NYT: GM knew about fatal defect, kept quiet

posted at 8:41 pm on July 17, 2014 by Ed Morrissey

Congress puts General Motors back on the hotseat today, with CEO Mary Barra and other executives testifying about the cover-up of its ignition-switch defect. That cover-up became more clear last night, thanks to a New York Times report on internal documents relating to the fatal crashes. The documents show that GM officials knew that some of the crashes were because of a loss of power and that the fatalities related to failed airbag deployment as a result, but said nothing — even as a woman was erroneously convicted of vehicular homicide:

The car crash that killed Gene Erickson caught the attention of federal regulators. Why did the Saturn Ion he was traveling in, along a rural Texas road, suddenly swerve into a tree? Why did the air bags fail? General Motors told federal authorities that it could not provide answers.

But only a month earlier, a G.M. engineer had concluded in an internal evaluation that the Ion had most likely lost power, disabling its air bags, according to a subsequent internal investigation commissioned by G.M. …

The company repeatedly found a way not to answer the simple question from regulators of what led to a crash. In at least three cases of fatal crashes, including the accident that killed Mr. Erickson, G.M. said that it had not assessed the cause. In another fatal crash, G.M. said that attorney-client privilege may have prevented it from answering. And in other cases, the automaker was more blunt, writing, “G.M. opts not to respond.” The responses came even though G.M. had for years been aware of sudden power loss in the models involved in the accidents.

The release of the assessments came too late for one woman:

Mr. Erickson was riding in the front seat of a Saturn Ion driven by Candice Anderson in 2004. They were an hour from Dallas when the car suddenly drove into a tree, killing Mr. Erickson but sparing Ms. Anderson. Only recently did Ms. Anderson, who pleaded guilty to criminally negligent homicide after the accident because she had a trace of Xanax in her system, learn that she was not to blame.

Despite the earlier determination by the engineer, Manuel Peace, that the engine’s shutting off had most likely been the reason for the crash, G.M., in its response to regulators, said there may not have been “sufficient reliable information to accurately assess the cause” of the incident.

That sounds a lot like obstruction of justice. GM later stated that the communication was protected by attorney-client privilege because the Erickson family had filed a lawsuit against GM, but that’s nonsense; the report wasn’t made as part of privileged communication between the engineer and his own attorney. Documents such as those are part of the discovery process in any lawsuit, and knowingly withholding documentary evidence in a criminal case is obstruction of justice.

The hearings are already underway, and perhaps Barra will get asked about why they allowed a woman to get convicted of manslaughter while GM had knowledge of potentially exculpatory information about the accident. They want to know more about the attempt by GM’s engineers and attorneys to keep this kind of information from the public, and apparently from the courts:

General Motors executives return to Capitol Hill on Thursday morning for what is sure to be another round of harsh questioning about their handling of an ignition switch defect linked to at least 54 accidents and 13 deaths.

Lawmakers plan to press Mary T. Barra, GM’s chief executive, and general counsel Michael P. Millikin on why top officials remained unaware of the defect for more than a decade even as the company’s attorneys settled legal claims resulting from accidents linked to the problem.

Thursday’s hearing will mark the first time GM’s top lawyer publicly answers questions about the ignition switch debacle.

“There’s a reason Michael Millikin will be testifying in addition to Mary Barra — and that’s because [Sen. Claire McCaskill] will be posing some tough questions that haven’t yet been answered about the role GM’s legal department played in delaying this recall,” said Andrew Newbold, a spokesman for McCaskill (D-Mo.).

An internal investigation by GM found that information about the switch defect never made its way to top executives and instead remained trapped in the company’s engineering and legal departments. Anton R. Valukas, the former U.S. attorney who oversaw the probe, concluded that a pattern of “incompetence and neglect” allowed the problem to fester for more than a decade before executives ordered the first of a series of recalls this year. In the aftermath of the report, Barra dismissed 15 employees, including several GM lawyers involved in safety issues at the company.

