Rental agencies warned GM for years about defects, crashes, and airbag failures

posted at 4:01 pm on August 2, 2014 by Ed Morrissey

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:


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What did the government know about the potential recalls prior to its selling of the stock they, um, acquired?

lorien1973 on August 2, 2014 at 4:11 PM

“Osama and GM are dead – I killed them” — obama

Schadenfreude on August 2, 2014 at 4:12 PM

Ford laughs its free azz off.

Schadenfreude on August 2, 2014 at 4:12 PM

OT - watch your palate.

Schadenfreude on August 2, 2014 at 4:17 PM

General Motors has already recalled more cars and trucks in the U.S. this year than it has sold here in the five years since it filed for bankruptcy.
 
Here’s the count: Since that filing in June 2009, GM has sold 12.1 million vehicles in the United States. Total U.S. recalls: 13.8 million.
 
http://money.c n n.com/2014/05/21/news/companies/gm-recall-nightmare/

rogerb on August 2, 2014 at 4:20 PM

This is your Grabberment Motor’s in action, just like your Grabberment, disregarding information that does not make them money or bring them power, regardless of the consequences of ignoring that information.

This is exactly why Trey Gowdy is going after Killary Klinton and the Obamanation Administration over their action during the attack on the Consulate in Benghazi.

oscarwilde on August 2, 2014 at 4:27 PM

I suspect NHTSA was too busy staging show trials of Toyota to pay any attention to what was going on with Government Motors.

slickwillie2001 on August 2, 2014 at 4:28 PM

That might explain why all the rental cars I’ve gotten lately have been Fords, Toyotas, and Nissans. I guess they would rather their customers not be dead. You would think GM would be the same.

joekenha on August 2, 2014 at 4:30 PM

What is it about this dang wantedlifestyle.com popup that can’t be deleted.

On topic: During the Clinton Admin those doing some research found out that the NHTSA knew that airbags could kill babies and small stature, elderly adults. That was hidden from the public; at least by the MSM. I tried to get the leadership of the NHTSA charged with manslaughter for the resulting deaths of some 52 babies, but to no avail. I expect the same here.

amr on August 2, 2014 at 4:40 PM

It should also be noted that in addition to these cover-up shenanigans, the only reason GM had such banner years during Obama’s first term is almost entirely due to Government fleet purchases.

Rusty Nail on August 2, 2014 at 4:42 PM

When you’re too big too fail these things happen more than normal.

How many trapeze acts would there be without a safety net?

CW on August 2, 2014 at 4:56 PM

Had GM gone through the bankruptcy process, these contingent liabilities would have come to light. Instead, billions of tax dollars were stolen and wasted on a company worth more dead than alive.

RadClown on August 2, 2014 at 4:57 PM

GM needs to go back to making good,solid,reliable vehicles like the Chevy Vega.

Dr. Carlo Lombardi on August 2, 2014 at 4:59 PM

It’s Pontiac’s revenge.

Flange on August 2, 2014 at 5:00 PM

And Obama thinks GM was worth saving salvaging?

BuckeyeSam on August 2, 2014 at 5:03 PM

“GM owners are dead, and ISIS in on the run…through the Middle East and in to our country.”

BuckeyeSam on August 2, 2014 at 5:05 PM

GM, the Union, and Government knew about this before the bailout!

lilium479 on August 2, 2014 at 5:18 PM

Since the bail out – anyone foolish enough to buy GM products – deserves what they get.

jake-the-goose on August 2, 2014 at 5:22 PM

jake-the-goose on August 2, 2014 at 5:22 PM

I was just going to say, having just bought a late-model used car — a VW — several months ago. My previous car was a Toyota that lasted me 14 years.

You could not give me a GM car, and if I ever have to use a rental car again, I’ll avoid one place I went that rented only Chevys — Impalas and Malibus and the like. Hated driving them for the couple days I had to. They were awkward and annoying and I couldn’t wait to turn them back in.

