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New round of recalls from GM, Q2 charge upped to $1.2B

  • General Motors (GM +0.6%) announces six new recall actions covering a total of 7.6M vehicles.
  • The safety recalls cover cars from model years 1997 to 2014.
  • The amount set aside for recall costs in Q2 has now been pushed up to $1.2B by the automaker.
  • Shares of GM have been halted.
Comments (49)
  • psychological-dividends
    , contributor
    Comments (572) | Send Message
     
    What the hell were they doing? Infusing poison gas into each car?
    30 Jun, 02:41 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (778) | Send Message
     
    Frankly, this was to be expected. The pendulum is now swinging too far to the other side. GM has to look at EVERY single possible defect and if there is even the very slightest risk to safety, they will issue a recall. The logic is pretty simple. If management doesn't do that, and there is another unforeseen problem and someone dies, somebody at GM is going to go to jail.

     

    I own GM and it's been a bumpy ride for sure. However, I have no intention of selling and may even buy more in the low 30's because once these issues are behind them, GM will have the safest cars on the road and probably be the most error free of all the major auto companies. They just need to weather this storm and move on. The good news is that all this "noise" doesn't seem to be affecting GM car sales at all.

     

    Disclosure - Long GM stock and warrants.
    30 Jun, 02:48 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (572) | Send Message
     
    You make a lot of great points.
    30 Jun, 02:50 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (778) | Send Message
     
    China sales... Europe bottoming out... plus the age of the average car currently on the road. All of these are good reasons to own GM. The stock has held around $32 on the lows and I see no reason why it will get that low again. However, in my opinion GM is "spring loaded" to the upside once they put all this behind them.

     

    Collect the nice dividend. Reinvest it. And wait for better times. GM could very easily be in mid-40's by next year at this time.
    30 Jun, 03:04 PM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (3241) | Send Message
     
    1997 is getting uncomfortably close to my 1996 Chevy Astro van. That's reaching a long way back!
    1 Jul, 02:20 AM Reply Like
  • warrenrial
    , contributor
    Comments (558) | Send Message
     
    Production should be halted as well.
    30 Jun, 02:46 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    Production on 90% of the cars affected by the recall was over 10 years ago.

     

    Has little bearing on what is in showrooms today.
    30 Jun, 06:17 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    90% of this is ignition switches.

     

    Clearly the amount of torque previously considered appropriate for actuation, has been re-thought and re-considered.

     

    Seems to be an overabundance of caution.

     

    Most of these cars are on brands and/or platforms no longer in production.

     

    I highly doubt this will have much effect on future Pontiac & Oldsmobile sales :)
    30 Jun, 03:03 PM Reply Like
  • retiredman
    , contributor
    Comment (1) | Send Message
     
    I have to agree since the Pontiac and Olsmobile line was turned off years ago. So no impact on sales.
    30 Jun, 05:38 PM Reply Like
  • funfun
    , contributor
    Comments (2017) | Send Message
     
    For God's sakes, wouldn't it be easier to recall tens of thousands of inept and integrity-depleted GM executives, engineers and Managers from all around the United States and abroad and replacing them with talented outsiders with strong business ethics and competence?

     

    …funfun..
    30 Jun, 03:14 PM Reply Like
  • Budavar
    , contributor
    Comments (1387) | Send Message
     
    Also recall the trustees of funds who keep buying the speculative GM stock for their client's nest eggs.
    30 Jun, 11:40 PM Reply Like
  • funfun
    , contributor
    Comments (2017) | Send Message
     
    This year alone: 48 recalls, 28 million defective GM cars!

     

    Soon the bumbling and fumbling bosses of General Motors will have recalled more cars than McDonalds has sold hamburgers!

     

    Gotta laugh at this serial commercial comedy playing seven days a week and twice on weekdays at the Ren Sin Theatre in Detroit.

     

    …funfun..
    30 Jun, 03:18 PM Reply Like
  • workhorse.invest
    , contributor
    Comments (56) | Send Message
     
    damned if they do, damned if they don't?
    30 Jun, 06:09 PM Reply Like
  • Ted Bear
    , contributor
    Comments (573) | Send Message
     
    From what I hear on the ground, this thing was already a VERY costly mess. The dealers don't have parts, don't have cars to loan out to customers who are afraid to drive their recalled vehicles while the parts become available, and the costs associated with renting cars has soared.

     

    In the meantime, GM shares seem to reflect a loyal customer base, the upselling that will occur from customer's cars being in the shop to install the recall items, and the 'new' sales which will come from customers wanting to get away from the issues with their existing cars.

     

    Whether it is good management, good promises, a good recall program, or simply dumb luck, GM seems to be escaping surprisingly unscathed.
    30 Jun, 03:34 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    Gm has taken a charge of 2.5 billion for the cost associated with the recalls and I'm sure this figure will rise as the year is only half over and Gm is nearing the all time record for the number of vehicles recalled in a year.
    30 Jun, 03:41 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    Ted have you been paying attention to the stock price?
    In a bull market coming closer to it's end.

     

    What do you think GM will do in a bear market?
    30 Jun, 03:43 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (778) | Send Message
     
    I'll counter by saying that the news today was pretty bad and the stock price went down about 1%. Why do you think that happened? You don't have to be a stock genius to know the answer.

     

    You can call General Motors "garbage" but there is a TON of value here if you bother to read more then the first page of the book. Too bad you probably won't participate when the full story is told. But hey, people always like to think they are the smartest guy in the room. Myself included.
    30 Jun, 09:04 PM Reply Like
  • funfun
    , contributor
    Comments (2017) | Send Message
     
    Typhoid Mary has set off an epidemic of 50 recalls, 29 million sick GM cars infected with deadly and destructive defects. In the meantime before repairs are made, millions of motorists and drivers are exposed to risk of loss of life and limb.

     

    The FDA should mandate a health warning:

     

    "Operating This GM Vehicle May Be Hazardous to Your Health"

     

    Your GM car may outlive YOU.

     

    …funfun..
    30 Jun, 04:01 PM Reply Like
  • june1234
    , contributor
    Comments (2499) | Send Message
     
    28 million cars recalled. How many GM cars are left on the road?
    30 Jun, 06:55 PM Reply Like
  • warrenrial
    , contributor
    Comments (558) | Send Message
     
    I would be more concerned with what they have in the showrooms today.
    30 Jun, 07:05 PM Reply Like
  • jstratt
    , contributor
    Comments (2209) | Send Message
     
    Maybe they can list the 2 or 3 models not under recall?
    30 Jun, 07:16 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    Matters little whether cars and/or brands out of production for 10 years or more have recalls. Other than the direct remedy expenses.

     

    Sales over the last few months have already demonstrated that.

     

    Along with #1 rankings in 2014 JD Powers Customer service satisfaction index in both mainstream (Buick)

     

    And luxury (Cadillac)
    categories.

     

    Not to mention GM #1 ranked 2014 JD Powers for dependability.

     

    I could also mention highest number of awards for both 2013 & 2014 JD Powers initial quality awards than any other manufacturer.

     

    I might even mention more IIHS 5 star TSP & TSP+ crash test ratings than any other manufacturer.

     

    Sales stats over the last few months have demonstrated that consumers look forward.

     

    Investors probably should too, IMO.
    30 Jun, 08:01 PM Reply Like
  • june1234
    , contributor
    Comments (2499) | Send Message
     
    JD Powers ALWAYS ranks US cars No 1, all the way into BK. In todays world those ratings, like products or services reviews are nothing more than marketing by the manufacturers themselves
    1 Jul, 06:17 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    It has been ranking Ford near the bottom for quite some time. (although Lincoln did take a step up with the recent survey)

     

    Chrysler not so good either.

