GM adds 218000 older cars as number of US recalls this year hits 29 – Reuters

Posted: Wednesday, May 21, 2014

DETROIT (Reuters) – General Motors Co is recalling more than 218,000 older Chevrolet small cars in the United States and its territories due to a potential fire hazard, bringing U.S. recalls this year to 29 and a record number of vehicles.

The recall, and a related smaller action, is the latest announced by GM, the largest U.S. automaker. The recall with the highest profile was of cars with defective ignition switches linked to at least 13 deaths. The Detroit company has been criticized by safety advocates and fined by U.S. safety regulators for its delayed response in catching the faulty switch.

A day after recalling 2.6 million vehicles globally, most of them in the United States, GM is recalling 218,000 Chevrolet Aveo cars in the United States from model years 2004 to 2008. The problem with the cars stems from a faulty part in their daytime running lights that could overheat and cause a fire, according to documents filed with the National Highway Traffic Safety Administration (NHTSA).

GM is recalling 214 Chevy Optra cars from the same model years that were sold in U.S. territories for the same problem. Both cars were built in South Korea. GM said it was aware of some fires related to the problem but did not say how many. It said there were no reports of injuries or fatalities.

“We are continuing to investigate,” GM said in a statement. The company said it did not yet have the number of vehicles affected by the recall outside of the U.S. market.

Last week, GM recalled almost 3 million vehicles globally and was fined a record $35 million by NHTSA. It also faces probes by the U.S. Department of Justice, Congress, the Securities and Exchange Commission and several states for its handling of the faulty ignition switch, which engineers first discovered in 2001. GM has been criticized for not recalling the vehicles affected by the bad ignition switch before this year.

Meanwhile, GM expects to complete its internal investigation of its handling of the issue within the next two weeks.

Wednesday’s two recalls bring the number of vehicles affected by its recalls this year to almost 11.8 million vehicles in the United States. That tops the previous full-year high of 10.7 million vehicles that the company recalled in the U.S. market in 2004. It pushes the number of vehicles that GM has recalled globally this year to about 15.6 million.

GM took a $1.3 billion charge in the first quarter for recall-repair costs and said Tuesday that it expects to take another $400 million charge in the second quarter for the same reason.

Since the recall began in February, GM has been hit with more than 70 lawsuits from customers who say their cars lost value because of the ignition defect, according to court documents.

Two U.S. senators on Tuesday introduced legislation that would require federal judges to consider the public’s interest before granting requests to seal court records in cases that have an impact on public health and safety.

Democratic Senator Richard Blumenthal of Connecticut and Republican Senator Lindsey Graham of South Carolina offered the bill in response to the GM ignition switch recall. GM has reached confidential settlements in several lawsuits brought by families of victims of accidents that have been linked to the ignition defect.

“GM’s recent legal maneuvering reaching secret settlements shows why this legislation is essential,” Blumenthal said. “This legislation would have enabled people to be aware of the threats to safety posed by the faulty ignition switches, and deaths could have been prevented.”

(Additional reporting by Richard Cowan in Washington and Jessica Dye in New York; Editing by Chizu Nomiyama; and Peter Galloway)


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