Neither the Washington Post nor the New York Times addresses the other big issue in the GM defects issue, which have now resulted in more than 29 million recalled vehicles since the first of the year. The NHTSA knew about the complaints involving airbags and loss of power, but repeatedly ignored them, as Liz Peek explained in March:

By 2011 there had been 204 complaints lodged. In 2010 then-Congressman Barney Frank inquired on behalf of a constituent about the multiple accidents apparently brought on by the random deceleration issue. He was told by NHTSA that it had “insufficient evidence to warrant opening a safety defect investigation.”  By that time, there had been several fatalities related to Cobalts’ stalling. Still, NHTSA did nothing.

At the same time, after the Obama administration had orchestrated a government takeover of General Motors, NHTSA hit Toyota with its largest-ever fine and demanded a recall of some 9 million cars and trucks. Over several years, NHTSA had received more than 3,000 reports of sudden acceleration in Toyotas; there had been some 75 fatal crashes. Though the incidents of problems continued to mount, it was not clear at the time of the recall what exactly accounted for the mishaps. The Wall Street Journal announced that a report attributing most of the accidents to driver error had been “temporarily blocked” by safety officials, acting under the direction of Secretary of Transportation Secretary Ray LaHood. …

Meanwhile, back in Detroit, evidence of problems in various GM cars – and especially the Chevy Cobalts — continued to mount. To date, the auto maker has reported 13 deaths   related to sudden deceleration in various GM models. While the government is now questioning why the Detroit firm delayed initiating a recall of the troubled vehicles, one can also challenge NHTSA’s hands-off attitude.

According to The Times, there were only 260 complaints specifically mentioning stalling, but almost 8,000 reports of problems that could be tied to the same defect – plenty of complaints to alert safety watchdogs. In all, the vehicles recalled have been involved in 78 deaths and 1,581 injuries.

By 2010, the US government had invested heavily in GM (and Chrysler) in a two-staged bailout of the automakers. Treasury held a considerable amount of stock in GM, which critics claimed would turn into a white elephant for taxpayers while the Obama administration spent years bragging about saving GM. “GM is alive, and Osama bin Laden is dead,” Barack Obama and Joe Biden repeatedly reminded voters in 2012. Only after Treasury finally divested itself of GM stock in December 2013 did this defect start to get attention — and the recalls have cost stockholders, including those who bought from Treasury, more than a billion dollars already this year.

If this set of circumstances had occurred in the private sector, such as a hedge fund dumping shares right before massive recalls and findings of years-long and known defects, you can bet that the SEC and probably the FBI would be conducting an investigation of insider trading and corruption, especially with the deaths involved in this defect. Congress should be asking the same questions, and they should start by subpoenaing communications records between the NHTSA and Treasury before another epidemic of disk-drive failures breaks out.


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It’s good enough for Government work Motors.

Flange on July 17, 2014 at 8:46 PM

How many does this make it? Ten? Eleven? More?

ncjetsfan on July 17, 2014 at 8:48 PM

I hope GM fails…

OmahaConservative on July 17, 2014 at 8:48 PM

But the union pension fund will still get bailout money.

jaywemm on July 17, 2014 at 8:49 PM

Impeachment? Are you crazy?

ncjetsfan on July 17, 2014 at 8:49 PM

Oh man, I hope the media will cover this so Obama can find out about it.

trubble on July 17, 2014 at 8:51 PM

OT, just heard on BOR from Jennifer Griffith that the death toll on the jet is now 298 – there were three babies on board. Awful day gets worse.

rbj on July 17, 2014 at 8:52 PM

“GM is alive, and Osama bin Laden is dead,” Barack Obama and Joe Biden repeatedly reminded voters in 2012.

Given the unclear circumstances such as “sea burial”, I suspect the second part of the slogan may be as much of a lie as the first.

Rix on July 17, 2014 at 8:59 PM

Did the government know about the future recalls before it sold its stock?

lorien1973 on July 17, 2014 at 9:00 PM

I’m sure Obama will be mad has ANYONE when he finds out about his next week.

Oh, and really, how can the media blame GM, they’re just following the example set by the Liar-in-Chief and his Regime. They learned from the best.

