GM Ignition Problems

Attorneys say GM seeks bankruptcy shield from lawsuit.

The AP (6/13) reports from Detroit that attorneys for a Georgia family “that is trying to reopen a wrongful death lawsuit against General Motors say the company is trying to move the case to federal court so it can use bankruptcy as a shield from the claim.” Attorneys Lance Cooper and Jere Beasley said on Wednesday in a statement “that GM’s court filings run counter to a promise made by GM CEO Mary Barra to fairly compensate families of people killed or those injured in crashes caused by defective ignition switches.” The AP notes that a Federal bankruptcy judge in New York ruled in 2009 “that the new GM is shielded from claims stemming from cars made before the company emerged from bankruptcy protection,” and instead, “the claims go against the old GM, which has limited assets.” The judge “now is being asked to decide if he will allow claims against the new company.”

        Nine states investigating GM recall delay. In continuing coverage of GM’s faulty ignition switches that led to at least 13 deaths, Bloomberg News (6/13, Harris, Smythe, 2.76M) reports that the attorney generals in Arkansas, Connecticut, Florida, Illinois, Indiana, Indiana, Kentucky, Louisiana, and Utah are investigating GM for its failure to launch a recall before this year. Bloomberg reports that the attorneys general include members of both parties, with Democrats in Arkansas, Connecticut, Illinois, Indiana, Iowa, and Kentucky and Republicans in Florida, Indiana, and Utah. Maine Attorney General Jim Tierney, the director of the National State Attorneys General Program said the “attorneys general investigating GM are concerned with addressing constituent concerns about whether their cars will be recalled and allaying those anxieties, he said. The attorneys general also want to see unsafe cars taken off the road.”

        A second article on Bloomberg News (6/13, Sandler, Lee, 2.76M) reports that GM said that a lawsuit concerning a fatal 2010 crash filed in a Georgia state courthouse should be included in a group of 90 cases that have been assigned to a Federal judge in Manhattan. Lawyer Jere Beasley said that GM’s attempt to relocate the case was “a frivolous move calculated to delay,” 

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GM Ignition Defects

Barra, investigator to appear before House subcommittee next week.

The AP (6/12, Gordon) reports that GM CEO Mary Barra will appear before the House Energy and Commerce Committee’s oversight subcommittee on June 18, the panel said Wednesday, and will be joined by Anton Valukas, who conducted the internal investigation of GM’s recall problems. GM “said Barra wants to return to Congress and report to lawmakers on actions the company is taking in response to the situation.”

        The New York Times (6/12, Wald, Subscription Publication, 9.65M) reports that the pair will face questions about why the company “failed to recognize a fatal defect in Chevrolet Cobalts and other small cars will testify before a House subcommittee next Wednesday.” Rep. Fred Upton and Tim Murphy, leaders of the committee and subcomittee respectively, said in a statement, “Mr. Valukas’s exhaustive report revealed disturbing truths about G.M.’s systemic and cultural failures that allowed this problem to go undiagnosed for over a decade. but many questions remain unanswered about the recalls and resulting changes within the company.”

        GM seeking black boxes from crashes. In a front-page story, the Wall Street Journal (6/12, A1, Spector, O'Connell, Subscription Publication, 5.51M) reports that facing a long spate of legal battles stemming from the defective ignition switches, the company is actively attempting to acquire the data recorders from accidents resulting from the defect. 

GM victims' fund to have 'modest' window for claims

DETROIT (Bloomberg) -- Kenneth Feinberg, who is managing General Motors’ fund to compensate victims of ignition flaws linked to at least 13 deaths, said there will be a modest window for filing applications after it starts accepting claims around Aug. 1.

“This program can’t go on forever,” Feinberg told Bloomberg Television today. “If we start by Aug. 1, we want to have a relatively modest timetable to invite claimants to file their claims.”

The program that will determine who is eligible to file a claim will be established by the end of this month, he said.

Feinberg, the lawyer who ran similar funds for victims of the Sept. 11, 2001, terrorist attacks and the 2010 BP Plc oil spill, was hired by GM to review compensation for victims following GM’s recall of 2.59 million small cars starting in February. The automaker is facing investigations from Congress and the U.S. Justice Department into why it took more than a decade to call back the cars and last week released its own internal investigation into the matter, which saw 15 people dismissed from the company.

To read the entire article, click here.

GM investigation finds “pattern of incompetence and neglect.”

