Here's Why You Should Pay Attention to the GM Recall Probe
On April 1, General Motors CEO Mary Barra will be questioned by the House of Representatives over a decade-long delay in recalling 1.6 million cars with lethally faulty ignition switches. Here are some of the issues GM should address as the investigations unfold.
.Next week, General Motors CEO Mary Barra will be questioned by the House of Representatives over a decade-long delay in recalling 1.6 million cars with lethally faulty ignition switches.
So far, Barra has been praised for facing the crisis head on. In a video message, she said "Something went wrong with our process in this instance. And terrible things happened.... we have apologized, but that is just one step in the journey to resolve this." But Barra's straightforward approach might still obfuscate the extent of the company's negligence. Barra, after all, only started as CEO in December of 2013. The New York Times reports:
She admitted that she learned in late December that internal safety committees were analyzing defects in the Chevrolet Cobalt, more than a month before the company decided to issue its recall and earlier than the company has said she was told. But she said she did not know the serious nature of the defects until Jan. 31, when she was informed that two safety committees had concluded that a recall was necessary. Her performance was a marked departure from the norm in the auto industry, where corporate chiefs routinely avoid talking about recalls unless subpoenaed by Congress.
In a recent article, Slate's Bryce Covert suggested that GM is setting Barra up to take a fall, citing research that shows women are more often promoted to leadership roles in major companies when the firms are in trouble. And it certainly seems convenient for the company, which has opted for settlements in lieu of admitting guilt over the faulty part, to offer someone who has only been in charge for a matter of months as an expert on the case.
In all the debate about blame, however, it's important to note the severity of the problem. The faulty ignition was responsible switching the car's engine off and preventing airbags from opening. So drivers of cars with the faulty switches run the risk of losing control of the car, and then losing built in crash-protections. GM explains on its recall page:
There is a risk, under certain conditions, that your ignition switch may move out of the “run” position, resulting in a partial loss of electrical power and turning off the engine. This risk increases if your key ring is carrying added weight (such as more keys or the key fob) or your vehicle experiences rough road conditions or other jarring or impact related events. If the ignition switch is not in the run position, the air bags may not deploy if the vehicle is involved in a crash, increasing the risk of injury or fatality.
To deal with the potentially fatal issue, GM told users to avoid using heavy keychains, which is not much of safety measure at all.
Barra, who will also be questioned by the Department of Justice for a criminal investigation into the delayed recall, may well be the company's sacrificial offering. But that doesn't mean GM should be held any less accountable for the way it has handled the case. Here are some of the other issues GM should address as the investigations unfold.
Years of negligence
According to the company, problems with the ignition switch were first detected in 2004. At the time, an investigation was opened into the problem, but it was "closed with no action" upon "consideration of the lead time required, cost, and effectiveness of [a number of potential solutions]." In 2005, the problem was again brought up, and engineers considered changing the ignition key from a slot to a hole shape, to keep the key from shifting and triggering the engine to turn off. The proposal was approved, but ultimately cancelled. Instead, the company provided key inserts to GM dealers to fit over the slot. However, in 2006 the engineers did switch over to the new design, but without noting the change in the part number for the ignition switch. According to Automative News, the "scant documentation of the change impeded GM's years-long search for clues," and was a breach of normal procedure:
Not assigning the new part number would have been highly unusual, according to three people who worked as high-level GM engineers at the time. None of the engineers was involved in the handling of the ignition switch; all asked that their names not be used because of the sensitivity of the matter. "Changing the fit, form or function of a part without making a part number change is a cardinal sin," said one of the engineers. "It would have been an extraordinary violation of internal processes."
In 2007 and 2009, investigations were opened into fatal crashes likely caused by the faulty part in 2005-2007 Cobalt models. Several years (and investigations) later, recalls were finally instituted for 2005-2007 Chevy Cobalt and Pontiac G5; 2003-2007 Saturn Ion; 2006-2007 Pontiac Pursuit; 2006-2007 Pontiac Solstice; and 2007 Saturn Sky vehicles. That amounts to 1.6 million cars. At least 13 deaths have been linked to the shoddy part, according to GM.
Intimidating families of victims
Earlier this week, the New York Times reported that while GM was dealing with the mess of its hushed investigation, it was misleading grieving families and pressuring them to drop wrongful death lawsuits. The Times reports:
At a meeting on May 15, 2009, they learned that data in the black boxes of Chevrolet Cobalts confirmed a potentially fatal defect existed in hundreds of thousands of cars. But in the months and years that followed, as a trove of internal documents and studies mounted, G.M. told the families of accident victims and other customers that it did not have enough evidence of any defect in their cars, interviews, letters and legal documents show.... in one case, G.M. threatened to come after the family of an accident victim for reimbursement of legal fees if the family did not withdraw its lawsuit. In another instance, it dismissed a family with a terse, formulaic letter, saying there was no basis for claims.
The New York Times reports that some families seeking legal action against GM opted to settle instead, agreeing to confidentiality terms that obscure GM's stance on the fatalities.
Bailout immunity
In 2009, GM famously received a massive government bailout after it filed for bankruptcy. This means that the company doesn't have to respond to legal claims filed prior to 2009 — which will make it difficult to build a case against the company. Some are calling for the company to waive this right in light of the decades-long neglect, but it seems it will be up to GM to make the final call. Unless, of course, Barra's performance next week prompts Congress to take more action.