     

    Don't see how they could be biased towards domestic nameplates.

     

    There is no direct short term correlation to a vehicle's overall quality to BK either as I see it.
    1 Jul, 06:31 AM Reply Like
  • june1234
    , contributor
    Comments (2499) | Send Message
     
    Its Fiat Chrysler now. For many yrs and yrs and yrs JD Powers ranked US autos as top of the heap. Those "reviews" are as real as the ones on "Angies List", or all those new cell phone reviews, images on a screen, just marketing.

     

    My fav one was a for a new LG phone just being introduced to the US. During the promo targeting a US audience its author admits he is using a Korean model not one built for any US network, just an image on a screen. Another "unbiased" review for another phone was nothing more than a cut and paste job borrowed from the manufacturers own website. I checked
    1 Jul, 06:46 AM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (354) | Send Message
     
    I hung with them as long as I could stand it, but today was the last straw. I had to unload them. I hope she gets the company straightened out. I might get back in one of these days. At the rate they're going, I expect a recall on my 1966 Chevrolet pickup one of these days!
    30 Jun, 08:10 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (778) | Send Message
     
    You made a decision to unload the stock because the share price went down .32 today??? It was around $4.00 lower then today's closing price about 3 months ago. Odd trading style?

     

    I'm not trying to be sarcastic or a jerk, but I'm happy when people like you jump ship and push the price down. It gets the speculators out along with the people who are traders & creates a better entry point for those wanting to add to their positions. Personally, if GM stock price broke $30 for some reason (I doubt that will happen), I would easily double my position. I'd probably still add more share around $32 since it's bounced off of that price a couple of times already.

     

    One last thing because I think this deserves to be mentioned here --- in my investing world, these are EXACTLY the situations every investor should look for and try to exploit. A solid company with a large customer base, growing sales and a lot of cash on hand gets beaten down because it had something happen that will cause one-time charges. This is very similar to JP Morgan's "London Whale" episode. The stock get's hammered because of a one-up event and less then 2 years later, the shareprice has doubled. I live for those situations. :-)

     

    Oh well... It's all just my opinion.
    30 Jun, 09:15 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    Unwise poker a lot of the same sentiment happened when the first time Gm broke 30 then 20 then 10 then 5 then one dollar.

     

    I know an idiot who put his entire retirement savings that were quite substantial entirely into GM stock, the fool lost it all.

     

    I gave GM 3 years, and honestly, I'm glad as heck I didn't lose anything other than the opportunity to have invested into a winner during those 3 years GM had everything going post bankruptcy and it still didn't do diddly squat.

     

    3 wasted years.

     

    GM is hardly a solid company and anyone risking their $$$ deserve to lose it given everything that is known about GM.
    1 Jul, 12:01 AM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    When I sold out of my GM position last Nov, whew... thank God I dumped that garbage.
    30 Jun, 08:40 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (3670) | Send Message
     
    This company should have gone bankrupt and broken up and sold off.

     

    Government didn't save those people's lives during the take over period.
    1 Jul, 01:38 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11015) | Send Message
     
    The problem is bad management, a bad union, and government support of GM as is which makes it even worse. This is why government support and stimulus fails horrible. Rather than fix the problems they only make it worse. The issue is management and its unions. Nothing will change thanks to bailout and government involvement with the private sector. We are moving to the same faults as the old soviet union. Stop the public sector intervention in the private sector economy before its too late.
    1 Jul, 02:07 AM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (3241) | Send Message
     
    I'm encouraged that Mary Barra is taking a zero tolerance approach and getting all the skeletons out of the closet at once. That means once she's done the slate is truly clean and GM can make a fresh start. It's an expensive way to earn back the public's trust, but in the end it will be worth it. I respect her for her decisive action.
    1 Jul, 02:33 AM Reply Like
  • funfun
    , contributor
    Comments (2017) | Send Message
     
    Ms. Barra is the biggest skeleton in the GM closet. The GM Chieftess has so little credibility as seen on Capitol Hill in April, she immediately became the lead for mockery on Saturday Night Live three days later before tens of millions of viewers. That sort of make-believe change in culture, and "NEW" GM PR posturing is hardly inspiring to intelligent investors, not to mention, more importantly car and truck buyers.

