General Motors Company (GM) plans to recall 6,000 units of large vans and sports utility vehicles (SUVs) from the 2012-model year due to a problem with their gear shaft leading to a loss of steering. The van models include Chevrolet Express and GMC Savana vans, which are mainly used by churches and airport shuttle services. On the other hand, the SUV lineups include Chevrolet Suburban and GMC Yukon XL.
The problem was detected by the company that manufactures the gear shafts. It has been revealed that the steering gear shaft may not have been properly hardened. GM stated that the steering would not fail as long as the vehicles go to service for at least 5 months. The automaker said that it has not yet received any reports of crashes or injuries due to the problem. The recall is anticipated to begin by April 4, 2012
This is the second recall of SUVs by GM in less than a month. Earlier this month, the automaker had announced that it would recall 16,618 units of Chevrolet Captiva and Opel Antara crossover SUVs in China due to a problem with the antilock braking system in the vehicles. The recall involves vehicles that were manufactured between April 11, 2006, and November 9, 2009.
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. also imposed a fine of $48.4 million on the company due to late recall of millions of defective vehicles.
GM, a Zacks #3 Rank (Hold) company, posted a profit of $0.7 billion or $0.39 per share in the fourth quarter of 2011, missing the Zacks Consensus Estimate by $0.03 per share. The results excluded net loss from special items of $0.2 billion or $0.11 per share. It compared with the profit of $0.9 billion or $0.52 per share in the fourth quarter of 2010.
Revenues in the quarter scaled up 3% to $38.0 billion, which was in line with the Zacks Consensus Estimate. Unit sales escalated 3% to 2.2 million vehicles from the fourth quarter of 2010. The automaker occupied a market share of 11.7% during the quarter, up from 11.5% in the year-ago quarter.
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