Bloomberg News

GM Poised for More Recalls as 2 Million Vehicles Probed

May 28, 2014

Mary Barra

Mary Barra, chief executive officer of General Motors Co., listens while testifying at a House Energy and Commerce Committee hearing in Washington, D.C. on April 1, 2014. Photographer: Pete Marovich/Bloomberg

U.S. regulators are investigating potential flaws in at least 2 million General Motors Co. (GM:US) vehicles that remain on the road, underlining the potential for still more recalls on top of this year’s already-record tally.

The largest U.S. automaker may continue to recall vehicles into the middle of the summer months, Brian Johnson, a Barclays analyst, wrote last week after meeting with a top GM executive. The company didn’t dispute Johnson’s characterization.

Clues to the sorts of issues that could be subject to recalls, and their potential scope, are contained in documents and data kept by the auto-industry’s main regulator in the U.S., the National Highway Traffic Safety Administration. NHTSA is looking into complaints from drivers on issues including corroding brake lines and the unexpected failure of automatic braking and headlights in GM vehicles, according to data on its website, which is regularly updated.

Any recalls would come on top of almost 14 million vehicles that GM has called back so far this year in the U.S. That already exceeds GM’s 10.7 million-vehicle mark set in 2004, according to NHTSA’s data. By comparison, Americans are expected to buy 16.1 million new cars and trucks this year, according to the average of analyst estimates compiled by Bloomberg.

GM is “continuing to work with NHTSA to resolve” its open investigations, Alan Adler, a spokesman for the automaker, wrote in an e-mail yesterday.

In April, Chief Executive Officer Mary Barra was called in front of national lawmakers to explain why the company took years to publicize faulty ignition switches in models from the mid-2000s that have been linked to at least 13 deaths. Since then, the largest U.S. automaker has told owners of millions more vehicles to bring their cars to dealers for repairs to shift cables, seat belts and other parts.

Genie’s Out

“They let the genie out of the bottle and can’t put it back in,” said Jack Nerad, executive market analyst at auto researcher Kelley Blue Book. “They’re almost certainly going to be finding more.”

NHTSA typically has several safety probes open at a time. A search of its online data shows four investigations of potential safety issues related to GM, covering 2.12 million vehicles, which haven’t been closed or resulted in a recall. A similar search of NHTSA data showed that Toyota Motor Corp., Ford Motor Co., Chrysler Group LLC, Nissan Motor Co. and Honda Motor Co. faced fewer probes each.

NHTSA declined to comment on open investigations.

In-House Investigators

Barra has apologized for the loss of life after defective ignition switches -- an issue the company said had surfaced internally as early as 2001 -- weren’t recalled until February 2014. She is revamping GM’s engineering, legal and safety departments as part of a promise to customers, regulators and Congress that the company will move aggressively to ensure future recalls aren’t delayed. GM has said it has added about 35 additional investigators.

To turn up potential flaws, GM is mining data on past vehicle complaints from 10 different sources, including dealers, customers and warranty repairs, Johnson, the Barclays analyst, said in his report last week.

“GM is trying to aggressively issue recalls for items as soon as they learn about it, rather than batching the items for a vehicle and waiting -- even if there may be negative optics around such a strategy,” Johnson wrote after a visit with Mark Reuss, GM’s head of product development.

Multiple Recalls

Reuss is leading a team of five executives who will make recall decisions, Johnson wrote. Those decisions used to be made by a lower-level committee of engineers, he wrote.

GM’s multiple recalls, costing about $1.7 billion in charges already this year, have helped push the 2014 U.S. industry total to almost 23 million this year, the most since a record 30.8 million in 2004, according to NHTSA data.

The scrutiny of GM will certainly add to the focus on all defects, Kelley’s Nerad said. “It puts the whole industry on notice,” he said. “There’s blood in the water.”

Among the 30 recalls that GM has conducted this year in the U.S., many have been prompted by consumer complaints rather than by NHTSA probes. Not all NHTSA investigations lead to recalls.

The largest of the current NHTSA investigations on GM vehicles was opened in January 2011 into 1.77 million pickups from the 1999 to 2003 model years, over brake lines that can corrode and fail, according to data on NHTSA’s site. The 890 complaints, mostly from drivers in states that use road salt to melt ice, are linked to 26 crashes and 10 incidents in which drivers had to steer off the road or into another lane to avoid a crash, NHTSA said.

Repair Kits

Adler, the GM spokesman, said GM had alerted its dealers of the issue in November with a so-called technical service bulletin, and pointed out that it’s routine maintenance to replace brake lines in older vehicles, regardless of their maker.

“The trucks in question are long out of factory warranty and owners’ manuals urge customers to have their brake lines inspected the same way brake pads need replacement for wear,” he said.

NHTSA said April 23 that it’s investigating more than 60,000 Chevy Impalas from the 2014 model year after one owner reported that the car’s automatic braking system kicked in unexpectedly at 40 miles (64 kilometers) per hour, causing a crash.

Since June 2012, NHTSA has been assessing more than 400 complaints involving 248,253 GMC Acadia and Saturn Outlook SUVs from 2007 to 2009 that have experienced loss of low-beam headlights because of a wiring issue. Another open investigation includes 42,904 Chevy and Buick models related to questions about a loss of battery charge, according to the data.

To contact the reporters on this story: Jeff Green in Southfield, Michigan at; Tim Higgins in Detroit at; Jeff Plungis in Washington at

To contact the editors responsible for this story: Jeffrey D Grocott at; Jamie Butters at Stephen West

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