Video: Questions mounting over GM, NHTSA response to deadly defect

posted at 2:01 pm on March 28, 2014 by Ed Morrissey

Over the last couple of weeks, questions have been raised over why General Motors did not act to recall vehicles with a known ignition-switch defect, which has been linked to at least 12 deaths and possibly hundreds more. Even more questions are coming up about the lack of action from National Highway Traffic Safety Administration (NHTSA), especially during the same period as their crackdown on Toyota — and the government’s ownership stake in GM. The Associated Press now reports that the NHTSA missed other clues as well on another GM vehicle, even though they had plenty of data available to catch the problem:

An Associated Press review of complaints to the National Highway Traffic Safety Administration shows that over a nine-year period, 164 drivers reported that their 2005-2007 Chevrolet Cobalts stalled without warning. That was far more than any of the car’s competitors from the same model years, except for the Toyota Corolla, which was recalled after a government investigation in 2010.

Stalling was one sign of the ignition switch failure that led GM last month to recall 1.6 million Cobalts and other compact cars, including the Saturn Ion, Pontiac G5 and Chevrolet HHR. GM has linked the problem to at least 12 deaths and dozens of crashes. The company says the switch can slip out of the “run” position, which causes the car to stall, knocks out the power steering and disables the air bags.

GM has recently acknowledged it knew the switch was defective at least a decade ago, and the government started receiving complaints about the 2005 Cobalt just months after it went on sale. House and Senate subcommittees have called the current heads of the automaker and NHTSA to testify on April 1-2 about why it took so long for owners to be told there was a potentially deadly defect in their cars.

On a percentage basis, the failure rate was much higher for the Cobalts than with the Corollas, one of the most popular vehicles in the US market. The defect was the same or similar to the ignition-switch problems in other GM cars. Furthermore, the Cobalt already had a raft of other issues, including a steering defect that NHTSA did investigate. And yet, the NHTSA did nothing about GM’s vehicles while demanding much greater responsiveness from GM’s biggest competitor.

One should always consider the tried-and-true axiom to never assign to malice what could be explained by incompetence. However, the easy ride that GM apparently had from the government that owned a big chunk of its stock at least raises the question of whether the federal government either (a) deliberately shielded GM from a potentially disastrous recall while it was still getting back on its feet, (b) went after Toyota to make them less competitive against the government’s own auto manufacturer, or (c) both. That suspicion is one good reason that the government that regulates a market should never have an ownership stake in one of its players, especially one as dominant as GM in the market.

Bloomberg’s Edward Neidermeyer warns consumers not to expect GM to ever be more than “Government Motors”:

When Mary Barra appears before Congress next week, she’ll face many versions of the same basic question: How do you solve a problem like General Motors? It’s actually one the representatives might do well to ask themselves, as the government bailout five years ago not only gave the company permanent too-big-to-fail status, but also immunized it from defect-related liability and, more broadly, helped further entrench the worst aspects of its long-dysfunctional corporate culture. …

In the decades since, GM has lived up to that reputation, consistently losing market share while handsomely rewarding lifelong executives. The federal bailout was supposed to change things; several of those involved have written books claiming their share of credit for GM’s “turnaround.” Yet what is different? No GM executive has so far admitted knowledge of anything about the 2006 ignition-switch redesign at the heart of a recall now involving 1.6 million vehicles and too many lives. (Because the part number wasn’t changed in 2006, likely to conceal evidence of a defect, GM admits it doesn’t even know how many switches on parts shelves across America it needs to recall.) As in all broken cultures, the smallest successes have a thousand fathers while the biggest problems are orphans. …

Cultural dysfunction of the scale now on display at General Motors thrives on impunity, which up until 2008 derived from inherited scale. Since the bailout, the moral hazard of the government’s implied backstop has made government complicit. After all, Washington’s response to GM’s clearly foreseeable collapse was to simply fix symptoms: crush debtholders, force union concessions, fire the CEO, pump in cash and cut it free of legal liability.

Now, five years after the government committed to these “fixes,” GM is in the grips of a quality scandal that seems to have no end. Spooked into hasty action by a stumbling giant that couldn’t keep accounts within a half-billion dollar margin of error and was too arrogant to even create contingency bankruptcy plans, public officials eliminated the only real solution to such terminally flawed cultures: creative destruction. Until Congress puts that option back on the table, GM is still very much Government Motors.

Maybe they should do the same with the NHTSA.


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Conflict of Interest.

oscarwilde on March 28, 2014 at 2:08 PM

The ignorant scumhag, who’s CEO, should be thrown out.

For how long will she claim “I did not know”? Does she think she’s obama?

Schadenfreude on March 28, 2014 at 2:10 PM

Hold them and obama accountable.

Plus, hold all who brung obama accountable too.

Schadenfreude on March 28, 2014 at 2:12 PM

This happened under Obama’s watch so, meh. Of course if we let him get away with this before you know it, he will be using the IRS or NSA to hassle his detractors.

Deano1952 on March 28, 2014 at 2:12 PM

Schadenfreude on March 28, 2014 at 2:12 PM

They will just hang the engineer out to dry. With full pension and benefits, of course.

Deano1952 on March 28, 2014 at 2:14 PM

The witch who claims ignorance, after all this time.

Schadenfreude on March 28, 2014 at 2:14 PM

Didn’t GM receive a massive bailout?

You betcha they did.

Just another fantastic choice of allies for Obozo.

KMC1 on March 28, 2014 at 2:16 PM

“The Associated Press now reports that the NHTSA missed other clues”

What evidence is there that they “missed” these clues? I think the proper term is “allegedly missed” or “claim(s/ed) to have missed”.

Dusty on March 28, 2014 at 2:17 PM

blink on March 28, 2014 at 2:19 PM

Statistically significant stalling events in one of the GM cars.

A years long complaint about certain GM vehicles.

cozmo on March 28, 2014 at 2:25 PM

It’s Bush’s fault, right ? right ?

burrata on March 28, 2014 at 2:26 PM

http://www.breakingnews.com/topic/general-motors/

GM faulty ignition switch recall
1d
Sen. Richard Blumenthal, D-Conn., says GM should issue warning as soon as possible and before Wednesday’s hearing on GM defects – @Reuters
end of alert
==============

GM faulty ignition switch recall
2d
US Senate panel sets April 2 hearing to probe GM, National Highway Traffic Safety Administration on ignition switch recall problem – @Reuters
end of alert

canopfor on March 28, 2014 at 2:28 PM

4d
Sen. Richard Blumenthal, D-Conn., requests Department of Justice requires General Motors to compensate victims of faulty ignition switches – @thehill
read more on thehill.com
===========================

GM faulty ignition switch recall
6d
GM shareholder files securities fraud suit over ignition recall – @detroitnews
read more on detroitnews.com
=============================

GM faulty ignition switch recall
7d
House Energy and Commerce Committee says GM CEO Mary Barra to testify at hearing on April 1 – @CNBC
see original on twitter.com
===========================

GM faulty ignition switch recall
9d
Lawyers searching for clients in General Motors recall of 1.6 million cars over ignition problems – @Reuters
read more on reuters.com

canopfor on March 28, 2014 at 2:29 PM

OBL is Dead, …GM IS ALIVE,…and some Customers have Died:

———–GaffeBiden
(Yes,..I’m kidding)

canopfor on March 28, 2014 at 2:33 PM

But GM only costed taxpayers $10 billion. I mean, except for the $45 billion in tax breaks Ford and Toyota didn’t get, and the advantage of people dying while regulators look past things like this.
 
But other than that they only cost taxpayers $10 billion.
 
And that was the Old GM® anyway, racists.

rogerb on March 28, 2014 at 2:36 PM

Worth reading this site.

