2014 General Motors recall
On February 7, 2014, General Motors (GM) recalled about 800,000 of its small cars due to faulty ignition switches, which could shut off the engine during driving and thereby prevent the airbags from inflating.[1] The company continued to recall more of its cars over the next several months. As of June 30, 2014, GM has issued 45 recalls in 2014, which have involved nearly 28 million cars worldwide and over 24.6 million in the United States. GM says it expects to charge $1.2 billion against its second quarter earnings as a result of its ongoing recalls, and the charge could get worse as lawsuits and investigations continue.[2]
The fault had been known to GM for at least a decade prior to the recall being declared.[3] Some have suggested that the company actually approved the switches in 2002 even though they knew they might not meet safety standards.[4]
The company is facing multiple investigations into why it did not attempt to fix these faulty ignitions sooner, including a federal criminal probe,[5] as well as a probe led by Anton Valukas, the latter of which produced a report which GM made public on June 5, 2014.[6] On March 31, 2014, GM's CEO, Mary Barra, met with the families of some of the people who had died in car crashes as a result of the faulty switches.[7] Barra testified at a House Subcommittee hearing on April 1; in her testimony, filed in advance of the hearing, she told the United States House Energy Subcommittee on Oversight and Investigations that "When we have answers, we will be fully transparent with you, with our regulators and with our customers."[7]
The parts necessary to replace the defective cars' ignition switches, and thereby resolve the problem which led to the recall, were scheduled to become available on April 7, 2014. Repairs were scheduled to begin the same day.[8] As of June 2014, however, the replacement switches had only been delivered intermittently to dealerships, with demand for the switches far outstripping supply.[9]
In September 2014, the National Highway Traffic Safety Administration was accused by several members of Congress for failing to take into account several important cues during the recall of GM cars.[10]
Initial and subsequent recalls
The first recall was announced on February 7, 2014, and involved about 800,000 Chevrolet Cobalts and Pontiac G5s.[1] On March 31, GM announced it was going to recall over 1.5 million more cars of six different models, due to faulty power steering. Of these, over 1.3 million were in the United States, and three of the models were also involved in the faulty ignition recall. The total number of cars recalled during 2014 was, as of April 1, 6.26 million.[11] On May 15, GM recalled 2.7 million more cars, bringing the total number of recalled vehicles in 2014 to 12.8 million worldwide, 11.1 million of which were in the United States.[12]
On June 16, 2014, GM announced they were recalling 3.4 million more cars, all of which were produced from 2000 to 2004. They also announced that they intended to replace the cars' keys because if they did not, the ignition switches could rotate, causing the car's engines to shut off and disabling power steering.[13]
On June 30, 2014, GM announced they were going to recall 8.45 million additional cars, almost all of which were being recalled for defective ignition switches. This announcement brings the total number of recalled cars in North America to about 29 million.[14] In November 2014 emails surfaced that showed GM ordered a half-million replacement ignition switches nearly 2 months before ordering a recall.[15]
Cause of ignition failure
The reason the ignition switches shut off even though they weren't supposed to was because the "switch detent plunger", which is designed to provide enough torque to keep the ignition from accidentally turning off, did not supply enough torque. General Motors was aware of this potential problem, and held meetings about it, as early as 2005.[16]
Quantifying fatalities
The faulty ignitions have been linked (by GM itself) to 13 deaths and 31 crashes.[7] The company only counts incidents which resulted in head-on collisions in which the airbags did not deploy. It does not include, for example, an incident where after a car's ignition switch failed, the car "spun out, hydroplaned, hit an oncoming vehicle and rolled off the road, dropping 15 feet into a creek".[17] In a collision in which two young women in a Chevrolet Cobalt were killed when the ignition switch shut off the engine, GM only counts the death of the woman in the front seat, because the death of the woman in the back seat was not caused by the failure of the airbag to deploy.[18] Most of the victims were under age 25.[19] On June 3, 2014, Reuters published an analysis concluding that the faulty switches were responsible for 74 deaths, based on Fatality Analysis Reporting System data. General Motors disputed its conclusion, and stood by their original figure of 13 deaths after the report was released as of June 3, 2014.[20] By the end of September, Reuters stated in an article that 153 deaths were linked to the faulty ignition switch.[21] As of March 2015, GM had offered compensation for 11 Category One injuries, along with 115 Category Two injuries.[22]. In April 2015, GM officially noted that the death toll was believed to have reached 87, higher than the previous number of 74 they reported in March of 2015. [23]
Public disclosure of the problem
The defect was not disclosed by GM nor was it discovered by government regulators or transportation safety agencies. Instead, public knowledge came about because Lance Cooper, a Marietta, Georgia attorney who sued GM on behalf of the family of a woman who had died in a crash, obtained thousands of pages of documents from GM and took the depositions of several GM engineers. According to Sean Kane, the president of a vehicle safety research firm, Cooper "single-handedly set the stage for this recall."[24]
Reaction to the recall
The families of the 13 people who died in car crashes involving the recalled vehicles gathered outside the US Capitol prior to Barra's testimony on April 1. They were joined by four Democratic politicians in support of tougher rules regarding the disclosure of automobile defects.[25] At the Capitol, they also said that their relatives had died "because they were a cost of doing business GM style."[26] The recall cost GM more than $3 billion in shareholders' value over four weeks.[27]
One mother, Laura Christian, created a Facebook page to bring together the family, friends and those who support them.[28]
Testimony and lawsuits
Congressional testimony
Barra's testimony also stated that she doesn't know why it took nearly a decade to try to initiate a recall, but that she has accelerated efforts to fix the switches,[5] and that she offers "my sincere apologies to everyone who has been affected by this recall, especially to the families and friends of those who lost their lives or were injured. I am deeply sorry."[29] These remarks were sharply criticized by some of the victims' family members, one of whom dismissed Barra's meeting with them as a mere PR stunt,[7] and by Heidi Moore, who wrote that "[Barra] saying sorry to Congress won't cut it" and that GM "has been good at telling stories that the public wants to hear."[30] Also attending the hearing will be David J. Friedman, the Acting Administrator of the National Highway Traffic Safety Administration (NHTSA), who will be asked why he did not act sooner to recall the cars with the faulty switches, since the NHTSA was aware of the problem before the recall.[25] Friedman's written testimony blames GM for not conveying "critical information" to regulators which could have led to recalls years earlier.[25] What follows is an incomplete list of statements Barra made during her testimony which received exceptional media attention:
- She testified that General Motors would employ Kenneth Feinberg as a consultant to help them decide how to compensate families of those injured by the recalled cars. This decision was praised by Paul M. Barrett, who wrote in Businessweek that "...bringing in Feinberg is an excellent first step" because he has more than 20 years of experience in mass-injury cases.[31]
- Barra also said that she asked attorney Anton R. Valukas to help find out why GM took so long to initiate a recall of the defective cars,[32] and that a full account of why this did not happen sooner would have to wait until the results of Valukas's investigation were announced.[33]
- Another of her widely reported remarks was that she found GM's concern about the cost of replacing the faulty switches "disturbing" (this was in response to Congresswoman Diana DeGette telling the subcommittee that it would have only cost 57 cents to fix each faulty ignition switch).[34]
- After being asked by Missouri Senator Claire McCaskill whether a GM engineer had apparently lied under oath, Barra confirmed that this had indeed happened (or at least seemed to).[33] McCaskill later appeared on This Week, where she said of GM that "They’ve tried to lawyer up and play whack-a-mole with these lawsuits, and terrible things have happened,” and that “Now it’s time for them to come clean, be transparent and most of all make victims whole no matter when this deadly ignition caused heartbreak in their families.”[35]
- During the hearings, Barbara Boxer asked Barra why, during the 33 years she worked at GM prior to becoming the CEO in 2013, she never heard anything about the faulty ignition switches. After Barra failed to give a substantive answer, Boxer exclaimed to her that "You don't know anything about anything," and that "If this is the new GM leadership, it's pretty lacking."[36]
