Auto recalls have been on the rise in recent years and the issue is unlikely to wane anytime soon. Reportedly, U.S. #1 carmaker General Motors GM is recalling more than 640,000 pick trucks worldwide to fix seat belt failure issues that can set a vehicle’s carpeting on fire. Currently, General Motors carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The recall affects Chevrolet Silverado 1500 and GMC Sierra 1500 trucks from the 2019 and 2020 model years. It also impacts 2020 Silverado 2500 and 3500 models, along with Sierra 2500 and 3500 heavy-duty trucks.
Notably, when the front seat belt pretensioners are deployed, hot gases expelled by the pretensioners could travel through a hole in the seat belt bracket, igniting the carpet. The dealers will seal the hole in the seat belt bracket, at no cost. The company has reported two fires caused by the problem but no injuries.
The recall news comes just a day after the company announced the filing of a federal racketeering lawsuit against its crosstown rival Fiat Chrysler FCAU for bribing United Auto Workers union officials. The lawsuit reveals how Fiat has been corrupting the bargaining process for several years in order to gain advantages, causing General Motors significant damages.
Recalls on the Rise
Frequent vehicle recalls are a major threat to auto companies. These not only result in significant expenses and lower vehicle resale value, but also involve reputational costs. Advanced technologies used in vehicles are resulting in more complex units, software errors and new dangers, in turn leading to a rise in recalls. Cost-cutting measures by automakers have also led to frequent recalls.Various auto biggies including Ford F and Nissan Motor NSANY, among others, have issued recalls this month.
Last week, General Motors’ close rival Ford issued a recall of roughly 228,000 F-150 pickups and Lincoln MKX vehicles in North America over concerns regarding loose cables that could lead to engine stalling or engine fires. Lately, Japanese automaker Nissan announced that it is recalling roughly 400,000 vehicles in the United States due to a braking system defect that could lead to a potential fire hazard.
The reports of frequent recalls of a huge number of vehicles on various grounds such as faulty airbags, non-compliance of emission norms, braking defects, seat belts, etc. indicate widespread quality dispute and safety issues. Notably, auto manufacturers need to introspect deeply in order to eliminate driving risks.
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