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General Motors Announces $1.7 Billion Dollars in Recall Expenses for First Half of 2014

General motors
image courtesy @ fox43.com
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DETROIT: U.S automaker General Motors has found the first quarter of this year to be trifling, to say the least. They announced on May 17 that they would be recalling another 2.4 million vehicles. This on top of 11.2 million that have already been recalled earlier in the year.

First quarter expenses totalled $1.3 billion, while GM estimates they’ll spend less in the second; somewhere in the neighborhood of $400 million.

While sales haven’t actually faltered in light of the recent recalls, GM’s stock values have plummeted over 20% since the start of the year (source). That figure includes a massive drop of 3.5% immediately following the May 17 announcement.

General motors
image courtesy @ fox43.com

 Record Breaking Recalls

The automaker is making record breaking strides though, considering they’ve smashed a record previously set in 2004 when they recalled an estimated 10.75 million vehicles due to a variety of safety-related issues.

Many of those recalls were due to ignition system problems that federal court proceedings have recently learned barely skimmed the surface when it came to the number of defective GM vehicles driving down roadways all over the world.

Court Proceedings

Hearings held in early May led to GM agreeing to pay a whopping $35 million in fines payable to the federal government, for hiding the fact that many of their small cars, such as the Chevy Cobalt, had deadly ignition system defects that have led to 13 confirmed deaths so far.

The proceedings showed that General Motors was in fact aware of the ignition problem, but continued to brush it under the rug to save costs for well over a decade. Not to mention that they did little to fix the actual problem.

Lawyers representing civil litigants say that the actual number of deaths actually exceed 50, and that once again GM is trying to pull the wool over the eyes of the buying public so they can keep turning out record vehicles.

All this in the wake of their 2009 bankruptcy.

 Current GM Recalls “Not Deadly”

GM spokesperson Alan Adler has stated that none of the current recalls have caused any deaths.

The recalls include:

  • 2004-2008 Chevy Malibu and 2005-2008 Pontiac G6 sedans (1.1 million vehicles in total). Recalled for fractured shift cables that result in the inability of the driver to select gears including putting the vehicle in park, and/or take their key out of the ignition. This problem has caused at least 20 crashes and 1 serious injury to date.
  • 2009-2014 GMC Arcadia, Buick Enclave, Chevy Traverse, and 2009-2010 model Saturn Outlooks (1.3 million vehicles in total). Recalled for defective lap belt cables that wear over time due to a design flaw.
  • 2015 Cadillac Escalades (1,400 in total). Recalled for poor welds in the dash area that could affect passenger side airbag deployment in a crash. No injuries have been reported from this defect.
  • 2015 Chevy Silverado and GMC Sierra HD’s due to a problem with a fuse block retaining clip that can cause a fire if it becomes loose. GM reports no accidents from the defect either.

Tell Us What You Think

What do you think about the recent recalls from GM?

Are you more, or less likely to buy a GM product knowing that they covered up potentially life-threatening safety concerns?

 

 

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