Tag Archive | "GM"

N.Y. Judge Rules in Favor of Dealer in Case Against GM


YONKERS, N.Y. — An administrative judge from New York’s Department of Motor Vehicles said Wednesday that General Motors’ (GM) statewide sales benchmark is unreasonable, ruling that the automaker cannot enforce a post-bankruptcy agreement with one of its dealers, Beck Chevrolet Co. Inc.

Administrative Law Judge Walter Zulkoski found that the manufacturer’s sales benchmark was unfairly applied to the Yonkers Chevrolet store when it attempted to terminate the dealer’s franchise agreement in 2013. In his ruling, Zulkoski cited New York’s Franchised Motor Vehicle Dealer Act, which states that manufacturers may not “use an unreasonable, arbitrary or unfair sales or other performance standard in determining a franchised motor vehicle dealer’s compliance with a franchise agreement.”

GM uses a measure of sales performance called the Retail Sales Index (RSI), a percentage determined by the actual sales of a dealer over the dealer’s expected sales. According to the ruling, “An RSI of 100 indicates the dealer is selling the number of vehicles the franchisor expects can be sold in the dealer’s Area of Geographic Sales and Service Advantage …”

As part of a participation agreement with GM, Beck Chevrolet agreed to achieve an RSI of 70 in 2010, 85 in 2011 and 100 in 2012. The dealership was unable to reach those benchmarks, but neither did several other dealerships — and those dealerships did not face termination.

“In 2013, Beck’s RSI was 105th out of 127 for New York State … Thus in 2013, 22 dealers in New York were below Beck’s RSI but not one of those in the nine downstate counties was facing the termination process that Beck is now challenging,” the ruling read, in part.

The reason so many downstate dealerships failed to meet GM’s standards, Zulkoski noted, is because GM uses a statewide average to determine RSI. Beck Chevrolet argued that using a New York City metropolitan average would be more realistic.

“Other jurisdictions have agreed with Beck that dealers in large metro areas should not be held to a statewide average,” Zulkoski said in his ruling.

Because GM did not attempt to terminate other dealers in the New York City metropolitan area that did not meet the statewide RSI standard, Zulkoski determined that the standard was not reasonably applied. He also noted that the manufacturer does not base its decisions to terminate solely on the basis of RSI, but noted that GM did not give another reason for terminating the dealership’s franchise agreement.

Under Beck Chevrolet’s participation agreement with GM, the dealership was also required to make image improvements. But Zulkoski ruled that GM “… does not like Beck’s facility’s physical appearance … it has not shown photos of what other Chevrolet dealers’ facilities look like to support its claim that Beck’s facility is below its standards by a preponderance of the evidence.”

Beck Chevrolet’s Vice President and Dealer Principal Russell Geller, who testified for both sides, also admitted that he knew of GM’s plans to put another dealer at the Beck Chevrolet location once the dealership was terminated.

“For the New York City metropolitan area, the RSI standard of GM is unreasonable as it does not realistically reflect the Chevrolet sales challenges that Beck and other New York metropolitan dealers face, and GM is not applying the RSI uniformly to all dealers in New York and thus GM lacks due cause to terminate Beck’s franchise,” Zulkoski concluded in his ruling.

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GM Recalls Nearly 7,600 Chevy Caprices Over Transmission Issue


General Motors Co. will recall about 7,600 Chevrolet Caprice police vehicles for a transmission issue, making this the 75th safety recall action the auto maker has taken this year and putting the number of total vehicles recalled by the company in North America at well over 30 million, reported The Wall Street Journal.

The recall, posted by the National Highway Traffic Safety Administration on Tuesday, covers certain 2011 through 2013 model year Caprices. The vehicles are police patrol cruisers equipped with a specific transmission selector lever that contains two pins that can become displaced.

If the pins get displaced, the driver may be able to shift the vehicle from “park” without depressing the brake pedal or remove the ignition key without the transmission being in “park.” The situation may lead to vehicles rolling away.

