 "GM recalls another 1.7 mn vehicles worldwide")
Mary T Barra, General Motors’ chief executive, announced another round of wide-ranging recalls on Monday, a sign that the company was moving with a new sense of urgency on safety problems after it disclosed a decade-long failure to fix a defect tied to 12 deaths.
The recalls, which cover 1.7 million vehicles worldwide for a variety of problems, come in addition to last month’s recall of 1.6 million Chevrolet Cobalts and other models. In one of Monday’s recalls, GM had alerted owners to the problem three years ago, but did not make a recall.
Barra also made her most forceful comments yet on GM’s need to reform its safety efforts.
“Something went very wrong in our processes in this instance, and terrible things happened,” she said in an internal video broadcast to employees.
GM has come under intense pressure from government officials to explain why it took years to address faulty ignition switches that could cut off engine power and disable air bags in Cobalts and other small cars.
Barra’s comments to employees — including a letter on March 4 — represent the latest effort by the company to limit the damage that the recalls have inflicted on its reputation and consumer confidence.
“Mary Barra understands the value of taking full responsibility for GM’s latest, high-profile challenges, especially if she wants to send the message that this is a new GM,” said Karl Brauer, an analyst with the auto-research firm Kelley Blue Book.
Investors showed scant reaction to the news. Shares of GM closed at $34.63, up more than 1 per cent on a strong day for the market.
The latest recalls followed orders by Barra to accelerate product reviews of safety issues that were already underway, the company said.
While the recalls were in various stages of completion, the company decided to announce all three actions at the same time, according to a person briefed on the decision who spoke on the condition of anonymity.
Barra said the move was a direct result of GM’s internal review of the faulty ignition switches. “I asked our team to redouble our efforts on pending product reviews, bring them forward and resolve them quickly,” she said.
GM also took the unusual step of disclosing the estimated cost of the ignition switch recall as well as the three new recalls. The company said it expected to take a charge of $300 million for the combined safety actions — a figure it would not normally announce until its quarterly earnings release.
There was no indication by GM that any of the affected models had been involved in accidents that resulted in injuries or deaths. The largest of three latest recalls was for 1.33 million sport utility vehicles because of a wiring problem that could cause air bags not to deploy in a crash.
The vehicles are Buick Enclaves and GMC Acadias from the 2008 to 2013 model years, Chevrolet Traverses from the 2009 to 2013 model years, and Saturn Outlooks from the 2008 to 2010 model years.
GM said a wiring problem could cause the illumination of a “service air bag” warning. Ignoring the warning will eventually result in the nondeployment of seat-mounted side air bags.
Monday’s announcement is not the first time that some of the owners had been alerted to the problem. In March 2011, GM sent them a notice warning them of the issue, although it said it was not necessary to take the vehicle to a dealership unless the warning light was illuminated.
Greg Martin, a GM spokesman, said in an email that the automaker “handled it through a service bulletin at the time given the data available about the population on the road.”
Barra said the company was cooperating with a wide series of investigations, including by federal regulators, the United States attorney’s office in New York, and two congressional committees. GM has also hired outside lawyers to conduct an internal review of why it took so long to reveal and fix a deadly safety problem.
“We have apologised, but that is only one step in the journey to resolve this,” she said in the video on Monday.
One management expert said GM needed to move aggressively and with greater transparency on the latest recalls.
“Maybe GM learned its lesson and realised they have to take action when consumers are potentially at risk,” said Kaitlin Wowak, an assistant professor of management at the University of Notre Dame.
The new recalls cover a broad range of vehicles with different problems.
In addition to the recall over the air bag warning light, the company said it would recall 66,000 Cadillac XTS sedans, model years 2013 and 2014, because problems in a brake pump could possibly cause engine fires. GM said it was aware of two fires related to the defect.
The automaker will also recall 354,000 full-size vans that do not comply with requirements for head impacts for unbelted occupants. The vehicles are Chevrolet Express and GMC Savannah vans from the model years 2009 to 2014.
The new recalls come as GM is trying to expedite the ignition-switch fixes and field questions from concerned owners of the affected models.
Barra said that the supplier of the switch, the auto-parts maker Delphi Automotive, has added a second production line to make replacement parts. GM has said it expects its dealers to be ready to install the new switches in April.
