Fallout from General Motors‘ faulty ignition switches – most fitted to North American market brands and sold largely in the US – is rumbling on but, so far, there has been no threat from officialdom to “hold the automaker’s feet to the fire” – a promise made infamously to Toyota by then-transportation secretary Ray LaHood during that automaker’s sudden acceleration recall crises several years ago.
Bloomberg News this week reported General Motors had hired Jenner & Block chairman Anton Valukas, who served as a US Justice Department-appointed examiner of the downfall of Lehman Brothers Holdings, to help lead the automaker’s internal probe of the ignition switch failure tied to at least 13 deaths.
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The news agency said the investigation of the handling of the flaw that prompted the recall of 1.6m vehicles is being conducted jointly by a team led by Chicago-based Valukas and GM general counsel Michael Millikin. Attorneys from the law firm King & Spalding are also part of the team handling the inquiry, GM said.
“He sounds like a good choice because he has prosecutorial experience and has done other outside controversial investigations,” Joan Claybrook, a former administrator of the National Highway Traffic Safety Administration (NHTSA) told the news agency. She is also a longtime consumer advocate and has been critical of GM’s response.
Bloomberg said the internal company probe is running parallel to a query from NHTSA on what steps the company took to investigate engineering concerns and consumer complaints dating from 2004. GM has until 3 April to answer specific questions in a 27-page order the agency issued on 4 March.
GM last month said heavy key rings or jarring can cause ignition switches on some Chevrolet, Pontiac, Saturn and Opel vehicles to slip out of position, cutting off power and deactivating air bags. GM has linked the defect to at least 23 crashes, including the 13 deaths.
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By GlobalDataFollowing precedence and regulator action, NHTSA could fine GM as much as $35m, a US record, if it finds the automaker didn’t pursue a recall when it knew the cars were defective. The agency can also seek criminal charges.
New GM CEO Bary Barra recently told employees the company’s reputation may be driven by how it responds. GM “has acted without hesitation” to address the recall in the past few weeks, Barra said in a note on a website last week for employees, Bloomberg noted. “We have much more work ahead of us.”
Hearings request
The report added that Claybrook and four advocacy groups – the Center for Auto Safety, Advocates for Highway and Auto Safety, the Consumer Federation of America and Consumers Union – had asked congressional leaders for hearings on how GM and NHTSA handled the Cobalt recall.
“General Motors seemingly ignored the problem for nearly a decade and failed to take any corrective action despite the mounting number of deaths and injuries related to defective ignition switches,” the groups said in letters to Senate Commerce, Science and Transportation Committee chairman Jay Rockefeller and Commerce Committee chairman Fred Upton.
Over 260 complaints
Earlier, the New York Times [NYT] alleged federal safety regulators received more than 260 complaints over the last 11 years about the GM vehicles but declined to investigate the problem.
The paper’s analysis of consumer complaints submitted to the NHTSA found that since February 2003 it received an average of two complaints a month about potentially dangerous shutdowns but responded repeatedly there was not enough evidence of a problem to warrant a safety investigation. The complaints – the most recent of which was filed only on Thursday last week (6 March, 2014) involved six models that GM is now recalling because of defective ignition switches that can shut off engines and power systems and disable air bags. GM told the paper it mailed the first recall notices to owners last Friday.
The paper said many complaints detailed “frightening” scenes in which moving cars suddenly stalled at high speeds, on highways, in the middle of city traffic, and while crossing railroad tracks. A number of the complaints warned of catastrophic consequences if something was not done.
The NYT said the safety agency sometimes responded with polite but formulaic letters similar to one it sent in December 2010 to Barney Frank, then a congressman from Massachusetts, who had written on behalf of a distraught constituent whose 2006 Cobalt kept stalling. In the letter to Frank, the agency said it had reviewed its database of complaints to determine if a “safety defect trend” existed. “At this time, there is insufficient evidence to warrant opening a safety defect investigation,” the letter concluded.
Problem repeating?
The paper noted that failure to recognise a pattern in individual complaints had been a problem for the safety agency before – in the late 1990s, it was criticised for failing to detect a wave of highway rollovers in Ford Explorers with Firestone tyres, a problem that was eventually linked to 271 deaths [and led to a massive recall of 6.5m tyres, over US$1bn in related costs for brand owner Bridgestone and the severance of a decades-old relationship between automaker and supplier – ed].
An NHTSA spokesman told the New York Times that, over the last seven years, the agency’s investigations in other cases had resulted in 929 recalls of more than 55m vehicles. The agency “uses a number of tools and techniques to gather and analyse data and look for trends that warrant a vehicle safety investigation and possibly a recall,” he said in a statement. The 260 complaints amounted to about .018% of the vehicles under recall.
In response to the Ford-Firestone tyre debacle, the US Congress passed a law in 2000 requiring automakers to report to the safety agency any claims they received blaming defects for serious injuries or deaths, so the government would not have to rely only on consumer reports. Since 2003, the NYT said, GM had reported at least 78 deaths and 1,581 injuries involving the now-recalled cars, according to a review of agency records. Though the records mention potentially defective components, how many of these records were related to the ignition problem is unclear, the paper noted. Even with that additional information, regulators appear to have overlooked disturbing complaints of engine shutdowns.
Repairs start April
In a later report, the New York Times said that repairs to the recalled GM vehicles, all of which are now out of production, would not begin until at least late April.
An initial recall letter warns owners: “Remove all items from your key ring, leaving only the vehicle key.” The letter, which does not advise drivers to stop using their cars, also tells owners that the replacement parts “are not currently available”.
GM spokesman Alan Adler told the paper the supplier, Delphi, needed to prepare machines that would make the part before mass production could begin. Once the part is made, a second letter will be sent to registered owners telling them to schedule an appointment at a dealership. That letter, GM told the NYT, would go out later in March. The parts are not expected to arrive at dealerships any sooner than early April.