Bmore on March 28, 2014 at 2:36 PM

Government Motors has sovereign immunity and will claim it.

I will never own another GM vehicle. Of course, thanks to Benedict Roberts we could be required to!

ConstantineXI on March 28, 2014 at 2:37 PM

Good thing we don’t have to worry about such a government conflict of interest in the medical services and insurance markets.

forest on March 28, 2014 at 2:40 PM

My dad had a 2007 Cadillac CTS, the brakes would lock up constantly, kept taking it back to the dealership who insisted their was nothing wrong with them. He drives a Hyundai Genesis now

Pegcity on March 28, 2014 at 2:41 PM

Maybe Ford can put out a new ad calling GM cars “death mobiles” and link the government’s demand to pull their ad that touts them not accepting bailout money. The government has a hidden agenda and are picking losers in the process.

djaymick on March 28, 2014 at 2:42 PM

Don’t forget the sweetheart tax deal Obama gave the new GM.

http://www.theblaze.com/stories/2012/05/03/preferential-treatment-gm-scores-sweetheart-tax-deal/

Mark1971 on March 28, 2014 at 2:43 PM

Buying a Government Motors vehicle is un-American.

beatcanvas on March 28, 2014 at 2:44 PM

Maybe Ford can put out a new ad calling GM cars “death mobiles” and link the government’s demand to pull their ad that touts them not accepting bailout money. The government has a hidden agenda and are picking losers in the process.

djaymick on March 28, 2014 at 2:42 PM

The Regime would raid them like Gibson if they did that. What, you think we have the freedom to criticize government and their hand picked pals? This is Amerika, land of the hammer, home of the sickle.

ConstantineXI on March 28, 2014 at 2:45 PM

Narrator: A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don’t do one.

Business woman on plane: Are there a lot of these kinds of accidents?

Narrator: You wouldn’t believe.

Business woman on plane: Which car company do you work for?

Narrator: A major one.

Pegcity on March 28, 2014 at 2:45 PM

what if this had gotten out before the election?

rob verdi on March 28, 2014 at 2:54 PM

Questions mounting over GM, NHTSA response to deadly defect

GM is now well above any questions from peon American citizens.

Obama’s Union thugs now own and run GM with their lackeys in all the executive positions so they have nothing to fear from the government or the judicial system.

RJL on March 28, 2014 at 2:56 PM

what if this had gotten out before the election?

rob verdi on March 28, 2014 at 2:54 PM

Then the journalist responsible who have gone to prison, while the rest of the media claimed it was all a Vast Right Wing Conspiracy and RAAAAACIST…

oscarwilde on March 28, 2014 at 3:01 PM

Once again, this is rather small potatoes. It’s like having a cow over Harry Reid throwing his granddaughter a little business even as he amassed a fortune worth millions from selling favors in government service.

~~

The GM “bailout” was really just a bankruptcy managed by Obama’s henchmen instead of bankruptcy court where it belonged. Bankruptcy court would have protected bondholders as it should, and also the thousands of people who held judgments against GM for wrongful death and injuries due to defects.

Yes, people who had sued and won against GM for product liability, but who were being paid over time in structured settlements or whose settlements had not been delivered yet, were screwed by Obama. They got cut off with nothing so he could keep all the little perks for his union thug buddies.

People who needed that money for lifetime care because they were paralyzed due to design defects in GM vehicles were suddenly at the mercy of Medicaid.

~~

The ignition switch is a scandal, but a minor one. There were no “hundreds” of deaths due to it, that’s wild speculation by hungry lawyers.

But the thousands of real lives, already given justice through the courts or by GM’s own admission, were all screwed over to save some union bosses from getting the boot. That’s your scandal, folks.

