GM Recalls for Faulty Air Bags - Analyst Blog
November 15 2012 - 12:00PM
Zacks
General Motors Company (GM) plans to recall
15,575 units of few Buick, Cadillac and Chevrolet model cars in
order to fix their defective driver-side air bags and head
restraints. The problem could lead to injury in case of a
crash.
The National Highway Traffic Safety Administration (NHTSA) reported
that the recall includes 2,949 units of Buick Verano, Chevrolet
Cruze and Chevrolet Sonic compacts due to the problem with the air
bags that might not deploy in a crash. In addition, the company
would recall 12,626 units of 2013 Cadillac XTS sedans for fixing
rear-seat head restraints that might not lock in position.
The company’s dealers will repair the vehicles free of charge. They
will replace the steering-wheel air-bag coil on the compact cars
and the head restraints on the Cadillac sedans.
Automotive safety recalls were brought into focus by media after
Toyota Motors’ (TM) announcement of the
largest-ever global recall of 3.8 million vehicles in September
2009, triggered by a high-speed crash that killed 4 members of a
family.
Later on, a string of recalls has led Toyota to face numerous
personal injury and wrongful death lawsuits in federal courts. The
Transportation Department of U.S. had also imposed a fine of $48.4
million on the company due to late recall of millions of defective
vehicles.
GM seems to be very cautious about finding and fixing the defects
in their vehicles in order to keep its brand value intact. Of late,
the company made a number of vehicle safety recalls.
At the beginning of October, the company has announced plans to
recall 40,859 cars in warm-weather states in the U.S. due to a
problem with their plastic-made fuel pump modules that could crack
and cause a fuel leak and fire.
The recall included Chevrolet Cobalt and Pontiac G5 sedans from the
2007–2009 model years, and Chevrolet Equinox, Pontiac Torrent SUVs,
and Saturn Ion sedans from the 2007 model year.
GM, a Zacks #3 Rank (Hold) company, posted a 9.7% fall in earnings
to 93 cents per share (excluding special items) in the third
quarter of the year from $1.03 in the corresponding quarter a year
ago. However, earnings per share in the quarter far exceeded the
Zacks Consensus Estimate of 61 cents.
Total profit ebbed 5.9% to $1.6 billion from $1.7 billion a year
go. The decline in profit was attributable to lower profits from
North America and increased loss in Europe.
Revenues in the quarter grew 2.5% to $37.6 billion, surpassing the
Zacks Consensus Estimate of $36.3 billion. Worldwide sales volume
inched up 1.6% to 2.3 million units from 2.2 million units a year
ago. However, total market share declined to 11.6% from 12.1% in
the third quarter of 2011.
Operating income fell 11.2% to $1.6 billion from $1.8 billion a
year ago. However, adjusted earnings before interest and tax (EBIT)
rose 4.5% to $2.3 billion from $2.2 billion a year ago.
GENERAL MOTORS (GM): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Toyota Motor (NYSE:TM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Toyota Motor (NYSE:TM)
Historical Stock Chart
From Jul 2023 to Jul 2024