She also said that 50 employees at GM’s technical centre had been assigned to handle calls and other inquiries from customers about the ignition issues.
The switch recall has threatened to overshadow GM’s steady improvements in product quality and profitability since it emerged from its government-backed bankruptcy in 2009.
In chronologies submitted to federal regulators, the company said it first knew of flaws in its ignition switches as far back as 2001.
But no safety action was announced until Feb. 13, when G.M. said it would recall 778,000 vehicles. Less than two weeks later, the company expanded the recall to 1.62 million vehicles worldwide.
Ms. Barra said on Monday that the company was revising its internal controls on recalls and other safety matters. “Our system of deciding and managing recalls is going to change,” she said.
And in her video to employees, she urged G.M. workers to be aware of the ignition-switch mistakes when making decisions that affect the company’s customers.
“We will be better because of this tragic situation if we seize the opportunity,” she said.
Still, Ms. Barra’s comments were greeted sceptically by some.
Laura Christian, the birth mother of 16-year-old Amber Marie Rose, who is among the 12 people GM acknowledges died in crashes related to the defect, said she did not believe the corporation had changed much.
“I seriously doubt they are any more responsible,” she said in an interview. “They are just trying to get ahead of the massive issues that they already have.”
Some consumers complained to the National Highway Traffic Safety Administration in recent years about their air bag warning lights, with problems cited in all of the recalled models.
“The service air bag indicator randomly comes on,” wrote the driver of a 2011 Chevrolet Traverse. “This is the car used by my 17-year-old daughter to drive herself and my son to school and I want to be assured that the air bags are working correctly and that the only problem is with a false service indicator.”
The recalls, which cover 1.7 million vehicles worldwide for a variety of problems, come in addition to last month’s recall of 1.6 million Chevrolet Cobalts and other models. In one of Monday’s recalls, GM had alerted owners to the problem three years ago, but did not make a recall.
Barra also made her most forceful comments yet on GM’s need to reform its safety efforts.
“Something went very wrong in our processes in this instance, and terrible things happened,” she said in an internal video broadcast to employees.
GM has come under intense pressure from government officials to explain why it took years to address faulty ignition switches that could cut off engine power and disable air bags in Cobalts and other small cars.
Barra’s comments to employees — including a letter on March 4 — represent the latest effort by the company to limit the damage that the recalls have inflicted on its reputation and consumer confidence.
“Mary Barra understands the value of taking full responsibility for GM’s latest, high-profile challenges, especially if she wants to send the message that this is a new GM,” said Karl Brauer, an analyst with the auto-research firm Kelley Blue Book.
Investors showed scant reaction to the news. Shares of GM closed at $34.63, up more than 1 per cent on a strong day for the market.
The latest recalls followed orders by Barra to accelerate product reviews of safety issues that were already underway, the company said.
While the recalls were in various stages of completion, the company decided to announce all three actions at the same time, according to a person briefed on the decision who spoke on the condition of anonymity.
Barra said the move was a direct result of GM’s internal review of the faulty ignition switches. “I asked our team to redouble our efforts on pending product reviews, bring them forward and resolve them quickly,” she said.
GM also took the unusual step of disclosing the estimated cost of the ignition switch recall as well as the three new recalls. The company said it expected to take a charge of $300 million for the combined safety actions — a figure it would not normally announce until its quarterly earnings release.
| TROUBLED WHEELS |
| General Motors’ CEO Mary T Barra has announced another round of wide-ranging recalls, a sign that the company is moving with a new sense of urgency on safety problems after it disclosed a decade-long failure to fix a defect tied to 12 deaths. Barra’s comments represent the latest effort by the company to limit the damage that the recalls have inflicted on its reputation and consumer confidence. HOW MUCH WILL THE RECALLS COST GM? The company is expected to take a charge of $300 million for the combined safety actions, including cost of the ignition switch recall as well as the three new recalls WHAT IS BEING RECALLED? The largest of three latest recalls is for 1.33 million SUVs because of a wiring problem that could cause air bags not to deploy in a crash. The vehicles are Buick Enclaves and GMC Acadias from the 2008 to 2013 model years, Chevrolet Traverses from the 2009 to 2013 model years, and Saturn Outlooks from the 2008 to 2010 model years. In addition to the recall over the air bag warning light, the company would recall 66,000 Cadillac XTS sedans, model years 2013 and 2014, because problems in a brake pump could possibly cause engine fires The automaker will also recall 354,000 full-size vans that do not comply with requirements for head impacts for unbelted occupants. The vehicles are Chevrolet Express and GMC Savannah vans from the model years 2009 to 2014 The recalls, which cover 1.7 million vehicles worldwide for a variety of problems, come in addition to last month’s recall of 1.6 million Chevrolet Cobalts and other models |
There was no indication by GM that any of the affected models had been involved in accidents that resulted in injuries or deaths. The largest of three latest recalls was for 1.33 million sport utility vehicles because of a wiring problem that could cause air bags not to deploy in a crash.