This is the second time in three days the auto maker has recalled certain Caprice models. The company had recalled some versions of the 2011 and 2013 model years for an ignition switch issue. A bumping of the ignition key could cause the switch to move from “on” to “accessory,” thereby disabling the air bags.

This also marks the seventh recall issued by the company since Thursday.

The company has now recalled approximately 30,011,650 vehicles in North America this year after pledging to take quicker action to spot and react to problems in the wake of its failure to recall 2.6 million cars with an ignition switch problem for about 11 years.

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GM Compensation Fund Approves 24 Death Claims Related to Ignition Switch Recall


DETROIT, Mich. – The number of approved death compensation claims related to a recall of a faulty General Motors ignition switch now stands at 24, up from 19 last month, reported Michigan Live.

The claims were approved by a fund set up by GM to compensate victims of a defective part in mid-to-late-2000s model cars that has led to a massive recall and a federal investigation.

The victim compensation fund is being overseen by Kenneth Feinberg, a prominent Washington, D.C. attorney who oversaw similar compensation facilities for disasters such as the BP Gulf of Mexico oil spill and the Sept. 11 terrorist attacks.

The latest tally of claims received stands at 1,130, including 165 death claims, 79 “Category One” injury claims, or those resulting in quadriplegia, paraplegia, double amputation, permanent brain damage or pervasive burns, and 886 “Category Two” injury claims, or injuries that required a hospital visit within 48 hours of an accident.

To date, there have been 40 claims determined eligible, including the 24 death claims, as well as four Category One injury claims and 12 Category Two claims.

The deadline for filing a compensation claim is Dec. 31. GM has estimated that compensating all victims of the defective car part could cost the Detroit automaker anywhere from $400-600 million.

GM has recalled 2.6 million vehicles, including 2.2 million in the U.S., affected by the ignition switch. The recall includes 2003-2007 Saturn Ions, 2007-2010 Saturn Skys, 2005-2011 Chevrolet HHRs, 2006-2010 Pontiac Solstices, and 2005-10 Chevrolet Cobalt and Pontiac G5 models.

The faulty ignition switches at the heart of the unprecedented recall can move out of the “run” position to the “accessory” or “off” positions, leading to a loss of power. The risk may be increased if the key ring is carrying added weight or if the vehicle goes off road or experiences some jarring event, including rough roads. If the key turns to one of those positions, officials say the front air bags may not work if there’s a crash.

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GM Caps Week With Three New Recalls


General Motors Co. capped the week by issuing three new recalls covering almost 60,575 vehicles in North America — the biggest for an ignition switch issue on some Pontiac G8 and Chevrolet Caprice police patrol vehicles, reported The Wall Street Journal.

The auto maker has now issued six separate recalls over the past three days and stopped shipping or selling its 2015 Chevrolet Colorado and GMC Canyon pickup trucks. The recalls had been submitted to the National Highway Traffic Safety Administration last month but notices didn’t post until Saturday.

A total of 46,873 model year 2008 through 2009 Pontiac G8 and 2011-2013 Chevrolet Caprice police patrol vehicles sedans are included in the first recalls. The ignition switch may slip from the “run” to “accessory” position if the driver’s knee interacts with the ignition key. GM’s Australian unit—known as Holden—discovered the condition during a review of unintended key rotation reports in recalled models in North America.

The Holden unit is developing a replacement fixed-blade key. GM is aware of one crash, no injuries and no fatalities in these vehicles.

The company is also recalling 10,005 model year 2004-2007 Cadillac CTS-V and 2006-2007 Cadillac STS-V sedans in the U.S. On certain vehicles, the fuel pump module electrical terminal may overheat, causing melting of the flange material. GM knows of no crashes, injuries or fatalities related to the condition.

Rounding out the group, 304 model year 2014 Chevrolet Sonics were recalled in the over concern a loose electrical connection in the steering column may affect driver air bag performance. If the condition is present and the air bag lamp is illuminated, it may result in the driver frontal air bag deploying only as a single-stage air bag in crashes of a certain severity. GM isn’t aware of any crashes, injuries or fatalities related to this issue.

GM has now issued 74 recalls covering almost 30 million vehicles.

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General Motors Gives Aggressive Outlook


American consumers are buying new cars and trucks at the strongest pace in years, offsetting car makers’ troubles elsewhere and leading the biggest U.S. auto maker to forecast fat profits ahead, reported The Wall Street Journal.

Overall U.S. sales rose 9% last month compared with the same period in 2013 to a nearly decade high. Demand for highly profitable sport-utility vehicles, once scorned as Detroit’s gas guzzling cash cows, continues to rise amid low fuel prices and more efficient designs.

SUVs and pickups were largely behind last month’s strong gains at General Motors Co. Fiat SpA’s Chrysler, Nissan Motor Co. and Honda Motor Co. Only Ford Motor Co., which confronts a change in its truck line, went in reverse during September.

Feeding that appetite for new cars will be key to building and repairing overseas units. So far, the outlook is sound. “A lot of analysts have been beating the drum for the past couple months [saying] that this will soon end,” said Fred Diaz, Nissan’s U.S. sales chief. “I don’t see it.”

U.S. buyers’ role in financing the future at GM and Ford were clear despite the contrasting visions laid out this week by the chief executives at the two biggest U.S. car makers. GM CEO Mary Barra pledged to get near 10% operating margins in North America and to halt losses in Europe by 2016.

Her crosstown rival, Ford CEO Mark Fields, is projecting long-range margins just shy of GM’s and using North American profits to finance a global market share push that seeks to tap Asia’s emerging markets and revive its faded luxury brand.

Mr. Fields’ plan hit a sour note with investors, sending shares to six-months lows over guidance for short-term profit declines, much of which is due to troubles in emerging markets.

GM shares gained 1.7% to $32.49 Wednesday on Ms. Barra’s plan, but remain below the $33 price fetched in their 2010 initial public offering. GM’s market value is nearly $53 billion, trailing Ford, Toyota Motor Corp. 7203.TO -2.85% and Volkswagen AG VOW3.XE -2.25% .

Simplification is the cornerstone of the visions presented this week by Ms. Barra and Mr. Fields. GM and Ford, long criticized for running sprawling businesses where executives weren’t challenged to collaborate, both are rushing to lower the number of vehicle platforms that provide the underpinning for the cars in their lineups.

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General Motors Appoints its First Cybersecurity Chief


General Motors Co on Tuesday named an engineer to serve as its first cybersecurity chief as the No. 1 U.S. automaker and its rivals come under increasing pressure to better secure their vehicles against hackers, reported Reuters.

The No. 1 U.S. automaker promoted manager Jeff Massimilla to the post as part of an eight-month review of its product design and engineering, said GM Vice President of Global Product Development Mark Reuss.

“If you look at the technology…as we put semi-autonomous and autonomous systems into vehicles, we have to be able to look at this at a very very critical systems level and do it defect-free for the customer,” Reuss said. “So that’s the competitive advantage we’re trying to really put in place for General Motors.”

Vehicles rely on tiny computers to manage everything from engines and brakes to navigation, air conditioning and windshield wipers. Security experts say it is only a matter of time before malicious hackers are able to exploit software glitches and other vulnerabilities to try to harm drivers.

Security researchers in recent years have uncovered vulnerabilities in those systems that they say make cars susceptible to potentially dangerous attacks.

For example, at last year’s Def Con hacking conference in Las Vegas, security researchers Charlie Miller and Chris Valasek exposed methods for attacking the Toyota Prius and Ford Escape. In August of this year they published a list of the world’s “most hackable” cars.

A group of well-known hackers and security professionals in August sent an open letter to GM and other automakers asking them to implement basic guidelines to defend cars from cyber attacks.

The non-profit group, known as “I am the Calvary” has suggested that carmakers adopt a five-part cyber-safety program to make their products less susceptible to attacks by hackers.

Egil Juliussen, an analyst with IHS Automotive, said that the move reflects the increasing importance of cybersecurity to the industry.

“The long-term trend is that the auto manufacturers will have to make security part of the hardware and software architecture,” he said. “It won’t make it impossible to hack, but it will make it hard enough so that there is no financial gain to do the hacking.”

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