The Senate grilled GM executives again this week over the ignition-switch defects that have driven most of the 30 million recalls in 2014, by far the record for an automaker and a number that keeps growing. A FOIA search by Bloomberg News turned up even more evidence of early warnings about the defect that has been linked to dozens of deaths. Rental-car agencies kept alerting GM to the problem of power loss and stalling, but the automaker did nothing about it:
Customer-service call transcripts, warranty records, letters and police reports show Enterprise Holdings Inc. had pressed the largest U.S. automaker about a potential Cobalt defect because air bags failed in routine crashes. Avis Budget Group Inc. and Hertz Global Holdings Inc. also had Cobalts in their fleets that crashed.
“If there is a canary in the coal mine, it’s the rental car companies,” said Maryann Keller, an industry consultant who was a board member at Dollar Thrifty Automotive Group Inc. from 2000 to 2012. “They were the first users of the vehicles en masse.”
The files obtained are among scores exchanged between GM and the U.S. National Highway Traffic Safety Administration over an eight-year period beginning in 2005 related to cars stalling and air bags not deploying in crashes. In the files GM submitted, there were 30 crashes involving 37 fatalities in the Cobalt and the Saturn Ion. The victims’ names were redacted.
The documents add to the evidence that GM for at least a decade failed to promptly resolve mounting complaints from rental-car companies, consumers, automotive reviewers and even its own dealers and mechanics about abnormal crashes that have since been linked to a faulty ignition switch.
The files show many missed opportunities to ask questions and connect disparate events — the very type of evidence that is supposed to be routed to and vetted by the government’s Early Warning Reporting system for potential automotive defects.
This raises even more questions about the NHTSA and their lack of action on the defects. GM told NHTSA after complaints from Vanguard that they didn’t find enough evidence to warrant an investigation despite the death of the driver in that brand-new Cobalt, but the company did apparently forward these complaints from the rental agencies along to the NHTSA. As the Bloomberg report notes, the Early Warning System generates a lot of noise as automakers report every complaint, valid or not, to the safety board in order to allow for the recognition of patterns in the data. The complaints from rental agencies should have been a big red flag, though, as their business is in the maintenance and operation of large fleets, and can see patterns emerging for themselves.
What happened? The Senate would like to know that, too, especially since the federal government ended up as a majority owner of GM stock for a few years under the Bush and Obama administrations — and these defects came to light immediately after the Department of the Treasury had finished selling off its stock. In any other circumstances, a massive stock sell-off by a major investor just before wrongdoing is made public would raise serious suspicions about insider trading and stock fraud.
Bloomberg reports that the Inspector General at Treasury has become curious about the NHTSA’s failure, too:
NHTSA also has been under scrutiny for missing signs of the broader ignition-switch failures and passing on opening a formal defect investigation in 2007 and again in 2010. The U.S. Transportation Department’s inspector general, Calvin Scovel, is reviewing the agency’s actions. Transportation Secretary Anthony Foxx said he asked for the review after questions raised by members of Congress, the public and the media.
That’s a good start. It seems less and less likely that the sell-off and the sudden NHTSA interest in GM’s defects afterward despite years of warnings from victims and rental agencies is a sheer coincidence.
GM CEO Mary Barra’s latest visit to Capitol Hill went largely unremarked, but WKRC offered a video report on the testimony: