General Motors Ignition Switch
On February 7, 2014, General Motors announced it would recall 619,122 2005-07 Chevrolet Cobalts and 2007 Pontiac G5’s for an ignition switch defect that could shut off the engine and power steering as well as deactivate the airbags. GM said there had been 6 deaths and 17 injuries in crashes associated with the defect. On February 24, 2014 GM expanded the recall to 1.6 million vehicles by including the 2003-07 Saturn Ion, and the 2006-07 Chevrolet HHR, Pontiac Solstice and Saturn Sky, and announced the number of known deaths was 13.
At the same time, GM issued its first public apology since it apologized to Ralph Nader in 1966. GM North America President Alan Batey said: “We are deeply sorry and we are working to address this issue as quickly as we can. The chronology shows that the process employed to examine this phenomenon was not as robust as it should have been. Today’s GM is committed to doing business differently and better. We will take an unflinching look at what happened and apply lessons learned here to improve going forward.” Shortly thereafter, GM CEO Mary Barra announced GM would enlist an outside firm to conduct an independent review of the company’s actions relative to the ignition switch defect.
On March 28, 2014 GM further expanded the recall, adding 823,788 2008-2011 vehicles to the recall that may have received the defective ignition as a service part. This action brought the total number of recalled vehicles to 2.2 million.
On April 1, 2014, GM CEO Barra and NHTSA Acting Administrator David Friedman testified on the matter before the House Energy and Commerce Subcommittee on Oversight and Investigations. This was followed on April 2 with another round of Barra and Friedman testimony before the Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Insurance. Documents obtained by these subcommittees shed light on both GM and NHTSA’s failures to ensure a timely recall. Both the House and Senate committees followed up with additional hearings in July.
Also on April 1, Ms. Barra announced the selection of Ken Feinberg to advise GM and to “explore and evaluate options in its response to families of accident victims whose vehicles are being recalled for possible ignition switch defects.” GM limited the scope of Feinberg’s compensation program to deaths and injuries, with no compensation program for economic damages. On June 30, 2014, Mr. Feinberg issued a final protocol which outlined the procedures for submission and evaluation of claims, as well as compensation calculations. See http://www.gmignitioncompensation.com/docs/FINAL%20PROTOCOL%20June%2030%20%202014.pdf .
GM issued four more ignition-related recalls over the ensuing three months. On April 9, 2014 GM issued a recall related to rollaway incidents in vehicles with the faulty ignition switches. On June 19, GM issued a recall on 2010-14 Chevy Camaros for ignition switches that could be moved out of the “ON” position by the driver’s knee. On June 20 and July 3, 2014, GM issued two recalls for ignition switch defects in almost 10 million vehicles across its fleet.
Despite the fact that these new recalls cited dangers similar to those remedied in the February and March recalls, GM refused to allow the Feinberg program to consider deaths and injuries attributed to the later-recalled models. At the time of publication, the Feinberg program had granted compensation for 77 death claims and 141 injury claims due to the ignition switch defect in the approved vehicles. For up-to-date information on the Feinberg program’s claims progress, see http://www.gmignitioncompensation.com/docs/program_Statistics.pdf .
GM learned about the ignition switch defect as early as 2001, while the Saturn Ion was still in development. Even after receiving reports of deaths and injuries caused by the defect, GM canceled plans to conduct a broad remedy, instead issuing Technical Service Bulletins in 2005 and 2006 that instructed dealers to respond to owner complaints by advising owners to remove heavy items from their keychains. Despite a climbing death toll, GM ignored the millions of vehicles on the road with the defect, and instead started production of another version of the switch that would be included in future vehicle production. This “new” version of the switch contained a larger detent spring and plunger to increase the effort required for key movement, thus avoiding the problems of the defective switch. This switch was designed during the same period in 2001 in which the defective switch was developed, but was not selected for the recalled vehicles due to increased cost of production. In a clear attempt to cover up the change, GM engineer Ray DeGiorgio made the unusual request that the parts number for the non-defective switch remain unchanged from the parts number of the defective switch.
While GM bears full responsibility for not recalling these vehicles in 2005 and changing the design for future models, NHTSA bears responsibility for not investigating and ordering a recall by 2007 when it discovered the defect and failed to influence a recall by GM. The Center for Auto Safety discovered internal NHTSA records that showed the agency learned of the defect through Special Crash Investigations into the advanced airbag systems in 2005 Chevrolet Cobalts. NHTSA not only met with GM regarding the defect in 2007, but also opened an initial evaluation to determine whether a defect investigation was warranted. No defect investigation resulted from this evaluation. Another evaluation was conducted by NHTSA in 2010 with the same result, as the agency was unable to find a defect trend in their data. NHTSA also obtained records of 17 lawsuits and claims from GM on Chevrolet Cobalts and Saturn Ions through its Early Warning Reporting System, but kept the records from the public.
GM is also facing a number of individual and class action lawsuits related to the defective ignition switches. Approximately 40 individual class action lawsuits were filed in 12 states seeking compensation for economic losses related to the defective switches. These lawsuits were consolidated as a multidistrict litigation in the U.S. District Court for the Southern District of New York. Complicating these lawsuits is GM’s 2009 bankruptcy, which absolves the “new” GM of liability related to vehicles produced prior to bankruptcy. GM has filed motions to have these class actions moved to federal bankruptcy court for a determination of whether the claims have been barred. Readers can view the progress of the MDL at http://gmignitionmdl.com/ . Readers can view the latest bankruptcy court filings here: http://www.motorsliquidationdocket.com/maincase.php3.
On May 16, 2014 GM agreed to a $35 million civil penalty due to the company’s failure to address the ignition switch defect in a timely manner. The DOT’s Inspector General has confirmed that an audit will be opened to look into NHTSA’s safety functions and process related to the GM recall. The US Department of Justice is also investigating GM for violation of criminal penalties for failing to comply with laws requiring timely disclosure of defects, as well as bankruptcy fraud related to actions by GM during its 2009 bailout.