Are Automakers Going Recall-Crazy?

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Toyota’s massive recalls over the past year appear to have prompted widespread worry among other automakers and even government officials. In recent months, we’ve been seeing recalls leaeven when the problems are minor.

General Motors (Stock Quote: GM) recalled its some of its 2010 Cadillac SRX vehicles in May due to a knocking sound that could come from the engine if drivers ignore owner's manual instructions and use low-octane fuel and drive aggressively, according to The Detroit News.

Only 547 of the Cadillacs with 2.8-liter V-6 engines were recalled, but GM will have its dealers reprogram the engine control module to fix the issue, according to the National Highway Traffic Safety Administration, the federal agency that regulates auto safety. The agency says that further damage could occur after the onset of the noise, including engine failure.

This Cadillac recall might remind millions of Toyota owners of problems with sticky floor mats, which were recalled by the automaker even though problems only occurred when they were installed incorrectly, an issue that led to the discovery of accelerator pedal problems as well.

Following the Toyota (Stock Quote: TM) recalls, the NHTSA has been receiving more car complaints, and as a result, they've been increasingly investigating those complaints and issuing recalls even when companies object, The Detroit News says.

The fact that manufacturers are reacting with an abundance of caution should come as no surprise. Initial reports of lead paint on children's toys prompted massive recalls in 2007 as well as increased regulation of chemicals in toys. The Detroit News reports that automakers are now trying to better track potential safety concerns by paying more attention to customer complaints.

The number of cars recalled in the first six months of 2010 doubled from last year to 10.2 million, and for the full year, automakers are predicted to recall a total of more than 20 million autos, according to The Detroit News.

And these car problems recalls aren't just a pain for consumers; companies pay millions, sometimes billions, to conduct recalls that could have been prevented.

Toyota's recall of 8.5 million vehicles, for instance, is costing the company at least $2 billion to conduct, according to Business Week.

And when GM recalled 944,000 of its cars on concerns about electrical fires in 2008, court papers showed that GM was demanding between $20 million and $25 million from a faulty part supplier to pay for those costs, according to mlive.com.

What's more, "if each one of the 1.5 million recalled vehicles is brought in to dealers, the compensation would cost GM about $150 million plus the expense of the actual fix," the site said.

Repairs that are made due to a recall are generally free for the consumer, but it's unclear whether Toyota's $16.4 million fine for delaying reports of car safety problems will eventually be passed on to future car buyers.

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