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Posts Tagged ‘GM recalls’

Over 100 File Death Claims With GM Compensation Fund

Number could still rise.

by on Aug.26, 2014

One of the replacement GM ignition switches.

General Motors continues to say it knows of 13 deaths connected to the faulty ignition switches it used in a wide range of vehicles recalled earlier this year, but the special victims’ compensation fund it has set up has already received claims linked to the death of at least 100 people.

While it remains to be seen if the fund will approve payment to all those who’ve filed, it is also expected the number will continue to increase in the weeks and months ahead.

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GM has said it anticipates paying out from $400 million to $600 million in connection with the fund, which was set up under intense pressure from safety regulators, federal lawmakers and consumer groups after the maker acknowledged it knew about the ignition switch problem for as much as a decade before ordering the February recall of 2.6 million vehicles.

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GM Earnings Crushed by Recall Costs

"Nevertheless, we remained profitable," said CEO Barra.

by on Jul.24, 2014

Earnings on new full-size models, such as this 2015 Chevy Tahoe, should boost GM's earnings going forward, analysts forecast.

The fallout from the ignition switch recall and other safety-related problems cut deeply into General Motors’ profitability for the second quarter, the maker reported.

Net income for the March to June period tumbled to just $200 million, or 11 cents per share, compared to a $1.2 billion net for the second quarter of 2013. The GM balance sheet was hammered during the latest period by one-time costs, most of them related to ongoing recalls, as well as for setting up a new victims’ compensation fund. Earnings before the recall-related charges would have been 58 cents a share.

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“The ignition switch put tremendous pressure on our earnings,” GM chief executive officer Mary Barray told analysts and reporters. “But nevertheless we remained profitable.”

Barra also said the sweeping recalls, which so far this year cover 29 million units, have not deterred GM from pushing ahead with its effort to improve its competitive position around the world.

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GM Rolls Out Another Six Recalls for 717,000 Vehicles

Maker's recall woes drag on.

by on Jul.23, 2014

The Chevy Camaro is one of the many vehicles targeted by the six new GM recalls.

After a brief reprieve – and hints that the worst of its safety problems had ended – General Motors has announced another six recalls collectively covering more than 700,000 cars, trucks and crossovers.

The latest move brings to more than 26 million the total number of vehicles GM has recalled since the beginning of the year. And when added to the service actions announced by competitors as varied as Ford, BMW and Toyota, the industry overall is fast approaching the 45 million mark, well surpassing the previous record, set in 2004, when 34.1 million vehicles were called back for safety problems.

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GM officials tried to put a positive spin on the latest action, global safety czar Jeff Boyer asserting that this goes to “signify how we’ve enhanced our approach to safety.”

But the seven new recalls also come as something of a setback for a company whose reputation had already taken a hammering during the first half of the year. By late June, GM officials had been dropping strong hints that they had largely addressed all the company’s outstanding safety problems.

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GM Issues Stop Sale on Used Cadillac Models

Unusual move reflects slow pace of recall repairs.

by on Jul.21, 2014

The announcement covers Cadillac CTS sedans using key, rather than keyless, ignition systems.

It’s become something of a regular occurrence for manufacturers to issue so-called “stop sales” when they suspect a new model might have a problem that could lead to a recall. Volkswagen recently ordered one for its new Golf and GTI models, and General Motors has issued several this year, including one covering its popular Chevrolet Cruze sedan.

But GM has now issued another, more unusual stop sale, this one telling its dealers to park and sit on some older Cadillac models because of potential ignition switch problems. The order covers Caddy CTS models sold during the 2003 to 2013 model-years, as well as 2004 to 2006 Cadillac SRX sport-utility vehicles. A handful of 2014 Cadillac CTS models were also included.

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The move, however, does not affect vehicles sold by non-GM dealers, whether franchised or independents, so shoppers need be aware that the vehicles have not yet been repaired and could be subject to problems until GM comes up with the appropriate fix.

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GM Recall Blitz May Be Winding Down

Biggest issues already dealt with, maker hints.

by on Jul.07, 2014

There are signs that GM CEO Mary Barra may not have to answer more questions about the company's latest recall as GM may finally be done recalling vehicles.

It has so far recalled nearly 26 million vehicles in the U.S. alone, and almost 29 million worldwide – more than any other maker in a single year. But after announcing 54 separate service actions since just the beginning of the year, GM is signaling that its recall blitz finally might be over.

Even then, the maker’s recall headaches are far from over. GM last month announced details of a new victims’ compensation fund to cover the deaths and injuries linked to a faulty ignition switch, a plan that could top $1 billion, according to some analysts. The maker also faces an assortment of legal problems, including a class action lawsuit filed in Seattle that could seek as much as $10 billion in damages. There are separate investigations underway in both houses of Congress, as well as a probe by the Justice Department. And GM has already said it expects to spend about $2.4 billion to handle all those recall during just the first half of 2014.

