February 13, 2014 at 5:22 pm

GM recalls 778K cars to replace ignition switches after fatal crashes

2007 Chevrolet Cobalt (GM)

General Motors Co.’s recall Thursday of more than 778,000 older Chevrolets and Pontiacs that came after six people died in crashes isn’t expected to have a negative impact on GM in the long-term, analysts said.

The company said it knows of five front-impact crashes in which six people died and air bags did not deploy in vehicles. GM said affected vehicles’ ignition switches can turn off in a crash. That causes the engine to shut down, and as a result, air bags fail to activate.

“All of these crashes occurred off-road and at high speeds, where the probability of serious or fatal injuries was high regardless of air bag deployment,” GM spokesman Alan Adler said. “In addition, failure to wear seat belts and alcohol use were factors in some of these cases.”

GM knows of 17 other front-end crashes in which air bags did not deploy and people were injured, Adler said.

The Detroit automaker is recalling 619,122 2005-07 Chevrolet Cobalt and 2007 Pontiac G5 vehicles in the United States; the vast majority of the affected vehicles are Cobalts. Fewer than 33,000 are G5s.

The total recall covers778,562 cars and includes 153,310 in Canada and 6,130 in Mexico.

All crashes involving death or injury occurred in the U.S., but Adler said GM would not provide information on when or where they occurred.

GM said some vehicles’ ignition switches weren’t tightened properly. The company said if a heavy key ring is added or the car goes off the road or experiences some other “jarring” event, the ignition switch may inadvertently be moved out of the “run” position.

Dealerswill replace the ignition switch. Until repairs are made, GM says drivers should remove non-essential items from key rings.

University of Notre Dame Assistant Professor of Management Kaitlin Wowak said the recall will cost GM time and money and could hurt the company’s results. “GM is also going to have to work on repairing the brand damage it will experience as a result of this recall,” he said in a statement. “GM will be dealing with the repercussions for an extended period of time.”

Edmunds.com senior analyst Jessica Caldwell disagrees. She doesn’t think the recall will have any impact on GM’s new or used car sales, as the vehicles are no longer made. The recall follows another large one by Toyota Motor Corp. this week that covered 1.9 million Prius cars and 295,000 others. Caldwell said with so many recalls, most consumers tend to forget which vehicles have been recalled unless they receive a letter about their own car.

“No long-term damage to General Motors is going to come out of this recall,” Caldwell said in an interview.

Jesse Toprak, chief analyst of Cars.com, said he’d put the severity of GM’s recall at a six on a scale of one to 10, with 10 being the worst. He said because there were deaths, people will take notice, but because the cars are no longer produced, the crashes occurred in unusual cases and the company took quick action, GM will experience minimal if any damage to sales or image.

“GM has come a long way in terms of quality improvements since these vehicles have been produced,” he said in an interview.

GM said the National Highway Traffic Safety Administration never investigated the issue. The automaker learned of it through field reports.

“The incident rate was very low with no growing trend,” Adler said.

The Cobalt and G5 have been subject to recalls before, including a 2010 recall to fix power steering systems in some 1.3 million Chevrolets and Pontiacs. That recall included 2005-2010 Cobalts, 2007-2010 G5s and other vehicles, spurred after a U.S. investigation into consumer complaints over sudden loss of power steering. In that case, GM initially had investigated the problem in 2009 and opted not to recall the vehicles, but reversed course after NHTSA opened an investigation.

Nearly 100,000 Cobalts from the 2005 to 2006 model years also were recalled in 2007 to upgrade head-impact protection.