GM recalls almost 3 million vehicles, to take charge of up to $200 million

DETROIT Fri May 16, 2014 1:35am IST

A General Motors logo is seen on a Denali vehicle for sale at the GM dealership in Carlsbad, California January 4, 2012. Automakers ended the year with strong U.S. sales but forecast lower growth in 2012, as a sluggish economic recovery is expected to continue.   REUTERS/Mike Blake  (UNITED STATES - Tags: TRANSPORT BUSINESS LOGO) - RTR2VWBZ

A General Motors logo is seen on a Denali vehicle for sale at the GM dealership in Carlsbad, California January 4, 2012. Automakers ended the year with strong U.S. sales but forecast lower growth in 2012, as a sluggish economic recovery is expected to continue.

Credit: Reuters/Mike Blake (UNITED STATES - Tags: TRANSPORT BUSINESS LOGO) - RTR2VWBZ

Stocks

   

DETROIT (Reuters) - General Motors Co said on Thursday it has issued five more recalls, covering almost 3 million vehicles globally, and is expected to take a charge of up to $200 million.

Still dealing with fallout from the recall of defective ignition switches linked to at least 13 deaths, the No. 1 U.S. automaker said the largest of the latest recalls covers more than 2.7 million cars for tail lamp malfunctions, including the Chevrolet Malibu, Pontiac G6 and Saturn Aura cars.

The other four recalls cover Malibu, Chevy Corvette sports cars, Cadillac CTS sedans and full-size trucks and SUVs. Most of the vehicles were sold in the United States.

GM said the new actions were a result of the sharper focus the company has put on safety issues following the recall earlier this year of 2.6 million vehicles for the faulty switch. So far this year, GM has recalled almost 12.8 million vehicles globally, easily topping the 9 million recalled in the previous five years combined.

"We have redoubled our efforts to expedite and resolve current reviews in process and also have identified and analyzed recent vehicle issues which require action," GM's global vehicle safety chief, Jeff Boyer, said in a statement.

Boyer said in an interview that the company's focus has been on the frequency and severity of any potential problems. He added GM continues to study how it handles recalls for further improvement in the process.

GM is under investigation by U.S. safety regulators, Congress, the Department of Justice, the U.S. Securities and Exchange Commission and several states for its handling of the defective ignition switch, which engineers first discovered in 2001. GM has been criticized for failing to detect the faulty part and for not recalling the vehicles earlier.

GM expects to complete an internal probe of its handling of the issue within the next two weeks.

Meanwhile, GM's board has hired New York law firm Wachtell, Lipton, Rosen & Katz to provide advice regarding the company's handling of the ignition switch recall, said a person familiar with the matter.

The law firm did not immediately respond to a request for comment and GM declined to comment.

The Detroit company said it expected to take a charge of up to about $200 million in the second quarter for the latest recalls, mostly for the cost of repairs. In the first quarter, GM took a charge of $1.3 billion mostly related to the ignition switch recall.

Of the 2,991,140 vehicles recalled on Thursday, more than 2.7 million were sold in the United States, more than 201,000 in Canada, more than 1,200 in Mexico and more than 76,000 were exported outside North America.

In the tail lamp recall, GM said it was aware of several hundred complaints, 13 crashes and two injuries. It had issued a dealer service bulletin for the problem in 2008 and recalled a smaller number of vehicles in January 2009. GM said it was not aware of any fatalities related to Thursday's recalls.

In the Malibu recall, GM caught a potential faulty brake issue on April 24, during development of an upcoming model, and after further testing ordered a recall on May 7, according to documents filed with the U.S. National Highway Traffic Safety Administration.

GM shares were down 1.7 percent at $34.33 on Thursday afternoon on the New York Stock Exchange.

(Additional reporting by Alison Frankel in New York; editing by Sofina Mirza-Reid and Matthew Lewis)

Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Republic Day

Reuters Showcase

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Banking Revolution

Banking Revolution

India turns to corner shops, mobile phones for banking revolution.  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

Gold Market

Gold Market

Chinese gold demand holds up ahead of holiday, Indian buying weak  Full Article 

India-U.S. Relations

India-U.S. Relations

Column - U.S. and India should join to balance China's rise  Full Article 

Padma Bhushan

Padma Bhushan

India honours Bill Gates with civilian award  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

New Greek PM

New Greek PM

Greek leftist Tsipras sworn in as PM to fight bailout terms  Full Article 

Australian Open

Australian Open

Venus fireworks illuminate Australia Day  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage