GM safety crisis grows with recall of 3 million more cars for ignition issues

SAN FRANCISCO/DETROIT Mon Jun 16, 2014 11:14pm EDT

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

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

Credit: Reuters/Jeff Kowalsky

SAN FRANCISCO/DETROIT (Reuters) - General Motors Co GM.N recalled three million more cars for ignition switch issues on Monday, roughly doubling the number of GM vehicles with known switch problems in a crisis that has defined the automaker and new Chief Executive Mary Barra this year.

GM on Monday recalled 3.36 million midsize and fullsize cars globally with ignition switches that can be jarred out of the "run" position, potentially affecting power steering, power brakes and air bags.

The switch issue is similar to the defect linked to at least 13 deaths in an earlier, 2.6-million vehicle recall of Chevrolet Cobalts and other small cars.

GM engineers first noted the Cobalt problem more than a decade ago, and GM's slow response to the switch issue triggered investigations within the company and by Congress and federal agencies.

"The recall is just sort of the tip of the iceberg in terms of what has to be done" at GM, Senator Richard Blumenthal, a Democrat from Connecticut and one of GM’s more vocal critics in Congress, said after Monday's recall.

GM said the engineer who designed the defective Cobalt switches, Ray DeGiorgio, also designed the switches on the latest batch of recalled cars. DeGiorgio was fired after the earlier recall. He could not be reached for comment.

GM has issued 44 recalls this year totaling about 20 million vehicles worldwide, which is more than total annual U.S. vehicle sales. Of the recalls this year, nearly 6.5 million of the vehicles were recalled for ignition switch-related issues, including more than half a million Chevrolet Camaros on Friday.

The automaker raised a recall-related charge for the second quarter to $700 million from $400 million. That takes GM's total recall-related charges this year to $2 billion.

Despite the rash of recalls this year, GM U.S. sales rose in May to the highest level since August 2008.

GM's high profile problem this year has catalyzed recalls at other automakers, said David Cole, chairman emeritus of the Center of Automotive Research in Ann Arbor. He described the recent flurry of activity as "recall spring."

"If it were unique to GM, I would say it is a much more serious problem," said Cole.

Clarence Ditlow, Executive Director Center for Auto Safety Of Monday's recall, said GM could not afford to take a chance on not recalling a car. "Their calculus has totally changed," he said.

GM said it was aware of eight crashes and six injuries related to the latest recall, and that there were no fatalities.

The automaker on Monday said it would replace or rework ignition keys to eliminate a slot in the end of the key. The slot allows a dangling key ring to slip to one side and pull the ignition key out of run position.

"The use of a key with a hole, rather than a slotted key, addresses the concern of unintended key rotation due to a jarring road event, such as striking a pothole or crossing railroad tracks," it said.

A spokesman said the ignition switches did not need to be replaced, even though they were "slightly" below the company specification for torque -- the force needed to move the switch out of the run position.

The latest recall includes Buick LaCrosse, Chevrolet Impala, Cadillac DeVille and several other models, though only the Impala is currently in production. The cars cover model years 2000 through 2014.

Monday's recall comes two days before CEO Barra is due to return to Congress to testify about the earlier Cobalt recall.

Barra will be joined by Anton Valukas, chairman of GM's outside law firm Jenner & Block, who conducted a months-long investigation that detailed deep flaws in GM's internal decision-making process.

The so-called Valukas report triggered the departures of 15 GM employees, including several high-ranking executives in the legal, engineering and public policy groups, as well as DeGiorgio.

GM said Barra wants to update Congress on the actions the company has taken in response to the switch recall crisis, including fixing the failures outlined in the company's internal report, announcing plans to establish a victims' compensation fund and setting up a structure at the company to ensure vehicle safety.

The U.S. National Highway Traffic Safety Administration, which administers vehicle recalls, said Monday that it would "monitor the pace and effectiveness" of the latest GM recall and "take necessary action as warranted."

(Additional reporting by Bernie Woodall in Detroit, David Lawder in Washington, DC, Narottam Medhora and Sampad Patnaik in Bangalore; Editing by Peter Henderson and Bernard Orr) ((Peter Henderson)

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 (10)
rwaynewright wrote:
Now GM will require another bail out to cover the cost of this blatantly criminal act. In many other counties the executives would be tried for murder but in America we let them give themselves million dollar bonuses. Ultimately some low level designer who signed off on something his boss told him was just fine will be the one to take the fall.

Jun 16, 2014 8:22pm EDT  --  Report as abuse
rwaynewright wrote:
Now GM will require another bail out to cover the cost of this blatantly criminal act. In many other counties the executives would be tried for murder but in America we let them give themselves million dollar bonuses. Ultimately some low level designer who signed off on something his boss told him was just fine will be the one to take the fall.

Jun 16, 2014 8:23pm EDT  --  Report as abuse
chuck2 wrote:
This recall thing, kind of points out to the consumer that when buying a car or anything, the old “Precieved value” thing, AKA this is what I will pay based on what I think (via various sellers propaganda/ads/spin) and have very little to do with the actual costs that make up a product. In fact if some products were not selling well, it is not unknown for company to raise the prices as makes it “more exclusive” AKA costs more must be better/status.

So when you Chev or other lower end car owners in line to get “recall fixed”, just remember the guy with high end Caddy is have exact same part “Fixed”, or the other way around. Amazing how many parts are common up and down the product lines, not just in automotive.

Jun 16, 2014 8:44pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video