     

    So it goes. "Around the Globe in Eighty Recalls". GM has been making unalloyed junk for more than a decade, much of it extraordinarily dangerous and deadly.

     

    …funfun..
    1 Jul, 06:18 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3670) | Send Message
     
    David

     

    She has no choice! She was found out, she is one of the biggest roots of the problem since she was in charge of a major part of where the problems existed. I cannot believe there has not been an emergency share holders meeting to oust the entire board! Where are the activist investors on this one? *crickets...
    1 Jul, 11:03 AM Reply Like
  • june1234
    , contributor
    Comments (2499) | Send Message
     
    Haven't heard of any GM recalls overseas. Does this mean they are safe overseas but not stateside?
    1 Jul, 06:14 AM Reply Like
  • funfun
    , contributor
    Comments (2017) | Send Message
     
    Ah…yes, all those tens of millions of GM cars produced and sold in the Peoples Republic of China and India and Latin America and Europe were designed and equipped with intense, meticulous focus on safety. Those GM vehicles are universally of the highest possible quality and are completely different from those in the United States subject to more than 50 recalls, 29 million cars. Investors need not worry about any costly recalls overseas.

     

    Parodically posted…funfun..
    1 Jul, 06:54 AM Reply Like
  • mitrado
    , contributor
    Comments (1948) | Send Message
     
    GM will be renamed as Totall Recall --- a move approved by Schwarzenegger, for sure! :-D
    1 Jul, 08:01 AM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    Well they are headed into the record books (sadly not in a good way).
    1 Jul, 10:57 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3670) | Send Message
     
    We are skinning GM alive for their incompetence but we cannot even hold members of the IRS in contempt or bring them up on obstruction of justice charges. This is how weak our country has become. If we were such political cowards in the 60s as we are today, Nixon would have still been in office.
    1 Jul, 11:05 AM Reply Like
  • funfun
    , contributor
    Comments (2017) | Send Message
     
    Ms. Barra has become Mr. Badwrench in a pantsuit.

     

    …funfun..
    2 Jul, 06:48 AM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    Fun can you believe she was at gm for like 30 years in the products department mostly and then did some time in HR.

     

    Misses Bad engineered junk that might accidentally kill someone if something like a little extra key on the chain hits just right.
    3 Jul, 06:06 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    If GM had any sense they would hire Alan Mull whats his name the guy retiring from the Ford gig.
    3 Jul, 06:07 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    Jack,

     

    What, and take outsourcing and quality to even worse extremes?

     

    Like J.L. French/Nemak engine blocks?

     

    I assume that has to be sarcasm? As much as I try, I cannot find any other explanation for it

     

    Not sales data,
    market share data,
    Stock price action,
    IIHS crash tests,
    Quality surveys,
    customer satisfaction surveys,
    Dependability & reliability surveys,
    awards & accolades within the automotive press

     

    http://bit.ly/1nG96QH

     

    http://bit.ly/1gx6bkZ

     

    http://bit.ly/1hyx1do

     

    http://bit.ly/1sKFuPr

     

    I have provided data, so this is by no means "blanket dismissal"

     

    Do you have some of your own to share with us?
    3 Jul, 06:27 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    So you are saying Alan Mullaly didn't walk on water while at Ford's fixing their broken culture and company?
    3 Jul, 06:47 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    Forrest Gump? (aka Mullally) walk on water?

     

    Are you serious?

     

    He was brought in by Bill Ford (over his head) and hit the credit lines before they were shut down, when the crisis hit.

     

    Basically because Ford essentially failed first, before the rest. That turned out to be pure luck.

