GM Falls on 3.6 Million-Vehicle Recall, New Air-Bag Defect

(Bloomberg) -- General Motors Co. recalled 3.64 million trucks, cars and sport-utility vehicles in the U.S. after discovering a new defect that could cause air bags to fail in crashes.

GM fell as much as 2.9 percent, the most since Aug. 2, after the recall was announced on Friday.

GM made the move after investigating a May 17 crash in which a Chevrolet Silverado’s air bags failed to deploy, the Detroit-based automaker said in documents on the National Highway Traffic Safety Administration website Friday. A company investigation pinpointed errors in the computer software that controls air bags and seat-belt pretensioners.

The air-bag controller “contains a software defect that may prevent the deployment of frontal air bags and pretensioners in certain rare circumstances when a crash is preceded by a specific event impacting vehicle dynamics,” GM said in a statement Friday.

The recall affects Chevrolet, Buick, GMC and Cadillac models from 2014-17, including popular vehicles like the Chevrolet Corvette, the Silverado and GMC Sierra pickups and Chevy’s Tahoe and Suburban SUVs. A full list of the models can be found on the NHTSA website. Consumers can also check their vehicles on lookup tools run by NHTSA and GM.

The faulty air-bag condition has some parallels to the ignition-switch defect disclosed in 2014, which resulted in more than 50 fatalities and the repair of more than 2.6 million cars. GM overhauled its approach to spotting defects and recalling cars after that controversy, leading to nearly 30 million cars being recalled that year.

The latest action is unrelated to the defective exploding Takata Corp. air-bag inflators, which has become the largest recall in U.S. history. More than 10 million inflators have been replaced in that recall, which is expected to eventually cover almost 69 million air bags. GM has replaced 551 inflators, or 0.17 percent of its expected total, according to NHTSA.

Ford Motor Co. cut its 2016 pretax profit forecast this week to about $10.2 billion from at least $10.8 billion because of the cost of an expanded recall of faulty door latches.

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net. To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman