General Motors Company (NYSE:GM) recalls 2.7 million more cars
General Motors Company (NYSE:GM) is recalling another 2.7 million cars on Thursday, which is sending the total number of GM’s recalled vehicles in the U.S. this year above 11 million. This puts the auto industry on track for hitting a record for recalls in 2014. General Motors said that the cars are being recalled to fix brake lights, headlamps, and power brakes. GM is going to take a $200 million charge this quarter to mostly cover repairs.
Toyota, Ford, Chrysler, and several other companies have also set up recall programs this year. The previous record of recalls in the U.S. auto industry was 30.8 million vehicles in 2004. The record may be broken this year.
Earlier this year, General Motors recalled 2.6 million older smaller cars due to an issue with a defective ignition switch. GM knew about that switch problem for over a decade before finally issuing a recall. This issue was connected to 13 deaths. GM has added 35 people to its recall review team to streamline the issue.
The largest of the new recall involves 2.4 million midsize cars to fix corrosion, which could cause brake lights to fail.
The $200 million recall charge is on top of a $1.3 billion charge that GM took in the first quarter that was mostly tied to recalls.
The Justice Department, the National Highway Traffic Safety Administration, and two congressional committees are both overseeing GM’s handling of the ignition switch recall.
The recall announced today included over 140,000 Chevrolet Malibu midsize cars (power-assisted brakes), 112,000 older Corvettes (headlight problems), 19,000 Cadillac CTSs (faulty windshield wipers), and 477 full-size pickup trucks (steering problem).