The New York Times (6/5, Vlasic, Subscription Publication, 9.65M) reports that GM’s internal investigation, released on Thursday, “found ‘a pattern of incompetence and neglect’ in its decade-long failure to recall millions of defective small cars but concluded that there was no deliberate cover-up,” according to CEO Mary Barra. She “said 15 employees had been dismissed, most in senior and executive roles, and five others had been disciplined.” However, the report “did not tie Ms. Barra and her top lieutenants to the recall delay that G.M. has linked to 13 deaths and 47 crashes.”

        In its lead story, The CBS Evening News (6/5, lead story, 3:00, Glor, 5.08M) reports that the investigation was “conducted by an attorney who does have a long relationship with GM” and “found the company discovered there were problems with ignition switches as early as 1999. Documents show engineers refer to it as the ‘switch from hell,’ which caused cars to inadvertently shut off.”

        ABC World News (6/5, story 5, 2:05, Muir) reported that Barra is “keeping her job.” ABC (Jarvis) added, “the investigation found no evidence of a cover-up and cleared Barra of any wrongdoing. A point she stood by since the beginning.”

        The Wall Street Journal (6/5, Bennett, Ramsey, Subscription Publication, 5.51M) reports that Barra, meeting with employees, said, “What [the report] found was a pattern of incompetence and neglect. We will accept responsibility for our mistakes, and we will do everything in our power to make sure this never happens again. This is a test of our character and our values. We are not hiding from the truth.” 

GM Ignition Switch Failure May Have Caused 74 Fatalities: Reuters

Chicago Tribune

At least 74 people have died in General Motors cars in accidents with some key similarities to those that GM has linked to 13 deaths involving defective ignition switches, a Reuters analysis of government fatal-crash data has determined. Such accidents also occurred at a higher rate in the GM cars than in top competitors'?? models, the analysis showed.

Reuters searched the Fatality Analysis Reporting System (FARS), a national database of crash information submitted by local law-enforcement agencies, for single-car frontal collisions where no front air bags deployed and the driver or front-seat passenger was killed.

The news agency compared the incidence of this kind of deadly accident in the Chevrolet Cobalt and the Saturn Ion, the highest-profile cars in GM's recall of 2.6 million cars with defective switches, against the records of three popular small-car competitors: Ford Focus, Honda Civic and Toyota Corolla.

The analysis found that the frequency of such accidents in the Ion was nearly six times that of the Corolla and twice that of the Focus. The Ion had 5.9 such fatal crashes per 100,000 cars sold, followed by the Cobalt, with 4.1, the Ford Focus with 2.9, the Civic with 1.6, and the Corolla with 1.0.

It is not clear how many of the deadly accidents identified by Reuters involved defective ignition switches, because crash reports typically do not include that data. That leaves open the possibility that air bags may have failed to deploy in some of the GM crashes for reasons other than faulty switches.

GM, which has offered few details of the fatal crashes related to faulty switches, told Reuters it derived the tally of 13 deaths from claims and lawsuits filed against the automaker. GM checked those claims and lawsuits against other sources available to it, including vehicle data recorders recovered from some crashes.

The Reuters analysis relied on the FARS database, which encompasses a much wider universe of accidents. GM declined to say whether it had used information from the federal database.

Reuters disclosed its findings in detail to GM and federal regulators at the National Highway Traffic Safety Administration (NHTSA).

GM declined to comment on Reutersâ?? findings or methodology, responding only that: "??Our focus is on doing the right thing for customers â?? fixing the recalled vehicles as quickly as possible, addressing our civic and legal responsibilities and setting a new industry standard for safety."

NHTSA Acting Administrator David Friedman told Reuters: "The final death toll associated with this safety defect is not known to NHTSA, but we believe itâ??s likely that more than 13 lives were lost."?

Toyota and Honda declined to comment. Ford said it took issue with the Reuters findings concerning the Focus, but didnâ??t specify its reasons.

GM engineers first encountered problems with the switches in 2001, a year before the first Ion went into production. The faulty GM ignition switches could cause engines to shut off while driving, leading to a sudden loss of power steering and power brakes, and the failure of air bags to deploy in a crash.

Managers subsequently considered, then rejected several proposals to repair or replace the switches because of the extra cost, GM told NHTSA and congressional investigators.

The automaker did not begin recalling the cars until February 2014, after a two-and-a-half-year internal investigation. Eventually, GM recalled every Ion and Cobalt built from model years 2003 to 2010. Reuters used those model years for its analysis.

Using the FARS database of crashes reported to U.S. safety regulators between 2003 and 2012, Reuters identified 45 front-seat fatalities in the Cobalt and 29 in the Ion. In similar crashes, there were 44 fatalities in the Ford Focus, 41 in the Honda Civic and 24 in the Toyota Corolla.

