U.S. congressional probe heats up as GM expands recalls

WASHINGTON/DETROIT Mon Mar 31, 2014 7:26pm EDT

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009. REUTERS/Jeff Kowalsky/Files

The General Motors logo is seen outside its headquarters at the Renaissance Center in Detroit, Michigan in this file photograph taken August 25, 2009.

Credit: Reuters/Jeff Kowalsky/Files

WASHINGTON/DETROIT (Reuters) - A U.S. congressional probe is focusing on why General Motors Co employees repeatedly approved substandard ignition switches linked to at least 13 fatalities, as the automaker on Monday announced another major recall, this time related to power steering issues.

On the eve of a high-profile hearing before a House of Representatives panel, GM said it is recalling more than 1.5 million additional vehicles globally. That brings its total recalls so far this year to more than 6 million.

The Detroit-based automaker says it is taking an aggressive stance on safety issues, after coming under intense criticism for waiting more than a decade to recall millions of cars with potentially faulty ignition switches.

On Monday, Democrats on the House Energy and Commerce Committee released details of some of the more than 200,000 pages of documents they have received from GM and a federal regulator.

The lawmakers said they want answers as to why GM employees approved for production ignition switches that failed to meet company standards. These faulty switches can cause engines to stall during operation, which also disables airbags, power steering and power brakes.

Lawmakers are also exploring whether another 14 fatalities could be connected to the faulty ignition switches, citing data from the National Highway Traffic Safety Administration regarding newer models of the recalled cars.

Those deaths occurred in accidents with vehicles displaying some of the same problems as those in the earlier fatalities.

The additional 14 deaths occurred after the 13 fatalities that GM has connected to defective ignition switches.

GM CEO Mary Barra, who is set to appear before the House panel on Tuesday, in prepared testimony extended her "sincere apologies" to those affected by the recall, "especially to the families and friends of those who lost their lives or were injured."

FIXING THE SWITCH

The bad publicity around the defective ignition switches has tarnished GM's reputation even as the automaker moved to close the chapter on its 2009 bankruptcy and $49.5 billion U.S. taxpayer bailout.

With last year's launch of a redesigned version of its highly profitable large pickup trucks and the recent reintroduction of a quarterly dividend, many analysts had begun touting the company's stock.

Lawmakers on Monday highlighted inconsistencies regarding the role of a key GM engineer, Ray DeGiorgio, in a decision in 2006 to revise the design of the ignition switch.

The change was made to the portion of the switch that holds the ignition key in place as it clicks between off, accessory and on positions, called the detent plunger and spring.

In an April 2013 deposition related to a crash in Georgia involving a recalled GM car, DeGiorgio said the company "certainly did not approve a detent plunger design change" for the 2006 replacement ignition switches.

However, Representative Henry Waxman and other senior Democrats on the House Energy and Commerce Committee said on Monday that "GM has provided the panel with documentation verifying that a Ray DeGiorgio, lead design engineer for the Cobalt ignition switch, signed off on a Delphi ignition switch change on April 26, 2006."

GM declined to make DeGiorgio available for comment on Monday.

'WE WILL FIND OUT'

Barra and NHTSA acting Administrator David Friedman are set to testify on Capitol Hill on Tuesday to an Energy and Commerce subcommittee and on Wednesday to a Senate panel.

In recent weeks, as more problems have surfaced with GM's ignition switches, the company has expanded its car recalls. The U.S. Justice Department has launched a criminal investigation and several lawsuits have been filed against the company.

In Barra's opening statement that she plans to deliver on Tuesday, she said: "I cannot tell you why it took years for a safety defect to be announced in that (small car) program, but I can tell you that we will find out."

The automaker has asked Delphi Automotive, manufacturer of the switch, to add a third production line to build the replacement parts to speed the recall, Barra said. GM previously said it expected to replace switches in all recalled cars by around October, but a spokesman said the recall's expansion on Friday may delay that.

Included in the recall are the Chevrolet Cobalt and Saturn Ion models.

Friedman, in his prepared testimony, pointed a finger at GM, saying the automaker "had critical information that would have helped identify this defect."

He called the GM probe "a difficult case," but defended his agency's actions. "We are not aware of any information to suggest that NHTSA failed to properly carry out its safety mission based on the data available to it and the process it followed," Friedman said.

However, an October 2011 audit by the Department of Transportation's inspector general found that NHTSA "lacks systematic processes" for tracking consumer complaints, ensuring timely investigations of defect complaints and training investigators. The agency argues it has made improvements since that report.

QUESTIONS ABOUT 'FIX'

Delphi said the redesigned switches used in 2008-2011 models of the recalled GM vehicles still did not meet GM standards, according to the documents handed over to Congress.

"This information raises important new questions about what GM knew, when GM knew about the risks from this faulty ignition switch, and how the company has handled the recalls of affected vehicles, including the recall of the 2008-2011 model year vehicles that was announced just three days ago," senior Democrats on the House Energy and Commerce Committee said.

A GM spokesman said that while Monday's recall regarding a loss of power steering included several models affected by the defective ignition switches, the issue was not related.

GM said it was aware of "some crashes and injuries" related to the issue, but no fatalities.

The Detroit automaker said it will now take a charge in the first quarter of about $750 million, mostly for the recalls it has announced including the defective switches. That is up from $300 million it previously disclosed.

(Additional reporting by Eric Beech in Washington; editing by Karey Van Hall and G Crosse)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (21)
GotDOCG wrote:
I owned a ’77 Pontiac Astra… in the following two years 1. replaced 5, count ‘em folks 5 fuel pumps. 2. transmission failed., 3. all four cylinders failed. 4.right rear shock absorber tower unit separated from the chassis… amazing all items just happen to go south after the (generous!!) 12,000 mile warranty expired… the company ran the other way… soooo, I showed up at the Chicago Auto Show in ’77 wearing a lemon yellow T-shirt with “I got suck with a lemon by Pontiac”… on the front… and “Pontiac Makes Lemons” on the back… after being stopped by dozens upon dozens of people; and 1/2 before the news media arrived, they decided to talk… at some point a salesman make the comment that they didn’t need customers like me… I took that to heart… have not set foot in any GM showroom these 37 years…

Mar 31, 2014 1:25pm EDT  --  Report as abuse
Bobo9 wrote:
As a past supplier to GM I can tell you they pound the dickens out of all their suppliers to take an extra penny out of the cost of everything they buy.
Odds are the redesigned switch cost them 4 cents or so less, & that mentality is what drove GM for years, & now it’s got them by the short hairs.

Mar 31, 2014 1:37pm EDT  --  Report as abuse
Overcast451 wrote:
Well, I guess they found their scapegoat.

But even if this guy did ‘sign off’ on it – I’m sure management above him, needed to also.

Mar 31, 2014 1:44pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Full focus