Financial life in a big town

February 4, 2010

Macy’s stock falls slightly on downgrade

Filed under: news — Tags: , — Silver @ 12:03 pm

Shares of Macy’s Inc. fell about 1 percent Monday afternoon after a Deutsche Bank analyst downgraded the stock to “hold” from “buy.”

According to a MarketWatch report, analyst Bill Dreher Jr. said the department store chain’s “My Macy’s” initiative, which consolidated merchandising and tailored it to local markets, hasn’t produced the expected results.

“Macy’s decentralization initiative is developing awkwardly and will likely need years of refinement before demonstrating significant traction," Dreher said in the MarketWatch story. He also lowered his first-quarter earnings forecast to $1.21 per share from $1.25. Analysts. on average, expect earnings per share of $1.18.

Shares of Macy’s (NYSE: M) lost about 1.5 percent, or 24 cents, to $15.69 in Monday afternoon trading.

Macy’s, with corporate offices in Cincinnati and New York, operates about 850 department stores in 49 states, the District of Columbia, Guam and Puerto Rico.

Source

January 31, 2010

India Raises Reserve Requirement More Than Forecast

Filed under: money, technology — Tags: , — Silver @ 4:33 am

The Reserve Bank of India told lenders to set aside more deposits as reserves than economists predicted after raising its growth and inflation forecasts. Stocks and bonds fell.

Governor Duvvuri Subbarao increased the cash reserve ratio to 5.75 percent from 5 percent, exceeding the median forecast for a half-point move in a Bloomberg News survey, an RBI statement showed in Mumbai today. The bank kept benchmark interest rates unchanged.

The decision is India’s biggest step yet toward raising borrowing costs as inflation and asset-bubble concerns reverberate across Asia. China, Malaysia and the Philippines moved closer toward raising rates this month and Australia and Vietnam have already done so, spurring a sell-off in stocks and bolstering the outlook for currency gains in the region.

“The policy is indicating a sequential step towards monetary tightening in India,” said Shubhada Rao, chief economist at Yes Bank Ltd. in Mumbai. “The bank may raise policy rates before the next scheduled meeting,” on April 20.

India’s benchmark stock index extended its drop, bond yields rose and the rupee weakened after the report. The Sensitive stock index fell 1.2 percent to 16,105.75, while the yield on 10-year government bonds increased to 7.59 percent from 7.55 percent at 11:20 p.m. in Mumbai. The rupee weakened to 46.39 against the dollar from 46.36 before the report.

Gaining Momentum

Governor Duvvuri Subbarao said India’s economic growth could “gain momentum” over the next year and “reinforce” inflationary pressures. The central bank raised its inflation forecast to 8.5 percent by March 31 from 6.5 percent.

“The message being sent across is that stern steps will be taken going forward to contain inflation,” said Killol Pandya, who oversees the equivalent of $152 million in Indian debt at Shinsei Asset Management India Pvt. in Mumbai. “There are indications the economy is turning around.”

In China, the central bank ordered some banks to pare lending, raised the ratio for deposits banks must set aside as reserves and guided bill yields higher this month after loan growth surged.

Malaysia kept borrowing costs unchanged on Jan. 26, while warning that rates cannot be kept “too low” for too long because of the need to prevent a build-up of “financial imbalances.” The Philippines increased its so-called rediscounting rate, one of the interest rates it charges lenders for borrowing money from the central bank, as it began unwinding stimulus measures.

Equities Retreat

Equities have retreated on concern that the withdrawal of stimulus measures will slow a rebound in corporate earnings. The MSCI Asia Pacific index has lost 7.3 percent in the past two weeks.

Analysts anticipate currency gains as strengthening economies force central banks to act. The rupee may gain almost 8 percent by year-end to 43 per dollar, according to the median forecast in Bloomberg survey. China’s yuan and Malaysia’s ringgit are estimated to advance 3.7 percent.

The Reserve Bank estimates India’s $1.2 trillion economy, Asia’s third largest, will expand 7.5 percent in the year ending March 31, more than its October forecast of 6 percent “with an upward bias,” Subbarao said in the statement today.

The bank left its benchmark reverse repurchase rate unchanged at 3.25 percent and the repurchase rate at 4.75 percent, today’s statement said. The increase in cash reserves will drain 360 billion rupees ($7.8 billion) from the banking system in two stages, on Feb. 13 and Feb. 27.

