GM joins recall race

The photo taken on August 3, 2009 shows GM cars on sale at a dealership in Yonkers, New York. General Motors has announced late Monday that it will recall 1.3 million cars in North America over a potentially faulty power steering motor following a federal probe into the problem in January. Photo:AFP/FILE

General Motors has announced it will recall 1.3 million cars in North America over a potentially faulty power steering motor following a federal probe into the problem in January.
The recall would cover 2005- through 2010-model year Chevrolet Cobalts and 2007-2010 Pontiac G5s, along with similar models in Canada and Mexico, the top US automaker said in a statement late Monday.
Complaints had been filed about power steering failures that could make the vehicles difficult to control.
"After our in-depth investigation, we found that this is a condition that takes time to develop. It tends to occur in older models out of warranty," GM vice president of quality Jamie Hresko said in the statement.
"Recalling these vehicles is the right thing to do for our customers' peace of mind," he added.
The US National Highway Traffic Safety Administration launched a probe of 905,000 Chevrolet Cobalts earlier this year after receiving more than 1,100 consumer complaints, which included reports of 14 crashes and one injury.

GM WILL MORE THAN TRIPLE TURNAROUND FUNDS

Another report from Frankfurt adds: The automaker said Tuesday it would more than triple its contribution to a rescue of ailing European division Opel/Vauxhall, providing more than half the total after calls from European governments.
Opel said in a statement that GM would invest 1.9 billion euros (2.6 billion dollars) "as part of its commitment to the European viability plan," more than three times an initial offer of 600 million euros.
Opel/Vauxhall chief executive Nick Reilly called the decision "the right course of action" for the company and said it "should clearly signal our determination to fix our business."
The funds would be provided in the form of both equity and loans, Reilly added.
GM had initially estimated Opel/Vauxhall would need 3.3 billion euros to get back on track, before European governments called for an additional 415 million "to offset the potential impact of adverse market developments," the statement said.
With GM putting up 1.9 billion euros of the new total, 3.7 billion euros, governments would be asked for less than two billion euros in loan guarantees, compared with 2.7 billion initially, it added.