GM Recalling Chevrolet Cobalts and Pontiacs to Fix Power Steering


Bloomberg.com - March 2, 2010

Situation
GM will recall 1.3M Chevrolet and Pontiac vehicles in North America to fix power-steering systems
US regulators received more than 1.1K consumer complaints about failures
GM will replace a motor in power-steering systems of Chevrolet Cobalt small cars and 3 Pontiac models
NHTSA began investigation following complaints, which included 14 crashes and 1 injury, GM said
Action follows global recall of more than 8M vehicles by Toyota
Carmakers are coming out with recalls as they want to show that they are being strict about quality, said Jeong Min Pak of Fitch Ratings
Significant Points
GM recall includes 2005-2010 Cobalt, 2007-2010 Pontiac G5, 2005-2006 Pontiac Pursuit sold in Canada, and 2005-2006 Pontiac G4 sold in Mexico
A remedy is being developed and customers will be notified when the plan is completed
The vehicles can still be steered when power-steering system fails, though it requires greater effort
Steering fault tends to occur in older vehicles for which warranties have expired, GM said
GM reported US sales of 104,724 Cobalts last year, a decline of 44% from 2008
Automaker said in January it plans to build fewer of the cars through April as it adjusts output to match demand