They don't call them Government Motors for nothing.
Over the weekend we titled our summary of GM's unprecedented avalanche of recalls so far in 2014 - the year in which the company's criminal practice of covering up its faulty products became a congressional scandal - as follows: "GM Set To Surpass Total Recall Record This Year [8]." Three days later we are happy to report that while Detroit, we not only have a big recall problem, we also have a new record, after moments ago GM just announced another 4 recalls affecting 2.4 million cars.
This brings the total number of vehicle investigations since the start of the year to 35, and with today's four latest fiascos, has initiated a whopping 29 recalls. More importantly, this also means that the number of domestic recalls rises to 13.6 million, smashing the previous record of 11.8 million recalls in 2004, and brings the number of global recalls to 15.2 million: or a stunning 56% greater than the 9.7 million cars GM sold in all of 2013!
As was expected, as part of today's most recent recall, GM took yet another charge, this time for $200 million. But don't worry: hedge fund pandering sell-side analysts everywhere will be sure to addback these recurring "non-recurring" charges to EPS and all shall be well.
Here are the highlights from today's announcement [9]:
In a continuing effort to quickly address emerging safety issues, General Motors announced today it is recalling about 2.42 million vehicles in four separate U.S. recalls. The recalls are for:
- 1,339,355 Buick Enclave, Chevrolet Traverse, GMC Acadia full-size crossovers from the 2009-2014 model years and Saturn Outlooks from 2009-2010 because front safety lap belt cables can fatigue and separate over time. In a crash, a separated cable could increase the risk of injury to front seat passengers.
- 1,075,102 of the previous generation 4-speed automatic transmission Chevrolet Malibu and from the 2004-2008 model years and Pontiac G6 from the 2005-2008 model years because of a shift cable that could wear out over time, resulting in mismatches of the gear position indicated by the shift lever.
- 1,402 Cadillac Escalades and Escalade ESVs from the 2015 model year because an insufficiently heated plastic weld that attaches the passenger side air bag to the instrument panel assembly could result in a partial deployment of the air bag in the event of a crash.
- 58 Chevrolet Silverado HD and GMC Sierra HD full-size pickups from the 2015 model year because retention clips attaching the generator fuse block to the vehicle body can become loose and lead to a potential fire.
GM has added 35 product investigators since the beginning of 2014, and, including those announced today, has initiated 29 safety and non-compliance recalls in the U.S. so far this year. Two of the recalls involve fewer than 100 vehicles.
* * *
GM stopped sale of the 2015 Escalade and Escalade ESV and sent overnight letters, called and emailed the 224 customers who had taken delivery of the vehicles and instructed them to not let occupants sit in the front passenger seat until the vehicle has been serviced. GM knows of no crashes or injuries associated with the Escalades.
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GM expects to take a charge of up to approximately $400 million in the second quarter, primarily for the cost of recall-related repairs announced in the quarter. This amount includes a previously disclosed $200 million charge for the five recalls announced May 16.
Here is the full list of recalls announced just in 2014. Considering we are barely five months into the year, expect this to grow substantially by the end of the year.
[10]
And the chart that puts it all in context: the amount of recalls in the first five months of 2014 alone is more than 15 times greater than the total recalls announced in 2013, and is 70% greater than the total number of recalls announced in the prior five years combined!
[11]
Once upon a time, executives would lose their jobs for such an unprecedented, and ongoing fuck up not to mention criminal cover up. But this is the New Normal, in which this company only exists because of the government's blessing. And one certainly wouldn't want to imply that once the government gets involved in the private sector all hell breaks loose, now would one?