The vehicles are Buick Enclaves and GMC Acadias from the 2008 to 2013 model years, Chevrolet Traverses from the 2009 to 2013 model years, and Saturn Outlooks from the 2008 to 2010 model years.
GM said a wiring problem could cause the illumination of a “service air bag” warning. Ignoring the warning will eventually result in the nondeployment of seat-mounted side air bags.
Monday’s announcement is not the first time that some of the owners had been alerted to the problem. In March 2011, GM sent them a notice warning them of the issue, although it said it was not necessary to take the vehicle to a dealership unless the warning light was illuminated.
Greg Martin, a GM spokesman, said in an email that the automaker “handled it through a service bulletin at the time given the data available about the population on the road.”
Barra said the company was cooperating with a wide series of investigations, including by federal regulators, the United States attorney’s office in New York, and two congressional committees. GM has also hired outside lawyers to conduct an internal review of why it took so long to reveal and fix a deadly safety problem.
“We have apologised, but that is only one step in the journey to resolve this,” she said in the video on Monday.
One management expert said GM needed to move aggressively and with greater transparency on the latest recalls.
“Maybe GM learned its lesson and realised they have to take action when consumers are potentially at risk,” said Kaitlin Wowak, an assistant professor of management at the University of Notre Dame.
The new recalls cover a broad range of vehicles with different problems.
In addition to the recall over the air bag warning light, the company said it would recall 66,000 Cadillac XTS sedans, model years 2013 and 2014, because problems in a brake pump could possibly cause engine fires. GM said it was aware of two fires related to the defect.
The automaker will also recall 354,000 full-size vans that do not comply with requirements for head impacts for unbelted occupants. The vehicles are Chevrolet Express and GMC Savannah vans from the model years 2009 to 2014.
The new recalls come as GM is trying to expedite the ignition-switch fixes and field questions from concerned owners of the affected models.
Barra said that the supplier of the switch, the auto-parts maker Delphi Automotive, has added a second production line to make replacement parts. GM has said it expects its dealers to be ready to install the new switches in April.
She also said that 50 employees at GM’s technical centre had been assigned to handle calls and other inquiries from customers about the ignition issues.
The switch recall has threatened to overshadow GM’s steady improvements in product quality and profitability since it emerged from its government-backed bankruptcy in 2009.
In chronologies submitted to federal regulators, the company said it first knew of flaws in its ignition switches as far back as 2001.
But no safety action was announced until Feb. 13, when G.M. said it would recall 778,000 vehicles. Less than two weeks later, the company expanded the recall to 1.62 million vehicles worldwide.
Ms. Barra said on Monday that the company was revising its internal controls on recalls and other safety matters. “Our system of deciding and managing recalls is going to change,” she said.
And in her video to employees, she urged G.M. workers to be aware of the ignition-switch mistakes when making decisions that affect the company’s customers.
“We will be better because of this tragic situation if we seize the opportunity,” she said.
Still, Ms. Barra’s comments were greeted sceptically by some.
Laura Christian, the birth mother of 16-year-old Amber Marie Rose, who is among the 12 people GM acknowledges died in crashes related to the defect, said she did not believe the corporation had changed much.
“I seriously doubt they are any more responsible,” she said in an interview. “They are just trying to get ahead of the massive issues that they already have.”
Some consumers complained to the National Highway Traffic Safety Administration in recent years about their air bag warning lights, with problems cited in all of the recalled models.
“The service air bag indicator randomly comes on,” wrote the driver of a 2011 Chevrolet Traverse. “This is the car used by my 17-year-old daughter to drive herself and my son to school and I want to be assured that the air bags are working correctly and that the only problem is with a false service indicator.”
©2014 The New York Times News Service