OT, just heard on BOR from Jennifer Griffith that the death toll on the jet is now 298 – there were three babies on board. Awful day gets worse.

rbj on July 17, 2014 at 8:52 PM

Whew, good to know the pro-infanticide folks won’t lose any sleep over that news!

Meople on July 17, 2014 at 9:00 PM

March 2010:
 

“They’re not getting my input, but they are very, very good about keeping me up to date about what’s happening. If it’s small, they tell me after, but we’re very much aware of what GM is doing, because as a shareholder, we need to be. I like to understand [Whitacre's] thinking, so I can convey it to the people who sort of are more directly, ultimately the decision-makers here” — Geithner and chief White House economic advisor Larry Summers.”

http://www.motortrend.com/features/consumer/112_1005_ron_bloom_interview/gm_administration.html#ixzz1Fd5frFd8

 
Someone was aware and making the decisions.

rogerb on July 17, 2014 at 9:01 PM

What manner of person would buy a car from government motors?

Rational Thought on July 17, 2014 at 9:06 PM

Yes, for the first time in our history a major corporation has hushed up serious defects in their products.

Government Motors sucks, but c’mon now.

Dr. ZhivBlago on July 17, 2014 at 9:07 PM

Here is the fix when your ignition shuts off .
Put car in natural and start again w/ key .
Right like anyone of us would have the
presence of mind to do so .
My dad told me …..Don’t
put lots of stuff on your
key chain ! Probably the
best advice .

Lucano on July 17, 2014 at 9:10 PM

What manner of person would buy a car from government motors?

Rational Thought on July 17, 2014 at 9:06 PM

That’s the matter of price. Pump enough (taxpayer) money into incentives, and many will.

Rix on July 17, 2014 at 9:10 PM

Choom Gang lied, people died.

(somebody had to…)

formwiz on July 17, 2014 at 9:11 PM

Yes, for the first time in our history a major corporation has hushed up serious defects in their products.
 
Government Motors sucks, but c’mon now.
 
Dr. ZhivBlago on July 17, 2014 at 9:07 PM

 
It’s this part:
 

Treasury held a considerable amount of stock in GM, which critics claimed would turn into a white elephant for taxpayers while the Obama administration spent years bragging about saving GM. “GM is alive, and Osama bin Laden is dead,” Barack Obama and Joe Biden repeatedly reminded voters in 2012. Only after Treasury finally divested itself of GM stock in December 2013 did this defect start to get attention — and the recalls have cost stockholders, including those who bought from Treasury, more than a billion dollars already this year.

rogerb on July 17, 2014 at 9:12 PM

Say it isn’t so. GM incompetent and criminal, Who would have thought. GM has been incompetent for over 50 years. Obama will probably give them a slap on the hand and another couple million dollar fine which they will ignore. I say take their cash pile of $40 billion away for the lies and murders they allowed to happen.

leader4hru on July 17, 2014 at 9:14 PM

Sorry! Would like to help but my hard drive just crashed!

GarandFan on July 17, 2014 at 9:15 PM

If this set of circumstances had occurred in the private sector, such as a hedge fund dumping shares right before massive recalls and findings of years-long and known defects, you can bet that the SEC and probably the FBI would be conducting an investigation of insider trading and corruption, especially with the deaths involved in this defect.

.
Your must know NO shame, Mr. Morrissey.

Are we expected to believe you are completely ignorant of Jon Corzine and his M.F. Global escapades?

Let’s start with the easy refresher first:

Jon Corzine will not face criminal charges over MF Global (I would include the MarketWatch link but HA is choking on the sources)

There will be no criminal charges for former New Jersey Governor Jon Corzine over the use of customer funds leading up to collapse of MF Global.

The criminal probe into whether there was wrongdoing on the part of Corzine by the Department of Justice will now be dropped due to lack of evidence, said a report in The New York Post, citing a person with knowledge of the matter.

.
I’ve commented on here before in DETAIL, so let’s just point out the most important part of this supposed LACK OF EVIDENCE.

