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June 18 ,2014 | by Sarah Parkin

General Motors recalls 3 million more vehicles

General Motors recalls more vehicles

General Motors has suffered huge losses in both money and reputation over technical problems with millions of vehicles – and today, another three million have been recalled.

General Motors (GM) has had a bad few weeks to say the least. Millions of the US manufacturer’s vehicles have been recalled so far this year – and yesterday (17 June), the financial and reputational losses have grown even further with news that another three million cars will have to be recalled.

 

Some 3.36 million cars across seven different models produced since 2000, including some big names such as certain Chevrolet Impalas and Cadillac Devilles, have been recalled in the latest action so that GM can either rework or replace the keys.

It’s intended to fix an issue with the cars’ ignition switches, which can apparently be kicked out of the “run position” if the car is either carrying additional weight or encounters a “jarring” experience, such as travelling over particularly rough terrain.

That’s a similar problem to the one that was noticed in some older small cars in February, when 2.6 million vehicles were recalled. GM believes that problem was linked to 13 deaths. No fatalities have so far been related to the issue with the key design which sparked today’s recall, but six crashes and eight minor injuries are thought to have resulted from the flaw.

Worryingly, it has emerged that both of these flaws can be traced back to the same engineer. Ray DeGiorgio was removed from his post along with 14 colleagues by chief executive Mary Barra when he was named in an internal report earlier this month. All of those who were removed were related either to the mishandling of the problem and delays of several years before the recall orders went out.

 

It is unclear whether the key design issue will be more costly to fix than the ignition switch problem which sparked the earlier recall, but it’s the last thing the company needs at a time when scrutiny is at its highest.

GM is in the middle of a flurry of expensive recall actions: it has had to recall some 20 million vehicles for various reasons in 44 recalls this year, which is actually more than are purchased in the US every year. It is believed it could set them back somewhere close to $2 billion (£1.18 billion).

But the loss has been more than financial – GM is facing serious reputational damage, which is why the pressure is mounting on Ms Barra to transform the working culture at a company that has clearly struggled with quality control in some quarters in the past.

Sarah Parkin

Sarah Parkin used to work as News Writer for LSBF.  Sarah is specialised in finance, technology and business news.

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