GM tells Wall Street recalls may last into summer
DETROIT – General Motors is telling Wall Street that a recent spate of recalls may last until mid-summer as the company continues to review unresolved safety issues.
The news comes a day after The Associated Press learned that GM CEO Mary Barra told members of Congress that the company cannot make ignition switches fast enough to keep up with demand in its recall of 2.6 million small cars.
The ignition switch problem has been linked to at least 13 deaths in crashes involving Chevrolet Cobalts and Saturn Ions. Congress and the Justice Department are investigating why GM knew about the switch problem for at least a decade but only started recalling the cars this February.
In a note to investors, Barclays analyst Brian Johnson wrote that he met with GM management on Wednesday, and was told by product development chief Mark Reuss that GM continues to review safety data for potential recalls. Johnson also wrote that it’s possible that cars already subject to one recall could be part of future recalls.
GM has now issued 29 U.S. recalls so far this year covering a total of 13.8 million GM vehicles, more than five times the number of cars the company sold last year.
Senior management will be more involved in safety, with Reuss leading a team of five people who will decide on future recalls, Johnson wrote. The company is trying to issue recalls as soon as it learns about an issue rather than waiting for more data, according to Johnson.
“This will increase the frequency of recalls, but will reduce the total number of vehicles recalled,” the analyst wrote.
Barra is preparing for a return trip to Capitol Hill as an investigation by an outside attorney into the ignition switch recall delays nears a close. She told lawmakers Wednesday that GM’s plan to compensate victims of small-car crashes could be released at the same time as the results of the investigation, according to a congressional aide who asked not to be identified because the meetings were private.