GM safety crisis grows as recalls mount
Jun. 30, 2014
DETROIT (AP) — General Motors' safety crisis deepened dramatically Monday when the automaker added 8.2 million vehicles to its ballooning list of cars recalled over faulty ignition switches.
The latest recalls involve mainly older midsize cars and bring GM's total recalls in North America to 29 million this year, surpassing the 22 million recalled by all automakers last year. They also raise questions about the safety of ignition switches in cars made by all manufacturers.
In the latest recalls, GM said keys may be jostled or accidentally bumped, causing the ignition to slip out of the "run" position. The recalls cover seven vehicles, including the Chevrolet Malibu from 1997 to 2005, the Pontiac Grand Prix from 2004 to 2008, and the 2003-2014 Cadillac CTS.
The company is aware of three deaths, eight injuries and seven crashes involving the vehicles, although it says there's no clear evidence that faulty switches caused the accidents. Air bags didn't deploy in the three fatal accidents, which is a sign that the ignition was out of position. But air bags may not deploy for other reasons as well.
A GM spokesman couldn't say Monday if more recalls are imminent. But this may be the end of the recalls associated with a 60-day review of all of the company's ignition switches. At the company's annual meeting earlier in June, CEO Mary Barra said she hoped most recalls related to that review would be completed by the end of the month.
Karl Brauer, an industry analyst with Kelley Blue Book, said the number of recalls — while huge — may be a good thing for the company in the long run.
"I think there's a new standard for what GM considers a potential safety defect, and Mary Barra has no tolerance or patience for potential safety defects that are unresolved," he said.
In a statement Monday, Barra said "we will act appropriately and without hesitation" if any new issues come to light.
Lance Cooper, a Marietta, Georgia, attorney who is suing GM, said he was not surprised by the additional recalls and expects even more. A company-funded investigation of the ignition switch problems by former U.S. Attorney Anton Valukas found that GM had a dysfunctional corporate culture in which people didn't take responsibility to fix the problems, Cooper said.
"Cars got made that were defective. The buck kept getting passed, and this is what happened as a result," Cooper said.
The announcement of more recalls extends a crisis for GM that began in February with small-car ignition switch problems. GM recalled 2.6 million older small cars worldwide because the switches can unexpectedly slip from "run" to "accessory," shutting off the engines. That disables power steering and power brakes and can cause people to lose control of their cars. It also stops the air bags from inflating in a crash. GM has been forced to admit that it knew of the problem more than 10 years, yet it failed to recall the cars until this year.
GM has been reviewing the performance of its ignition switches since the first recalls were announced, and it continues to find more that can turn too easily. Of the 29 million vehicles recalled by the company this year, 17.1 million have been due to ignition switches.
The problem has drawn the attention of the National Highway Traffic Safety Administration, the government's road safety agency. On June 18, the agency opened two investigations into ignition switches in Chrysler minivans and SUVs, and acknowledged that it's looking at the whole industry.
The agency is looking into how long air bags remain active after the switches are moved out of the run position. In many cases, the answer is less than a second.
GM's conduct in the small-car recall already is under investigation by the Justice Department and both houses of Congress. Earlier this year, the company paid a $35 million fine to NHTSA for delays in reporting the small-car ignition switch problems.
GM's recalls on Monday bring this year's total so far to more than 40 million for the U.S. industry, far surpassing the old full-year record of 30.8 million from 2004.
The recalls come the same day the company's compensation consultant, Kenneth Feinberg, announced plans to pay victims of crashes caused by the defective small-car switches. Attorneys and lawmakers say about 100 people have died and hundreds were injured in crashes, although Feinberg said he didn't have a total.
Feinberg said the company has placed no limit on how much he can spend in total to compensate victims. But victims of the new set of recalls announced Monday can't file claims to the fund, which deals only with the small cars.
In the original recall, the ignition switches didn't meet GM's specifications but were used anyway, and they slipped too easily out of the "run" position.
The vehicles recalled Monday have switches that do conform to GM's specifications. In these cases, the keys can move the ignition out of position because of jarring, bumps from the driver's knee or the weight of a heavy key chain. The cars recalled Monday will get replacement keys; the small cars recalled in February are getting new ignitions.
In all the cases, the ignition switches out of the "run" position and into the "accessory" or "off" position.
GM is urging people to remove everything from their key rings until all of the recalled cars can be repaired.
Of the three people who died in crashes involving the newly recalled vehicles, it's unclear whether those deaths were ignition-related, said GM spokesman Alan Adler. In each of the cases the air bags didn't deploy, but there are many reasons air bags don't deploy, including the angle at which a car is hit and whether or not the occupants were belted, he said.
The Detroit company said it plans to take a $1.2 billion charge in the second quarter for recall-related expenses. Added to a $1.3 billion charge in the first quarter, that brings total recall expenses for the year to $2.5 billion.
GM also announced four other recalls Monday covering more than 200,000 additional vehicles. Most are to fix an electrical short in the driver's door that could disable the power locks and windows and even cause overheating.
GM has announced 54 separate recalls this year.
GM's stock fell 32 cents, or just under 1 percent, to close at $36.30 on Monday.