gm recall

GM to Recall 1.3 Million Cars Due to Steering Issue

General Motors Co. is expected to recall approximately 1.3 million small vehicles in North America to repair a power-steering problem that may have caused 14 craches and 1 injury, the company said on Tuesday.

The problem affects 2005-2010 Chevrolet Cobalt, 2007-2010 Pontiac G5s, Pontiac Pursuits sold in Canada, and Pontiac G4s sold in Mexico, reports said. GM began the voluntary recall after the National Highway Traffic Safety Administration received more than 1,100 complaints related to the issue.

GM’s recall follows in the footsteps of Toyota’s highly publicized global recall of more than 8 million vehicles due to issues including brakes, unintended acceleration, and floor mats. Toyota—which was known for its quality—has seen its reputation tank among potential auto buyers due to the massive recalls.

“They want to avoid the negative press that Toyota has received,” said Fitch Ratings director Jeong Min Pak in an interview with Bloomberg. “A lot of carmakers are coming out with recalls as they want to show that they are being strict about quality.”

GM’s last recall affected 857,735 vehicles in August 2008, involving faulty gearshift assembly that could cause the car to shift out of the “park” position.

“Recalling these vehicles is the right thing to do for our customers’ peace of mind,” said GM Vice President of Quality Jamie Hresko in a company statement.

GM Triples Opel Investment

On Tuesday, GM announced that it would triple funding to its European Opel / Vauxhall division, hoping to persuade European governments to grant loans and financial guarantees to the automaker.

In a revised plan released on Mar. 2, GM will contribute 1.9 billion euros (US$2.6 billion), more than tripling its previous commitment, to its Opel operations in Germany and Vauxhall brand in the U.K.

The commitment “is the right course of action for Opel/Vauxhall and should clearly signal our determination to fix our business,” said GM Europe CEO Nick Reilly. “We have shared this decision with the European Commission as well as the national and state governments involved.”

GM Chairman Ed Whitacre said in a statement that it is vital that GM’s headquarters “demonstrate our commitment” for the European operations to instill “renewed trust and confidence” in Opel/Vauxhall.

GM almost sold its European operations to Canada’s Magna International, but pulled out of an agreed-upon deal after the company decided that its European operations were central to the company’s core business.

The Russelsheim, Germany-based Opel employs 48,000 people in Europe, with half of the workers in Germany.