Mendoza School of Business

GM recalls 1.5 million additional cars, will take $300-million charge

Published: March 17, 2014 / Author: Jerry Hirsch

General Motors Co. will recall 1.5 million vehicles and take a $300-million charge against its earnings to pay for repairs as part of a initiative to be more responsive to problems with its cars.

The recalls include nearly 1.2-million 2008-13 Buick Enclave and GMC Acadia sport-utility vehicles, 2009-13 Chevrolet Traverse SUVs and 2008-10 Saturn Outlook SUVs for an air bag problem.

Additionally the automaker recalled 303,000 Chevrolet Express and GMC Savana vans from the 2009-14 model years and 63,900 Cadillac XTS sedans from the 2013 and 2014 model years.

The recalls come as GM faces numerous probes and intense criticism for not moving fast enough to fix an ignition switch problem in Chevrolet Colbalts and other small sedans that the car company says has been linked to 12 fatal crashes and outside analysts say could be responsible for as many as 303 deaths.

GM recalled the vehicles only last month even though documents demonstrate that the automaker knew about the problem for more than a decade.

“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,” said Mary Barra, GM’s chief executive.

“I asked our team to redouble our efforts on our pending product reviews, bring them forward and resolve them quickly,” Barra said.

Barra is pursuing a smart strategy in getting the automaker to quickly review safety issues, said Kaitlin Wowak, a University of Notre Dame management professor who researches supply chain risks and disruption.

“Maybe GM learned its lesson and realized they have to take action when consumers are potentially at risk?” Wowak said. “The airbag recall gives GM an opportunity to show consumers they are willing to take action before consumers are harmed. It is also a chance for Mary Barra to show the world what she is made of.”

To read the entire article visit: GM recalls 1.5 million additional cars, will take $300-million charge

A similar article quoting Kaitlin Wowak appeared in the New York Times.


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