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General Motors (GM) at Risk of a Recall for Faulty Air Bags
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General Motors Company (GM - Free Report) reportedly has around 20 million vehicles with defective airbag parts. Per The Wall Street Journal, the defect resulted in several injuries and two deaths. The government has asked to recall the vehicles to prevent further injuries or deaths.
The Detroit-based automaker has not disclosed the number of affected vehicles publicly. Per sources, the defect exposes General Motors to U.S. auto-safety regulators’ push to recall nearly 52 million ARC Automotive air-bag inflators.
During a crash, the inflators explode with too much force and hit passengers and the driver in the face and neck with shards.
The National Highway Traffic Safety Administration (NHTSA) has not disclosed the number of vehicles or names of the models that will be part of the recall. In April, NHTSA sent a letter to ARC to demand a recall.
ARC rejected NHTSA’s request, instigating the regulatory agency to schedule a hearing necessary to order a formal recall. ARC stated that extensive field tests showed no defect in the airbag and called air-bag rupture incidents isolated.
Steve Gold, vice president of ARC, said that no other automaker using these inflators has determined a systemic safety-related issue.
Besides General Motors, 11 auto manufacturers having ARC air-bag inflators are covered by NHTSA’s action. These manufacturers include Ford, Volkswagen, Toyota and Hyundai.
Over a span of six years, GM has issued five recalls on vehicles that have ARC airbags. The latest recall was issued earlier this year on nearly 1 million Chevrolet and Buick SUVs after an injury was reported in a crash in March.
GM believes the evidence and data presented by NHTSA are not sufficient to issue a recall. The company is finding a fix for vehicles that have already been recalled. The automaker said the owners can continue driving the affected vehicles and they will receive necessary replacement parts as soon as the company finds a remedy.
Per NHTSA’s estimate, in the future, one out of every 370K air-bag inflators will rupture.
Sharon Yukevich, an investigator at NHTSA, said that any one of the nearly 52 million subject inflators is at risk. A complete recall will address the risk, she added.
NHTSA will accept comments on its initial defect determination until Dec 4, 2023 and will then decide whether to order a recall or not.
The Zacks Consensus Estimate for LI’s 2023 sales and earnings implies year-over-year growth of 154.7% and 9,200%, respectively. The EPS estimate for 2023 and 2024 have moved north by 31 cents and 65 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for F’s 2023 sales and earnings indicates year-over-year rises of 7.5% and 12.2%, respectively. The EPS estimates for 2023 and 2024 have moved up by 6 cents and 8 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 9.2% and 47.7%, respectively. The EPS estimates for 2023 and 2024 have moved north by 24 cents and 20 cents, respectively, in the past 60 days.
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General Motors (GM) at Risk of a Recall for Faulty Air Bags
General Motors Company (GM - Free Report) reportedly has around 20 million vehicles with defective airbag parts. Per The Wall Street Journal, the defect resulted in several injuries and two deaths. The government has asked to recall the vehicles to prevent further injuries or deaths.
The Detroit-based automaker has not disclosed the number of affected vehicles publicly. Per sources, the defect exposes General Motors to U.S. auto-safety regulators’ push to recall nearly 52 million ARC Automotive air-bag inflators.
During a crash, the inflators explode with too much force and hit passengers and the driver in the face and neck with shards.
The National Highway Traffic Safety Administration (NHTSA) has not disclosed the number of vehicles or names of the models that will be part of the recall. In April, NHTSA sent a letter to ARC to demand a recall.
ARC rejected NHTSA’s request, instigating the regulatory agency to schedule a hearing necessary to order a formal recall. ARC stated that extensive field tests showed no defect in the airbag and called air-bag rupture incidents isolated.
Steve Gold, vice president of ARC, said that no other automaker using these inflators has determined a systemic safety-related issue.
Besides General Motors, 11 auto manufacturers having ARC air-bag inflators are covered by NHTSA’s action. These manufacturers include Ford, Volkswagen, Toyota and Hyundai.
Over a span of six years, GM has issued five recalls on vehicles that have ARC airbags. The latest recall was issued earlier this year on nearly 1 million Chevrolet and Buick SUVs after an injury was reported in a crash in March.
GM believes the evidence and data presented by NHTSA are not sufficient to issue a recall. The company is finding a fix for vehicles that have already been recalled. The automaker said the owners can continue driving the affected vehicles and they will receive necessary replacement parts as soon as the company finds a remedy.
Per NHTSA’s estimate, in the future, one out of every 370K air-bag inflators will rupture.
Sharon Yukevich, an investigator at NHTSA, said that any one of the nearly 52 million subject inflators is at risk. A complete recall will address the risk, she added.
NHTSA will accept comments on its initial defect determination until Dec 4, 2023 and will then decide whether to order a recall or not.
Zacks Rank & Key Picks
GM currently carries a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Li Auto (LI - Free Report) , Ford Motor Company (F - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LI’s 2023 sales and earnings implies year-over-year growth of 154.7% and 9,200%, respectively. The EPS estimate for 2023 and 2024 have moved north by 31 cents and 65 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for F’s 2023 sales and earnings indicates year-over-year rises of 7.5% and 12.2%, respectively. The EPS estimates for 2023 and 2024 have moved up by 6 cents and 8 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 9.2% and 47.7%, respectively. The EPS estimates for 2023 and 2024 have moved north by 24 cents and 20 cents, respectively, in the past 60 days.