General Motors Isn't the Only Automaker Struggling With Massive Recalls

Nissan also faces a recall of over 1 million vehicles this year.

Mar 26, 2014 at 3:00PM
Longview

The Dow Jones Industrial Average (DJINDICES:^DJI) was trading 19 points lower, or 0.12%, by mid-afternoon despite a new government report showing a 2.2% month-over-month increase in February in orders for durable goods -- vehicles and other products meant to last more than three years. That was the strongest reading since November, although it was driven in large part by aircraft orders. Excluding the volatile transportation segment, durable goods orders rose only 0.2%. After adverse weather conditions seen throughout early 2014, and businesses selling through inventories, economic growth in the first quarter is expected to slow from last year's fourth quarter. With that in mind, here are some companies making headlines today.

It's been a rough go for some automakers for the first quarter of 2014. Merely a few weeks into Mary Barra's new role as CEO of General Motors (NYSE:GM), the company began recalling 1.6 million small cars due to a faulty ignition switch tied to at least 12 deaths. GM shares have slid roughly 15% under Barra's watch, and the problems go further than vehicle recalls.

Images

GM hopes sales of its 2014 Silverado pick up this spring. Source: General Motors.

GM's most important vehicle, the Chevrolet Silverado, saw sales decline 15% over the first two months of the year compared to 2013. Investors are awaiting sales results for March, when the company offered its steepest discounts on the Silverado to date; if sales still struggle, it'll be a very bad sign for America's largest automaker. Also of interest to investors is General Motors' Cadillac brand, which was a big success story last year, but which has witnessed a sales decline of nearly 8% so far this year.

GM isn't the only automaker having problems early in 2014. Nissan is recalling over 1 million vehicles globally to fix a software glitch that could deactivate the front passenger airbag. The Japanese car maker is expected to begin updating the software for free by mid-April, according to the National Highway Traffic Safety Administration.

Meanwhile, despite multiple smaller recalls of Ford's (NYSE:F) Escape, sales continue to surge. The Blue Oval said retail registrations of the Escape are up 81% since 2009, which is higher than the overall industry growth.

"While Escape is a compact utility built for everyone and we're seeing strong sales across the board, sales are really being driven by these active adults in the 55- to 64-year-old range," said Erich Merkle, U.S. sales analyst for Ford, in a press release. "It's no secret baby boomers are playing a large role in the compact utility vehicle segment, and will continue to do so well into the foreseeable future."

What's good about this trend for Ford and its investors is that baby boomers have the cash and are looking to spend it on premium trims and technology options -- a profitable sales mix.

"Trendy baby boomers want to downsize their homes and their vehicles, but they're not willing to give up premium content in either case," said Amy Marentic, marketing manager for Ford's global car and crossover group.

Last year, Ford gained more market share in the U.S. than any other major automaker. It hopes to take even more share after GM's massive recall this year. 

2 stocks to buy for this surging Chinese market
U.S. automakers boomed after WWII, but the coming boom in the Chinese auto market will put that surge to shame! As Chinese consumers grow richer, savvy investors can take advantage of this once-in-a-lifetime opportunity with the help from this brand-new Motley Fool report that identifies two automakers to buy for a surging Chinese market. It's completely free -- just click here to gain access.

Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers