GM’s Questionable Ignition Order Offers Fuel for Legal Fires

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Lawyers seeking settlements and payouts from General Motors over its handling of the faulty ignition switch recall earlier this year received some fresh ammunition with which to load their cases. A report from the Wall Street Journal says the company ordered half a million new ignition switches from supplier Delphi Automotive two months ahead of the period it notified regulators of the issue.

The recall covered 2.5 million vehicles and was a catalyst for GM’s record 30-odd million vehicle recalls this year alone, and has been officially tied to 30 fatalities as a result of the problem. In some cases, the ignition switches could slip out of the run position, causing a loss of power when the car was in motion and thereby disabling the airbags. In addition to the National Highway Traffic Safety Administration (NHTSA), the Justice Department has also launched its own probe into the matter.

But the recent developments, which resulted from uncovered emails between a GM contract worker and Delphi in December of last year, imply that one of the world’s largest automakers delayed informing the public of the problem for as long as possible, the Journal reported, adding that the order for 500,000 new switches “suggests the company took initial concrete action to address the defect, but outside of scrutiny by regulators and vehicle owners.”

The order was omitted from a 315-page independent report by Anton Valukas, who was instructed to form a timeline of the recall situation in order to help establish accountability. The Wall Street Journal said he wasn’t available for comment on the story, but has said that he was assigned to find out only why it took so long to initiate the recall in the first place.

Source: Thinkstock
Source: Thinkstock

The Journal noted that it’s common practice for automakers to check for parts availability just ahead of a recall, especially one as major as the ignition switch debacle turned out to be. But there isn’t a boilerplate protocol for initiating such actions, and WSJ pointed out that “the major parts order will be used by attorneys representing thousands in class-action lawsuits against GM, which claim the auto maker delayed informing the public of the problem for as long as possible.”

The matters are made worse given that GM knew about the faulty switch as early as 2003, yet failed to take action on the problem until earlier this year. “This order for 500,000 parts raises deeply disturbing questions about the validity of the Valukas report,” Connecticut Senator Richard Blumenthal (D) told the Wall Street Journal. “But more important, the timeline of GM’s effort to protect its car owners. The question is why the delay and how many lives were put at risk since GM waited at least two months before issuing a recall even though it had already decided to order parts?”

Reportedly, a meeting took place among engineers and managers in which no minutes were kept. The Valukas report, as well as GM’s own timeline, indicate that no recall decisions were taken at the meeting or the day following; the following day, though, an order for 500,000 replacement switches was put into Delphi, with instruction “to draw up an aggressive plan of action to produce and ship the parts at the time,” the Journal reported.

At the time of the meeting and subsequent parts order, GM was still under former CEO Dan Akerson’s oversight; current CEO Mary Barra took the reins in January, though she conceded that she became aware of the problems in December. GM ultimately informed the NHTSA on February 7 of the recall, that affected about 780,000 vehicles. That figure was later expanded to more than 2.5 million.

Since the Wall Street Journal report, GM has responded to some coverage of the news. In response to Autoblog’s take on the story, GM spokesman Alan Adler said that “these emails are further confirmation that our system needed reform, and we have done so. We have reorganized our entire safety investigation and decision process and have more investigators, move issues more quickly and make decisions with better data,” and outlined the revised process for handling safety concerns.

Adler mentioned in the Journal’s piece that the company was not required to divulge its parts orders to the NHTSA, but the behind-the-scenes maneuvering isn’t going to be helping GM’s already tarnished image once the legal cases in question start hitting courtrooms.