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For General Motors, recovery always seems to be a case of two steps forward and one step back. The same day it reported an impressive 32% increase in sales during February, the automaker also announced it was recalling some 1.3 million compact cars built between 2005 and 2010, and suspending sales of 2010 Chevrolet Cobalt so it can fix a power steering assist.
The National Highway Traffic Safety Administration opened an investigation Jan. 27 into approximately 905,000 Cobalt models in the United States after receiving more than 1,100 complaints of loss of power steering, 14 crashes and one injury, GM disclosed. "We're playing this as honest and transparent as we can," said Mark Reuss, president of GM's North American Operations.
Many of the models being recalled have been on the road for several years. "We found that this is a condition that takes time to develop. It tends to occur in older models out of warranty," said Jamie Hresko, GM Vice President of Quality, who said the company began looking at the problem in 2009.
GM watchers generally took the news as a sign of GM's new assertiveness on image control. "The GM recall is a result of the heightened awareness that the manufacturers have on the quality of their products in the wake of Toyota's problems. We will continue to see automakers be very proactive about owning up to manufacturing problems before the issues become PR nightmares," says Jesse Toprak, an analyst with TrueCar.com.
GM president Reuss, meanwhile, initiated a sweeping reorganization of the company's U.S. sales and marketing staff on Tuesday that eliminates layers of management between him and local dealerships, and concentrates the company's marketing dollar in a new, smaller organization led by Susan Docherty, who has been vice president of sales and will now also oversee marketing.
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