General Motors Company (GM) announced two tires of recall of about 10,000 pickup trucks from the model year 2011 due to problems with their automatic transmission and steering shaft.
The first set of recall is related to a faulty automotive transmission clip that could slip and show the incorrect position of the transmission gear. According to the National Highway Traffic Safety Administration (NHTSA), the fault could cause the vehicles to roll away, leading to a crash. The recall involves 9,000 units of Chevrolet Colorado and GM Canyon trucks.
The second set of recall is related to bolts on the intermediate steering shaft that may not have been tightened to the specification. It involves 891 units of Cadillac Escalade, Chevrolet Silverado and GM Sierra trucks in the U.S., Canada and Mexico.
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 end of past month, GM recalled 50,500 units of Cadillac SRX luxury crossover vehicles due to a software glitch that may cause non-deployment of airbags in case of an accident, leading to injuries to those sitting in the right rear seat
The recall affected 47,401 vehicles in the U.S. and the rest in Canada and Mexico from the 2011 model year. GM is unaware of any crashes, injuries or complaints related to the problem.
GM, a Zacks #3 Rank (Hold) stock, earned a profit of $3.2 billion or $1.77 per share in the first quarter of 2011 that increased more than threefold from $865 million or 55 cents per share a year ago. However, more than half of the profits have been contributed by one-time gain from sales of the company’s ownership interest in Delphi Automotive LLP ($1.6 billion) and Ally Financial Inc. ($300 million).
Excluding these gains and a $0.4 billion goodwill impairment charge at GM Europe (GME) resulting from a change in accounting standards and charges of $0.1 billion at GM International Operations (GMIO) related to revised tax regulations affecting the company’s India joint venture, GM’s profit stood at $1.7 billion or 95 cents per share, topping the Zacks Consensus Estimate by a penny. It was also GM's biggest profit in 11 years since earning $1.8 billion in the second quarter of 2000.
Revenues during the quarter went up 15% to $36.2 billion on sales of 2.2 million vehicles globally, up 11% from the prior year. It exceeded the Zacks Consensus Estimate of $35.2 billion.
Strong demand for its fuel-efficient lineups including Chevrolet Cruze compact and Equinox crossover helped boost the company’s sales. The automaker occupied a market share of 11.5% during the quarter, up from 11.1% in the year-ago quarter.
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