GM Sales Unaffected By Recall, Reveals China Expansion Plans

Cameron Aubernon
by Cameron Aubernon

Reuters reports a lawsuit related to the 2014 General Motors recall crisis filed in federal court in California has placed airbag supplier Continental Automotive Systems U.S. at-fault for its role in the recall. Attorney Adam Levitt of Grant & Eisenhoffer proclaimed the supplier knew about the out-of-spec ignition switch at the heart of the recall as early as 2005, yet “did nothing to redesign its airbags” to deploy even when electrical power was cut, “nor did it warn NHTSA or the public.” Continental joins Delphi Automotive as the second supplier to face a lawsuit linked to the ongoing recall crisis.

Between the National Highway Traffic Safety Administration and GM, Automotive News says the former found itself pushing the latter on a number of occasions to do more than issue service bulletins, regional recalls, warranty extensions and customer-satisfaction campaigns regarding problems ranging from corroded fuel filler pipes in full-size vans and risks of fire from door modules in fullsize SUVs, to malfunctioning airbags in Camaros and Malibus and the aforementioned ignition switch affected over 2.26 million 2003 – 2011 vehicles to date. In a 2013 email released to the public by the ongoing Congressional investigation into the recall, NHTSA Office of Defects Investigation director Frank Borris expressed his frustration with the automaker to GM executive Carmen Benavides over GM’s slow approach to communication and action, as well as needing more provoking to do more than the least amount of effort to resolve an issue.

In more NHTSA/GM news, The Detroit News reports the agency has closed the book on its four-year investigation of 334,000 2004 – 2007 Saturn Ions regarding steering problems after the automaker announced they would recall the cars. Four service bulletins linked to power-steering repairs will be issued by GM, affecting the Ion and Chevrolet Cobalt, as well as the Saturn Aura, Pontiac G6 and Chevrolet Malibu. A total of 10 crashes linked to power-steering failure — with two resulting in injury — 4,787 complaints and 30,560 warranty claims were discovered by the NHTSA during the investigation.

As for bringing the affected vehicles in for service, Automotive News reports GM-affiliated and non-GM dealerships are having a rough time with the recalls, citing a lack of parts, growing backlog of recall-related repairs, and lost sales and dealer-related financing. However, GM President Dan Ammann says the main recall hasn’t had a “measurable impact” on overall sales, citing a 4 percent truck-led U.S. sales gain in March and a “decent start” to April’s sales. That said, Ammann has not ruled out a future impact from the recall news.

In the meantime, GM will invest $12 billion into China by 2017, with plans to boost production capacity 65 percent by 2020 based on expectations of the local market to reach 33 million to 35 million new vehicles made per year by the start of the new decade, which Ammann claims will be double that of total projected U.S. demand at the same time. The expansion would total capacity to 8 million units per year, fueled by 60 all-new or refreshed products introduced to China between now and 2018, including 11 new utility vehicles — such as the Chevrolet Trax — and a new Cadillac model every year through 2016.

Finally, The Detroit News reporter Henry Payne took to heart GM CEO Mary Barra’s statement before Congress about allowing her son to drive an affected Cobalt so long as the key was by itself in the ignition switch, turning up at a local dealership to drive an affected 2006 Cobalt to see for himself what would happen. In short: Nothing involuntary, as Payne had to put the switch into the “accessory” position himself to recreate what may have happened in the reported accidents and fatalities linked to the switch.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Carguy Carguy on Apr 21, 2014

    Toyota didn't see much of a sales impact from its media attention of its recall and nor will GM. GMs strategy at this point is to mitigate their liability and keep the hordes of lawyer vultures at bay. Just like the Toyota incident the brand will move on, there will be a fine, some lawyers will get rich but the owners of the affected vehicles will not see much in the way of compensation.

    • See 5 previous
    • Sunridge place Sunridge place on Apr 21, 2014

      @carguy 10% of Toyota's US sales back then was around 175,000 units. Assume an average of $25k invoice price, its about a $4 billion hit. To be conservative, assign half the hit to the 'recall' hysteria, and you have a $2 billion hit against Toyota's annual revenues of over $200 billion, it was a drop in the bucket.

  • Jpolicke Jpolicke on Apr 21, 2014

    Someone please explain to me why Continental is being dragged into this. Are they somehow at fault for making an electrically powered device that fails to function in the absence of electricity?

    • See 7 previous
    • Exfordtech Exfordtech on Apr 22, 2014

      @DenverMike Not sure about this particular model, but many vehicle supplemental restraint modules get their vehicle speed info from the powertrain control module. I don't know if Continental should be held responsible for lack of deployment, but the failsafe functions should be in GM's hands in my opinion.

  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
  • ToolGuy Ford is good at drifting all right... 😉
  • Dave Holzman A design award for the Prius?!!! Yes, the Prius is a great looking car, but the visibility is terrible from what I've read, notably Consumer Reports. Bad visibility is a dangerous, and very annoying design flaw.
  • Wjtinfwb I've owned multiple Mustang's, none perfect, all an absolute riot. My '85 GT with a big Holley 4 barrel and factory tube header manifolds was a screaming deal in its day and loved to rev. I replaced it with an '88 5.0 Convertible and added a Supercharger. Speed for days, handling... present. Brakes, ummm. But I couldn't kill it and it embarrassed a lot of much more expensive machinery. A '13 Boss 302 in Gotta Have It Green was a subtle as a sledgehammer, open up the exhaust cut outs and every day was Days of Thunder. I miss them all. They've gotten too expensive and too plush, I think, wish they'd go back to a LX version, ditch all the digital crap, cloth interior and just the Handling package as an add on. Keep it under 40k and give todays kids an alternative to a Civic or WRX.
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