EVERY electronic account transfer in the WORLD is tightly controlled with ZERO wiggle room regarding WHO is required to use THEIR UNIQUE electronic credentials to approve certain types of transfers.

Whether MCH or ACH, when transfers that DIRECTLY violate the regulations are made, one of those parties IS the guy at the top. ALL of these records are maintained for years and years. The fact that Jon Corzine’s credentials were used to transfer the client funds into M.F. Global’s corporate accounts is a FACT.

One that SOMEHOW eludes the witless investigators of the F.B.I. to this very day.

But strangely enough, despite the F.B.I. saying there was NO CRIME and proving unable to find the MONEY, the trustee assigned by the court was able to track it down.

Want to guess what electronic systems HE used to find the money?

Next time you want to hold up a “paragon of virtue” try Little Sisters of the Poor …

… rather than the TWO ORGANIZATIONS (SEC & FBI) ceaselessly working to make sure NO member of the GOPe/Democratic Donor Class EVER goes to jail.

PolAgnostic on July 17, 2014 at 9:16 PM

Testing 1 … 2 … 3…

PolAgnostic on July 17, 2014 at 9:16 PM

Hmmmmm …. new moderation filters in effect, Mr. Morrissey?

PolAgnostic on July 17, 2014 at 9:18 PM

NYT: Obama knew about HealthCare Website defect, kept quiet

NYT: Obama knew about Benghazi, kept quiet.

NYT:Obama knew about Benghazi, kept quiet.

NYT:Obama knew about Being UnQualified for POTUSA, kept quiet.

NYT:Obama knew about EVERYTHING, kept quiet.

canopfor on July 17, 2014 at 9:20 PM

No bad language at all.

First submittal with two links – didn’t post.

Second try with one link – didn’t post.

Third try with NO links – didn’t post.

Do two test posts – go through OK.

Try third post again – First “Duplicate comment” response from moderation system.

PolAgnostic on July 17, 2014 at 9:21 PM

When you’ve lost the NYT…..

Lord Whorfin on July 17, 2014 at 9:21 PM

Given the unclear circumstances such as “sea burial”, I suspect the second part of the slogan may be as much of a lie as the first.

Rix on July 17, 2014 at 8:59 PM

Agree on that. I don’t trust anything from this pig. And I’m still up in the air on where he was born too.

What manner of person would buy a car from government motors?

Rational Thought on July 17, 2014 at 9:06 PM

My first and only new car was a Chevy. But the dealership was closed down so I know at least they weren’t Obama supporters. Toyota next time. Non-union labor.

Judge_Dredd on July 17, 2014 at 9:27 PM

Totally OT; Bobby Jindal rocks!!!

lineholder on July 17, 2014 at 9:29 PM

Treasury held a considerable amount of stock in GM, which critics claimed would turn into a white elephant for taxpayers while the Obama administration spent years bragging about saving GM. “GM is alive, and Osama bin Laden is dead,” Barack Obama and Joe Biden repeatedly reminded voters in 2012. Only after Treasury finally divested itself of GM stock in December 2013 did this defect start to get attention — and the recalls have cost stockholders, including those who bought from Treasury, more than a billion dollars already this year.

rogerb on July 17, 2014 at 9:12 PM

I’m also interested in any insider trading that might have been done by people in Congress and their staffs, since they are immune from insider trading laws that the rest of us have to observe.

slickwillie2001 on July 17, 2014 at 9:31 PM

GM should have been allowed to catastrophically fail.

But the union pension fund will still get bailout money.

jaywemm on July 17, 2014 at 8:49 PM

By my calculations, somewhere around $30 billion on $20 billion pre-bankruptcy GM liabilities to the benefits portion thereof (and if everything works out for them, a similar amount of profit for the VEBA from driving Chrysler into the arms of Fiat).

Steve Eggleston on July 17, 2014 at 9:34 PM

PolAgnostic on July 17, 2014 at 9:21 PM

Try e-mailing Ed.