Also in April 2014, federal safety regulators testified before Congress that they had expected the airbags in the defective cars to be able to deploy for 60 seconds after the engine stalled, but General Motors later told the Associated Press that they actually can only do so for 150 milliseconds.[37]
Reactions to Barra's testimony
In the Wall Street Journal, Holman Jenkins praised the fact that Barra didn't argue that the failure to recall the defective vehicles was due to "...the problems of a company that no longer exists and a product that's no longer made." However, for the same reason, he also criticized her for suggesting that the company would be more customer-focused with her as the CEO than it was when GM first found out about the faulty switches.[38]
Lawsuits
A large number of lawsuits have been filed in response to the recall, by those claiming to have been injured due to the recalled vehicles' faulty switches. These lawsuits include at least two class action ones, one filed by a man from Myerstown, Pennsylvania on April 2 and another filed in federal court in California.[39] Two other lawsuits have also named Delphi Automotive, the car parts manufacturer who produced the defective switches, as one of the parties partly responsible for the deaths caused by the now-recalled vehicles.[40] On July 29, 2014, a lawsuit was filed in US District Court in Manhattan on behalf of 658 people who claim that they were injured or killed because of the faulty ignition switches in GM's recalled cars. The lawsuit alleges that GM knew about the faulty switches since 2001 but did not recall any of its cars until 2014.[41]
GM's statements on the safety of recalled cars
General Motors has stated that the recalled cars are safe to drive unless you have additional items attached to the key ring. However, some consumer advocacy groups have urged GM to declare the cars unsafe for driving no matter what, saying they still pose a danger.[42] In fact, a lawsuit was filed in Texas on April 4, with the plaintiffs aiming to force GM to declare its recalled cars unsafe to drive, but the judge, Nelva Gonzales Ramos, refrained from doing so that day, saying she needed more information.[43]
Aftermath
Repairs
GM said the parts needed to repair the faulty ignition switches were expected to become available on April 7, 2014. However, that same day, CNN Money contacted six dealerships, none of whom had received these parts. A spokesman for GM, Alan Adler, said that he didn't know how many replacement parts had been shipped to dealerships, or when the majority of parts would be available.[44]
Fines
On April 8, the NHTSA fined GM $28,000 because the company hadn't supplied the agency with the information it had requested it give them by April 3, and the agency charged them $7,000 for each day after then that GM didn't provide this information.[45] On May 16, GM agreed to pay the Department of Transportation the maximum fine of $35 million for delaying the recall of the defective cars they recalled earlier in 2014.[46]
Executive departures
On April 14, 2014, GM announced that two of its executives—Selim Bingol, senior vice president for global communications and public policy, and Melissa Howell, senior vice president for global human resources—were departing the company. GM did not say whether Bingol and Howell had resigned or were fired.[47]
Valukas report
On June 5, 2014, Valukas' report on the recall was made public. In it, he asserted that the company's failure to fix the defective switches sooner was not due to a cover-up on the company's part,[48] but rather due to "their failure to understand, quite simply, how the car was built."[6] The report led to Barra firing 15 of her employees.[48]
Feinberg plan
On June 30, 2014, Kenneth Feinberg unveiled a plan to compensate victims of recalled GM cars, including an agreement to pay "whatever it costs" to do so. At a press conference held by the National Press Club, Feinberg added that the compensation fund will accept applications from August 1, 2014 until the end of the year, and that he has the last word as to how much the victims' families should be compensated.[49] [50] In the first week after the fund began accepting applications, 125 claims were filed, 63 involving fatalities.[51] As of September 15, 2014, according to Feinberg's deputy administrator, Camille Biros, 19 deaths are eligible for compensation under Feinberg's plan.[52]
References
- ↑ 1.0 1.1 Valdes-Dapena, Peter. "GM: Steps to a recall nightmare". CNN Money. Retrieved 17 June 2014.
- ↑ GM's latest recall of 8.4 million cars is one of the largest in history. The Verge. Retrieved 30 June 2014.