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But the worst, in terms of new recalls could be over, wrote JP Morgan auto analyst Ryan Brinkman, in a report last week, noting that, “GM concluded its enhanced product safety review that has led to a significantly elevated pace of vehicle recalls.” (more…)

Op-Ed: Assessing Detroit’s Brand Addiction

Why the good cop/bad cop game isn’t working anymore.

by on Jun.30, 2014

A 2007 Chevrolet Cobalt, one of the GM vehicles covered by the maker's ignition switch recall.

Does the game of good cop/bad cop still work in Detroit?  What happens when the bad cop (General Motors) keeps making bad decisions, and the good cop (Chevrolet) has no authority and no voice of its own?

In mid-March, the bad cop tried to dig out of its hole as new GM CEO Mary Barra met with reporters to discuss recent product recalls.  “I want to start by saying how sorry personally and how sorry General Motors is for what has happened,” she said in reference to the accidents linked to faulty ignition switches.

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I think we can all agree with Barra’s framing: this is a GM problem.  Specifically, the inability of the company’s bureaucracy to deal with the ignition switch issue that was uncovered as early as 2001.  One can study many things in this case, from GM’s internal crisis response to product quality to governance issues.  What leapt to mind for me was GM’s devotion to being a “house of brands” that tries to isolate crises to a specific marque, or to the corporate level when the problem is found in multiple brands.

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100s, Perhaps 1,000s, Likely Eligible for GM Victims’ Compensation Plan

Administrator will have free hand in deciding who gets payout.

by on Jun.30, 2014

GM compensation fund czar Kenneth Feinberg.

When General Motors formally unveils the victims’ compensation fund later today, it’s expected to give a free hand to the administrator who will have to decide on how to pay out to those involved in crashes linked to the maker’s faulty ignition switches.

According to several sources, as well as published reports, administrator Kenneth Feinberg could eventually wind up paying out more than $1 billion, not only to the families of those killed in crashes caused by the ignition switch defect, but also to those injured, whether passengers or pedestrians, as well as those in vehicles struck by the now-recalled GM vehicles.

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“He will have complete independence” from GM to decide who will receive compensation, and for how much, the automaker’s CEO Mary Barra said during a U.S. House subcommittee hearing earlier this month. Barra added that the compensation program will cover “everyone who lost a loved one due to this issue, or who suffered serious physical injury.”

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U.S. Makers Tracking to Decimate Recall Record in Just Six Months

GM leads the pack with 17.7 million vehicles called back.

by on Jun.24, 2014

Ford President Joe Hinrichs said the automaker hasn't changed its approach toward vehicle recalls this year.

It is the record no one wants to see broken, but everyone expects it will be. With yesterday’s recall of 3 million vehicles, automakers in the U.S. have recalled 31.4 million vehicles this year, easily surpassing last year’s total of 27.96 million in just under six months and within an eyelash of the record total of 33.01 million from 2004.

Automakers are certainly aware of dubious distinction they’re facing. Joe Hinrichs, president of the Americas, Ford Motor Co., notes there are “unique circumstances going on in the industry” right now. That said, Hinrichs insists Ford has not changed its corporate approach to recalls.

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While General Motors is playing a central role in encroaching on the previous high-water mark with 17.7 million vehicles recalled this year, including 6 million recalled for faulty ignition switches, Ford may have a unique perspective on the current flurry of recalls. It wasn’t that long ago it was the poster child for automotive recalls due to the Firestone and Explorer debacle at the beginning of the decade. (more…)

Cadillac Loses Another Top Exec

Turmoil at the top as sales bottom out.

by on Jun.19, 2014

Bill Peffer becomes the third U.S. sales chief to leave Cadillac in less than two years.

This was supposed to be a big year for Cadillac as it rolled out new models like the CTS and updated Escalade, and solidified the gains of other recent models, such as the compact ATS and big XTS sedans. But instead of growth, the brand has been wracked with turmoil, losing a procession of senior managers as sales have unexpectedly tumbled.

Cadillac’s only recently hired U.S. sales chief has left the company for supposedly personal reasons. Whether he fell short of expectations, General Motors isn’t revealing, but the luxury brand’s volume was down 2.3% for the first five months of the year, a sharp disappointment considering Caddy had been anticipating double-digit sales growth in 2014.

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The departure of Bill Peffer, who joined GM just last autumn, is the latest in a series of executive departures, a list that includes former Cadillac global strategic development chief Don Butler, who left the company last August, and Peffer’s predecessor Chase Hawkins, who was fired as sales chief for “violating a company policy.”

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“Deathtrap,” “Powder Keg” and “Defect” Among GM’s List of Banned Words

Euphemisms are the rule for GM engineers.

by on Jun.17, 2014

The Camaro recall is due to an "issue," rather than a defect, it seems, at least in GM-speak.

What do you do when you’ve recalled more than 20 million vehicles worldwide in a matter of months, paid record fines and face the prospect of criminal charges for a decade-long delay in addressing a fatal ignition switch defect?

For one thing, stop talking about “defects” and “problems.” In the dictionary, according to General Motors , the faulty ignition switch at the root of the problem is a “condition” that “does not perform to design.”

The Word is "Free"!

Among the 100s of thousands of pages of GM documents that have come to light as part of the many investigations into the maker’s recall, one includes a list of 69 words and phrases engineers have been told they cannot use when discussing problems…er, conditions.

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