Exacerbate Inflation

“As growth accelerates and the output gap closes, excess liquidity, if allowed to persist, may exacerbate inflation expectations,” Subbarao said in the statement. “Though the inflationary pressures stem predominantly from the supply side, the consolidating recovery increases the risks of these spilling over into a wider inflationary process.”

India’s benchmark wholesale-price inflation accelerated to 7.3 percent in December, the fastest pace since November 2008. Food accounted for 80 percent of December’s inflation reading, government data showed, as deficient rains last year hurt output of rice, wheat and sugar.

Subbarao’s move is aimed at checking manufacturing inflation that surged to 5.2 percent in December from 1.6 percent in October. Industrial production rose 11.7 percent in November, the fastest pace in two years, as sales at companies including Hero Honda Motors Ltd. surged.

Hero Honda, the nation’s biggest motorcycle maker, reported a better-than-estimated 79 percent increase in third- quarter net income after sales climbed.

Food Inflation

“Tighter monetary policy will have no impact on inflation as it is largely a supply-side-driven phenomenon,” Harsh Pati Singhania, president of the Federation of Indian Chambers of Commerce and Industry in New Delhi, said before the report. “Interest rates should not be increased.”

Subbarao said there have been “some signs” of demand pressures on inflation and that he expects the current growth rate of 7.5 percent to continue in the next financial year starting April 1.

To ease supply constraints, the government on Jan. 13 announced plans to sell as much as 3 million metric tons of wheat and rice in the open market until March and permit duty- free imports of white sugar until Dec. 31 to increase supplies.

Prime Minister Manmohan Singh’s government is under pressure to tame inflation as opposition parties stepped up their criticism for failing to curb prices. Inflation is politically sensitive in India, where the World Bank estimates almost three-quarters of the nation’s 1.2 billion people live on less than $2 a day.

Subbarao said the withdrawal of monetary accommodation can’t be “effective” in controlling inflation unless the fiscal stimulus is also rolled-back in a coordinated manner. He said government borrowing must be cut to contain inflation and to meet credit demand of companies.

Source

January 26, 2010

A step in the right direction for shoe business

Filed under: technology — Tags: , , — Silver @ 10:51 am

The casual shoes in your closet were likely made in Asia.

But one new GTA footwear company, Oliberté, took a different path and became the first international footwear firm to pick Africa for its manufacturing centre.

Actually, Oliberté founder and CEO Tal Dehtiar chose the continent first and then chose the product.

The enterprise is the natural follow-up to his five years of running MBAs Without Borders, a charity that paired business volunteers with entrepreneurs in 25 developing countries.

He founded the non-profit entity after graduating from McMaster University’s MBA program, instead of heading for Bay St. like his classmates.

"I love business. I love helping people. I love developing countries," says Dehtiar, who speaks four languages. "I had to find a way to make it all work together."

Last year, MWB became a division of the Washington-based non-profit agency CDC Development Solutions and Dehtiar was free to search for another enterprise.

"I wanted something tangible. People said `If you really want to help, we need you to make a product in Africa that people are willing to buy,’" says Dehtiar. "I thought, what product has been around for years?"

The answer: Shoes.

With a thriving tannery industry in Ethiopia and extensive rubber production in Liberia, making shoes would be a good fit for Africa, he thought.

Working from his office and warehouse in Oakville, Dehtiar hopes his concept will make a difference, and the urban casual footwear will appeal to the fashion-conscious city dweller with a social conscience.

Born in Israel, with a Latvian mother and Ukrainian father, he grew up in Toronto after the family moved to Canada. His parents, both graduate engineers who run an upscale furniture showroom (Room Deco Furniture in Woodbridge), are good role models for Dehtiar’s brand of small business entrepreneurship.

"We’re not going to be in Ethiopia because it’s cheap," he says. "We’re going to make sure the factories are paying their workers properly."

He has also chosen factories that met international environmental standards.

If the company name sounds familiar, that’s because you may have seen Dehtiar pitching his idea on the Jan. 6 episode of Dragon’s Den, the CBC TV show that gives entrepreneurs a chance to convince the show’s venture capitalists to invest in fledgling companies. He was asking for $200,000. Unfortunately, the guest judge on the show, fashion personality Jeanne Beker, didn’t appreciate the casual shoes.

