Manufacturers Have Recalled Almost 4 Million Cars in the Past Month!

The defective ignition switches have been linked to 12 deaths in GM cars. Additionally, data from the Center for Auto Safety allege that there may be 303 related deaths of front-seat occupants occurred when the airbag failed to deploy in some of GM’s 2005-07 Cobalt models and 2003-07 Ions, which were two of the models included in the recalls announced Monday. GM calls the report “pure speculation,” and the Insurance Institute for Highway Safety and the National Center for Trauma and EMS at the University of Maryland said the figure did not take into account whether airbags would be expected to deploy in some crashes.

However, GM is not alone in its recall troubles. On Sunday, Honda Motor Co. Ltd. (NYSE: HMC) announced the recall of more than 800,000 of its popular Odyssey minivans built in 2004. Although Honda has issued three recalls for the Odyssey in less than a year, the company has reported no injuries or fires in its Odyssey minivans during the time frame of the recall. And Fiat Chrysler made a very modest recall, by comparison, of 18,000 new 500L models because of transmission problems.

GM is expecting to spend some $300 million in the first quarter of this year to repair the vehicles in the new recalls, as well as those in the recall of the 1.6 million small cars. GM is facing intense pressure to explain why it took years to address the ignition switch problem, which it first learned about in 2004. Mary Barra, GM’s CEO, said that the company was cooperating with several investigations, including those brought by federal regulators, the U.S. attorney’s office in New York and two congressional committees. Barra ordered a comprehensive internal safety review after the ignition switch recall.

A class action filed against GM in a Texas federal court last Friday appears to be the first one related to the recall of the 1.6 million cars, as owners claimed that their vehicles lost value because of ignition problems that were blamed for the 12 fatal crashes. The proposed class action alleges that GM failed to fix the defect, despite having known about it since 2004, creating “unreasonably dangerous” conditions for drivers of the affected models.

For now, GM is shielded from lawsuits resulting from accidents that happened before its July 2009 bankruptcy, because it is now a different legal entity. The current company was created from the federally supported bankruptcy in 2009. The “new” company is assumed to be free of old — pre-2009 — claims and lawsuits, which remain with the “old” GM.

However, the fact that the company knew about the major safety hazards of its vehicles and resulting fatalities, and yet waited for so long to make the recall could significantly affect GM’s reputation. GM no longer sells the recalled models but the customers might raise concerns regarding its ability to address similar problems that might occur in its current models, which could affect the company’s future sales.