GM’s Ignition Recall Lapse - Fines, Investigation and Congressional Probes Oh My!
In case you missed the news, GM is recalling approximately 1.6 million Chevrolet, Pontiac, Saturn and Opel vehicles for problems with the ignition switch. When GM first introduced this recall, they claimed that only Chevy Cobalt and Pontiac G5 sedans were affected. They also claimed that most people just needed to remove all objects from their key ring besides the key. Since that initial statement, things have grown substantially. Officially GM has this recap of the issue:
- The problem: The ignition switch is not sturdy enough, so the key can be jostled out of the “run” position by a heavy key chain or the motion of a car running off the road, cutting power to the car and potentially causing the airbags not to deploy in a crash.
- The fix: GM will send a letter to owners the week of March 10, with the first parts available in early April. Until then, owners are advised to use the ignition key with nothing else attached.
- Affected models: 2003-07 Saturn Ion, 2005-07 Chevrolet Cobalt, 2006-07 Chevrolet HHR, 2006-07 Pontiac Solstice, 2007 Saturn Sky, 2007 Pontiac G5; 2005-06 Pontiac Pursuit (Canada only), 2007 Opel GT (Europe only)
- Scope of recall: 1.6 million cars, including 1.4 million in the United States
- Known incidents: 31 frontal crashes in which 13 front-seat passengers died.
While the recall itself isn’t terribly bad, the problem deals with the timeline. As the story goes, GM first heard of the issue in field report back in 2005. They responded by working with their supplier to redesign the part and the manufacturing of it. This new piece and process was implemented in 2007 model year vehicles. However, GM never announced a recall of the models that were equipped with the bad part.
GM also didn’t even announce a formal inquiry into the issue until 2011 after several crashes of 2007 and earlier vehicles in which the air bags didn’t deploy. It, then, took GM until just a month ago to issue a recall.
The Tread Act, passed in the fall of 2000 in response to the Ford Explorer and Bridgestone/Firestone scandal, requires automakers to respond to recalls in a “timely manner.” This recall, on the surface, doesn’t seem to have been handled as “timely” at all.
“New” GM’s Response
GM’s new CEO Mary Barra has been leading the charge to salvage the company’s reputation and contain the fallout. She is reportedly working around the clock to handle the recall head on.
"Our company's reputation won't be determined by the recall itself, but by how we address the problem going forward," Barra wrote in a message to employees last week. "What is important is taking great care of our customers and showing that it really is a new day at GM."
Barra went on to say that her executive team “acted without hesitation” when the matter was brought to them a few weeks ago. She has vowed to conduct an “unvarnished” internal review.
Since the recall, GM has avoided looking like they are hiding anything. Many GM executives have spoken publicly on the matter (a bit unheard of). There also has been an op-ed published in USA Today and GM has responded quickly to social media complaints.
On Monday, March 10, 2014, GM issued a statement that they are bringing in a team of lawyers to do an internal probe. This team is headlined by none other than Anton Valukas. You may remember this attorney as the guy who brought down Lehman Brothers.