But viewers haven’t seen the whole story payday loans. Since the CBC segment was taped in May, Dehtiar’s enterprise has flourished. From a standing start (he sold 500 pairs of shoes in 2009), Oliberté is running now with orders for more than 10,000 pairs from stores in Europe, Australia – sales that will cover his costs without even adding in North America.

This year, he estimates about 20 per cent of his sales will be in Canada, while Europe and the U.S. will capture 40 per cent each. He has a couple of part-time warehouse staffers and a part-time designer as well as project managers in Africa.

Canada’s a tougher market, says Dehtiar.

"We’re a conservative society," he says.

Retailers told him that as they emerge from a recession they only want known brands for this year.

"They said we love what you’re doing. It has huge potential. Stick around," he says. "In the U.S. they are a little more risk taking."

The shoes are also available through the company’s website.

He has a few target markets for the goat-leather-lined shoes, which come in seven styles and retail for up to $129. He aimed at educated, higher-income customers, and then noticed a big following from the fashionable urbanites (U.S. footwear chain Underground Station carries his line). Then the evangelical community came on board, intrigued by the humanitarian values.

Despite the compelling story, starting a new company is plain hard work.

Dehtiar has invested about $100,000 so far, and he has investors interested, possibly including the Business Development Bank of Canada. Finding financing was tough at first since the banks he approached said running a charity for five years didn’t count as business experience and the 29-year-old was too young.

Getting the shoes to entertainers could be a marketing gambit that pays off. Actress Kristen Stewart from Twilight picked them up at the Toronto International Film Festival. Snoop Dogg has a couple of pairs. So does Somalia-born Canadian hip hop artist K’naan, whose song "Wavin" Flag was chosen as the soccer anthem for this year’s FIFA World Cup in South Africa.

Celebrities can pick up his shoes at the behind-the-scenes lounges at the upcoming Grammy Awards and the Black Entertainment Awards. All the Miss America pageant contestants will receive Oliberté shoes.

In demand as a speaker, Dehtiar is becoming a celebrity himself. This winter he will visit business classes at the University of Michigan, Pepperdine and Duke.

Source

January 22, 2010

Darda Says U.S. Economy May Expand 4% This Year

Filed under: economics — Tags: , — Silver @ 6:24 pm

The U.S. economy will grow 4 percent this year, said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut, mirroring rebounds from recessions in the 1970s and 1980s.

Darda said growth will be ignited by the “initial spark” from a recovery in capital markets and corporate earnings, as well as the rebuilding of business inventories. The job market will recover more slowly, with the unemployment rate falling to about 9 percent by the end of this year from 10 percent in December, Darda said.

“If you look at the tone and tenor of indicators that tell us where the economy is going in the future, they’ve all improved fairly dramatically,” Darda said in an interview today on Bloomberg Radio.

The index of U.S. leading indicators increased more than anticipated in December, a sign the economy will keep growing through the first half of the year, the New York-based Conference Board said today. The board’s gauge of the outlook for the next three to six months rose 1.1 percent, the most in three months, after climbing 1 percent in November.

Darda’s outlook for the economy is more optimistic than the median forecast in this month’s Bloomberg survey of economists, which calls for growth of 2.7 percent in 2010 after a contraction of 2.5 percent last year.

A recovery from the deepest recession since the 1930s will do little to bring down an unemployment rate that’s close to a 26-year high, according to the survey fast cash now.

Labor Market Outlook

Unemployment is forecast to average 10 percent this year, the highest annual rate in seven decades. Employers have cut more than 7.2 million jobs since the recession began in December 2007.

“When you are coming out of such a deep, deep hole it takes time” for the labor market to heal, Darda said. “You could have a rip-roaring recovery and still not get unemployment to a level you would consider full employment.”

The Federal Reserve will probably keep its benchmark interest rate close to zero through the third quarter of the year in a bid to bring down unemployment. The rate-setting Federal Open Market Committee next meets Jan. 26-27.

The Fed’s regional economic survey, the Beige Book, reported the economy improved in 10 of the central bank’s 12 districts. The survey was released Jan. 13.

(In the U.S., hear Bloomberg Radio on satellite radio: Sirius Channel 130 and XM Channel 129. In New York City, tune to WBBR 1130 on the AM dial.)

Source

January 19, 2010

The Week Ahead

Filed under: economics — Tags: , , — Silver @ 8:48 am

MONDAY

StatsCan: Releases November international security transactions.

