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5:55 pm
Mon March 31, 2014

The Long Road To GM's Ignition Switch Recall

Originally published on Tue April 1, 2014 12:08 pm

The new head of General Motors, Mary Barra, goes to Capitol Hill Tuesday to begin two days of testimony.

It's the first time she'll be questioned about a safety defect that's been linked to at least 13 deaths and has sparked a 2.6 million-vehicle recall.

At issue for the Detroit CEO is a classic question: What did GM know about the problems with ignition switch problems in its cars, and when did the company know it?

And just as important for GM and government regulators is the follow-up question: Why did no one act sooner?

In the recent history of General Motors, there's one car that sort of symbolizes the problems of the old GM: the Chevy Cobalt.

'A Moment Of Panic'

The car is currently the subject of about a half-dozen investigations. Even if more than 1 million Cobalts were not being recalled, the cars would still have a bad reputation, simply for not being a quality vehicle.

Scott Oldham of Edmunds.com says that's hindsight. "At the time, in the context of what GM was making before the Cobalt, it was seen, for the most part, as a giant leap forward," he says.

Oldham remembers test-driving the Cobalt at an event for journalists and industry analysts when the car was being launched a decade ago. He drove on the track with an engineer in the passenger seat.

"And I remember coming up to a curve, and I moved my foot, and as I moved my foot, my knee kind of pinned this key fob between my knee and the steering column," Oldham explains. "And when I hit the brake, my leg moved down. And it basically pulled the key down and shut the car off."

The systems that were connected to the engine just stopped working.

"There was this moment of panic where I said, 'Oh my God, the steering isn't working,' " he recalls. "I got the car slowed down and pulled to the side. Catastrophe was avoided."

About 10 miles later, it happened again.

Oldham and the engineer stopped at the side of the road to try to figure out what had happened. Finally, he recalls, they realized what was going on.

"I would start the car and then just with my hand, just pull down on that key fob just ever so slightly," Oldham says. "And sure enough, I could turn the car off. And we looked and each other, and I go, 'That seems like a little bit of problem.' "

That was in 2004.

'Cautious' Regulators?

According to documents released Sunday, GM engineers received reports about problems like this — and held meetings about it — in 2005. Engineers decided against a fix because it would take too long and cost too much money.

A couple of months later, the company looked into another fix — and that plan was scratched, as well, though dealers were notified of a potential problem.

All this while GM was hemorrhaging money, losing billions of dollars. In the fall of 2005, then-CEO Rick Wagoner announced plans to close nine factories and cut 30,000 jobs.

The move was necessary, he said, to get the company's costs in line with its global competitors.

The first death related to the faulty ignition switch problem would occur that same year.

In 2007, the National Highway Traffic Safety Administration began to connect the dots with that first death and the faulty ignition switches, but no investigation was launched.

Joan Claybrook, a former head of NHTSA and now a critic of the agency, says NHTSA and the auto industry have developed a very cozy relationship that includes a revolving door between carmakers and the regulator.

"If you're at NHTSA and you want to get a higher-paying job and you want to go to one of the auto companies, and they come in and request something from the agency, you're not going to be the hard taskmaster," she says. "You're not going to be the cop on the beat. You're going to be very gentle on that company, because you want them to hire you."

Claybrook says the problem could be as simple as people at the agency doing their jobs poorly.

"Government officials are by their nature cautious," she says. "And they have a lot of power and they don't want to be abusing their power, but they are cautious in part because they don't want to be criticized."

Liability Questions

What government officials knew, and what GM knew, has a bearing on the half-dozen investigations underway, but it could also have bearing on the victims.

Who is liable for defects is complicated in part by GM's bankruptcy. If the accidents occurred before the old GM went under, they don't necessarily transfer to the new company.

John Pottow, who specializes in bankruptcy at the University of Michigan's law school, says lawsuits likely lie ahead for the automaker.

"If you had a problem with your car, and GM knew that there were cars out there with problems on them but didn't tell the public," he says, "then those people could come forward now, especially if they were injured, or even join a class of injured people, and sue the company."

Lawsuits may be the least of the problems for Mary Barra, GM's new CEO. She faces two tests on Tuesday. One: Can she separate the old company from the new before Congress?

And the second: Sales performance. Car sales numbers come out Tuesday — the first sign of how much the car-buying public has been, and will be, listening.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel.

