GM faces rough road ahead over recall

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Posted: Sunday, March 2, 2014 12:00 am

General Motors Co. faces tough questions as it grapples with a massive recall of several models with faulty ignition switches and a new investigation announced last week by the National Highway Traffic Safety Administration.

The automaker could face civil and criminal penalties as the agency’s investigation unfolds. Though NHTSA has never levied criminal penalties before in a recall case, it was given the power by Congress in 2000 as a result of the Ford Explorer’s rollover problems with Firestone tires.

NHTSA said it will examine “the timeliness of GM’s recall” and wants “to determine whether GM properly followed the legal processes and requirements for reporting recalls.” The defect has been connected to 13 deaths over a decade and now involves 1.37 million cars.

The recall now includes 2005-07 model year Chevrolet Cobalts and Pontiac G5s, 2003-07 Saturn Ions, 2006-07 Chevrolet HHRs and 2006-07 Pontiac Solstice and Saturn Skys.

A similar investigation into Toyota’s recalls for unintended acceleration resulted in a $17.5million fine — the highest in history for the agency.

GM said it will “cooperate fully.” Last week, GM apologized for the way it handled the situation, but it has not acknowledged any wrongdoing.

The defect cited involves an ignition switch in the steering column that can be jarred out of place by a heavy key chain or after being hit by a knee or other object. The switch can fail and cause the car to turn off and its air bags to no longer operate. GM has acknowledged issues with the switch and said they should be replaced.

The defect has affected consumers like Dallas sales manager Blake Higgins, owner of a 2007 Chevy Cobalt SS.

On three occasions, Higgins has accidentally bumped the ignition switch, causing the engine to turn off while he was still driving.

“I’m about 6 feet and I have pretty long legs. I sit with the seat pretty far back, so my knee is pretty close to where the ignition is,” he said. “My knee hit the switch after I hit a pretty hard bump and the car turned off.”

GM’s reputation also is on the line as it navigates the highly charged publicity and works to answer questions from car owners across the nation worried about safety.

An automaker risks its reputation when it delays or resists a recall — especially when the defect can be linked to deaths. It took years for Ford to overcome damage to its reputation for gas tanks in the Ford Pinto that could explode in rear-end collisions.

Chrysler, however, seems to have emerged relatively unscathed from its recall last year of 1.56 million model-year Jeep Grand Cherokees from 1993-98 and Jeep Libertys from 2002-07, after initially refusing NHTSA’s request to recall the SUVs. Last September, the Auburn Hills, Mich., automaker said the recall would cost an estimated $151 million.

Sean Kane, founder and president of Safety Research & Strategies, predicted earlier this week that NHTSA would focus on the timeliness of the recall, in part because it took GM about a decade to take action.

“In this case, there is ample evidence that GM did not issue the recall (in) a timely fashion,” Kane said.

A defense attorney for the family of one of the crash victims that received a confidential settlement said Wednesday he thinks criminal penalties should be levied against the company.

“It’s our position that criminal penalties should be considered,” said Georgia attorney Lance Cooper, who represented the estate of pediatric nurse Brooke Melton, who was killed in an accident in Georgia.

Cooper said the Transportation Recall Enhancement, Accountability and Documentation Act, which Congress enacted in 2000, allows the government to enact criminal penalties when an automaker intentionally hides information about a recall.

He also criticized GM for deciding to sell the Cobalt before fixing the defect.

“It’s a sin of commission and omission,” he said. “They were deliberately doing things to jeopardize the safety of consumers and then not telling them about the defect.”

Cooper said his office has been fielding calls from other potential victims of the ignition switch defect.

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