TUESDAY

Bank of Canada: Interest rate announcement.

StatsCan: Releases leading indicators for December.

WEDNESDAY

StatsCan: Releases December consumer price index, November manufacturing sales, travel between Canada and other countries.

 

Earnings: Danier Leather reports second-quarter results.

THURSDAY

Earnings: MDS Inc. and Viterra report their fourth-quarter results.

StatsCan: Releases November wholesale trade figures.

FRIDAY

StatsCan: Releases November retail sales.

Source

January 16, 2010

December deficit nearly doubles

Filed under: marketing — Tags: , , — Silver @ 12:06 am

The U.S. government posted a deficit of $91.9 billion in December, nearly double the shortfall of a year earlier and marking the government’s 15th straight month in the red, the Treasury Department reported Wednesday.

The shortfall brings the total deficit for the first quarter of fiscal year 2010 to $388.5 billion, up from $332 billion during the same period last year.

It was the second consecutive December the government spent more than it took in. In December 2008, the deficit was $51.8 billion.

While December’s deficit was less than the $120.3 billion in November, that’s no reason to celebrate. The government typically rings up a surplus in December as year-end bonuses boost high individual withholding and as companies make quarterly income tax payments.

The deficit remained high in the first three months of the fiscal year because while spending was down by $3.6 billion from the same period last year, tax revenue fell even more, dropping by $59.7 billion as individual income and payroll taxes declined.

Interest paid on the debt in December was $104.6 billion — 34% of federal outlays for the month.

"No surprises, the government obviously continues to run a very large deficit," said Gus Faucher, director of macro economics at Moody’s Economy short term personal loan.com. "But that’s necessary as a response to the recession and the financial crisis."

The Treasury estimates the annual deficit will climb to $1.502 trillion for the full fiscal year 2010, up from $1.42 trillion in 2009.

Debt ceiling: For the long term, many economists are less concerned about monthly and annual deficits, focusing instead on the enormous accumulation of national debt and its rapid upward trend.

"We want to have a big deficit now because that’s helping to stimulate the economy, said Faucher. "The concern is about the longer run."

That’s especially true after Congress raised the debt ceiling again. The new limit for the amount of debt the Treasury is allowed to have, passed in the last days of 2009, was set at $12.394 trillion, up $290 billion from the previous level of $12.104 trillion. Depending on the state of the economy, this should provide the government relief until mid-February.

As of Monday, the country’s total public debt was $12.285 trillion, $109 billion below the debt limit. 

Source

January 13, 2010

Bonds mixed after jobs report

Filed under: marketing — Tags: , — Silver @ 12:48 am

Treasurys were mixed on Friday after the government posted a larger-than-expected jobs decline.

What prices are doing: The benchmark 10-year note was up less than 1/32 at 96-11/32, and the yield was 3.83%. Bond prices and yields move in opposite directions.

The 30-year bond fell 12/32 to 94-21/32 and its yield rose to 4.72%. The 2-year note increased 4/32 to 100-2/32 and yielded 0.98%.

What’s driving prices: The government’s employment report showed a drop of 85,000 jobs in December, missing analysts’ expectations, which called for no change. November’s jobs number was revised to a gain of 4,000 from an initially reported decline of 11,000.

What analysts are saying: "The disappointment in the employment number just feeds into the hands of the [Federal Reserve]," pushing yields lower and Treasurys higher as investors become less optimistic that the Fed will raise rates soon, said Peter Cardillo, a chief market strategist at Avalon Partners.

But in 2010, he predicts rising yields as the economy continues its recovery. He said he wouldn’t be surprised if the yield on the 10-year note reached 4% by January or February.

"I think yields are headed higher," he said. "The more convincing economic news we get, the higher the yields." 

Source

January 10, 2010

Accelerating Factory Exodus Guts Japan Manufacturing Center

Filed under: online — Tags: , , — Silver @ 8:48 am

Hoya Corp. kept its Pentax camera plant north of Tokyo open as rivals steadily moved factories overseas to cut costs, yet it couldn’t compete as the yen surged against the dollar and euro during the global recession.

The company paid suppliers and workers in yen, sold products in dollars and euros, and converted revenue into yen. Six straight quarterly losses prompted Hoya in June to close the last domestic Pentax plant, in Tochigi prefecture, as the yen rallied against the dollar.

