GM releases results of ignition-switch probe

The long-awaited results of an internal investigation into General Motors’ flawed handling of an ignition switch defect linked to at least 13 deaths were released Thursday, and it should go a long way to answering some of the puzzling questions still hanging over the scandal.

The report by former U.S. attorney Anton R. Valukus should address:

Why did GM take more than decade to order a recall?

As early as 2001, engineers noticed that the ignition switch installed in Saturn Ions, Chevrolet Cobalts, Pontiac G-5s and other small cars could be inadvertently turned off, causing cars to stall, disabling air bags and stiffening brakes and steering. The question is particularly perplexing because company documents given to congressional investigators said a fix would cost just 90 cents per switch when the cars were in production.

GM officials have indicated they struggled to grasp the scope of the problem, even as engineers investigated and company lawyers authorized settlements tied to accidents in which the defect played a role.

GM CEO Mary Barra revealed the findings of an internal probe into why the company did not recall faulty ignition switches earlier and detailed the company's actions, including firing 15 employees. (Reuters)

When did top GMofficials, including chief executive Mary T. Barra, learn about the problem?

Barra has said that she first got wind of the switch problem in December, but did not understand its full implications until late January, a couple of weeks after taking over as GM’s CEO. Meanwhile, former Treasury Department officials who worked on the company’s bankruptcy and $50 billion federal bailout said they never knew about the switch problem.

Why did GM quietly redesign the ignition switch in 2006, a move that seemed to alleviate much of the problem? Who knew about the change? And why was it not documented with a new part number? And why did it not lead to a recall of older vehicles equipped with the defective part?

Two GM engineers have been suspended with pay in connection with that change. But it remains unclear whether any higher-ups knew about the change.

Why did GM not tell federal safety regulators that it was investigating the role of the switches in frontal accidents in which air bags did not deploy?

National Highway Traffic and Safety Administration acting chief David Friedman said that in September 2012, a GM engineer was so concerned about the problem that he wrote an e-mail saying a “driver’s knee may contact the key or key fob and turn the ignition off. With the ignition in that position, the air bags will not deploy.” But the company did not tell federal investigators.

“So, GM engineers knew about the defect. GM investigators knew about the defect. GM lawyers knew about the defect. But GM did not act to protect Americans from that defect,” Friedman said last month at a news conference in which NHTSA announced that it had hit GM with a $35 million fine, its maximum levy under law.

Barra, who in April deflected many questions about the recall during congressional hearings saying she was waiting the outcome of the probe, is scheduled to discuss the findings with employees and reporters at a GM facility outside Detroit.

But no matter how comprehensive the report, the trouble caused by the recall debacle is expected to continue for GM over the coming months and years.

The company has hired mediation specialist Kenneth R. Feinberg to construct a compensation fund for families of crash victims. The company is not expected to announce Feinberg’s findings for several weeks. Meanwhile, the company faces a spate of lawsuits from shareholders, dealers and others in connection with the defect.

In addition, the company is facing a series of governmental investigations, including a federal criminal probe that could result in financial penalties along the lines of the $1.2 billion paid by Toyota earlier this year for misleading consumers about unintended acceleration problems with several of its models. Already, GM says the ignition switch recalls — and a flood of others that followed it — have cost GM $1.7 billion.

Despite those problems, GM sales are robust: Earlier this week the automaker reported that May was its best month in nearly six years, with sales up 13 percent over the previous May.

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
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