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via:Chron.com

General Motors Co. plans to recall 1.3 million Chevrolet and Pontiac vehicles in North America to fix power-steering systems after U.S. regulators received more than 1,100 consumer complaints about failures.

 

GM will replace a motor in the power-steering systems of Chevrolet Cobalt small cars and three Pontiac models, the Detroit-based carmaker said in an e-mailed statement late Monday. The National Highway Traffic Safety Administration began an investigation following complaints, which included 14 crashes and one injury, GM said.

 

The action follows global recalls of more than 8 million vehicles by Toyota Motor Corp. for issues including unintended acceleration, which have prompted lawsuits and Congressional hearings. The cases have triggered a review of the NHTSA by the U.S. Transportation Department’s inspector general to examine the way government investigators monitor automotive defects.

 

“A lot of carmakers are coming out with recalls as they want to show that they are being strict about quality,” said Jeong Min Pak, a Seoul-based senior director at Fitch Ratings. “They want to avoid the negative press that Toyota has received.”

 

The vehicles covered by GM’s action are the 2005-2010 Cobalt, 2007-2010 Pontiac G5, 2005-2006 Pontiac Pursuit sold in Canada, and the 2005-2006 Pontiac G4 sold in Mexico. A remedy is being developed and customers will be notified when the plan is completed, the statement said.

 

“Recalling these vehicles is the right thing to do,” Jamie Hresko, a vice president for quality at GM, said in the statement.

 

The vehicles can still be steered when the power-steering system fails, though it requires greater effort, Hresko said. The steering fault tends to occur in older vehicles for which the warranties have expired, he said.

 

The NHTSA said Feb. 1 it was investigating the Cobalt because of reports of “sudden loss” of power steering.

 

GM reported U.S. sales of 104,724 Cobalts last year, a decline of 44 percent from 2008. The automaker said in January it plans to build fewer of the cars through April as it adjusts output to match demand.

 

The company plans to triple its funding to reorganize the Opel division, part of an effort to persuade governments in Europe to provide loans and guarantees.

 

The automaker will contribute 1.9 billion euros ($2.6 billion) in a combination of equity and loans to its operations in the region including the Vauxhall brand in the U.K., Opel Chief Executive Officer Nick Reilly said today in a statement.

 

“European governments, not least Germany, want GM to raise its commitment to Opel as a condition to provide state aid,” said Marc-Rene Tonn, an analyst at M.M. Warburg in Hamburg. “GM is moving in the right direction and this should mean restructuring at Opel can get under way sooner.”

 

Total restructuring costs will increase by 415 million euros to 3.7 billion euros “to offset the potential impact of adverse market developments,” Opel said. That would put GM’s contribution at about half of the amount. GM is asking governments to provide less than 2 billion euros in loan guarantees, compared with 2.7 billion euros sought earlier.

 

GM, the biggest U.S. carmaker, needs the money to fund cutbacks of 17 percent of Opel’s workforce and 20 percent of production capacity in the next two to three years. Opel and Vauxhall employ about 48,000 people, with about half of those workers in Germany.

 

The Ruesselsheim, Germany-based division set a target on Feb. 9 of breaking even in 2011 and making money in 2012 following the reorganization, which will include the introduction of 12 models and the closure of a Belgian plant.

 

“We hope that our strong commitment will be well received as a major milestone in our ongoing discussions about government guarantees,” Reilly said in the statement. The CEO will hold a roundtable with journalists at the Geneva auto show later today.