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A Flurry of Recalls at G.M. as Pressure Mounts

  • 05-21-2014
General Motors issued four new recalls on Tuesday, bringing its total for the year to 13.5 million, already the most in the company’s history.þþThe recalls — including 2.4 million cars, trucks and sport utility vehicles involved in Tuesday’s actions — represent an extraordinary about-face for the nation’s largest automaker. Since February, G.M. has been under intense pressure from federal officials, safety advocates and consumers for its decade-long failure to fix cars with a defective ignition switch that G.M. has linked to 13 deaths.þþIn response, it has made broad changes to its safety practices and more aggressively identified problems. Its mounting tally of safety actions has already far surpassed the 758,000 vehicles that the company recalled in the United States last year, and it is more than four times the nearly 2.8 million vehicles it sold domestically last year. At any given time, about 250 million cars are registered in America.þþBut the newly aggressive approach to safety has not mollified some of G.M.’s toughest critics.þþ“They are doing damage control and reacting to the outrage over their history of concealing safety issues,” Senator Richard Blumenthal, a Democrat from Connecticut, said in an interview on Tuesday.þþLast week, the Transportation Department hit G.M. with a $35 million penalty, the maximum allowed under law, and imposed oversight of the automaker’s safety practices for neglecting to inform government officials of the ignition-switch defect in a timely manner.þþAnd with more state and federal investigations underway, the automaker desperately needs to demonstrate that it is taking vehicle safety more seriously than in the past.þþG.M.’s chief executive, Mary T. Barra, said during congressional hearings in April that the company was intent on swiftly rooting out problems with its vehicles and repairing them.þþ“All of our G.M. employees and I are determined to set a new standard,” Ms. Barra said.þþG.M. has named the company’s first vice president in charge of global vehicle safety, Jeff Boyer. It has also added 35 product investigators to examine warranty claims and other data for vehicle defects that might not have been detected before.þþSo far this year, the company has issued 29 safety recalls in the United States, including the four announced on Tuesday, covering dozens of models and a wide range of defective parts.þþIt has been a humbling experience for a company that has promoted its overall improvements since going bankrupt and receiving a $49.5 billion federal bailout in 2009.þþIndustry analysts said the pressure on Ms. Barra and the company was having an effect.þþ“It is reassuring to see that her actions match her testimony and press releases, but the fact is that it is a reflection of a tougher stance being adopted by federal regulators,” said Eric Ibara, an analyst with the auto-research firm Kelley Blue Book.þþThe repair bills have been costly as well. The recalls announced on Tuesday, which required a $200 million charge, brought the overall expense of G.M.’s safety actions this year to $1.7 billion, wiping out much of its profit.þþAnd while G.M.’s sales have not suffered, its reputation for vehicle quality has been badly tarnished. The latest recall also came as Senator Blumenthal and Senator Lindsey Graham, Republican of South Carolina, introduced legislation that would make it harder for corporations to seal court records in product-liability lawsuits.þþSenator Blumenthal said the bill was spurred by an article on Sunday in The New York Times about G.M.’s confidential settlement last summer of a wrongful-death lawsuit linked to a defective ignition switch.þþG.M. has acknowledged that the 13 people died as a result of crashes in Chevrolet Cobalts and other small cars equipped with defective ignitions that could unexpectedly cut engine power and deactivate air bags.þþBut even with the changes to G.M.’s safety procedures, the nation’s top auto regulator said last week that the company still had much to prove about its commitment to improving safety.þþ“Recent actions indicate that G.M. is beginning to change,” said David Friedman, acting chief of the National Highway Traffic Safety Administration. “But we must make sure that change expands.”þþThis year’s recalls broke G.M.’s previous record for recalled cars, more than 10.7 million in 2004.þþG.M. said on Tuesday that its latest round of recalls included 1.3 million large S.U.V.s that had front-seat safety belts that could wear out and break over time.þþThe vehicles with the problem are 2009-14 Buick Enclaves, Chevrolet Traverses and GMC Acadias, and 2009-10 Saturn Outlooks.þþG.M. did not say whether it knew of accidents or injuries associated with the issue, but it has told its dealers they cannot sell new or used models of the vehicles until repairs are made.þþAnother recall covers more than a million midsize cars from the 2007-8 model years. The vehicles include the Chevrolet Malibu, Malibu Maxx and Pontiac G6 sedans, and the recall involves faulty cables that could make it difficult for drivers to shift gears.þþG.M. said it was aware of 18 crashes and one injury related to the problem.þþThe two other recalls were smaller, but they involved new models that had only recently gone on sale.þþG.M. said it was recalling 1,402 Cadillac Escalades and Escalade ESVs from the 2015 model year for a defective weld that could result in only partial deployment of air bags in an accident.þþAnd in one of the smallest recalls on record, G.M. said it would recall 58 heavy-duty Chevrolet Silverado and GMC Sierra pickups from its 2015 model lineup because fasteners attached to a generator could become loose and potentially cause fires.þþThe company’s troubles have not gone unnoticed by investors. On a day when the broader stock market fell less than 1 percent, G.M.’s shares fell nearly 3.5 percent, to $33.07 a share.þþG.M.’s stock price has declined nearly 20 percent this year.þþþ Correction: May 20, 2014 þþAn earlier version of this article gave an incorrect state for Senator Lindsey Graham. He represents South Carolina, not Florida.þ

Source: NY Times