General Motors Company (GM) plans to recall more than 27,000 units of its Cadillac crossover vehicles globally because their wheel nuts may not have been tightened properly at the time of assembling. The recall affects 2013 Cadillac SRX models equipped with 18-inch wheels.
GM revealed that about 18,871 Cadillac vehicles will be recalled in the U.S., 913 units in Canada, and the remaining 7,397 units of exported vehicles outside North America.
The automaker has not yet received any reports of injuries or accidents related to the problem. It has asked vehicle owners to bring the vehicles into their dealers so that the tires can be checked and wheel nuts can be tightened free of cost.
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. slapped a fine of $17.35 million on Toyota due to late response regarding a defect in its vehicles to safety regulators as well as late recall of those vehicles. According to the department, it was the maximum allowable fine under the law for not initiating a recall in a timely manner. The latest fine added to $48.4 million imposed by the U.S. government on the company in 2010 due to late recall of millions of defective vehicles.
Last month, General Motors recalled 144 units of its newly launched 2013 Buick Encores in order to fix their steering wheel fastener that may not have been properly installed. The Detroit-based automaker has informed that the steering wheel in the vehicles could come loose or separate from the steering column. The new compact crossover Encore is built between Dec 9 and Dec 28 by GM Korea. The same model is sold in Europe as Opel Mokka.
GM, a Zacks Rank #3 (Hold) stock, reported a 28.0% fall in earnings to 67 cents per share in the first quarter of the year from 93 cents in the same quarter of 2012 (all excluding special items) due to lower earnings generated from the company’s all geographic operations except Europe. Despite this, the automaker’s earnings exceeded the Zacks Consensus Estimate by 11 cents per share.
Net earnings fell 31.3% to $1.1 billion from $1.6 billion in the first quarter of 2012. Including a net loss from special items, earnings were $0.9 billion or 58 cents per share in the quarter compared with $1.0 billion or 60 cents a year ago.
Revenues in the quarter slid 2.4% to $36.9 billion, despite a 3.6% rise in retail unit sales to 2.4 million vehicles globally. It was higher than the Zacks Consensus Estimate of $36.4 billion.
Few stocks that are performing well in the industry where GM operates include Federal-Mogul Corp. (FDML) and Visteon Corp. (VC). Both the stocks carry a Zacks Rank #1 (Strong Buy).
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