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GM recalls 7.6M more cars as costs balloon, stock trade halted

Special to SEGAZINE

General Motors announced six new safety recalls Monday — including its single largest this year — involving a total of about 7.55 million vehicles in the U.S.

Trading in GM stock was halted at 2:30 p.m. ET and resumed by 3 p.m., once the GM recall news and new charges were announced. The stock closed at $36.30, down 32 cents, or 0.87%, on the day.

The company also announced that it would increase its second-quarter charges to pay for recalls to $1.2 billion, up from the previous announced $700 million.

With the latest recalls, GM now has called back 25.68 million vehicles in the U.S. this year for safety-related repairs — a record for GM and, equal to more than two years of the company’s total output. It’s also close to the annual average total recalls for all automakers in recent years — though well of the industry’s one-year recall record of 58.43 million vehicles in 1999.

The cavalcade has come as GM set about cleaning house on pending safety issue after the recalls for a deadly switch defect in February and March. GM is under a federal regulatory microscope because of those recalls, which are linked to 13 deaths.

“They are expanding (the recalls) now that there is more scrutiny” from safety authorities and Congress, says Sean Kane of Safety Research & Strategies. “Even after the recall barrage, however, there are many, many GM vehicles made over the years that have somehow dodged all the recalls.

Most of the vehicles in the latest announcement, more than 6.8 million in the U.S., are covered by a single new recall that extends the small-car ignition switch issue — “unintended ignition key rotation” that can shut off the engine while underway — to more midsize and full-size GM cars.

GM spokesman Alan Adler says although the latest recall’s ignition switches met GM’s specifications, there are fears that if they are bumped or jarred, they can pop into “accessory,” disabling the car’s airbags.

The company says it has identified seven crashes involving eight injuries and three fatalities that could be tied to the latest ignition-switch recall, although it adds there is “no conclusive evidence” of a link.

In the small cars, GM has been replacing ignition switches. In the latest batch, the fix will likely be a replacement key with a hole rather than a slot. Adler says owners of the vehicles are urged to drive only with a single key and nothing attached until they get the fix.

Models included in Monday’s switch recall include the 1997 to 2005 Chevrolet Malibu, 1998 to 2002 Oldsmobile Intrigue, 1999 to 2004 Oldsmobile Alero; 1999 to 2005 Pontiac Grand Am; 2000 to 2005 Pontiac Grand Am; 2000 to 2005 Chevrolet Impala and Monte Carlo and 2004 to 2008 Pontiac Grand Prix. A separate U.S. recall covers 554,328 vehicles: the 2003 to 2014 Cadillac CTS and 2004 to 2006 Cadillac SRX.

Trading in GM stock was halted at 2:30 p.m. ET and resumed by 3 p.m., once the GM recall news and new charges were announced. The stock closed at $36.30, down 32 cents, or 0.87%, on the day.

USA TODAY

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