resistance short that could lead to overheating, melting of plastic components and a possible engine compartment fire.
GM said it is aware of two engine compartment fires in unsold vehicles at dealerships and two cases of melted components.
With respect to the Enclave, Traverse, Acadia and Outlook, the OEM determined the vehicles are equipped with a service air bag warning light in the driver information center.
Officials said ignoring the service air bag warning light will eventually result in the non-deployment of the side impact restraints, which include driver and passenger seat-mounted side air bags, front center air bag (if equipped), and the seat belt pretensioners.
To repair the condition, GM said franchised dealers will remove the driver and passenger side air bag wiring harness connectors and splice and solder the wires together.
“Today’s announcement underscores the focus we’re putting on the safety and peace of mind of our customers. We are conducting an intense review of our internal processes and will have more developments to announce as we move forward,” Barra said.
GM expects to take a charge of approximately $300 million in the first quarter primarily for the cost of the repairs for the three safety actions and the previously announced ignition switch recall.
Fitch: Greatest Recall Risk to GM Is Reputational
Before Monday’s announcement, Fitch Ratings analysts in Chicago said GM’s recall of faulty ignition switches in 1.6 million vehicles primarily presents reputational risk for the company, although follow-on costs could mount
“A federal probe examining the length of time it took GM to announce the recall and the near-continuous stream of negative headlines related to it could exacerbate the situation. We do not currently expect the recall to have an effect on GM's ratings or Outlook, but we are monitoring the situation closely as more information becomes available,” Fitch analysts said.
“We believe direct costs associated with the recall, along with any associated fines, will likely be manageable and will not affect the company's credit profile. The cost of the part itself is estimated to be low and changing the switch should be a simple and relatively quick process. We estimate that the cost of the recall could be less than $100 million. We also view GM's offer of a $500 incentive toward the purchase of a new vehicle as having a limited financial impact on the company as well,” they continued.
Fitch estimated that any potential fine from the National Highway Traffic Safety Administration would probably be capped at $35 million, which the firm views as quite manageable given the company’s cash generating capabilities.
“Legal costs associated with lawsuits that are likely to be filed are unknown and could pose more of a risk,” Fitch said. “Lawsuits tied to accidents that occurred prior to GM’s 2009 bankruptcy may be considered prepetition claims, but the actual impact on GM will depend on how the courts view these claims and what legal avenues might be available to plaintiffs. Any settlement costs could be significant as well. GM will also incur legal costs associated with its own internal investigation into the matter.”
Fitch went on to contend that the longer term impact to the brand will largely depend on the company’s handling of the situation.
“The vehicles affected by the recall have all been out of production for a number of years, and there are no indications that any vehicles currently in production have similar issues,” Fitch said.
“However, potential customers could be concerned about the internal workings of the company that led to the apparent delay in deciding to recall the vehicles. GM’s management will need to convince potential customers that the internal issues that led to the recall delay have been rectified.
“Indirectly, another cost of the recall is the time that senior management will spend focusing on it. GM currently has several significant restructuring actions underway globally, as well the launch of key new vehicles,” analysts went on to say. “The recall is likely to divert some management attention away from these other important activities at a critical time for the company. That the company's top senior leaders are relatively new to their positions could add to the challenges.”
Honda Odyssey Recall
Meanwhile, Honda said this past weekend that it will voluntarily recall 886,815 Odyssey minivans from the 2005 through 2010 model years in the United States to replace the fuel strainer, free of charge.
“Prolonged exposure to acidic chemicals, which are present in some car wash formulas and the general environment, along with high ambient temperatures, may cause the cover of the fuel strainer to deteriorate prematurely, resulting in cracks in the material,” Honda officials said.
“Cracks in the cover of the fuel strainer, which is located on the top of the fuel tank, could lead to a fuel smell being present or, in extreme cases, to leaking fuel, increasing the risk of fire. Honda is not aware of any crashes, injuries or fires related to this issue, which was discovered during warranty repairs,” they continued.
Since these vehicles are no longer in production, the OEM indicated that updated fuel strainers will not be available in sufficient quantity until the summer.
As a result, officials said owners of included vehicles will be informed of the recall in an initial notification letter to be sent in late-April to early-May, and at that time, owners of vehicles from the affected model years will also be able to determine if their specific vehicles will later require repair by visiting www.recalls.honda.com or by calling (800) 999-1009 and selecting option No 4.
Honda added a second notification letter will be sent to owners in the summer when updated parts become available for their specific vehicles, inviting them to schedule an appointment for repair at their local Honda dealer.
Two Recalls from Chrysler
Chrysler Group recently announced two separate recalls, covering about 70,000 units.
The larger of the two campaigns is for approximately 49,400 full-size cars to inspect and replace, if necessary, various headlamp components.
The OEM explained customer service data led Chrysler engineers to investigate reports similar to those that prompted a 2012 recall. The campaign involved police vehicles equipped with jumper harnesses and other components that overheated.
“Chrysler Group was not aware of any related injuries or accidents in the 2012 campaign, nor is the company aware of any injuries or accidents involving the current recall,” officials said.
Chrysler said will inspect and replace, if necessary, headlamp jumper harnesses and bulbs, or headlamp assemblies, on certain model-year 2011 and 2012 Dodge Chargers equipped with halogen headlamps. Repair costs will be borne by the company.
Affected are approximately 43,450 vehicles in the U.S., 2,850 in Canada, 375 in Mexico and 2,700 outside the NAFTA region.
Furthermore, Chrysler is recalling another approximately 19,500 cars to upgrade their transmission software.
The automaker said its engineers launched an investigation after reviewing reports that some vehicles equipped with dual dry clutch automatic transmissions would not shift readily out of park and/or their transmissions did not receive, or were slow to receive, an intended gear selection.
Chrysler said it is unaware of any related injuries or accidents.
“The investigation discovered the function of one microcontroller component may be compromised by certain temperature extremes. A software update resolves the issue,” officials said.
Affected are certain 2014 Fiat 500L models, of which approximately 20 percent are in dealer hands.
Repair costs will be borne by the company. Affected customers — approximately 18,100 in the U.S. and 1,400 in Canada — will be contacted and advised when to schedule service.
“Of the total, an estimated 200 vehicles may require shift-module replacement to ensure hardware-software compatibility,” officials said.
Chrysler indicated that customers with questions about either recall can call (800) 853-1403.