- ↑ CBS/AP (23 May 2014). "General Motors announces 30th recall of year". CBS News. Retrieved 28 May 2014.
- ↑ Spangler, Todd (30 March 2014). "Delphi told GM ignition switch didn't meet specs". Detroit Free Press. Retrieved 4 June 2014.
- ↑ 5.0 5.1 Pollock, Lauren (1 April 2014). "What You Need to Know About the GM Recalls". Wall Street Journal. Retrieved 1 April 2014.
- ↑ 6.0 6.1 Healey, James R. (5 June 2014). "GM: Ignorance left 'switch from hell' unfixed". USA Today. Retrieved 13 June 2014.
- ↑ 7.0 7.1 7.2 7.3 Spangler, Todd (1 April 2014). "Families put human face on massive GM recall". USA Today. Retrieved 1 April 2014.
- ↑ Naughton, Keith (4 April 2014). "GM Dealers Turn Therapists for Anxious Recall Customers". Bloomberg.com. Retrieved 6 April 2014.
- ↑ Ruiz, Rebecca (17 June 2014). "Car Owners Criticize Pace of G.M. Recall Repairs". New York Times. Retrieved 3 August 2014.
- ↑ Lowy, Joan. "Congress: Safety agency mishandled GM recall". AP. Retrieved 16 September 2014.
- ↑ Woodall, Bernie (31 March 2014). "GM to recall 1.5 million vehicles to fix electric power steering issue". Reuters. Retrieved 1 April 2014.
- ↑ Fletcher, Michael (15 May 2014). "General Motors recalls another 2.7 million vehicles". Washington Post. Retrieved 16 May 2014.
- ↑ CBS/AP (16 June 2014). "GM recalls 3.4 million more cars for ignition defect". CBS News. Retrieved 17 June 2014.
- ↑ Bennett, Jeff (30 June 2014). "GM to Recall 8.45 Million More Vehicles in North America". Wall Street Journal. Retrieved 1 July 2014.
- ↑ http://online.wsj.com/articles/gm-ordered-new-switches-long-before-recall-1415584224
- ↑ Glinton, Sonari (31 March 2014). "The Long Road To GM's Ignition Switch Recall". NPR. Retrieved 6 April 2014.
- ↑ Gregory Wallace. Poppy Harlow and Amanda Hobor (4 June 2014). "How Brooke Melton's death led to the GM recall". CNN Money. Retrieved 4 June 2014.
- ↑ Liberto, Jennifer (28 May 2014). "Two died in 2006 Cobalt crash. But GM counts only one". CNN Money. Retrieved 28 May 2014.
- ↑ Krisher, Tom (1 April 2014). "GM Recall: Many Victims Were Young Drivers". Associated Press. Retrieved 1 April 2014.
- ↑ Feeney, Nolan (3 June 2014). "GM Disputes Report Tying Ignition Switch Problem to 74 Deaths". Time. Retrieved 4 June 2014.
- ↑ http://www.reuters.com/article/2014/09/29/us-gm-recall-compensation-idUSKCN0HO1F220140929
- ↑ "GM ignition switch death toll continues to rise". Autoblog.com. 25 March 2015./
- ↑ "GM ignition switch deaths grow to 87 people". Autoblog.com. 21 April 2015.
- ↑ Lee, Patrick G.; Plungis, Jeff (March 19, 2014), Marietta lawyer plays key role in GM recall, The Atlanta Journal-Constitution, retrieved 2014-04-06
- ↑ 25.0 25.1 25.2 Hirsch, Jerry (1 April 2014). "GM's Mary Barra set to face Congress about deadly safety defect". Los Angeles Times. Retrieved 1 April 2014.
- ↑ Paul A. Eisenstein (1 April 2014). "GM Takes Heat From Families, NHTSA, Congress". NBC News. Retrieved 5 June 2014.
- ↑ Lachapelle, Tara (6 April 2014). "GM Investors Unshaken as Recall Cuts $3 Billion in Value". Businessweek. Retrieved 6 April 2014.
