After a new mass recall because of defective ignition locks, general motors now has to repair a total of about 20 million cars. That’s twice the annual production of opel’s parent company. The estimated cost of the repairs will rise by $300 million to $2 billion (approx. 1.5 billion. Euros).
General motors launched recalls number 39 to 44 this year on monday. By far the biggest chunk was 3.4 million sedans worldwide, where the ignition key can jump back while driving. That turns off brake boosters, power steering and possibly the airbags. Gm is aware of eight accidents with six people injured, the company said in detroit.
The same problem in 2.6 million compact cars had triggered a wave of recalls. Here there had been a series of fatal accidents. The real scandal, however, was that engineers had known about the problem for more than ten years, but nothing happened. Mary barra, the company’s ceo since the beginning of the year, has promised clarification and is now having a targeted search for defects. Some cars have to go to the repair shop because of several defects, which distorts the total figure somewhat.
For gm, coming to terms with past mistakes is not only a financial feat: in the first quarter, the company set aside 1.3 billion dollars for repairs, resulting in a drop in profits; in the second quarter, another 700 million dollars will be lost. It is also a logistical challenge, as in many cases the spare parts have to be manufactured in sufficient quantities and then installed by the repair shops. This will take months.
The latest sedan recall affects several models of the u.S. Brands chevrolet, buick and cadillac from 2000 to 2014, of which only one model is currently on the market. Opel models were not named. Gm will revise or replace the ignition key. In the recalled compact cars, however, gm is replacing the ignition lock or a switch that was designed too weakly.
Gm has made safety its top priority after the scandal broke. This wednesday, the company’s ceo must once again face questions from members of congress in washington. The topic is the report by attorney anton valukas, who investigated the case of the delayed ignition interlock recall on behalf of gm management. In the process, serious shortcomings came to light.
The company fired 15 employees as a result of the report. In an emotional speech, barra then apologized to the victims of the accident or their survivors and promised compensation. "This should never have happened," the manager said at the time. "We simply did not do our job."According to the company, 13 people died because of the defect; consumer users estimate more than 300.
Gm already had to pay a fine of 35 million dollars because of the sloppiness with the tumbler locks on the compact cars. In addition, numerous lawsuits are underway against the company by car owners and accident victims or their families. By far the largest number of problematic cars were sold in the u.S., followed by canada and mexico.