“The rise in the yen is definitely one of the biggest triggers that convinced us to accelerate our move offshore,” said Hiroshi Hamada, Hoya’s chief operating officer. “There was no reason to keep high-cost manufacturing in Japan.”

Lens-maker Hoya is one of 13 companies — including Komatsu Inc. and Panasonic Corp. — shutting or downsizing Tochigi factories in the past year. The strengthening yen, weakening domestic demand and second-highest corporate taxes among major economies are spurring the exodus of manufacturers to Vietnam, the Philippines and China, companies and analysts say.

Hoya rose 2 percent to 2,570 yen at the close trading in Tokyo, outpacing the 1.1 percent gain on the benchmark Nikkei 225 Stock Average. Shares of the Tokyo-based company have gained 55 percent in the last 12 months.

About 740,000 Japanese manufacturing jobs disappeared last year through November, the statistics bureau said. More than a third of factory capacity sits idle, trade ministry figures show.

‘Breaking Point’

Japan’s industrial output is 19.8 percent below its pre- recession peak, with the country shipping 35 percent fewer goods in November than the peak of 7.6 trillion yen ($82 billion) in March 2008.

“Corporate Japan is voting with its feet,” said Jesper Koll, now head of equity research at JPMorgan Chase & Co. in Tokyo. “They’re going overseas. The hollowing out of Japan is being turbo-charged.”

Profits from overseas operations at Japanese companies exceeded domestic earnings for the first time in fiscal 2008, said the Japan External Trade Organization, a government-funded organization focused on luring investment. Foreign operations generated 52.5 percent of earnings, according to JETRO’s analysis of 890 listed companies.

The yen surged 14 percent since Lehman Brothers Holdings Inc. filed for bankruptcy protection in September 2008, the most among 16 major currencies tracked by Bloomberg. It reached a 14- year high of 84.8 against the dollar on Nov. 27. The yen gained 20 percent against the euro since January 2008.

No Incentives

A stronger currency erodes the value of repatriated earnings and makes Japanese exports more expensive for foreign buyers.

Overseas markets are more lucrative as domestic demand slips because of declining wages — down 14 percent since a 1997 peak — and an aging, shrinking population. More than 20 percent of Japanese are over 65, and the population will decrease by 3.2 percent this decade, according to the National Institute of Population and Social Security Research.

Japan’s 39.5 percent corporate tax rate for large firms is second-highest behind the U.S.’s 40.8 percent, according to the Finance Ministry.

“There’s less incentive to keep, stay or do business in Japan, especially the factories,” said Masafumi Yamamoto, chief foreign-exchange strategist at Barclays Capital in Tokyo instant payday loans completely online. “That movement should continue.”

Last month’s 7.2 trillion yen government stimulus package didn’t promote long-term growth, said Yasukazu Shimizu, senior market economist at Mizuho Securities Co. in Tokyo.

Komatsu, Panasonic Leave

Manufacturing is 40 percent of Tochigi’s economy –twice the national average. Before the recession started in November 2007, there were three job openings for every two applicants, according to the Labor Ministry.

Now there are three applicants for every opening in the prefecture, about an hour from Tokyo on the bullet train.

Komatsu, the world’s second-biggest maker of construction equipment behind Caterpillar Inc., closed a dump-truck assembly plant there. China surpassed Japan as Komatsu’s biggest market for construction and mining machinery in the quarter ended June 30.

Komatsu forecasts full-year profits of 35 billion yen as sales decline by 6.5 percent.

Consolidating Operations

Panasonic Communications Co., subsidiary of Tokyo-based Panasonic Corp., the world’s biggest maker of plasma TVs, shut its fax-machine factory in June. The parent company says cost cuts, including 15,000 jobs, will help narrow a net loss for the current fiscal year to 140 billion yen from the earlier estimate of 195 billion yen.

“We wanted to increase efficiency,” Panasonic spokesman Akira Kadota said. “It made sense to consolidate our operations.”

Shuttered shops abound in Utsunomiya, a city of 500,000 where Tochigi’s government established an unemployment center. The converted storefront advised more than 12,000 people since April, manager Chiaki Yashiro said.

“There isn’t anything out there,” said Yuuji Takashi, 53, who lost his job at a car parts-maker early last year. “They’re sending it all to China.”

Toyota City, Japan-based Toyota Motor Corp., which makes more than half of its cars abroad, plans to suspend one domestic assembly line and add capacity in China and India, its fastest- growing markets. Domestic passenger car sales are down 25 percent since the 1990 peak of 5.1 million, according to the Japan Automobile Dealers Association.