- ↑ Bunkley, Nick (25 March 2014) A mother's life mission Auto News
- ↑ Healey, James (1 April 2014). "GM's Barra apologizes to families in testimony". USA Today. Retrieved 1 April 2014.
- ↑ Moore, Heidi (1 April 2014). "GM sold us on a comeback. Don't buy a CEO's apology – buy cars that are safe". The Guardian. Retrieved 1 April 2014.
- ↑ Barrett, Paul M. (1 April 2014). "The One Important Thing GM CEO Mary Barra Told Congress". Businessweek. Retrieved 2 April 2014.
- ↑ Hirsch, Jerry (1 April 2014). "Mary Barra: GM has 'civic responsibility' to compensate crash victims". Los Angeles Times. Retrieved 2 April 2014.
- ↑ 33.0 33.1 Hughes, Siobhan (2 April 2014). "Senators Challenge GM's Barra, Push for Faster Change". Wall Street Journal. Retrieved 2 April 2014.
- ↑ Associated Press (2 April 2014). "GM slammed at hearing for failing to address 57-cent defect linked to deaths". Fox News Channel. Retrieved 2 April 2014.
- ↑ Wolfgang, Ben (6 April 2014). "Sen. McCaskill: ‘Moment of truth’ for General Motors". Washington Times. Retrieved 6 April 2014.
- ↑ Rushe, Dominic (2 April 2014). "US senators accuse GM chief Mary Barra of 'cover-up' over recall". The Guardian. Retrieved 5 April 2014.
- ↑ Associated Press (13 May 2014). "General Motors recall reveals discrepency in air bag deployment". New York Daily News. Retrieved 14 May 2014.
- ↑ Jenkins, Holman (4 April 2014). "In Defense of 'Old General Motors'". Wall Street Journal. Retrieved 5 April 2014.
- ↑ Miller, Matt (2 April 2014). "Midstate man hits GM with class-action lawsuit, joins legal fray over ignition switch defect". Pennlive.com. Retrieved 3 April 2014.
- ↑ Dye, Jessica (3 April 2014). "Despite hurdles, Delphi's liability in GM recall could be tested". Reuters. Retrieved 3 April 2014.
- ↑ Associated Press (31 July 2014). "Lawyer sues General Motors on behalf of 658 plaintiffs over faulty ignition switches". Fox News. Retrieved 3 August 2014.
- ↑ Carrns, Ann (4 April 2014). "Understanding Particulars of G.M.’s Safety Recall". New York Times. Retrieved 5 April 2014.
- ↑ Healey, James R. (4 April 2014). "Judge needs more time on GM recall request". USA Today. Retrieved 5 April 2014.
- ↑ Wallace, Gregory (7 April 2014). "General Motors owners still waiting for recall repairs". CNN Money. Retrieved 8 April 2014.
- ↑ Jensen, Christopher (8 April 2014). "U.S. Fines General Motors $28,000 for Not Cooperating With Ignition Flaw Inquiry". New York Times. Retrieved 9 April 2014.
- ↑ Healey, James (16 May 2014). "GM to pay maximum $35 million fine for recall delay". USA Today. Retrieved 16 May 2014.
- ↑ Vlasic, Bill (14 April 2014). "2 Executives Leave G.M. After Wide-Ranging Recall". The New York Times. Retrieved 15 April 2014.
- ↑ 48.0 48.1 Colias, Mike (10 June 2014). "GM employees are 'owning' Valukas report, Barra says". Autonews. Retrieved 13 June 2014.
- ↑ Healey, James (30 June 2014). "Feinberg announces how GM switch victims will be paid". USA Today. Retrieved 1 July 2014.
- ↑
- ↑ Snavely, Brent (8 August 2014). "GM victims' fund gets 63 death claims in first week". USA Today. Retrieved 8 August 2014.
- ↑ Kim, Susanna (15 September 2014). "Deaths From GM Ignition Switch Defect Exceed Initial Estimate". ABC News. Retrieved 15 September 2014.
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