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Analyst says GM recalls could last through mid-summer

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By Mike Colias, Crain News Service

DETROIT (May 28, 2014) — General Motors Co.’s barrage of safety recalls could last through mid-summer, a Wall Street analyst said, citing a recent meeting with the company’s executives.

Barclays Capital analyst Brian Johnson said in a research note that GM is continuing a process of “mining data” on potential safety problems from 10 sources, including customer complaints, warranty claims and reports from dealerships.

“It is possible that the recall announcements may continue into mid-summer,” Mr. Johnson wrote, noting that it will take safety investigators until then to work through the data.

The analyst met May 21 with GM global product chief Mark Reuss and CFO Chuck Stevens. A GM spokesman declined to comment on Mr. Johnson’s note.

Mr. Johnson cited a significant change in how GM handles recalls: Mr. Reuss is leading a team of five who will “make decisions on all recalls going forward,” he said.

Previously, a three-member team decided when to issue recalls: the heads of manufacturing, engineering and quality, according to two people familiar with the process. In documents submitted to federal regulators, GM called that group the Executive Field Action Decision Committee.

GM has tripled its team of safety investigators to 60 over the past few months to accelerate decisions on safety recalls.

The auto maker issued six new recalls last week, bringing its total this year to 29 recalls affecting 13.8 million U.S. vehicles, a record for the company. Some vehicles are counted more than once because they are being called back for more than one repair.

The investigators are analyzing potential defects on an “issue to issue” basis, rather than by make and model year, so “it is possible that GM may issue further recalls” for vehicles that already have been called back, Mr. Johnson said.

He concluded that “it is tough to say if recalls from past vehicles (have) already peaked.”

This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.

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