Video: GM adds more than 3 million cars to recalls

The coincidences of Treasury divestment continued yesterday when GM announced it would add another 3.2 million cars to its recalls this year. The latest recall involves the same ignition-switch problem that GM and the National Highway Transportation Safety Administration ignored until after Treasury sold its GM shares late last year. The model years now go back to 2000, which should raise plenty of questions about how everyone missed this while the US government owned a stake in GM:

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General Motors announced today another ignition-switch recall for an additional 3.16 million vehicles. The recall is expected to increase the financial cost to $700 million from $400 million in its second quarter.

It’s been more than four months after GM began recalling 2.6 million small cars to fix ignition switches that the company says have been involved in at least 54 crashes and 13 deaths.

General Motors has now recalled about 20 million cars this year in North America and automobiles exported around the world.

With this deluge of recalls, one might wonder just how quickly GM can get these cars fixed. It’s a good question, and CBS Atlanta answers that it might take all year. One dealer has cars stacked up in their sales lot, and the backlog keeps growing:

The scale of this recall is simply staggering, and makes the question of timing even more acute. This problem obviously began before the bailout of the automakers, beginning in 2008 by George W. Bush and amplified considerably by Barack Obama in 2009, mainly on behalf of the unions and at the expense of senior investors. Obama certainly took credit for it, claiming in 2012 that “GM is alive and Osama bin Laden is dead” because of his leadership.

However, the problems of the ignition switch began arising during the same period. GM has already fired 15 people for their part in sloughing off the defect, but the NHTSA still has not answered for why the government regulator failed to respond to a number of reports of serious issues with the GM ignition switch and its airbag deployment failures, even when deaths were reported from it. Treasury didn’t fully divest itself of GM stock until last December, when Obama announced that his bailout worked. “Today, that bet has paid off,” Obama said in taking credit for rescuing GM.

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Now that bet is starting to look like a case of insider trading. Did the White House deliberately ignore this defect until it could unload the stock? Having 20 million cars recalled in six months is a singular event for any automaker, and the timing certainly looks suspicious. If any other investor dumped his shares under these circumstances, the SEC and the Department of Justice would have had investigations humming after the first five million recalls.

Congress’ investigation is still under way, and looking at both GM and the NHTSA:

In the last 2 1/2 months, congressional investigators have received more than 1 million pages of documents from GM and 15,000 from NHTSA, who has come under scrutiny for not ordering a recall sooner. At the subcommittee’s first hearing in April, Barra declined to answer many questions, saying she would wait until Valukas finished his report.

I wonder if the NHTSA will have a Lois Lerner-like “hard drive failure” soon.

Related: I’m pretty darned stoked about my new 2015 Subaru Forester. I’m sure there will be a recall or two — my previous Honda CR-V, which I drove for nearly 13 years and just gave to my son and daughter-in-law, had at least a half-dozen, some airbag related — but I’d be surprised if they ever had to pull the entire fleet off the streets. It handles very well, gets good gas mileage for its class, and the Eyesight adaptive response system is much better than I had anticipated.

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David Strom 10:00 AM | April 16, 2024
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