PatriotGal2257 on August 2, 2014 at 5:41 PM

Rental agencies warned GM for years about defects, crashes, and airbag failures

Ed,

With all due respect this headline glosses over the bigger problem. GM KNEW about these defects, crashes, and airbag failures for years and did nothing. GM didn’t take action. NHTSA is also at fault for inaction but the Ford Pinto scandal pales in comparison to GM’s indifference to producing a safe product.

And, of course, it was all profit driven. By the time of the government bailout, thousands of dollars for every unit produced went to an insanely generous pension system for the UAW.

The real question here is why the lies continued after the government became the owner of GM. I was living in Michigan at the time and the only real concern was the successful launch of GM’s street legal golf cart called the Chevy Volt. It was a big enough a deal that Jennifer Granholm’s official portrait includes a model of the Volt in the scenery.

WHY ARE ALL THESE DEFECTS ONLY COMING TO LIGHT AFTER THE UNITED STATES GOVERNMENT DUMPED ITS STOCK IN GM AT A MASSIVE LOSS?

Happy Nomad on August 2, 2014 at 5:45 PM

It should also be noted that in addition to these cover-up shenanigans, the only reason GM had such banner years during Obama’s first term is almost entirely due to Government fleet purchases.

Rusty Nail on August 2, 2014 at 4:42 PM

I remember stories that came out about major purchases of vehicles by the federal government, and local journalists found them sitting in parking lots doing nothing.

slickwillie2001 on August 2, 2014 at 5:45 PM

You could not give me a GM car, and if I ever have to use a rental car again, I’ll avoid one place I went that rented only Chevys — Impalas and Malibus and the like. Hated driving them for the couple days I had to. They were awkward and annoying and I couldn’t wait to turn them back in.

PatriotGal2257 on August 2, 2014 at 5:41 PM

My only positive comment about GM products is that they come with more cup holders than the number of passengers who could possibly fit in the car (outside clowns).

When I’ve had cause to rent a car, the GM products always fell far short when it comes to quality. GM trucks are another business sector and far more competitive.

Happy Nomad on August 2, 2014 at 5:54 PM

You could not give me a GM car, and if I ever have to use a rental car again, I’ll avoid one place I went that rented only Chevys — Impalas and Malibus and the like. Hated driving them for the couple days I had to. They were awkward and annoying and I couldn’t wait to turn them back in.

PatriotGal2257 on August 2, 2014 at 5:41 PM

My only positive comment about GM products is that they come with more cup holders than the number of passengers who could possibly fit in the car (outside clowns).

When I’ve had cause to rent a car, the GM products always fell far short when it comes to quality. GM trucks are another business sector and far more competitive.

Happy Nomad on August 2, 2014 at 5:54 PM

I remember a time when it was hard to find a rental from the big three or four renters that was not an American car. That has changed very significantly.

slickwillie2001 on August 2, 2014 at 6:00 PM

“..the federal government ended up as a majority owner of GM stock for a few years under the Bush and Obama administrations —”

Although the government made a bridge loan in late 2008, it never owned GM stock in the Bush administration. That happened with the corrupt bankruptcy in 2009 during Obama’s first term.

That said, the problems were occurring for years and the NHTSA failed under both administrations. The problems were known prior to the bankruptcy but were hidden by GM and apparently ignored by the government watchdog agencies.

lvtaxman on August 2, 2014 at 6:10 PM

I remember a time when it was hard to find a rental from the big three or four renters that was not an American car. That has changed very significantly.

slickwillie2001 on August 2, 2014 at 6:00 PM

Sort of.

I’m driving a Toyota product produced in the South. My last car was a Ford built in Mexico.

IMO, the “big three” is an idea that needs to end. What we are really talking about here is the preservation of the UAW.

