Bloomberg News

GM Pressed by U.S. for Answers on Delay in Recalling Cobalt (1)

March 05, 2014

General Motors World Headquarters

The auto-safety regulator could fine General Motors Co. as much as $35 million, which would be the most ever by the U.S., if it finds the Detroit-based automaker didn’t pursue a recall when it knew the cars were defective. Photographer: Jeff Kowalsky/Bloomberg

The U.S. told General Motors Co. to detail what it knew, and when, about ignition-switch failures linked to 13 deaths that led the nation’s largest automaker to recall 1.6 million Chevrolet, Pontiac and Saturn vehicles.

The National Highway Traffic Safety Administration sent GM a 27-page order requesting specifics, by April 3, on steps the company took to investigate engineering concerns and consumer complaints dating from 2004. GM last month said heavy key rings or jarring can cause ignition switches on some cars to slip out of position, cutting off power and deactivating air bags.

GM has now linked the defect to at least 23 crashes, including the 13 deaths. The auto-safety regulator could fine GM as much as $35 million, which would be the most ever by the U.S., if it finds the Detroit-based automaker didn’t pursue a recall when it knew the cars were defective.

“Falsifying or withholding information in response to this special order may also lead to criminal penalties of a fine or imprisonment of up to 15 years, or both,” the agency said in the March 4 order posted on its website today.

The company is fully cooperating with NHTSA’s probe and welcomes “the opportunity to help the agency have a full understanding of the facts,” a GM spokesman, Alan Adler, said in an e-mailed statement today.

“In addition to getting NHTSA the information they need, we are doing what we can now to ensure our customers’ safety and peace of mind,” Adler said. “We want our customers to know that today’s GM is committed to fixing this problem in a manner that earns their trust.”

107 Questions

GM Chief Executive Officer Mary Barra yesterday said she would lead senior executives monitoring progress on the recall, which includes Chevrolet Cobalt and Pontiac G5 cars, and said 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 for employees. “We have much more work ahead of us.”

In its order, which GM said it received yesterday, NHTSA asks for information on 107 questions about the company’s steps leading up to the recall, including the 10-year timeline the company provided regulators Feb. 24.

The agency said it wants all GM documents used to prepare the timeline, details about each of the 23 crashes the company linked to the defect and all depositions and testimony from lawsuits.

2007 Meeting

NHTSA said it also wants names and correspondence from any employee involved in the company’s attempts, going back to 2004, to investigate and isolate ignition-switch failures. It asks for details on why engineering fixes proposed in 2004 and 2005 weren’t implemented. And it wants to know what happened after a 2007 meeting in which regulators and GM discussed an air bag failure after a Cobalt lost engine power.

The agency told GM to describe why North America President Alan Batey said the company’s “process employed to examine this phenomenon was not as robust as it should have been,” and details about how the process will be changed.

“We are a data-driven organization, and we will take whatever action is appropriate based on where our findings lead us,” NHTSA spokesman Nathan Naylor said in a statement today.

U.S. auto-safety regulators were told by a research team in 2007 of a possible link between defective ignition switches and airbags not deploying. GM described the issue in a technical service bulletin to dealers the previous year. NHTSA didn’t start a defect investigation at the time and GM didn’t issue a recall until this year.

GM Apology

GM has started an internal probe to provide an “unvarnished report on what happened,” Barra said yesterday.

The initial recall on Feb. 13, limited to 778,562 Cobalts and G5s, was widened less than two weeks later to include more than 800,000 additional vehicles. Those vehicles include 2003-2007 Saturn Ions, 2006-2007 Chevrolet HHRs, the 2006-2007 Pontiac Solstice and the 2006-2007 Saturn Sky. Other models affected are the 2005-06 Pontiac Pursuit sold in Canada and the 2007 Opel GT sold in Europe.

GM said it was “deeply sorry,” in a Feb. 25 statement.

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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