GM adds 284,000 older cars as number of U.S. recalls this year hits 29

[May 22, 2014]  By Ben Klayman and Richard Cowan

DETROIT/WASHINGTON (Reuters) - General Motors Co is recalling more than 284,000 older Chevrolet small cars in the United States and other markets because of a potential fire hazard, bringing U.S. recalls at the automaker this year to 29 and a record number of vehicles.

The two recalls are the latest announced by GM, the largest U.S. automaker. The recall with the highest profile was of cars with defective ignition switches linked to at least 13 deaths. The Detroit company has been criticized by safety advocates and fined by U.S. safety regulators for its delayed response in catching the faulty switch.

A day after recalling 2.6 million vehicles globally, most of them in the United States, GM is recalling 284,913 Chevrolet Aveo and Optra cars in the United States and other markets from model years 2004 to 2008. The problem with the cars stems from a faulty part in their daytime running lights that could overheat and cause a fire, according to documents filed with the National Highway Traffic Safety Administration (NHTSA).

GM said it was aware of some fires related to the problem but did not say how many. It said there were no reports of injuries or fatalities.
 

Meanwhile, GM Chief Executive Mary Barra met on Wednesday with Democratic Senator Claire McCaskill of Missouri, who chairs a Senate panel investigating GM's ignition switch recall, as well as other Democratic lawmakers including Senator Charles Schumer of New York, Senator Edward Markey of Massachusetts, Rep. Diana DeGette of Colorado and Rep. John Dingell of Michigan.

McCaskill spokesman Andy Newbold said Barra gave the senator an update on GM's progress on its internal investigation, which the company expects to complete within two weeks. He added that the senator still intends to hold a follow-up hearing after GM's internal probe is complete.

GM also said North American general counsel Lucy Clark Dougherty is now advising global vehicle safety chief Jeff Boyer on legal issues in a move to speed up the process around recalls. But the company downplayed speculation about a larger overhaul of its legal department and said general counsel Michael Millikin has been asked to remain in his position.

Last week, GM recalled almost 3 million vehicles globally and was fined a record $35 million by NHTSA. It also faces probes by the U.S. Department of Justice, Congress, the Securities and Exchange Commission and several states for its handling of the faulty ignition switch, which engineers first discovered in 2001. GM has been criticized for not recalling the vehicles affected by the bad ignition switch before this year.

Wednesday's two recalls bring the number of vehicles affected by its recalls this year to almost 13.8 million in the United States. That tops the previous full-year high of 10.7 million vehicles that the company recalled in the U.S. market in 2004. It pushes the number of vehicles that GM has recalled globally this year to more than 15.8 million.

GM took a $1.3 billion charge in the first quarter for recall-repair costs and said Tuesday that it expects to take another $400 million charge in the second quarter for the same reason.

Since the recall began in February, GM has been hit with more than 70 lawsuits from customers who say their cars lost value because of the ignition defect, according to court documents.

Two U.S. senators on Tuesday introduced legislation that would require federal judges to consider the public's interest before granting requests to seal court records in cases that have an impact on public health and safety.

Democratic Senator Richard Blumenthal of Connecticut and Republican Senator Lindsey Graham of South Carolina offered the bill in response to the GM ignition switch recall. GM has reached confidential settlements in several lawsuits brought by families of victims of accidents that have been linked to the ignition defect.

"GM's recent legal maneuvering reaching secret settlements shows why this legislation is essential," Blumenthal said. "This legislation would have enabled people to be aware of the threats to safety posed by the faulty ignition switches, and deaths could have been prevented."

(Additional reporting by Jessica Dye in New York; Editing by Chizu Nomiyama, Peter Galloway and Meredith Mazzilli)

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