GM Recalls: What the Recall of Over 1 Million Cars Means for GM’s Future

On Feb. 27, GM issued a recall of nearly 1.4 million vehicles made between 2003 and 2007 after faulty ignition switches were associated with their engines suddenly switching off while in operation. The switch failures disabled power systems in the vehicles, which included disabling airbags, and are associated with 13 reported deaths. While several companies have been forced to recall models over the years, any recall that involves fatalities has the potential to do serious damage to a company.

Read ahead for a look at what has happened since the recall and what the future holds for GM.

Affected Models and Years

At present, GM confirms that the 2003-2007 Saturn Ion, 2005-07 Chevrolet Cobalt, 2006-07 Chevrolet HHR, 2006-07 Pontiac Solstice, 2007 Saturn Sky and 2007 Pontiac G5 are the focus of the recall. Obviously, this effects a huge number of drivers, which does not help GM’s situation. The enormity of the situation has really taken a toll on GM’s reputation and image.

Delay in Recall

GM said that the first report of a possible ignition switch malfunction came in 2003 after one of its engineers experienced an engine shutdown during a test drive. At the time, the automaker did not regard the power failure as anything serious. Even though vehicles’ power brakes and power steering were disabled, it was possible to operate them manually. Engines restarted after shifting them into “park” or “neutral,” and the failure was not regarded as critical at the time.

GM admitted that its investigation into the malfunction and accidents was not as dedicated and thorough as it should have been. At the same time, the National Highway Traffic Safety Administration is under fire for its slowness in investigating the crashes and pursuing appropriate action.

What GM is Doing

GM is offering free repairs to present owners of the affected model years. Owners are advised to use only a single key when starting their vehicles until repairs can be made. Additional items should be removed from keyrings. Heavy keyrings and jarring the key have been associated with the malfunctions, according to the automaker.

What Lies Ahead

What will happen to GM? No one is certain, but Toyota is embroiled in a similar suit after sticking accelerator pedals caused vehicles to accelerate out of control, resulting in fatal accidents. That company is involved in an ongoing criminal investigation in New York. At the least, GM is likely to pay a very hefty multi million-dollar fine, and it may very well find itself in the middle of a similar investigation. While this is not a good time for GM, we have seen other companies bounce back from embarrassing recalls. If they do bounce back, it could take years to rebuild their reputation and try to repair the company.

GM’s ten-year lack of attention in investigating the ignition switch failures is a black mark against the company’s reputation. It is not possible to look into the future, but comparing its situation with other automakers that have gone down the same road makes it likely that GM may have a short-term sales decline and lower financial performance for a several years while it pays the fines.

AUTHOR BIO: This article was written by Dixie Somers, a freelance writer who loves to write for business, finance, women’s interests, and technology. Dixie lives in Arizona with her husband and three beautiful daughters. Information for this article was provided by the auto experts of salvageyardlosangeles.com who specialize in used auto parts.