1.6m-unit ignition switch recall could end up costing GM a huge amount in repairs, rebates, litigation and fines

1.6m-unit ignition switch recall could end up costing GM a huge amount in repairs, rebates, litigation and fines

Due probably to the fact, the odd Opel GT roadster excepted, most of the 1.6m affected cars were sold in North America, General Motors' 'ignition switch recall' has attracted little attention here in Olde Englande. But, across the other side of the Atlantic, storm clouds are building.

My latest wrap on the current state of play is on just-auto today and follows the several reports we've published over the last couple of months.

These began in mid-February with the initial news of a 779,000-unit Chevrolet Cobalt/Pontiac G5 recall "to correct a condition that may allow the engine and other components, including airbags, to be unintentionally turned off" and it's pretty much snowballed from there.

Two weeks later came a doubling of the number of vehicles, more models and more model years (this is, as other automakers, including Toyota and Honda, have found to their cost in recent years, the unpredicted downside of using vast quantities of common components across as many model lines as possible).

Next came an extraordinary admission - GM said it had known about the problem with the ignition switches - an accidental bump can turn the engine (and airbags) off too easily - for at least a decade (there have been claims this week the automaker actually knew of the issue as far back as 2001).

Then the inevitable: the feds, in the form of NHTSA, began to investigate and news reports started to mention possible fines of up to US$35m.

GM - whose structure and current management is very different from the pre-bankruptcy 'old' GM, clearly began to take the issue very seriously and reportedly engaged a top attorney to head an internal review while new CEO Mary Barra sent a reassuring message to staff.

News then came that a federal criminal investigation was under way (Toyota was scutinised in 2009 over its 'unintended acceleration' issues so there is a precedent for that) and there was talk of both House and Senate committee investigations.

And so to today, with the latest developments being GM's offer to owners of cars affected by the recall of a $500 rebate off purchase or lease of a GM replacement, claims GM knew of the switch problem as far back as 2001 (it had admitted publicly to 2004), safety advocacy groups claiming deaths arising from the defect are much higher than GM or NHTSA acknowledges and calls for GM to set up some sort of trust fund to compensate 'victims'.

While it's not hard to have some sympathy for CEO Barra and the rest of her management team at 'new' GM for having to deal with what is effectively a problem inherited from 'old' GM, it certainly appears that a problem was identified a long time ago, a fix considered and even developed, but, incredibly, nothing was done. And now, chickens are coming home to roost.

The Ford/Firestone tyre recall and Toyota 'unintended acceleration'/floormats/sticky accelerator pedals debacles of the last decade and a half give some idea of how this will likely work out eventually - GM will fix as many cars as it can lure back to its dealers, lots of lawyers will head to court and billions of dollars will change hands between automaker and plaintiffs.

And, with NHTSA having fined Toyota the then-maximum penalty of US$17.4m back in 2012, it's likely GM will also need to budget for a similar payment though NHTSA itself is also under scrutiny for an apparent hands-off approach.

None of this will end particularly well.

On a lighter note, with The Weekend imminent, may I commend to you an entertaining tale from our very own Rob Golding, who knows more about Minis than most, following a drive in BMW's third generation redesign on the Spanish island of Majorca this week. Nice work, if you can get it.

Enjoy that weekend.

Graeme Roberts, Deputy Editor, just-auto.com