Total Recall: GM Pulls 3 Million More Cars Due To Problems With Brakes, Lights, Wipers And Steering

When "new" GM emerged from bankruptcy, in addition to losing billions of taxpayer funds so the government can buy a few hundred thousand labor union votes, the narrative sold to the public is that the company is a new, and vastly improved version of the legacy monster that went bankrupt in 2009, and instead of worrying about its balance sheet, the company would have the freedom to innovate and impress new customers. However, following the recent spate of scandals rocking the "new" GM, the only thing that the bankruptcy appears to have done is pushed its litigation liabilities into the pool of prepetition unsecured claims. As for the quality, well, not so much, which explains why recalls are now becoming a daily event such as the most recent one which as we learn today involves a whopping 3 million cars and trucks worldwide to fix five different safety problems that have triggered hundreds of complaints and some injuries, but no deaths.

Among the extensive components that have resulted in this most recent fiasco for the new CEO are brakes, lights, wipers and the steering wheel.

USA Today reports:

Most of the vehicles -- 2.7 million -- are in the U.S. They include a handful of GM's redesigned pickups and SUVs, which have a potential steering problem.

 

It's serious enough that GM sent those owners overnight-delivery letters Wednesday, telling them to have their trucks hauled -- not driven -- to dealers for inspection and repair, if needed.

 

Also included in the new recall: 140,067 new Chevrolet Malibus for brake issues, reported here Wednesday.

The good news: this announcement will allow GM to addback another $200 million in "one-time"charges to its EPS in the process almost certainly beating whatever its Q2 earnings estimate is.

The models impacted in the latest recall:

  • 2,440,591 U.S.-market, previous-generation passenger cars for a taillamp malfunction that also can disable the cruise control, traction control, electronic stability control and panic braking assist feature. Another 194,314 are in Canada and 68,819 were exported.
  • 477 full-size, 2014-model, U.S.-market pickup trucks and 2015 Chevrolet Tahoe SUVs for a tie-rod defect that can lead to a crash. Another 33 are in Canada and 10 have been exported.
  • 111,889 previous-generation Chevrolet Corvettes in the U.S., for loss of low-beam head lamps. Another 3,054 are in Canada and 5,677 more were exported. In addition, 103,158 newer Corvettes that might have the same problem get the fix in what GM calls a customer satisfaction program.
  • 19,225 Cadillac CTS 2013-2014 models for windshield wiper failures. Another 732 are in Canada, 94 in Mexico and 1,512 were exported.
  • 140,067 Chevrolet Malibus from the 2014 model year for hydraulic brake booster malfunctions. Canada has another 732 and Mexico has 1,163.

And here is where GM has been skimping on production and quality control costs:

The taillight problem that is the biggest group in the recall involves 2004-2012 Chevrolet Malibu, 2004-2007 Chevrolet Malibu Maxx, 2005-2010 Pontiac G6 and 2007-2010 Saturn Aura models. GM says their brake-lamp wiring harness has to be modified.

 

GM says corrosion causes the brake-light fault, which also can disable the cruise control, traction control, electronic stability control and panic braking assist feature.

 

The automaker says it knows of several hundred complaints, 13 crashes and two injuries, but no fatalities as a result of the condition. The company issued a technical service bulletin concerning the problem in 2008, and recalled a small group of 2005 model-year cars in January 2009.

 

The Corvette recall is because the low-beam headlights can quit working. Models from 2008-2013 with the same flaw will be covered under what GM calls a customer satisfaction program.

 

GM knows of several hundred complaints as result of the condition but no crashes, injuries or fatalities.

 

The Cadillac CTS has a potential fault that can cause the windshield wiper system to quit working after a jump start when the wipers have been left on but are restricted, such as by ice and snow. Dealers will replace the wiper module free of charge. GM is unaware of any crashes or injuries due to the condition.

The bttom line: this most recent recall GM brings the total number of recalls for 2014 alone to 24 and includes 12.8 million vehicles worldwide, 11.2 million of those in the U.S. (remember: recall charges are "one-time" and should certainly be added back to non-GAAP EPS). This compares to less than 1 million recalls in all of 2013 - one wonders just how many potential accidents GM swept under the rug last year and how many more (millions) are coming?

That said, we increasingly fail to see any notable differences between the old and new GM. All that's left now is for GM to release an anniversary edition of the Aztec and the anti-metamorphosis will be complete.