General Motors will recall about seven million big pickup trucks and SUVs worldwide to replace potentially dangerous Takata air bag inflators.
The announcement came Monday after the U.S. government told the automaker it had to recall six million of the vehicles in the U.S.
GM says it will not fight the decision, even though it believes the vehicles are safe. It will cost the company an estimated $1.2 billion US , about one third of its net income so far this year.
The automaker had petitioned the agency four times since 2016 to avoid recalls, contending the air bag inflator canisters have been safe on the road and in testing. But the National Highway Traffic Safety Administration (NHTSA) on Monday denied the petitions, saying the inflators still run the risk of exploding.
Owners complained to the NHTSA that the company was placing profits over safety.
Exploding Takata inflators caused the largest series of auto recalls in U.S. history, with at least 63 million inflators recalled. The U.S. government says that, as of September, more than 11.1 million had not been fixed. About 100 million inflators have been recalled worldwide.
27 deaths worldwide
Takata used volatile ammonium nitrate to create a small explosion to fill air bags in a crash. But the chemical can deteriorate when exposed to heat and humidity, and they can explode with too much pressure, blowing apart a metal canister and spewing shrapnel.
Twenty-seven people have been killed worldwide by the exploding inflators, including 18 in the U.S.
Monday’s decision by NHTSA is a major step in drawing the Takata saga to a close. It means that all Takata ammonium nitrate inflators in the U.S. will be recalled, NHTSA said. Earlier this year the agency decided against a recall of inflators with a moisture-absorbing chemical called a dessicant. NHTSA said it would monitor those inflators and take action if problems arise.
GM will recall full-size pickup trucks and SUVs from the 2007 through 2014 model years, including the Chevrolet Silverado 1500, 2500 and 3500 pickups. The Silverado is GM’s top-selling vehicle and the second-best selling vehicle in the U.S. Also covered are the Chevrolet Suburban, Tahoe and Avalanche, the Cadillac Escalade, GMC Sierra 1500, 2500 and 3500, and the GMC Yukon.
It took the agency more than four years to arrive at its decision, which comes toward the end of U.S. President Donald Trump’s four-year term.
NHTSA said in a prepared statement that it analyzed all available data on the air bags, including engineering and statistical analyses, aging tests and field data.
“Based on this information and information provided to the petition’s public docket, NHTSA concluded that the GM inflators in question are at risk of the same type of explosion after long-term exposure to high heat and humidity as other recalled Takata inflators,” the agency said.
Declared defective
The company has 30 days to give NHTSA a proposed schedule for notifying vehicle owners and starting the recall, the statement said.
GM said that although it believes a recall isn’t warranted based on the factual and scientific records, it will abide by NHTSA’s decision.
Spokesman Dan Flores said Monday that none of the inflators have blown apart in the field or in laboratory testing. But he said GM wants to avoid a drawn-out fight with the government.
“Although we are confident that the inflators in the GMT900 vehicles do not pose an unreasonable risk to safety, continue to perform as designed in the field and will continue to perform as designed in line with the results of our accelerated aging studies, we will abide by NHTSA’s decision to maintain the trust and confidence of customers and regulators,” he said in an email.
In a 2019 petition to NHTSA, GM said the inflators were designed to its specifications and are safe, with no explosions even though nearly 67,000 air bags have deployed in the field. The inflators, it said, have larger vents and steel end caps to make them stronger.
But Takata declared the GM front passenger inflators defective under a 2015 agreement with the government.
In its petition, GM said that Northrop Grumman tested 4,270 inflators by artificially exposing them to added humidity and temperature cycling, and there were no explosions or abnormal deployments.
However, NHTSA hired air bag chemical expert Harold Blomquist, who holds 25 air bag patents, to review the data, and he concluded that the GM air bags were similar to other Takata inflators that had exploded.
Test results for the GM inflators included abnormally high-pressure events “indicative of potential future rupture risk,” NHTSA said in documents. “These findings illustrate that GM’s inflators have a similar, if not identical, degradation continuum” to other Takata inflators that have exploded, the agency wrote.
Flores said GM already has purchased 1.6 million replacement inflators made by ZF-TRW that do not use ammonium nitrate.
‘Unexploded hand grenade’
Jason Levine, executive director of the nonprofit Center for Auto Safety, which opposed GM’s petitions to avoid recalls, said it’s a good day for millions of GM owners who had to wait four years for a decision on “whether they are driving with an unexploded hand grenade in their steering wheel.”
Shares of GM rose nearly 3 per cent in Monday morning trading to $44.21. The company said the recalls will be phased in based on replacement inflator availability, and will cost $400 million this year.
Drivers can check to see if their vehicles have been recalled by going to nhtsa.gov/recalls and keying in their 17-digit vehicle identification number.
The previous Takata recalls drove the Japanese company into bankruptcy and brought criminal charges against the company. Eventually it was purchased by a Chinese-owned auto parts supplier.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