The new head of General Motors goes to Capitol Hill tomorrow, and she'll be there to answer a classic Washington question: What did GM know, and when did the company know it? And you could also add this question: Why did no one act sooner? It all has to do with a safety defect linked to at least 13 deaths and a 2.6 million vehicle recall. NPR's Sonari Glinton has been looking back at the events that led up to GM's current crisis.

SONARI GLINTON, BYLINE: When you think about the recent history of General Motors, there's one car that sort of symbolizes the problems of the old GM. It's the Chevy Cobalt, the topic of about a half-dozen investigations. And even if more than a million Cobalts weren't being recalled, they would still have a bad rep for not being quality vehicles. Scott Oldham with Edmunds.com says that's hindsight.

SCOTT OLDHAM: At the time, in the context of what GM was making before the Cobalt, it was seen, for the most part, as a giant leap forward.

GLINTON: Oldham remembers driving the Cobalt at a test facility when it was being launched. You see, car companies have these test drives where they line up a bunch of new cars and analysts and journalists can drive the cars and talk to engineers and executives. On this particular day, Oldham was driving on a track with an engineer in the passenger seat.

OLDHAM: And I remember coming up to a curve and I moved my foot. And as I moved my foot, my knee kind of pinned this key fob between my knee and the steering column. And, I don't know, when I hit the brake, you know, my leg moved down and it basically pulled the key down and shut the car off.

GLINTON: The systems that were connected to the engine just stopped working.

OLDHAM: There was this moment of panic where I said, oh, my God, you know, the steering isn't working, you know - what? And we - I got the car slowed down and pulled to the side. You know, catastrophe was avoided.

GLINTON: While Oldham and the engineer tried to figure out what happened, about 10 more miles later, it happened again. Finally, they realized what was going on.

OLDHAM: We even sat on the side of the road, I recall, and I would start the car and then just, you know, with my hand, just pull down on that key fob just ever so slightly, you know, just enough. And sure enough, I could turn the car off. And we looked at each other, I go, that seems like a little bit of a problem.

GLINTON: That was in 2004. And according to documents released on Sunday, GM engineers received reports about problems like this and held meetings in 2005. Engineers decided against the fix because it would take too long and cost too much money. A couple months later, the company looked into another fix. That plan was scratched as well, though dealers were notified of a potential problem. All of this while General Motors was hemorrhaging money, losing billions of dollars. Here's then-CEO Rick Wagner in the fall of 2005, announcing plans to close nine factories and cut 30,000 jobs.

RICK WAGNER: These actions are necessary for General Motors to get its cost in line with our major global competitors. In short, they're an essential part of our plan to return our North American operations to profitability as soon as possible.

GLINTON: The first death related to the faulty ignition switch problem would occur that same year. In 2007, the National Highway Traffic Safety Administration, or NHTSA, would begin to connect the dots with that first death and the faulty ignition switches. No investigation was launched. Joan Claybrook is a former head of NHTSA and now a critic of the agency. She's president emeritus of Public Citizen, a consumer rights group. Claybrook says NHTSA and the auto industry have developed a very cozy relationship that includes a revolving door between car makers and the regulator.

JOAN CLAYBROOK: If you're at NHTSA and you want to get a more higher paying job and you want to go to one of the other companies and they come in and request something from the agency, you're not going to be the hard task master. You're not going to be the cop on the beat. You're going to be very gentle on that company because you want them to hire you.

GLINTON: Claybrook says the problem could be as simple as people at the agency doing their jobs poorly.

CLAYBROOK: Government officials are, by their nature, cautious. And they have a lot of power, and so they don't want to be accused of abusing their power. But they are cautious in part because they don't want to be criticized.

GLINTON: What government officials knew and what GM knew has a bearing on about a half dozen investigations, but it could have a bearing on victims. Who is liable for defects is complicated in part by GM's bankruptcy. If the accidents occurred before the old GM went under, they don't necessarily transfer to the new company. John Pottow specializes in bankruptcy at the University of Michigan's School of Law.

JOHN POTTOW: So if you had a problem with your car, and GM knew that there were cars out there with problems on them but didn't tell the public, then those people could come forward now, especially if they were injured or even join a class of injured people, and sue the company.

GLINTON: Lawsuits may be the least of the problems for GM's new CEO, Mary Barra. She faces two tests. Can she separate the old company from the new before Congress? And also, tomorrow is the day when car sales numbers come out. It's the first sign of how much the car-buying public has been and will be listening. Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.

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