GM Recalls Cruze for Brake Problem

Zacks Equity Research
August 19, 2013

General Motors Company (GM) is recalling its 2011 and 2013 Chevrolet Cruze cars in the U.S. to fix a problem in the power-assisted brakes, according to media reports. This is the eighth recall for Cruze since its launch three years back.

The problem is occasional failure in the power brake boosters while reversing the car, which can lead to a crash unless the driver puts extra pressure on the brake. According to General Motors, the problem has resulted in about 27 low-speed crashes. However, there have been no injuries.

The problem has surfaced in the 2011 and 2012 Cruze models that were manufactured in Lordstown, Ohio and carry 1.4-liter turbocharged gasoline engines and 6T-40 six-speed automatic transmissions. Around 230,000 cars are estimated to be recalled by General Motors.

However, the problem can be easily fixed by replacing a switch in the power brake vacuum pipe assembly. General Motors dealers will replace the switch in the recalled cars for free.

In Jun 2012, General Motors had recalled close to 194,000 Cruze cars to fix a fire risk. The car has also been recalled for various problems like detaching fuel tanks, transmission and steering troubles, and faulty side air bags.

While safety advocates are worried about the high number of recalls, Cruze continues to be popular. It was the third ranked compact car in terms of sales in July. Honda Motor Co., Ltd.’s (HMC) Civic and Toyota Motor Corporation’s (TM) Corolla occupied the first two spots.

However, General Motors is not the only carmaker troubled by recalls. Earlier this month, Toyota Motor recalled around 342,000 Tacoma midsize pickup trucks to fix faulty front seat belts. Ford Motor Co. (F) also recently announced that it will recall 33,021 units of C-Max hybrid multi-purpose vehicles (MPV) in the U.S. for a roof component that does not meet safety requirements.

General Motors carries a Zacks Rank #2 (Buy).

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