General Motors Company (GM) recalled 4,077 units of Buick LaCrosse due to problems in their electronic stability control systems. The vehicles, 2012 model, were manufactured between June 9 and July 2 this year at the company’s Fairfax Assembly Plant in Kansas City, Kansas.
The automaker noticed that the stability system in the vehicles has not been calibrated properly, which could lead to malfunctioning of the system’s sensors, causing the electronic stability control system to activate falsely. This could ultimately result in sudden changes in operation of the vehicle or deceleration. As of now, no accidents have been reported due to the problem.
Automotive safety recalls were brought into focus by media after Toyota Motors’ (TM) announcement of the largest-ever global recall of 14 million vehicles since November 2009.
The Japanese automaker’s recall was related to problems such as faulty accelerator gas pedals and slipping floor mats as well as defective braking systems. The Transportation Department of U.S. also imposed a fine of $48.4 million due to late recall of millions of defective vehicles.
Since the beginning of 2010, GM recalled about 3 million vehicles in the U.S., Canada, Mexico and South Korea. Among these, the largest recall was made in June last year, involving 1.5 million vehicles, in order to fix a problem with a heated windshield wiper fluid system that has been causing fire in the vehicles.
At the beginning of last month, GM recalled 10,000 pickup trucks from the model year 2011 due to problems with their automatic transmission and steering shaft.
GM, a Zacks #3 Rank (Hold) stock, earned a profit of $2.54 billion or $1.54 per share in the second quarter of the year, which almost doubled from $1.33 billion or 85 cents per share in the same quarter of 2010. With this, the automaker has beaten the Zacks Consensus Estimate by 33 cents per share.
Revenue in the quarter appreciated 19% to $39.37 billion (including $330 million from GM Financial) on worldwide sales of 2.32 million units versus 2.16 million a year ago, thereby capturing a market share of 12.2%. It also exceeded the Zacks Consensus Estimate of $36.61 billion.
Operating income rose to $2.45 billion from $1.90 billion a year ago. Earnings before interest and tax (EBIT) was $3.0 billion (adjusted) compared with $2.0 billion in the second quarter of 2010.
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