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Key questions and answers about the GM recall controversy

This week members of Congress will question General Motors’ new chief executive Mary Barra on the company’s botched handling of a defective ignition switch linked to 13 deaths that led to the recall of millions of vehicles.

If you haven’t been following the General Motors story (or if you have and are understandably confused) here is what you need to know:

Q: Is my car subject to the GM recall?

A: Your best bet is to go to the GM website where you can enter your Vehicle Identification Number to confirm your recall status. The list of recalled cars is really long and it keeps changing as the company recalls more vehicles for problems other than the faulty ignition switch that prompted the first recall in late February. On Monday, the company recalled another 1.5 million vehicles because of a power steering problem.

Q: What’s wrong with the ignition switch?

A: If jostled, the faulty switches turn off the engine abruptly while the car is in motion, disabling the air bags and causing the brakes and power steering to stiffen. “At the core of the problem is a part in the vehicle’s ignition switch that is 1.6 millimeters less “springy” than it should be. Because this part produces weaker tension, ignition keys in the cars may turn off the engine if shaken just the right way,” NPR reported.

 Q: What did GM know and when?

A: According to a memo based on documents provided by GM and federal regulators released Friday by congressional investigators, GM first detected a defect during pre-production testing of the Saturn Ion but thought the problem had been addressed. In 2002 and again in later years, GM approved use of the ignition switch supplied by a company called Delphi, even though it did not meet GM’s own performance specifications. GM engineers flagged the ignition switch issue again in 2004 but the company rejected multiple proposals to fix the problem because it would take too long and cost too much. By 2005, reports of stalling vehicles and a fatal crash involving a faulty airbag had been reported. GM responded by issuing a service bulletin to dealers. Regulators got wind of the problems at GM by 2007 but declined to investigate. In February 2014 GM finally issued a recall. Check out this NPR timeline for more info on what GM knew and when.

Q: If GM knew something was wrong, why didn’t they do anything?

A: That’s what Congress and federal investigators are trying to figure out. One theory is that GM’s corporate culture discourages discussion of bad news, a problem exacerbated by the pressure of the 2008 financial crisis and taxpayer bailout of the company.  “When GM was struggling to cut costs and buff its image, a recall of its popular small cars would have been a terrible setback,” explained the Washington Post, citing sources familiar with the automaker. For its part, “GM has explained delays in reporting the ignition-switch flaw by saying that company engineers struggled for years to pinpoint the source of the problem,” the Post reported.

Q: Why didn’t federal regulators do anything?

A: According to House Energy and Commerce Committee’s findings, the National Highway Transportation Safety Administration contacted GM about consumer complaints in 2007. The agency twice considered investigating why airbags in some GM cars failed to deploy (a problem linked to the faulty switch) but on both occasions decided there wasn’t enough evidence to act. The NHTSA told the Post that it launched investigations into three crashes linked to the faulty switches, but “those investigations were stymied by a host of complicating factors, officials said, including the introduction of a new type of air bag that was suspected of causing the deployment failure.

Q: What’s the issue here, legally speaking?

A: Generally, the issue is whether GM was intentionally misleading when it delayed disclosing and correcting the problem with the faulty ignition switch. Under a 2000 law called the Tread Act, automakers have to report deaths, injuries and other defect-related information to federal authorities in a timely fashion. However, the Justice Department, which has launched a criminal investigation into GM, could go after the company for wire fraud. That’s the much broader legal theory prosecutors used to score a record $1.2 billion settlement with Toyota recently over allegations that the Japanese automaker defrauded consumers by making misleading statements about a deadly safety issue. Though he didn’t refer to GM by name, Attorney General Eric Holder said when he announced the Toyota deal that he expected it to serve as a model for how prosecutors would handle future cases involving “similarly situation companies.”

Barra will testify before the House Energy and Commerce Committee’s subcommittee on Oversight and Investigations Tuesday at 2 p.m. and then before the  Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Insurance on Wednesday at 10:00 a.m.

GM's ignition switch recall. Sources: GM, McSwain Engineering, staff reports. Photos: Michael Spooneybarger – Reuters. Graphic: Tobey – The Washington Post
Gail Sullivan covers business for the Morning Mix blog.



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