     

    Largely due to the 1-2 punch from Both the Explorer Tire debacle along with post Katrina gas prices, as almost ALL of Ford's profits were from both F-150 & Explorer at the time.

     

    When GM witnessed that, is when the Green light was given for the Volt.

     

    I give credit to Bill Ford for asking for help.
    And Mullally too, for doing what he had to do at the time with "One Ford"

     

    But, Ford should have made some commitments and investments a couple years ago. It may be too late by now.

     

    Ford needs a "Car Guy" at the helm like GM had with Bob Lutz who is largely responsible for GM's current product on the market today.

     

    Sadly, Ford has not really had such a guy at the helm since Donald Petersen.

     

    " One Ford" is no longer the right thing in the current environment.

     

    http://nbcnews.to/1moSmao

     

    http://bit.ly/1aZ1obe

     

    Petersen,

     

    Bits of his influence remain today, sadly fading fast;

     

    http://bit.ly/1mPgK4C

     

    http://lat.ms/1mPgIda

     

    http://bit.ly/1mPgK4I

     

    http://bit.ly/1mPgK4M

     

    http://bit.ly/1mPgKl2

     

    I really hope Ford can find another guy like Donald, as Mark Fields is not the answer IMO.

     

    http://bit.ly/TE33zx
    3 Jul, 08:08 PM Reply Like
  • funfun
    , contributor
    Comments (2017) | Send Message
     
    Ford Chief, Alan Mullaly, provided strong and ethical leadership to Ford Motor Company. He never panhandled the American taxpayers for $50 billion or had his company declare bankruptcy stiffing his creditors and investors. Nor has he been legally swaddled by high-paid criminal defence lawyers. Or summoned to Capitol Hill to explain a decade of consumer fraud and cover-ups, and had his credibility and character mocked on Saturday Night Live. Nor has he been forced to recall a colossal number of cars, over 50 recalls involving 35 million defective cars in six months year to date. Nor is Ford Motor Company facing $billions in fines and litigation and settlements of claims for hundreds of deaths and injuries from their lethally defective vehicles. …funfun..
    3 Jul, 08:57 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    funfun,

     

    Here's your panhandling request from Ford to the US gov't you claim does not exist

     

    You continually keep stumbling on facts. This letter is public record. Why are you not aware of it? Or, maybe you are, and wish to deceive other SA members?

     

    Just one line from the letter,

     

    "Ford is asking for access to up to $9 billion in bridge financing, but reiterated that it hopes to
    complete its transformation without accessing the loan should Congress agree to make the funds"

     

    http://bit.ly/1oZ93wb

     

    BTW, they got $5.9B from the DOE.

     

    And, if you read the request, is says.

     

    effectively,

     

    -have more ready in case things don't turn out as planned-
    3 Jul, 09:26 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (677) | Send Message
     
    I'm not a big fan of the Ford company, but comparing stock prices and fates -- Gm had to go the forced or unforced bankruptcy route and had substantial governmental tinker and bias to keep it afloat.

     

    Ford would have likely failed only because of the cascading effect on part suppliers going under had GM not been rescued by the tax payers.

     

    Ford stock dipped to around a dollar and has since recovered without the excessive involvement and bending and selective enforcement of certain laws.

     

    Alan is a much better people person and engineer than Mary.

     

    The guy designed and was in charge of things that fly that are way more complex than ground vehicles. He saw what was wrong with Ford the cronyism and stupid yes men head in the sand mentality, and for his part, he changed a lot of that.

     

    Bill Ford would have run Ford into the ground.

     

    Ford would beg Alan to stay only if he would.

     

    Mary has been part of the problem almost since day one.
    4 Jul, 11:45 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3670) | Send Message
     
    Obama didn't save GM, that was a lie...they stole our money and went bankrupt anyway...like Romney, who was right...said should have happened anyway without tax payer money.
    4 Jul, 12:53 PM Reply Like
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