Yen Tips Scale

The surging yen helped tip the scales, Toyota Vice President Takeshi Uchiyamada said in October.

“We’re affected by the exchange rate,” Toyota spokesman Paul Nolasco said. “We deal with that by building as much of our product as close to our customers as possible.”

The Pentax factory peaked in the 1970s, with 1,500 workers making 35-millimeter, single-lens reflex cameras. Hoya’s Hamada moved all camera production offshore helping the company’s Pentax division to return to profit with operating income of 1.19 billion yen last quarter. Continuing to manufacture in Japan was “stupid,” according to Hamada.

“It was a waste,” he said.

Source

January 7, 2010

Report buoys Canada’s economic outlook

Filed under: economics — Tags: , — Silver @ 5:36 am

A closely-watched manufacturing index blew away all expectations Monday, raising hopes that the U.S. economy is not just back on solid ground, but heading higher at a good clip.

Good news for the United States, to be sure, but connecting the dots to the Canadian economy is a bit more complicated.

"Anytime we see positive economic news out of the U.S., it’s a sign that our strongest trading partner is improving and we can expect to see knock-on effects on our own economy," said Meny Grauman, senior economist at CIBC World Markets.

"The direct links are not there but it’s definitely an encouraging sign in general that there is some support for Canadian economic recovery."

As usual, the loonie is throwing a wrench into the works. It rose by almost a full penny Monday alone, pulled along by higher prices for oil and other commodities. In its first day of 2010 trading, the Canadian dollar jumped 0.87 of a cent (U.S.) to 96.02 cents. The U.S. Institute for Supply Management’s index came in well ahead of economists’ expectations, rising to 55.9 in December, up from 53.6 in November. That’s also its highest level in almost three years. A reading above 50 indicates expansion. The bigger the difference, the faster the expansion.

"It’s huge," said Derek Holt, vice-president of economics with Scotia Capital.

"If the U.S. manufacturing sector really is stabilizing and recovering, then given the seamless cross-border integration of manufacturing production, it’s going to be a boon to Canada as well.

"The trillion-dollar question is: Is it believable?" Holt said.

The index first registered growth in August after 18 months of contraction, hitting a low of 32 high quality business cards.9 a year earlier.

One concern is the recovery may not be broad enough. Fewer industries reported growth in December than in the past couple of months, said Sal Guatieri, senior economist at BMO Capital Markets.

"It’s a glass half-full or half-empty scenario. Half the industries did report growth. We could take it as a positive or a negative."

But that doesn’t automatically mean the demand for Canadian products will be strong.

"It’s more positive if we see domestic spending strengthening in the U.S. That implies more demand for Canadian exports," Guatieri said.

"Consumer spending has turned modestly higher and the jury is still out on business investment. It picked up in the third quarter then weakened in the fourth."

Canada lacks a broad index to gauge the health of the manufacturing sector.

But economists have spotted signs of growth. In November, the monthly labour-force survey by Statistics Canada showed a small gain in manufacturing jobs.

Canadian manufacturers have been hamstrung by the rising dollar, which makes their products more expensive for U.S. customers.

"Economic fortunes may be rising, but a stronger Canadian dollar goes along with that and counteracts some of those positives. It makes the recovery in Canadian manufacturing more complicated," Grauman said.

"It will continue to be an issue over the next few months."

Source

January 2, 2010

GM recalls 22,000 Corvettes

Filed under: money — Tags: , , — Silver @ 4:51 pm

General Motors is recalling some 22,000 Chevrolet Corvettes, because of potentially leaky roofs, National Highway Traffic Safety Administration said Wednesday.

The recall includes 2005-2007 model year Corvettes with removable roofs and 2006-2007 Corvette Z06s, according to GM.

A problem with the adhesive between the roof panel and the frame could cause them to pull apart, the agency said.

"If there is a complete separation, the roof panel may detach from the vehicle," according to the NHTSA. "If this were to occur while the vehicle was being driven, it could strike a following vehicle and cause injury and/or property damage."

Dealers will install a new design roof panel free of charge to correct the problem, NHTSA said in its recall notice.

The safety recall is expected to begin next month. Owners are being told Chevrolet at 1-800-630-2438 or at www.gmownercenter.com. 

Source

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