Steve Eggleston on July 17, 2014 at 9:35 PM

Mustang car, Ram truck, wife drives a German thing, kids are in Toyotas and Hondas; GM is dead to me and I say this as a guy who owned mostly GM my entire life.

Bishop on July 17, 2014 at 9:43 PM

This is called fraud, when it’s not owned by Obama.

The Obama Cult is a criminal enterprise.

faraway on July 17, 2014 at 9:44 PM

Just like the VA. Man, these government agencies are all the same.

Grammar Nazi on July 17, 2014 at 9:45 PM

The ones fired have experience at lies and cover ups so they will be hired by the VA.

docflash on July 17, 2014 at 9:46 PM

Can’t wait to watch the executives get perp walked in front of Congress and humiliated in front of…

what?

I thought we were talking about an imaginary contrived problem with Toyota

carry on…

trs on July 17, 2014 at 9:47 PM

Not excusing GM behavior in any of this at all, but how, exactly, does loss of power make you drive into a tree?

bofh on July 17, 2014 at 9:49 PM

Try e-mailing Ed.

Steve Eggleston on July 17, 2014 at 9:35 PM

.
Thanks for the suggestion, Steve … but since I was strongly taking Ed to task for the part highlighted in bold:

If this set of circumstances had occurred in the private sector, such as a hedge fund dumping shares right before massive recalls and findings of years-long and known defects, you can bet that the SEC and probably the FBI would be conducting an investigation of insider trading and corruption, especially with the deaths involved in this defect. Congress should be asking the same questions, and they should start by subpoenaing communications records between the NHTSA and Treasury before another epidemic of disk-drive failures breaks out.

as being … implausibly tone deaf to reality … (i.e. SEC & FBI being among the MORE corrupt federal organizations) among other things.

I don’t know that any of them will make it through moderation.

Or maybe the NSA just evaporates them outside my firewall. ;->

PolAgnostic on July 17, 2014 at 9:55 PM

Pop culture imitates life a little too closely, eh, GM?

A new car built by my company leaves somewhere traveling at 60mph. 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, multiplied by the probable rate of failure, B, then multiply the results by the average out-of-court settlement, C. A times B times C equals X.

If X is less than the cost of the recall we don’t do one.

Are there a lot of these kinds of accidents?

You wouldn’t believe.

Mark Boabaca on July 17, 2014 at 10:11 PM

GM’s Unions are Alive.

It’s Customers are Dead.

HumpBot Salvation on July 17, 2014 at 10:25 PM

Not excusing GM behavior in any of this at all, but how, exactly, does loss of power make you drive into a tree?

bofh on July 17, 2014 at 9:49 PM

Rural road. Sharp curve. Sudden loss of power steering.

jon1979 on July 18, 2014 at 1:41 AM

Congress should be asking the same questions….

What makes you think Congress isn’t in on it?

PersonFromPorlock on July 18, 2014 at 2:18 AM

Lost emails and crashed hard drives soon to be announced at the NHTSA…

albill on July 18, 2014 at 5:58 AM

These contingent liabilities would have been revealed through due diligence in a bankruptcy court, but stayed hidden because the government takeover had everything to do with politics, and nothing to do with sound business practices.

RadClown on July 18, 2014 at 6:56 AM

An internal investigation by GM found that information about the switch defect never made its way to top executives and instead remained trapped in the company’s engineering and legal departments.

An internal investigation ordered by GM bigwigs finds that GM bigwigs were totally ignorant of the biggest safety risk in GM vehicles over the period of more than a decade?

Yeah. Sure. Knock me over with a feather.

runawayyyy on July 18, 2014 at 9:13 AM

An internal investigation by GM found that information about the switch defect never made its way to top executives and instead remained trapped in the company’s engineering and legal departments.

LOL, yeah because legal departments NEVER, NEVER inform top executives about issues that might impact the company. Doesn’t even begin to approach believability.

HumpBot Salvation on July 18, 2014 at 11:18 AM

What did Steve Rattner know and when did he know it?

What did Tim Geithner know and when did he know it?

What did Larry Summers know and when did he know it?

Esaus Message on July 18, 2014 at 4:42 PM