A major U.S. automaker just announced a recall.
On Friday, September 9, General Motors Company (NYSE:GM) announced that it will be recalling 4.3 million vehicles worldwide. The recall is due to a software defect that, in rare circumstances, can prevent air bags from deploying during a crash. The defect has been linked to one death and three injuries. (Source: “GM Recalls 4.3 Million Vehicles Worldwide for Software Defect,” Reuters, September 9, 2016.)
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Additionally, the National Highway Traffic Safety Administration (NHTSA) posted some detailed information about the recall on its web site. (Source: “Recall Subject: Frontal Air Bags May Not Deploy,” National Highway Traffic Safety Administration, September 9, 2016.)
NHTSA’s document shows that the recall includes “certain model year 2015-2017 Chevrolet Silverado 2500 HD, 3500 HD, Tahoe, Suburban, GMC Sierra 2500 HD and 3500 HD, GMC Yukon, GMC Yukon XL, Cadillac Escalade and Cadillac Escalade ESV vehicles and 2014-2017 Chevrolet Corvette, Silverado 1500, Trax, Caprice Police Pursuit Vehicle, GMC Sierra 1500, Buick Encore, and 2014-2016 Buick Lacrosse, Chevrolet Spark EV and SS vehicles.” (Ibid.)
According to the NHTSA, under certain conditions, the air bag sensing and diagnostic module (SDM) software could activate a diagnostic test. When this happens, the frontal air bags and the seat belt pretensioners would not deploy in the event of a crash.
General Motors said that this recall would not have a material impact on its financial results.
GM stock slipped 3.09% to $30.73 per share on Friday at around 1:45 p.m.
Before this recall, the Detroit automaker was doing quite well for itself. Second-quarter revenue came in at a record $42.4 billion, representing 11% growth year-over-year. Adjusted earnings increased 44% year-over-year to a record $1.86 per share. (Source: “GM Reports Second Quarter Net Income of $2.9 Billion, Up 157 Percent,” General Motors Company, July 21, 2016.)
