New Problems, New Recalls Add Up to $300 Million First-Quarter Charge for GM

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Just when investors in General Motors Co. (NYSE: GM) thought they might have seen the last of automobile recalls for a while, the company announced Monday that it is recalling an additional 1.55 million vehicles. The new recalls are the result of three new issues and are not related to the ignition switch recall of 1.6 million vehicles that GM announce earlier this year.

The affected vehicles in the latest round of recalls include:

  • 303,000 2009 to 2014 model year Chevrolet Express and GMC Savana vans with gross vehicle weight less than 10,000 pounds to install new instrument panel material to meet compliance requirements for unbelted passengers
  • 63,900 2013 and some 2014 model year Cadillac XTS cars to repair a possible brake booster corrosion issue
  • 1.18 million of some 2008 to 2009 and all 2010 to 2013 Buick Enclave and GMC Acadia models, 2009 to 2013 Chevrolet Traverse and 2008 to 2010 Saturn Outlook vehicles to repair wiring on seat-mounted side airbags

The company also said in its press release that it would take a charge of about $300 million in the first quarter of 2014 for the cost of these and the ignition switch repair announced earlier.

GM CEO Mary Barra said:

I asked our team to redouble our efforts on our pending product reviews, bring them forward and resolve them quickly. That is what today’s GM is all about. Today’s announcement underscores the focus we’re putting on the safety and peace of mind of our customers. We are conducting an intense review of our internal processes and will have more developments to announce as we move forward.

More developments? More bad developments or some new, good developments?

GM’s stock price has recovered from the initial reaction to this announcement and was up about 0.2% at $34.16 in a 52-week range of $27.11 to $41.85.