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GM lifts sales stall on '13, '14 Cruzes



Published: Thu, June 26, 2014 @ 12:10 a.m.

Recall expected to repair faulty part in air bags

By ROBERT CONNELLY

and JORDYN GRZELEWSKI

news@vindy.com

LORDSTOWN

Tens of thousands of Lordstown-built Chevrolet Cruzes have mechanical air-bag issues that led to a nationwide sales halt that was lifted Wednesday night.

”We’ve been able to identify approximately 33,000 vehicles that have been built with a bad part. So, we’re in the process of lifting the stop sale on most of the cars” inventoried at dealerships, said Jim Cain, GM spokesman.

Tom Mock, GM Lordstown spokesman, confirmed the blanket stop-delivery order was lifted late Wednesday.

The vehicles affected are certain 2013 and 2014 Cruzes. A bad part in the steering wheel air bag is the problem.

Before identifying the number of vehicles affected, GM notified dealerships in the U.S. and Canada on Tuesday to halt sales and deliveries of 2013 and 2014 Cruzes.

“They’re not recalled yet ... We’re working towards a recall,” Cain said.

Cain said the halt notice was issued Tuesday to figure out exactly how many bad parts were shipped and were installed.

The halt notice came after GM announced earlier this month that Cruze sales were up 41 percent from last year with 32,393 sold in May compared to 23,055 in May 2013. That number was slightly lower than the highest amount of Cruze sales in June 2013 of 32,871.

Already GM is embroiled in recalls and congressional scrutiny over faulty ignition switches for several vehicles, including the Cruze’s Lordstown-built predecessor, the Chevrolet Cobalt. Cain said customers who have asked for a vehicle have been offered one — about 30,000 people — but the numbers are declining “because we are repairing more cars every day.” He reminded owners to keep just the key on the ring, and no additional weight.

In late March, sales were halted for the 2013-14 Cruze with 1.4-liter turbocharged four-cylinder gasoline engines. That later led to a recall of 172,000 Cruzes because of an axle issue in the 2013 and 2014 models.

But for the air bag: “It’s a mechanical issue, and it’s the same supplier involved in the Toyota recall,” Cain explained.

The Toyota recall was announced Monday and its supplier is Takata Corp., a Tokyo-based supplier of seat belts, steering wheels and other auto parts.

The National Highway Traffic Safety Administration opened an investigation this month after getting six reports of air bags rupturing in Florida and Puerto Rico. Three people were injured in those cases. It had estimated 1.1 million vehicles in the U.S. could be affected, but the total is likely to climb. That recall was only for cars sold in hot, humid parts of the country.

Takata recommended recalls in Florida, Hawaii, Puerto Rico and the U.S. Virgin Islands.

“That one is chemical ... our issue is mechanical. The module was just built with the wrong part. Even though it’s the same supplier, it’s a different issue,” Cain said.

According to Karl Brauer, senior auto analyst at Kelley Blue Book, the stop notice shows GM being more responsible in the wake of its other recent recalls.

“It’s an example of GM’s new attitude and commitment to safety,” Brauer said. “It’s good overall, because it means more protection for customers. But it is impacting their sales line.” Brauer said that in the past, car manufacturers waited to get more details on which models were defective before issuing stop notices or recalls. He said GM acted before knowing which Cruze models had problems because of the increased scrutiny the company is facing.

Michelle Krebs, senior analyst for autotrader.com, agreed that GM’s sales will be affected bv the stop notice because the Cruze is one of GM’s best-selling cars.

“What’s been interesting about the whole GM recall thing is that it hasn’t hurt their sales. This stop-sale will certainly have some effect,” Krebs said.

According to Krebs, the stop notice came at a particularly bad time for GM and for car dealerships because the bulk of car sales happen at the end of the month, and that June sales will definitely be impacted.

Brauer said this may not be the last stop notice issued by GM.

“[This is] the double-edged sword of having a greater focus on safety and more scrutiny on potential problems. This is a good thing overall but because the company has elevated their level of scrutiny, it means that items like this will be more common in the near future,” Brauer said.

Mary Barra, the CEO of GM, will appear on NBC’s “Today Show” today.

Nearly 10 million vehicles with Takata air bags have been recalled since 2008. Takata is one of the world’s largest air bag suppliers.

Glenn Johnson, president of United Auto Workers Local 1112 at the Lordstown assembly plant, had no comment Wednesday night.

The Associated Press contributed to this report.


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