UPDATE 2-Documents show GM's sluggish response to deadly defect

Fri Apr 11, 2014 5:49pm EDT

* Ignition switch flaw linked to at least 13 deaths

* Documents show GM engineers' early knowledge of defect

* NHTSA says GM "slow to act" on defects and recalls (Adds quotes from documents, details of case, adds DETROIT to dateline)

By Eric Beech and Paul Lienert

WASHINGTON/DETROIT, April 11 (Reuters) - Documents made public on Friday by a U.S. House of Representatives committee provided fresh details on General Motors Co's awareness of problems surrounding ignition switches in millions of its cars - long before the Detroit automaker recalled the vehicles.

These documents also show that federal regulators were concerned that GM dragged its heels on safety measures at a time when ignition-switch failures in some of its smaller vehicles were being linked to deaths that now total 13.

A top official with the National Highway Traffic Safety Administration told General Motors in a July 2013 email that the automaker was "slow to communicate, slow to act" on defects and recalls.

The House Energy and Commerce Committee, which has collected more than 250,000 documents - mainly from GM but also from parts supplier Delphi Automotive Plc and a federal regulator - is trying to find out why it took GM more than a decade to notify the public of a safety problem linked to fatalities.

Committee Chairman Fred Upton, a Michigan Republican, said the documents illustrate "failures within the system."

In February and March, GM recalled 2.6 million older cars, including Saturn Ions and Chevrolet Cobalts, due to concerns that faulty ignition switches could cause the vehicles' engines to turn off during operation. That, in turn, can prevent airbags from operating and disable power steering and power brakes.

GM supplied the committee with a document confirming the automaker in May 2002 approved the original ignition switch supplied by Delphi. The switch was used for the first time in the 2003 Ion, which went into production just three months later.

Delphi earlier told the committee that the switch, which was designed by GM engineer Ray DeGiorgio, did not meet GM's internal torque specifications in Delphi's testing of samples.

The documents also show DeGiorgio exploring the idea of broadly replacing the defective ignition switch.

An email exchange in October 2012 shows DeGiorgio discussing the prospect of replacing ignition switches in about 1.5 million Cobalts, roughly a year and a half before the first recall was announced.

GM announced earlier this week that DeGiorgio, who was the lead engineer for the switch, has been placed on paid leave.

In the email to Brian Stouffer, who was a field performance assessment engineer in GM's product investigations department, DeGiorgio discussed possible costs related to recalling autos in order to replace the faulty ignition switches.

It is not clear what prompted the email exchange.

EARLY EVIDENCE OF PROBLEM

Congressional investigators have been looking into whether cost considerations contributed to GM not acting quickly after it first noticed ignition switch problems in 2001.

Another GM document, this one from 2005, shows that engineers had early and specific evidence of the problem.

It details the analysis of an incident reported by Gary Altman, a senior GM engineer who also was placed on leave this week as the company conducts an internal investigation into its response to the flawed ignition switch.

The document says that Altman, who was the program engineering manager for the Cobalt and Ion, reported on Oct. 29, 2004, that the Cobalt ignition "can be keyed off with knee while driving."

It says the problem was detected in a field test of the 2005 Cobalt. "While driving the vehicle the driver's knee bumped the key in such a manner as to turn off the ignition," it states.

The document also indicates "business case unacceptable," an apparent reference to the internal decision made not to fix the part because of costs.

Altman testified in a 2013 deposition that GM delayed action because of costs.

In another document, Delphi engineers on June 14, 2005, discussed a request from GM that they perform a force displacement analysis on the switch.

"Ray is requesting this information," wrote Delphi engineer John Coniff in an apparent reference to GM's engineer DeGiorgio. "Cobalt is blowing up in their face in regards to turning off with the drivers knee."

An hour later, another Delphi employee responded that they had the equipment to perform the test.

LOAD OF MATERIALS

With "much left to examine," according to Upton, the House panel, as well as a Senate panel conducting its own investigation, is expected to take weeks examining the load of materials collected from GM and the NHTSA.

Both panels held hearings at the beginning of April, with GM CEO Mary Barra undergoing tough questioning. Additional hearings are expected later this spring or into summer.

Lawmakers have accused DeGiorgio of lying and GM of engaging in criminal activity.

Attempts by Reuters to obtain comments from DeGiorgio and Altman were not successful.

According to one document obtained by the committee, Barra, who assumed the top position in January, received an email in 2011 pointing to steering problems in GM models that later were recalled.

That email cited a New York Times story dated Oct. 3, 2011, which reported on NHTSA deliberations concerning Saturn Ions and Chevrolet Cobalts that were experiencing steering problems related to a loss of power.

The email to Barra, however, does not mention ignition switch problems, something the new CEO said she became aware of just last December.

Meanwhile, a top official with NHTSA told General Motors in a July 2013 email that the automaker was "slow to communicate, slow to act" on defects and recalls.

Frank Borris, head of NHTSA's Office of Defects Investigation, said in a July 2013 email to GM executive Carmen Benavides that the company was more difficult to work with than other automakers and he cited six instances in which the agency disagreed with GM on safety issues. This was the same email that accused GM of being "slow to communicate" and "slow to act" on details and recalls.

Congress is trying to determine whether GM officials failed to react in a timely way to the critical safety defect and whether NHTSA regulators also may have failed to carry out their duties.

Some members of Congress already are discussing the possibility of passing legislation to increase civil and criminal penalties for automakers' failure to react quickly to safety concerns and to tighten reporting requirements in crashes involving fatalities.

(Additional reporting by Julia Edwards and Marilyn Thompson in Washington, Bernie Woodall in Detroit, Jessica Dye in New York, and Peter Henderson in San Francisco; Writing by Richard Cowan; editing by Karey Van Hall and Matthew Lewis)