Adjoran on March 28, 2014 at 3:06 PM

My wife LUVS her Escape. ’nuff said…

vnvet on March 28, 2014 at 3:40 PM

’nuff said…

vnvet on March 28, 2014 at 3:40 PM

No it ain’t. ‘Cuz my wife loves hers too.

cozmo on March 28, 2014 at 3:49 PM

Let me get my bias out of the way first: I am a trial lawyer. A Libertarian minded trial lawyer but a trial lawyer nonetheless.

Now, this story, to me, is a text book example of the need for civil tort liability administered by the most local form of government- a jury of twelve citizens. The civil tort system is what brought all of this to light and what will hopefully not only compensate the victims, but convince GM that this kind of behavior will cost them more in the long run than hiding dangerous problems.

The regulatory system (which would be the only alternative to govern such behavior if the tort system is gutted) is simply not adequate, too “onesized fits all”, less free market and too bureaucratic.

Are there abuses of the tort system? Sure. (but many fewer than the Chamber of Commerce wants you to believe.) But the same can be said about most of our individual rights (the right to a trial by jury in civil cases is an individual right guaranteed by the 7th Amendment).

People abuse the 1st Amendment and say heinous, horrible, dangerous things- yet we should not weaken the First Amendment.

People use guns for murder, robbery and mayhem- yet we should not weaken the Second Amendment.

Many fewer of us will ever need the protection of the Seventh Amendment, but I assure you that to those who do, the right to a jury trial is a precious right. Yet it comes under constant attack with nary a peep from those who otherwise revere our constitution.

This soapbox is getting a little tall. I think I will step down.

Andre the Giant on March 28, 2014 at 3:58 PM

Buying a Government Motors vehicle is un-American.

beatcanvas on March 28, 2014 at 2:44 PM

I avoid any product assembled by greedy UAW goons. I like Toyota and Nissan, and give preference to those models built in the USA.

slickwillie2001 on March 28, 2014 at 5:19 PM

That suspicion is one good reason that the government that regulates a market should never have an ownership stake in one of its players, especially one as dominant as GM in the market.

The GM “bailout” was really just a bankruptcy managed by Obama’s henchmen instead of bankruptcy court where it belonged. Bankruptcy court would have protected bondholders as it should, and also the thousands of people who held judgments against GM for wrongful death and injuries due to defects.

Yes, people who had sued and won against GM for product liability, but who were being paid over time in structured settlements or whose settlements had not been delivered yet, were screwed by Obama. They got cut off with nothing so he could keep all the little perks for his union thug buddies.

People who needed that money for lifetime care because they were paralyzed due to design defects in GM vehicles were suddenly at the mercy of Medicaid.

Adjoran on March 28, 2014 at 3:06 PM

Good thing we don’t have to worry about such a government conflict of interest in the medical services and insurance markets.

forest on March 28, 2014 at 2:40 PM

‘Nuff said.

AesopFan on March 28, 2014 at 5:38 PM

General Motors, like other government employees, no one knows ANYTHING!

GarandFan on March 28, 2014 at 5:40 PM

Where are Ralph Nader, and Michael Moore, demanding Mary Barra’s head on a pike?

And, wasn’t she in charge of product design when this problem first erupted a decade ago?

Is it because she’s a Democrat?

Another Drew on March 28, 2014 at 7:16 PM

Remember and point out this fiasco the next time somebody says that nationalized healthcare is something government can do well.

Would healthcare be affordable, and responsive to the needs of individuals and the public at large, with the government running it? What evidence is there for that? There is plenty of evidence to the contrary. Obamacare being exhibit A.

Democrats can blame this GM thing on Republicans, and Republicans can blame it on Democrats. Let them point fingers all day, but the bottom line is that either way, it is big government that is screwing us over. The Constitution gives the Feds some power and they are supposed to use it to be the protectors of the people from all threats foreign and domestic.

Instead they are paving the way for our downfall and lining their own pockets all along the way.

D.C. now stands for District of Corruption.

s1im on March 28, 2014 at 8:04 PM