Happy Nomad on August 2, 2014 at 6:17 PM

Lessee now, Romney’s been proven right on all the things about which he warned us

GM’s worse than dead, it’s deadly and they knew it

bin Laden’s dead, but terrorism’s making a big comeback

Tell me again why we can’t impeach the lot of them.

formwiz on August 2, 2014 at 6:18 PM

Why anyone buys a GM is beyond me…so many other good companies.

right2bright on August 2, 2014 at 6:23 PM

I remember a time when it was hard to find a rental from the big three or four renters that was not an American car. That has changed very significantly.

slickwillie2001 on August 2, 2014 at 6:00 PM

Sort of.

I’m driving a Toyota product produced in the South. My last car was a Ford built in Mexico.

IMO, the “big three” is an idea that needs to end. What we are really talking about here is the preservation of the UAW.

Happy Nomad on August 2, 2014 at 6:17 PM

Agreed. I avoid all UAW products now, not just GM.

slickwillie2001 on August 2, 2014 at 6:41 PM

Yeah, but union GM figured they’d be safer from the law than an affirmative-action hire in middle management.

viking01 on August 2, 2014 at 6:54 PM

Why isn’t Ms. Barra facing some indictments yet?

Another Drew on August 2, 2014 at 7:10 PM

Happy Nomad on August 2, 2014 at 5:54 PM

slickwillie2001 on August 2, 2014 at 6:00 PM

Yes, exactly. The rental place I dealt with is a small, family-owned franchise and one of the workers once told me that he’d drive any car as long as it was an American one. I had to stop myself from rolling my eyes at him. He was a young kid — 20-something — and I couldn’t help thinking that he was probably lost in what his dad and other older people told him about how great American cars once were. The key word is, of course, once.

PatriotGal2257 on August 2, 2014 at 7:12 PM

What did the government know about the potential recalls prior to its selling of the stock they, um, acquired?

lorien1973 on August 2, 2014 at 4:11 PM

You do know that’s racissssst, right?

platypus on August 2, 2014 at 9:58 PM

Wow, this is pretty terrifying. I rented Cobalts numerous times during this period. I thought the problem was people with large, heavy keychains that pulled the ignition switch off while they were driving. Rental car keys are single keys on a plastic chain. If those rental Cobalts had ignition switches that failed, it was definitely a bigger problem than we have been led to believe.

rockmom on August 2, 2014 at 10:54 PM

Well of course the rental companies were communicating their concerns to the NHTSA…

And the NHTSA was storing the communications on Lois Lerner’s hard drive.

Marcola on August 3, 2014 at 1:34 AM

It should also be noted that in addition to these cover-up shenanigans, the only reason GM had such banner years during Obama’s first term is almost entirely due to Government fleet purchases.
Rusty Nail on August 2, 2014 at 4:42 PM

The thought of government bureaucrats having to drive GM clattledeathtraps seems somehow… fitting.

Marcola on August 3, 2014 at 1:38 AM

What I want to know is this: Who are the braniacs at GM who decided it was a good idea to redesign an ignition switch? Millions and millions of perfectly functioning ignition switches were put into cars for years and years. GM used the same switch for seemingly eons. We are talking about a very simple design with a small cam and interference spring that applies tension when in the ‘run’ position.

But like all good designers, they sit around a table and think “Hey, this switch has been working perfectly for 30 years but I can make it better.”

Hubris, plain and simple.

BierManVA on August 3, 2014 at 7:48 AM

What is it about this dang wantedlifestyle.com popup that can’t be deleted.

amr on August 2, 2014 at 4:40 PM

Is that the autorunning ad that has no mute button? Hot Air, please do not run these ads. I keep a browser tab open to Hot Air at all times and I do not appreciate blaring ads going off every few minutes while I am doing something else. Show a little more class.

Mallard T. Drake on August 3, 2014 at 12:33 PM

GM needs to go back to making good,solid,reliable vehicles like the Chevy Vega.

Dr. Carlo Lombardi on August 2, 2014 at 4:59 PM

Luckily, GM learned its lesson and scrapped the Vega in favor of two other engineering masterpieces, the Chevette and the Citation.

MrKleenexMuscles on August 4, 2014 at 12:38 AM