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GM to recall about 7 million pickups, SUVs for faulty air bag inflators – CBC.ca

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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.

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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.

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Why the Bank of Canada decided to hold interest rates in April – Financial Post

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Divisions within the Bank of Canada over the timing of a much-anticipated cut to its key overnight interest rate stem from concerns of some members of the central bank’s governing council that progress on taming inflation could stall in the face of stronger domestic demand — or even pick up again in the event of “new surprises.”

“Some members emphasized that, with the economy performing well, the risk had diminished that restrictive monetary policy would slow the economy more than necessary to return inflation to target,” according to a summary of deliberations for the April 10 rate decision that were published Wednesday. “They felt more reassurance was needed to reduce the risk that the downward progress on core inflation would stall, and to avoid jeopardizing the progress made thus far.”

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Others argued that there were additional risks from keeping monetary policy too tight in light of progress already made to tame inflation, which had come down “significantly” across most goods and services.

Some pointed out that the distribution of inflation rates across components of the consumer price index had approached normal, despite outsized price increases and decreases in certain components.

“Coupled with indicators that the economy was in excess supply and with a base case projection showing the output gap starting to close only next year, they felt there was a risk of keeping monetary policy more restrictive than needed.”

In the end, though, the central bankers agreed to hold the rate at five per cent because inflation remained too high and there were still upside risks to the outlook, albeit “less acute” than in the past couple of years.

Despite the “diversity of views” about when conditions will warrant cutting the interest rate, central bank officials agreed that monetary policy easing would probably be gradual, given risks to the outlook and the slow path for returning inflation to target, according to the summary of deliberations.

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They considered a number of potential risks to the outlook for economic growth and inflation, including housing and immigration, according to summary of deliberations.

The central bankers discussed the risk that housing market activity could accelerate and further boost shelter prices and acknowledged that easing monetary policy could increase the likelihood of this risk materializing. They concluded that their focus on measures such as CPI-trim, which strips out extreme movements in price changes, allowed them to effectively look through mortgage interest costs while capturing other shelter prices such as rent that are more reflective of supply and demand in housing.

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They also agreed to keep a close eye on immigration in the coming quarters due to uncertainty around recent announcements by the federal government.

“The projection incorporated continued strong population growth in the first half of 2024 followed by much softer growth, in line with the federal government’s target for reducing the share of non-permanent residents,” the summary said. “But details of how these plans will be implemented had not been announced. Governing council recognized that there was some uncertainty about future population growth and agreed it would be important to update the population forecast each quarter.”

• Email: bshecter@nationalpost.com

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Meta shares sink after it reveals spending plans – BBC.com

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Woman looks at phone in front of Facebook image - stock shot.

Shares in US tech giant Meta have sunk in US after-hours trading despite better-than-expected earnings.

The Facebook and Instagram owner said expenses would be higher this year as it spends heavily on artificial intelligence (AI).

Its shares fell more than 15% after it said it expected to spend billions of dollars more than it had previously predicted in 2024.

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Meta has been updating its ad-buying products with AI tools to boost earnings growth.

It has also been introducing more AI features on its social media platforms such as chat assistants.

The firm said it now expected to spend between $35bn and $40bn, (£28bn-32bn) in 2024, up from an earlier prediction of $30-$37bn.

Its shares fell despite it beating expectations on its earnings.

First quarter revenue rose 27% to $36.46bn, while analysts had expected earnings of $36.16bn.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said its spending plans were “aggressive”.

She said Meta’s “substantial investment” in AI has helped it get people to spend time on its platforms, so advertisers are willing to spend more money “in a time when digital advertising uncertainty remains rife”.

More than 50 countries are due to have elections this year, she said, “which hugely increases uncertainty” and can spook advertisers.

She added that Meta’s “fortunes are probably also being bolstered by TikTok’s uncertain future in the US”.

Meta’s rival has said it will fight an “unconstitutional” law that could result in TikTok being sold or banned in the US.

President Biden has signed into law a bill which gives the social media platform’s Chinese owner, ByteDance, nine months to sell off the app or it will be blocked in the US.

Ms Lund-Yates said that “looking further ahead, the biggest risk [for Meta] remains regulatory”.

Last year, Meta was fined €1.2bn (£1bn) by Ireland’s data authorities for mishandling people’s data when transferring it between Europe and the US.

And in February of this year, Meta chief executive Mark Zuckerberg faced blistering criticism from US lawmakers and was pushed to apologise to families of victims of child sexual exploitation.

Ms Lund-Yates added that the firm has “more than enough resources to throw at legal challenges, but that doesn’t rule out the risks of ups and downs in market sentiment”.

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Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st

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Pipeline

Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.

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In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.

Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.

After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.

“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.

The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.  

The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).

The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.

The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.

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