Vol. 78/No. 19      May 19, 2014

In February and March, GM made two recalls for a total of 2.6 million vehicles with faulty ignition switches and brakes. The company has confirmed that if bumped or weighed down by a heavy key chain, the ignition can shut off engines and power systems and disable airbags. Flaws in the brake system can cause overheating and engine fires. The recalls affect models with faulty ignition switches produced in 2003-2007 and brake system problems in 2013 and 2014.

GM has conceded that 13 deaths and 32 crashes are linked to defective ignition switches. According to a report on air-bag failures by Friedman Research Corp., 303 passengers were killed from 2003 to 2012 when air bags failed to open in two of the recalled models.

Family members of some of those killed were present when Congressional committees held hearings with GM CEO Mary Barra April 1-2.

“Stop the games, stop the cover-up, get the 2.5 million cars off the road,” Renee Trautwein, whose daughter Sarah Trautwein, 19, was killed in a crash in 2009, said on MSNBC’s Jansing & Company show after attending the hearings April 2.

Internal GM documents released by a House committee March 30 show that the company chose between two ignition switches in 2001, and went for the cheaper one, even though there were reports of failures in pre-production tests. They started installing the bad switches in 2003 models.

Supplier Delphi reported in 2002 that the part didn’t meet GM’s own specifications. But GM made a business decision not to fix the problem. Gary Altman, engineering manager of the Cobalt model, closed an investigation into the ignition switch in 2004 because “none of the solutions presents an acceptable business case.” The cost would have been less than $1 per car.

In 2005 GM sent a bulletin to car dealerships saying that it would provide inserts to tighten the key-ring hole to reduce jostling of the key inside the ignition for customers who complained about ignition shutoffs. Then in 2006 GM quietly changed the ignition for its 2007 models. The company issued no report and didn’t even alter the part number, which lawsuits point to as an attempted cover-up.

The change was discovered by investigators who initially couldn’t figure out why reports of shutoffs and air-bag failures dropped off with 2007 models. Top company officials, from lead engineer Ray DeGiorgio to CEO Barra, claim they knew nothing about it.

Government investigations include a criminal probe by the Justice Department, investigations by the National Highway Traffic Safety Administration and the U.S. Securities and Exchange Commission, and inquiries by House and Senate committees.

GM says it faces 55 lawsuits in the U.S. and five in Canada related to the ignition recall and that it will “vigorously defend” itself in all cases. The company’s stance is that it should be immune from any “economic loss” lawsuits related to the faulty ignition because of its 2009 government-backed bankruptcy. The time to seek compensation for pre-2009 claims “has long passed,” said GM’s lead bankruptcy lawyer Harvey Miller.  
 
 
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