There appears to be no end in sight when it comes to General Motors Co.'s unprecedented recall efforts being spearheaded by CEO Mary Barra. With Monday's announcement of six new recall campaigns of 8.4 million vehicles globally, including 7.6 million in the U.S., the Detroit-based automaker has recalled more vehicles than the entire U.S. industry combined last year and, with six months left, could break the 2004 industry record of 30.8 million vehicles recalled by itself.Watch video
DETROIT, MI- There appears to be no end in sight when it comes to General Motors Co.'s unprecedented recall efforts being spearheaded by CEO Mary Barra.
With Monday's announcement of six new recall campaigns of 8.4 million vehicles globally, including 7.6 million in the U.S., the Detroit-based automaker has recalled more vehicles than the entire U.S. industry combined last year and, with six months left, could break the 2004 industry record of 30.8 million vehicles recalled by itself.
"We're hitting unprecedented numbers here," said Kelley Blue Book senior analyst Karl Brauer, during a phone interview. "People have to be starting to think when is this going to end?"
GM has announced 54 recall campaigns involving roughly 29 million vehicles globally, including nearly 25.7 million in the U.S., in 2014. Its recalls account for roughly 64 percent of the U.S. industry's more than 40 million recalled vehicles this year.
And while sales appear unaffected by the recall crisis and industry analysts praise Barra and her leadership team for being proactive, investors might not take too kindly to GM being in the red for 2014.
Kenneth Feinberg, the independent claims administrator for the GM Ignition Compensation Program, announces the details of the program, including eligibility, scope, rules for the program, and timing of submitting claims, during a news conference at the National Press Club in Washington, Monday, June 30, 2014.(AP Photo/Manuel Balce Ceneta) GM on Monday increased its expected recall expenses for the second quarter from $700 million to $1.2 billion. That's in addition to a $1.3 billion hit in the first quarter due to recalls, upping its expectations to $2.5 billion – roughly 66 percent of its entire 2013 earnings.
"I keep wondering if/when the tipping point is to where their current sales start to suffer," said Brauer, adding Barra has handled the recall crisis very well.
Those figures exclude the money that will be allocated to its compensation fund for those impacted by the initial ignition switch recall of 2.6 million vehicles that began in February, which attorney Kenneth Feinberg announced details of hours before the latest recalls on Monday.
Feinberg wouldn't estimate the total cost for GM or how many claims he expects to be eligible for the program. Bank of America Merrill Lynch analyst John Murphy said he expects the program to cost GM $1 billion or less.
"The lack of a definitive total limit on the compensation for faulty ignition switches will likely remain an overhang on GM's stock," he said in a note to investors.
Trading of GM shares was reportedly halted for less than 30 minutes following the newest recall announcement. The stock closed at $36.30, down 32 cents
The plethora of recalls this year for GM is due to the company's exhaustive inspection efforts following the well-publicized ignition switch recall that has been linked to at least 13 deaths and dozens of accidents.
GM says it has made changes to every process that affects the safety of its vehicles, and the company has acted or will act on all 90 of the recommendations put forward by former U.S. Attorney Anton Valukas in his independent report to the company's Board of Directors.
"We undertook what I believe is the most comprehensive safety review in the history of our company because nothing is more important than the safety of our customers," said GM CEO Mary Barra. "Our customers deserve more than we delivered in these vehicles. That has hardened my resolve to set a new industry standard for vehicle safety, quality and excellence."
The recalls announced Monday include 27 models ranging from the 1997 to 2014 model years. The majority of the vehicles recalled are due to "unintended ignition key rotation" that can cause the key to move out of the "run" position to the "accessory" or "off" positions, leading to a loss of power. If the key turns to one of those positions, the front air bags may not work if there's a crash.
GM is aware of seven crashes, eight injuries and three fatalities as part of the newest recalls. The fatal crashes occurred in older model full-size sedans being recalled for inadvertent ignition key rotation. There is no conclusive evidence that the defect condition caused those crashes, according to GM.
A GM spokesman said victims that are part of the newest recalls will not be eligible for the compensation program announced by Feinberg on Monday.
Dan Hill, president of communications and government affairs firm Ervin | Hill Strategy in Washington, D.C., said it's too early to determine whether the program announced by Feinberg goes far enough.
Family members of a victims of a faulty GM ignition switch places photographs of the people killed when the ignition switches failed in their cars, on a wall in the hearing room on Capitol Hill in Washington, Wednesday, June 18, 2014. (AP Photo/Cliff Owen) "This program is a success if it does what's right, and they solve it, and avoid protracted litigation," he said. "If they end up fighting out a lot of these cases in the courts instead of solving them for the fund, then I would say it was a failure."
GM has linked the faulty ignition switches to at least 13 deaths and 54 crashes, but others, including victims' family members and lawyers, say the death toll is more than 100. GM has said its numbers could increase based on Feinberg's findings because it only included those involved in front-end collisions.
Feinberg is best known for overseeing millions of dollars in compensation in high-profile tragedies, including the Sept. 11 terrorist attacks, the Virginia Tech school shooting, the BP Deepwater Horizon oil spill in the Gulf of Mexico and the Boston Marathon bombing.
In previous compensation programs, Feinberg said the vast majority, if not all eligible victims, opted for the program over litigation.
But Hill said some victims may want to wait as long as possible to accept any kind of deal pending current investigations, including possible criminal charges by the Department of Justice.
"There are going to be lawyers advising GM victims, 'we've got this, we don't want to go this route,' " he said.
GM claims must be filed between Aug. 1 and Dec. 31. Feinberg promised payments within 90 or 180 days depending on the severity of the claim.
For more information on the program and claims forms, visit GM's new compensation website at gmignitioncompensation.com.
Michael Wayland covers the automotive industry for MLive. Email him at MWayland@mlive.com & follow him on Twitter @MikeWayland or Google+.