Yet another recall at General Motors

General Motors is back in the news for recalling yet another round of vehicles. This time it is having customers return 2.4 million cars, right as the company continues to battle safety issues.

Bill Vlasic and Christopher Jensen had this story for the New York Times:

General Motors issued four new recalls on Tuesday, bringing its total for the year to 13.5 million, already the most in the company’s history.

The recalls — including 2.4 million cars, trucks and sport utility vehicles involved in Tuesday’s actions — represent an extraordinary about-face for the nation’s largest automaker. Since February, G.M. has been under intense pressure from federal officials, safety advocates and consumers for its decade-long failure to fix cars with a defective ignition switch that G.M. has linked to 13 deaths.

In response, it has made broad changes to its safety practices and more aggressively identified problems. Its mounting tally of safety actions has already far surpassed the 758,000 vehicles that the company recalled in the United States last year, and it is more than four times the nearly 2.8 million vehicles it sold domestically last year. At any given time, about 250 million cars are registered in America.

The Wall Street Journal story by Jeff Bennett said that GM was beginning to lose investor confidence:

Tuesday’s recall, and the $200 million charge that came with it, followed by less than a week the disclosure of a $200 million charge and a recall of 2.7 million vehicles.

A GM spokesman couldn’t say whether the bulk of the recalls are now done. He said the auto maker is continuing to look for and respond to safety issues.

The latest run-up in recall costs comes after two prominent investors, Warren Buffett and David Einhorn, disclosed their companies had sold GM shares. Mr. Buffett’s Berkshire Hathaway Inc. cut its position in the auto maker by 10 million shares, and now owns 30 million shares valued at about $1 billion.

Mr. Einhorn’s Greenlight Capital Inc. sold its entire stake in GM during the first calendar quarter when the auto maker took a $1.3 billion charge on recall related expenses. Greenlight had owned 17 million shares.

The U.S. auto industry to date this year has recalled almost 22 million vehicles, second only to 2004 when 30.8 million cars and trucks were recalled in the country. GM’s 13.5 million U.S. recall tally thus far this year exceeds its previous record of 10.7 million U.S. vehicles recalled during all of 2004, according to the National Highway Traffic Safety Administration.

Bill Koenig, a Forbes contributor, quoted an analyst as saying the firm needs to work on its public image after all the issues:

The company has been “appearing in the news for not the right reasons,” said Karl Brauer, senior analyst with Kelley Blue Book. Despite that, GM’s post-bankruptcy cars and trucks “are still drawing interested consumers,” he said.

“The metaphor I would use is the house got really dirty and now they’re going to clean it up and make sure it doesn’t get that dirty again,” Bauer said of GM’s vehicle recalls.

The recalls have dominated the tenure of Chief Executive Officer Mary Barra, who took the helm of the largest U.S.-based automaker in January. Barra this week installed a new global communications chief, Tony Cervone, who previously worked at GM.

Chris Isidore wrote for CNNMoney that one problem was so serious in some vehicles that GM isn’t allowing any of the cars to be sold:

The crossover SUVs being recalled — Buick Enclave, Chevrolet Traverse, GMC Acadia and Saturn Outlook — have a problem that can cause the front seat belt to separate from the car during a crash. GM (GM,Fortune 500) said it is a serious enough problem that it is ordering dealers not to sell new or used models of the vehicles until repairs are made. The model years involved are 2009 to 2014.

GM was hit with a $35 million fine Friday by the National Highway Traffic Safety Administration for a delay in reporting problems with a faulty ignition switch tied to at least 13 deaths. GM engineers knew of the switch problem as early as 2004, but the company did not start recalling the cars until February this year.

GM CEO Mary Barra has repeatedly apologized for the delay, saying it was unacceptable and promising to take steps to make sure it didn’t happen again. The automaker has hired 35 product investigators since the recall scandal broke and appointed a new executive in charge of safety.

Bloomberg Businessweek had a piece by Paul M. Barrett that said CEO Barra was having difficulty figuring out its public relations position:

In the face of a spreading defect-liability crisis, General Motors (GM) can’t seem to get its story straight. The company is struggling to clarify whether it wants to apologize to consumers, mollify regulators, or shout down plaintiffs’ attorneys.

The automaker agreed on Friday to submit to unusually close and ongoing federal scrutiny in the wake of a massive recall of almost 2.6 million small cars. “We have learned a great deal from this recall,” GM Chief Executive Officer Mary Barra said in response to the announcement, which included news of a $35 million fine. “We will now focus on the goal of becoming an industry leader in safety. We will emerge from this situation a stronger company.”

Barra just can’t seem to catch a break. After appointing a new executive to oversee safety, I’m sure she thought that would mollify the detractors. General Motors has a long way to go before it regains the public trust.