Reuters found the Focus had 43 fatal accidents, the Cobalt had 42, the Civic had 39, the Ion had 28 and the Corolla had 24. While the raw crash numbers appear comparable, the rate of deadly crashes was higher in the two GM models, as the Ford, Honda and Toyota models sold in substantially greater numbers.

The Insurance Institute for Highway Safety, a non-profit safety research group connected with the U.S. insurance industry, reviewed the Reuters analysis.

David Zuby, executive vice president and chief research officer, said: "Your crash rates suggest that Cobalt and Ion are less crashworthy than the other models for which you'??ve computed similar statistics," and are similar to those in a 2011 IIHS analysis.

Zuby added that there were several limitations to the analysis, noting that "??while your analysis does focus on circumstances that are similar to the cases involving GM air bags that failed to deploy because of the ignition switch problem, it cannot be said definitively that the ignition switch problem" caused 74 deaths.

It is possible, Zuby said, that limitations in the data examined by Reuters may overstate the number of deaths attributable to air bag non-deployment in the car models examined.

Those limitations include the fact that there are other reasons why air bags may not deploy in a frontal crash, such as a car sliding under a truck.

Air bag defects unrelated to the ignition switch could cause a failure to deploy, he said, and air bags are designed not to deploy in some situations, such as where the passenger is a child. Zuby also noted that an Insurance Institute study showed the FARS database overstated the problem of air bag non-deployments.

That means the number of fatalities from the Reuters analysis is probably inflated, he said. However, the problems would not affect one model more than another, he added.

At the same time, there are other ways in which the Reuters tally may undercount switch-related fatalities in the GM models. The FARS crash data runs only through 2012, and Reuters did not include two fatalities of backseat passengers.

The fatalities entered in the FARS database and reviewed by Reuters do not include at least five of the 13 deaths acknowledged by GM. One died in 2013, past the range of the current FARS data, and two died in a multi-car accident.

Another, Amber Marie Rose, was killed in the July 2005 single-car crash of her 2005 Cobalt in Maryland. GM has confirmed that Rose is among the 13 victims, and investigators hired by NHTSA said her air bag did not deploy. But the FARS data indicates that the air bag did deploy and her death isn't included in the Reuters count.

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GM to release Valukas report on Thursday.

In continuing coverage of GM’s faulty ignition switch scandal, the CBS Evening News (6/4, story 7, 2:15, Dubois, 5.08M) reports that GM will release the results of its internal investigation into its response to its faulty ignition switches that have been linked to at least 13 deaths. CBS also reports that GM CEO Mary Barra will inform GM employees of the findings on Thursday morning and then meet with reporters. CBS spends most of its report interviewing the families of those who lost people due to the defects, including Candice Anderson who was convicted of a felony after a crash later found to be related to the faulty ignition switches. CBS News (6/5, Glor, 5.21M) also reported the story on its website.

        The New York (NY) Times (6/5, Ivory, Subscription Publication, 9.65M) reports that in creating the report, former US attorney Anton Valukas looked into GM’s engineering, legal, product investigations and regulatory affairs departments; GM has said that all four of those departments “knew in some form of the defective switch.” The Times notes that GM still has to deal with investigations conducted by both chambers of Congress, the Justice Department, and “a group of state attorneys general.”

        The Detroit (MI) News (6/5, Shepardson, 643K) reports that GM gave the report to NHTSA on Wednesday. The News reports that currently, there has been no evidence presented that any senior executives at GM were aware of the defects “until just before GM ordered a recall in early February.” The News notes that there has been some skepticism of GM using Valukas to conduct the investigation since he has represented GM in the past “when the SEC investigated accounting errors at GM and the automaker was forced to repeatedly restate its financial results.” Kelley Blue Book senior analyst Karl Brauer said that the report “needs to come off as genuine, not as a GM-sponsored version of what happened, but what really happened.” A second Detroit (MI) News (6/5, Shepardson, 643K) article reports that GM and NHTSA turned over hundreds of thousand more pages of documents to House Energy and Commerce committee over the last two months.

        The Los Angeles (CA) Times (6/5, Hirsch, 3.46M) reports that the Center for Auto Safety’s executive director Clarence Ditlow said that the report “has to explain what triggered the change, and why didn’t they change the part number,” and that a failure to do so “makes the move look like a cover-up.” Ditlow says that the part change may have hindered NHTSA’s investigation as it would have caused the number of complaints to decline; he said “Changing the part without changing the part number was an effort to deceive NHTSA.”

        Similar coverage was provided by Bloomberg News (6/5, Higgins, Plungis, Green, 2.76M).