The National Highway Traffic Safety Administration (NHTSA) recently demanded the recall of 67 million air bag inflators made by ARC Automotive Inc., citing a safety defect. While General Motors (NYSE:GM) has already recalled 994,763 vehicles in this matter, a review by the Wall Street Journal (WSJ) has identified more models of GM and other automakers that are impacted by the defective air bag inflators and could be recalled.
More Recalls Possible
Regulators have cautioned that ARC’s air bag inflators could explode during a crash and spew metal shrapnel into the vehicle’s interior. WSJ’s review of documents submitted to the NHTSA during the eight-year probe identified at least 6.8 million vehicles that automakers admitted were built with the potentially defective air bags. Overall, ARC’s defective air bag issue impacts at least 50 different vehicle models across 15 automotive brands, including General Motors, Ford (F), Hyundai (HYMTF), Audi, BMW, and Volkswagen (DE:VOW3).
As per the review, General Motors appears to have the highest number of vehicles (at least 3.6 million) that have the potentially defective ARC inflators.
Aside from the four models (spanning 2008 to 2017 model years) already recalled by General Motors, documents submitted to NHTSA reveal that the Detroit-based automaker has identified at least 25 additional models built with ARC’s potentially dangerous air bag inflators. The company has not yet issued a recall for these vehicles. GM continues to investigate the matter with the help of a third-party engineering firm.
While several other automakers, including Ford, have also submitted records to the NHTSA about vehicles with ARC-made inflators, WSJ’s review of NHTSA’s recall filings shows that most of the vehicles have not been recalled. Eight separate recalls in the U.S. triggered by the air bag concern cover a little over one million vehicles that include 13 models. This indicates the possibility of more recalls in the days ahead. In a statement, BMW denied being impacted by the issue. Nonetheless, most automakers are still reviewing and collecting data on this matter.
“We are still investigating,” said Maria Buczkowski, a Ford spokeswoman. “We have not had any ARC air bag inflators rupture in the field.”
Meanwhile, ARC continues to decline NHTSA’s demand to recall the defective inflators that were made between 2000 and 2018.
Amid macro pressures, intense competition, and potential recalls due to the ARC air bag inflator issue, Wall Street is cautiously optimistic on Ford and General Motors, with a Moderate Buy consensus rating on the stocks.
