GM Adds 970,000 Cars to Ignition Switch Recall

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The total number of cars included in the General Motors Co. (NYSE: GM) recall to repair a defective ignition switch rose to 2.6 million on Friday, when the company added 971,000 cars to the list. The newly added vehicles include all model years for Chevrolet Cobalt, Chevrolet HHR, Saturn Ion, Saturn Sky, Pontiac G5, and Pontiac Solstice made between 2003 and 2011. The original recall affected model years 2005 to 2007.

The defect is that the weight of the key ring, perhaps coupled with road conditions, may cause the ignition switch to be jarred out of the “run” position. That could turn off the engine and shut down the car’s electrical power which could cause the airbags to fail to deploy. Bloomberg News said Friday that 13 deaths have been linked to the defect.

Reuters reported on Wednesday that it is still possible to purchase ignition switches with the same part number as the defective switch which was manufactured by Delphi Automotive. The part was redesigned after 2007, but the part number was not changed, and it is possible that newer cars may have received the older, defective part when brought in for repair work.

The 971,000 vehicles included in the latest recall include 824,000 in the U.S., according to Reuters. GM is also recalling the remaining quantity of around 5,000 switches of the 95,000 replacement ignition switches sent to the spare parts market. The new replacement switches will have a different part number.

On Friday, GM issued a stop order on sales on some of its 2013 and 2014 Chevy Cruze models, the vehicle that the company sells as a replacement for the Cobalt. No reason was given for the order nor did GM indicate how many cars were affected.

We noted yesterday that if the Cruze defect is serious enough to warrant a halt to sales, it is probably serious enough to warrant a recall. In any event, April sales at GM will see a negative impact from the order to halt sales on its best-selling car.

GM’s new CEO Mary Barra is attacking the ignition switch recall head-on. She has said that the company “is taking no chances with safety,” which is the right thing to say. But fixing a problem after the fact is far more costly than building the vehicle properly in the first place. Barra’s stuck trying to dodge a double-edged sword her predecessors left her as a parting gift.

GM closed Friday up 0.6% to $34.67. The shares are down 15% this year.

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