BMW Issues Second Recall This Month

By Jason Ianni,
Money and Investing Writer

BMW (ETR: BMW) of North America has issued recalls in over one million of their luxury vehicles due to the potential of parts catching fire. These recalls span over six years of production, between 2006 and 2011, and include models like the 3-series, 5-series, X5, X3 and Z3.

One problem that the vehicles have experienced is a short circuit in part of the engine, the heater valve, which causes that part to melt. This then can cause the vehicle to catch fire, even when it is not in use.

A second recall deals with faulty wiring for the heating and air conditioning system.

These faulty wirings have caused cars to overheat and catch fire when not in use as well.
In the heating and air conditioning recall, BMW told NHTSA (U.S. National Highway Traffic Safety Administration) it first got a report of an incident in 2008 involving heat-related damage to a 2006 3-Series sedan, but did not determine a cause.

In the heater valve recall, BMW first received a report in 2009 of an incident in a 2007 X5 involving heat-related damage to the engine compartment. They received other reports of the same problem and continued to review the issue and inspect returned parts.
These aren’t the only problems BMW vehicles have had in the past month. In mid-October 85,000 BMW X3 SUVs were recalled for potential airbag problems. The defect, which occurred in the front passenger seat, failed to recognize whether or not a person occupied the seat.

This defect could cause the airbag to not deploy in the event of an accident, leading to potentially serious injuries. Stock prices for BMW were as high as 89.05 a share prior to this recall, and fell to as low as 85.46 after the recall. BMW closed on Friday at 89.57, so it can be expected that the price per share will drop again due to the most recent recalls.
BMW spokesman Michael Rebstock said the recalls cover about 1 million vehicles, nearly all in the United States and about 15,000 in Canada. These recalls are taking place exclusively in North America as of now, but may expand to other parts of the world if the same problems are seen.

Rebstock has also said that the risk for fire is low in both cases, but the vehicles in need of the recall should be left outside “in an abundance of caution” until they are able to get their parts replaced.

These recalls have negatively impacted their stock prices in recent months, but the real question is if it will affect the brand that this prestigous company has built. Only time will tell, and the CEO Harald Krrueger will have a tough road ahead of him if things keep going this way.

BMW dealers will begin to replace necessary parts to repair both problems starting December 18th.

 

A version of this article appeared in the Tuesday, November 7th print edition.

Contact Jason at
jason.ianni@student.shu.edu

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s