GM's Little Van Recall Extends Auto Industry Woes

GM Van Recall Extends Auto Industry Woes
GM Van Recall Extends Auto Industry Woes

It is just a little recall, but it was prominent in the news -- another straw on the auto industry's back at a time when recalls seem to be announced every week.

GM said Friday that it would recall 5,000 heavy vans because faulty alternators can cause their engines to catch fire. According to Reuters, the vans are brand new, having been built in February and March. GM is halting production of the 2010 Chevrolet Express and GMC Savana passenger and cargo vans while it looks into the problem.

GM said the vehicle identification numbers
of the effected heavy-duty Express 2500 and 3500 series vans end with eight characters from A1129327 to A1142523. The GMC Savana 2500 and 3500 series VIN numbers end with eight characters running from A1128784 to A1901915.

Industry-watchers, including research firm Edmunds' expert, noted that the U.S. has experienced a surge in sales of cars and light trucks during March, an increase that may be as much as 30% over last year. That could put the domestic annual "run rate" of sales over 13 million, a figure the car industry has not hit in over two years.

Now, the industry has to ask itself the question: How many recalls will it take to break the public's trust in new cars and trucks? At what point do a growing number of people decide to keep their old vehicles until this wave of recalls, which now includes almost every large auto company, is over?

Consumers have been remarkably patient with the car companies; they've kept coming into showrooms. That may be because of substantial incentives which were started by Toyota (TM) and matched by many of its competitors. Incentives will cost the car companies billion of dollars in the U.S. this year, but it may be pricing rather than confidence in the industry that is keeping sales at reasonable levels. The danger of that is the car companies, which might have made a lot of money this year, will make a lot less.